“When I get a hold of the son of a bitch who leaked this, I’m gonna tear his eyeballs out, and I’m gonna suck his fucking skull!”
GORDON GEKKO, Wall Street
On January 25, 2004, beepers and cellphones began ringing at intelligence headquarters and chanceries around the world. The reason was an article published by Al-Mada, an independent newspaper in Baghdad, which contained a secret list of names compiled by Saddam’s personal accountants.
“Presidents, Journalists, and Political Parties
Received Millions of Oil Barrels From Saddam”
[translated from Arabic]
BAGHDAD—Al-Mada has obtained a list of the individuals and firms to whom Saddam Hussein allocated crude oil during the various stages of the UN “oil-for-food” program. The list includes the names of individuals, companies, political parties, groups, and organizations from all over the world.
Interestingly most of the recipients of Iraqi oil had nothing to do with the oil business. They were neither involved in oil distribution nor in its storage or its sale and were not known to be interested in oil before they received these allocations. They include, among others, the Russian Orthodox Church… the Russian Communist Party… French politicians… the president of Indonesia… a British member of Parliament… Jordanian, Syrian, and Egyptian politicians… and the list goes on. Two hundred and seventy people in all.
[The list shows that] the defunct regime of Saddam Hussein had turned the UN program into a dirty business and a political game to fund his secret purchases of armament, expensive construction materials for the presidential palaces, and luxury items for extravagance. It also turned the contract for selling oil into the biggest operation in modern history for buying loyalty and influence around the world.…
Foreign journalists jammed inside the U.S.-occupied “Green Zone” of Baghdad scrambled for copies of the article. Al-Mada, owned by Fakhri Kareem, a Kurdish opponent to Saddam Hussein, made a name for itself that day. It was not a scoop; it was a bomb. The list of 270 bribe-takers was picked up by the newswires, and within hours bloggers in the United States had pounced on the story, running independent searches to confirm the identities of the people it named.
The list had been found in the archives of the Iraqi Oil Ministry and, according to the article, had been leaked by former Baathists to members of Iraq’s Governing Council. In September 2003 I had been warned, by an old college friend whose father now sat on the Iraqi Governing Council, that extremely sensitive documents had been retrieved from Saddam’s files, one of which implicated the UN Oil-for-Food program in massive international fraud.
I had immediately called the United Nations to warn them and advise them to launch an internal investigation into fraud under the program. I spoke to Christer, my second Swedish director, who told me he knew for certain that Pasha would not permit such an investigation. So I called Spooky. The latter told me to meet him for lunch. He set a rendezvous point at “the clock, by the information desk, in the middle of Grand Central Station.”
“Why not meet directly at a restaurant?” I asked.
Then I remembered. It is a standard security precaution, when one wants to make sure a conversation stays private, to set a meeting point that is not the ultimate place where the talking takes place. We would meet by the clock at Grand Central and pick a restaurant at random from there.
Trevor asked me for the source of my information. My friend from Brown University was called Tamara Chalabi. Her father, Ahmad Chalabi, had been the Pentagon’s candidate of choice to lead the “new Iraq.” The CIA and the State Department opposed the man and gave preference to Iyad Allawi. Chalabi had been accused in the media of defrauding the Petra Bank in Jordan in the 1980s. He personally argued that he was forced to flee Jordan because Saddam had sent assassins to kill him. I had no idea which version was true, but I knew Tamara well. She had worked for The Brown Journal of World Affairs, which I had cofounded and edited, and she had gone on to get a PhD in history at Harvard. She had followed her father to Baghdad during the war and visited the old home from which her family had been ejected before she was born. The Chalabis are an old, well-known Iraqi family whose prominence dates back further than the creation of the modern Iraqi state itself, in 1924. Her forefathers had participated in the creation of Iraq at the time when Gertrude Bell, Lawrence of Arabia, and Winston Churchill were involved in transforming that piece of the Ottoman Empire into a kingdom that would ultimately achieve independence from British rule. Her father was now working with Paul Bremer, the CIA veteran President Bush had appointed as proconsul in Iraq. The finance committee of the Iraqi Governing Council, which included Chalabi and other Iraqi leaders, had discovered Saddam’s secret list months before it was leaked to Al-Mada.
Back when I met with Spooky, I had no idea what shape or form the document would take, or what it included, but if Tamara said it was incriminating for the United Nations, I trusted she had it from a good source. She had heard that I was considering rejoining the United Nations and was telling me to be careful because a scandal might break out. She was not at liberty to give me further details, and I would not reveal her as my source to Spooky. But I repeated my advice that the UN should investigate itself before it was too late.
Spooky smiled, the way he always did when he thought I was being naïve. “They’re going to shove it all under the carpet,” he said, as he ordered another glass of wine. Then he shared the story of another UN colleague named Rehan Mullick, a bright Pakistani-American database manager, who had joined the UN right after I left. Rehan had sought to alert New York to the Iraqi government’s massive diversion of goods bought under the Oil-for-Food program. His report was ignored. No action was taken—except for the fact that Rehan’s contract was not renewed.
I asked why the man had not sought protection as a whistleblower. Spooky reminded me there was no such law protecting UN employees.
“They simply got rid of him. Just like they got rid of you.”
“I resigned,” I reminded him.
“Well, one way or the other,” Spooky said. “They sidelined our office. Now my own contract is up for renewal. They’re delaying it. I don’t know if I’ll have a job next month.”
We parted rather depressed. Spooky seemed resigned. All he wanted was a chance to put his skills and knowledge to good use in Iraq, but in the aftermath of the bombing, the UN had evacuated all personnel and everything was on hold (pending the revamping of the UN’s security office, a process that would take several years). In any case, Spooky was in no position to push for an investigation either.
Several months passed, and still no scandal erupted. Pasha had been thanked profusely by all members of the United Nations Security Council as the Oil-for-Food operation officially closed down in November 2003. Was it possible that the Iraqis had been persuaded not to make public the documents they had found? By mid-January, I was beginning to think that history would simply roll forward and that the story of how the international community defrauded the Iraqi people for years, in collaboration with Saddam Hussein, would never fully come to light. Hundreds of cardboard boxes filled with UN files would simply be hoarded off to a huge depot, never to be opened again.
Then Al-Mada dropped the bombshell. A wave of panic spread through the thousands of companies that had traded under the program, and a great number of international oil traders and other power brokers were awakened by calls from reporters trying to establish whether Saddam’s secret list of bribe-takers was genuine. Soon, they would receive visits from law enforcement officers as well.
Upon reading the news, I picked up my phone.
“Did you see it?” I asked Spooky.
“Yes.”
“That’s it. The endgame has begun,” I ventured.
“I suppose you’re right,” he said. “God only knows where this will end.”
It took time to decipher Saddam’s secret list. But right off the bat there were some interesting surprises. Few delegations on the UN Security Council would be spared embarrassment. Spooky had predicted a bloodbath in which only the most agile political backstabbers would survive. Another veteran of political investigations in Washington had made it even plainer to me: “Sharpen your knife, young man. There’s only two ways these things can go. Either the blame is put on people at the bottom of the pyramid or it’s laid on people at the top. Where do you think it belongs?”
I’d have to think about that one. In the meantime, I tried to focus on understanding who did what and when, how it all related to my own experience and decisions, and how it might reflect on my former office.
The case that most shocked the Iraqi newspaper’s editors was that of British Parliamentarian George Galloway. “The case of George Galloway is truly tragic,” the paper wrote. “This man defended many just Arab causes. But as soon as he got closer to the Iraqi regime, he was corrupted.…”
Galloway was never charged with corruption. His Mariam Appeal charity was criticized by the British charity commission for not screening its funders and for losing its records. But the Iraqis were hardly surprised to find out the UN operation in general had been corrupted. They knew they weren’t getting their money’s worth. Seeing the newspaper name people who appeared to have lobbied on their behalf in the past was just another piece of bad news, in another bad news week, crowning a bad news decade.
The new Iraqi government was the first to launch an investigation, hiring the consulting firm KPMG to track down the sales records of people and firms listed as Saddam’s secret bribe-takers. The U.S. Congress, then dominated by Republicans, raised the stakes even further, launching five separate investigations. Committee chairmen in the House and Senate were falling over one another to shed light on the brewing scandal. Soon France, Britain, New Zealand, India, South Africa, Australia, Spain, Italy, Germany, Denmark, and just about every accountable state on the planet (note the absence of Russia) would launch probes of their own.
Bloggers went into overdrive, digging up all sorts of connections between people on the list and posting them on the web for journalists to feed on. Soon stories began to surface linking companies named on UN and U.S. terror watch lists for funding Al Qaeda as having benefited from Oil-for-Food contracts. Unnamed U.S. government officials would be quoted as saying, “It seems very plausible that [Iraq’s] oil money went to terrorism financing.”
To some conservatives, it suddenly looked like the long-sought “smoking gun” linking Saddam to international terrorism might finally have surfaced. Saddam’s secret list allowed intelligence analysts to establish a connection between the Iraqi dictator and specific companies, such as Delta Oil, a Saudi oil company that supported the Taliban during the time Osama bin Laden was active in Afghanistan. But Pakistan, a nominal U.S. ally, had provided similar support to the Taliban. Not to speak of Congress itself, which, while it did not support the Taliban per se, was, thanks to the spectacular yet covert efforts of Congressman Charlie Wilson, the primary underwriter of weapons flowing into Afghanistan up to 1989.
Other companies that traded under the UN relief program were linked to Al Taqwa, a cluster of financial entities spanning the globe, from the Bahamas to Italy, and controlled by members of the Muslim Brotherhood, which the United States and even the UN had placed on the terrorism watch list. Ayman al-Zawahiri, Osama bin Laden’s number two, was an early member of the organization, which essentially pioneered modern Islamist terrorism.
Some columnists who had supported the war similarly decided this was the long-sought “smoking gun” linking Saddam to 9/11. But it was a tenuous link, and the public didn’t really bite. The links that reporters had established between companies doing business under the UN program and Al Qaeda did not prove that actual Oil-for-Food money had landed in bin Laden’s hands. Short of the name Osama bin Laden appearing directly on the list, the Oil-for-Food program could not legitimately be linked to the 9/11 attacks.
This did not mean Saddam did not use the UN program to support other terrorist organizations more directly. Right there on the list of corrupt purchasers was the Popular Front for the Liberation of Palestine. (PFLP should not be confused with the Palestine Liberation Organization, or PLO, formerly led by Yasser Arafat and now by Mahmoud Abbas, who has abandoned terrorism and recognized the State of Israel, and is actively trying to achieve peace.) The PFLP is a Syria-based terrorist organization that has claimed responsibility for suicide bombings in Israel. Usually, it acts when Israel and the PLO are getting closer to a deal, and it often succeeds in derailing all progress made with a spectacularly bloody attack against civilian targets. There on the list, in black and white, was proof that Saddam had used the humanitarian program to support an international terrorist organization.
I felt nauseous. Upon learning this news, I expected a statement to come out from the UN, a pledge finally to investigate this new evidence and get to the bottom of it. But nothing came.
So I continued my own investigation, using all the information I could get my hands on. It soon became clear that the UN would be too embarrassed to shed light on some of the other names on the list as well, as they had been intimately linked with UN activities for years.
One such person was France’s former ambassador to the United Nations, Jean-Bernard Mérimée. Ambassador Mérimée had sat on the UN Security Council when the Oil-for-Food scheme was first negotiated, at times presiding on the UN Security Council. One year after he retired from the French Ministry of Foreign Affairs, in 1998, he was appointed by Kofi Annan to serve as his special adviser on European affairs. His tenure in that position was extended until February 14, 2002, and he continued to work for Annan right up to the 2003 Iraq War. He was a known advocate within Annan’s team of advisers for lifting the sanctions. Even as he was working in Annan’s inner circle, he was profiting from Saddam’s bribes.
Tariq Aziz would later confirm from prison that Mérimée had made a request for an oil allocation after he retired as France’s ambassador to the UN. Mérimée was included for the first time in the list in a table dated August 4, 2002. He would ultimately receive oil allocations totaling approximately six million barrels. While still in the position of special adviser, Mérimée arranged to resell two million barrels of oil for a net profit of $165,725. Nice little commission.
Another key French official was Charles Pasqua, the former minister of the interior, who received eleven million barrels of oil from the government of Iraq. According to Iraqi officials and records, the oil allocations were handled on Pasqua’s behalf by his diplomatic adviser, Bernard Guillet. According to Guillet, Tariq Aziz conveyed through him an offer of underpriced Iraqi crude to Pasqua to thank him for his “support for Iraq.” The oil allocated to Pasqua was resold to Genmar Resources GMBH, a company based in Switzerland. The resale was handled by Guillet, who received at least $234,000 in cash payments as commission. His accounting of the distribution of that money was rather vague.
Pasqua had met with Aziz twice, in 1993 and in 1995, and he also facilitated a visit to France for Aziz at a time when the two countries had no official diplomatic relations. In addition, Pasqua’s diplomatic adviser traveled to Baghdad on two more occasions, including in June 1999, when an Iraqi Oil Ministry official wrote a memo certifying to the Iraqi leadership that Guillet was indeed there to represent Pasqua and was authorized to handle his eleven-million-barrel oil allocation for him. Again, Aziz told Guillet that “the leadership [i.e., Saddam Hussein] would like to thank Mr. Pasqua for what he did for Iraq.” Guillet would later tell investigators he was worried that a man of Pasqua’s stature might not be able to take in this kind of bribe. But Aziz must have said something reassuring, because Guillet then went straight to the Oil Ministry to discuss the details of the Iraqi offer.
Upon returning to France, Guillet said he provided Pasqua with an oral briefing, during which he told him about Aziz’s generous offer. According to Guillet, Pasqua exclaimed, “Je serai le roi du pétrole!” (“I’ll be the king of oil!”).
Guillet explained that this was meant as a joke and that Pasqua then added, “I hope you did not accept this offer.”
Pasqua, who by then was a French member of parliament, denied ever shouting that he’d be the king of oil, and said he never received a briefing from Guillet as he returned from Iraq and never heard about Aziz’s offer. But documents prove that the firm Genmar did purchase Iraqi oil that was allocated to Pasqua. And an internal memo from the executive director of Iraq’s oil marketing organization to Iraq’s minister of oil specified that “the Swiss company Genmar is confirmed as the company nominated by Charles Pasqua to lift” (meaning, pick up) the eleven million barrels of oil from the Iraqi port. And a third man, Elias Firzli—a consultant for Total, a large French oil conglomerate closely linked to the French government—confirmed to investigators that he helped Guillet (who had never traded oil before in his life) resell the underpriced Iraqi crude to Genmar. In return for his help, Firzli would collect the profits from the oil sale and pay Guillet a commission. Guillet traveled to Switzerland on eight occasions to collect the cash from Firzli’s account there. This lucrative business eventually yielded Guillet a total profit of $1,111,874—money that should have gone to Iraq’s most needy.
Investigators left open the possibility that Guillet acted on his own, using Pasqua’s name to make money behind his back. Whether it was Pasqua or his diplomatic adviser who in fact became the “king of oil” would be investigated by a French anticorruption judge. In April 2005, Guillet was arrested in his home and questioned by a French magistrate. The affair would hang over Pasqua for years to come as court proceedings dragged on. As with all the members of Saddam’s secret list, no final conclusions can be drawn about their guilt outside of a court of law. Even as he claimed his own innocence, Pasqua speculated that it was quite likely that other French officials had taken part in the illicit scheme.
Russia’s parliament was well oiled as well (as previously mentioned), with Vladimir Putin’s oil minister distributing underpriced oil allocations to the rest of Russia’s political parties and favored oligarchs directly. Just as Saddam had used the program to strengthen his hold on power, Putin had used it to solidify his control over the Russian parliament and prepare his post-presidential power shift to the post of prime minister. Of course, the information contained in Saddam’s list would take time to confirm. In the case of Russia, where the justice system was not free to do its job, it would take until 2008 to find a firsthand witness to corroborate key information.
In January 2008, a former Russian top spy confirmed that he personally set up a network of agents who helped the Russian government steal nearly $500 million from the United Nations’ Oil-for-Food program in Iraq before the fall of Saddam Hussein. Sergei Tretyakov, who defected to the United States in 2000 as a double agent, revealed in a book that he oversaw an operation that helped Saddam’s regime manipulate the price of Iraqi oil and allow Russia to skim profits. Tretyakov, a former deputy head of intelligence at Russia’s UN mission from 1995 to 2000, revealed that he recruited a senior Russian official in the Oil-for-Food program. Though he speaks of the person in code name, I recognized the description of our Russian “oil overseer”—one of those we used to refer to as Double O’s.
It was interesting to find out what kind of work our former colleague actually did all day long. He basically helped “fix” Iraq’s oil prices in a way that facilitated fraud. And to think I suspected him of merely picking his nose all day long.
As the governments and diplomatic establishments of Britain, France, and Russia, three key members of the Security Council, had now been implicated, I wondered if they would retaliate with information involving wrongdoing by the United States.
Once again, Saddam’s secret list provided ample ammunition for competing intelligence services to sling mud at one another. Judging from the vigor with which the U.S. Senate engaged in the investigative process, I found it interesting that the White House seemed to be taking a step back from the whole scandal. Why the sudden silence from the Bush administration? As both houses of Congress and think tanks like the Heritage Foundation and the American Enterprise Institute (where President Bush had made his “vision” speech about a new Iraq and a new Middle East) were banging on about the scandal, how could the White House stay aloof?
It turned out that U.S. firms, some of which had strong White House connections, had been in on the illegal and deeply immoral feeding frenzy as well. This, despite the fact that the Iraqi government followed an explicit policy of favoring companies and individuals based in France, Russia, and the Middle East as recipients of its underpriced oil bribes.
To circumvent this policy, some British and American oil-trading companies attempted to disguise themselves as French to fool the Iraqi regime. In October 1998, an official in the French government’s Sanctions Department—that is, the arm of the French government that was supposed to enforce the sanctions on Iraq rather than break them—wrote to an Iraqi official in Paris about his own “concerns, and his government’s concerns… regarding the increase in British and American companies who exploit the decision of the Iraqi leadership to provide priority to French companies, by signing contracts with Iraq through their offices in France.”
The French official referred to these as “hoax” companies. An interesting word choice given the general setup France itself was involved in. Nonetheless, after being notified of the official French complaint in November 1998, Iraqi Vice President Taha Yassin Ramadan wrote a letter titled “Dealing with French Companies.” In his letter, Ramadan made it clear to all ministries that Iraq needed to prevent American and British companies from exploiting Iraq’s preferential treatment of French companies. Clearly, they didn’t like being conned at their own game. Texans with French berets on their heads would no longer be tolerated.
On one occasion, in order to obtain more oil, a beneficiary named on the list—the French diplomat Serge Boidevaix—emphasized to Iraqi officials a position taken by the French government that was supportive of Iraq at the UN, thereby going on the record to establish a clear link between France’s voting record at the United Nations and Saddam’s preferential oil sales policy.
“We were happy to see the decision of the Security Council to increase the total amount for exports to $8.3 billion,” wrote Boidevaix in a letter to the Iraqi government, “and as you may know, on the French side we proposed an increase without limits or restrictions. As I mentioned in my last letter, we would be grateful for an increase to our [read: my own] current allocation of 5 million barrels, and could lift at Basra [port] anytime in October or November if you had additional volumes to allocate.”
French officials would later deny that their policy was guided by economic interests. France had acted to “uphold international law,” explained Dominique de Villepin, even as French diplomats were being investigated for breaking international law and had themselves gone on record linking their country’s UN policy to their thirst for more Iraqi oil. The most respected French newspaper, Le Monde, eventually published an editorial that openly questioned France’s claim to have acted purely in the interest of international law, given the undeniable profits made by its diplomatic and political elites.
At least France’s justice system, and its press, saved the country’s honor by pursuing wrongdoers. The same could be said for the United States. But the mere fact that Texas oil companies had tried to disguise themselves as French was not the most embarrassing part for the Bush administration. Two stories in particular had the White House concerned. The first was the fact that Chevron had been one of the U.S. companies buying Iraqi oil and allowing for kickbacks of more than $20 million to find their way back into Saddam’s pocket. As it turned out, Condoleezza Rice was a member of Chevron’s board at the time. Specifically, she led Chevron’s public policy committee, which oversaw areas of potential political concern for the company. In 2007 Chevron was brought to court and forced to settle for a large fine after admitting it “should have known” in 2000 that kickbacks would be going to Saddam.
Correction: it knew. And the woman who would soon be named secretary of state after serving on the board’s policy committee was probably aware of this dirty business as well.
The other awkward “link” that had the White House concerned was a tad more complex. It started with a rather banal crooked deal but ended up causing possible embarrassment for Vice President Dick Cheney, because it involved a client previously represented by one of his aides, I. Lewis “Scooter” Libby.
Here’s how that twisted entanglement of interests came into existence. In 1998, after several unsuccessful attempts to participate in the UN Oil-for-Food program by trading pharmaceuticals and cosmetic goods, a French businessman named Claude Kaspereit, the son of a French parliamentarian, decided to get into the oil business and established a company called EOTC. The question was: how could he get an underpriced oil allocation from the Iraqi government? Word of mouth had it that one had to be recognized as one of Saddam’s little helpers in order to gain entry to the den of thieves.
Kaspereit found a rather creative solution. In June 2000 he arranged to charter a flight to Iraq, without UN authorization and in violation of the embargo, to generate publicity against the sanctions. His plane included a number of anti-sanctions activists, including, bizarrely, Jany Le Pen, the wife of the notoriously racist and Arab immigrant–bashing French politician Jean-Marie Le Pen, who came in second in France’s 2002 presidential election. Jany Le Pen had started a “nonprofit” organization called SOS Enfants Iraq (SOS Iraqi Children).
This embargo-breaking visit attracted the attention of Saddam Hussein, who sent a delegation out to the airport to receive them. Kaspereit later sent letters to a number of senior Iraqi officials, including Tariq Aziz, to thank them for their warm reception. He requested that Aziz and Amer Rashid, Iraq’s oil minister, convey directly to Saddam the group’s solidarity with the Iraqi people and their “support for Saddam Hussein’s political action.”
Such shameless statements had a way of turning out profits. Following Kaspereit’s publicized flight to Baghdad, the government of Iraq began granting him oil allocations, for a total of 9.5 million barrels. The problem was, Kaspereit’s EOTC was a shell company that had no means of financing such large purchases of crude oil.
Enter Marc Rich and Company. Remember Marc Rich? The Jewish-American multimillionaire was convicted in U.S. federal court of tax evasion, racketeering, and other charges related to his oil deals with Iran during the U.S. embargo on that country. Rich had fled to Switzerland, where he received asylum, but his ex-wife, Denise Rich, continued to live in the United States, where she was an active supporter of the Democratic Party; she contributed money to Bill Clinton’s presidential library fund and to Hillary Clinton’s 2000 Senate campaign. On top of giving $450,000 to the Clinton Library, Denise Rich gave upwards of $1 million to the Democratic Party and $109,000 to Hillary Clinton’s 2000 Senate campaign.
The Riches’ generosity paid off when Marc made the list of more than 100 people President Clinton pardoned just before leaving office in January 2001. Rich’s pardon prompted a public outcry and Congressional investigations into whether it had been granted in return for Denise Rich’s political contributions. Clinton regretted his decision but tried to defend it partially by saying that Marc Rich had received a lot of letters of support from Jewish leaders and had been an active supporter of Israel.
Well, he was certainly also a supporter of Iran in the 1980s, and he had no scruples about making a profit by trading with Saddam Hussein under the UN Oil-for-Food program.
Still, Rich had to act discreetly. Following the media frenzy that followed his pardon, he could not be seen to help finance purchases of underpriced Iraqi crude oil by Saddam’s political friends, especially not people like Kaspereit, who had gone on paper supporting Saddam’s “political action.” It wouldn’t look good for Marc Rich to support the political action of a funder of Palestinian terrorism while he was cultivating an image as a strong supporter of Israel.… In any case, “Moses is Moses, business is business,” goes the saying. Clearly, Rich had not gotten rich by letting scruples keep him up at night. He was quite prepared to finance Kaspereit’s deal, as long as his name was not revealed to the United Nations. So, in his instructions to the French bank BNP, which held the UN’s Oil-for-Food account, Rich specified that the letters of credit for the purchase of Iraqi crude should not, under any circumstance, be under the name of his own company (even though he was underwriting the deal); instead, it was attributed directly to Kaspereit’s company, EOTC.
This meant that the French bank had to lie to the UN about the real source of funding for the oil purchase, thereby breaching the terms of its contract with the world organization, which obliged it to disclose the identity of buyers. The request even violated the BNP’s internal rules. But the BNP had no problem with Rich’s request.
The oil would go to a “do-gooder.” Kaspereit’s self-anointed title was chairman of the Society for Support of Iraqi Children. Thanks to his help, Iraq’s children saw $1.83 million that might have gone to humanitarian aid vanish into the pockets of Saddam Hussein, via a Jordanian bank account. It is perhaps ironic that it also made Rich, a pro-Israel financier, and Kaspereit richer at these same children’s expense.
Given Clinton’s involvement in pardoning, I began to wonder why the Bush administration didn’t jump on this opportunity to discredit the Clintons and the Democrats. Claudia Rosett, the first and best-informed investigative reporter working the Oil-for-Food scandal, had revealed the full extent of the link and given the White House a clear opening to score points in the run-up to the 2004 presidential election. But soon it became clear that the story involving Rich could not be exploited for political gain against the Democrats without boomeranging on the White House itself. Rich’s former lawyer in the United States had been none other than Scooter Libby—Dick Cheney’s chief of staff—who was by then being investigated for having leaked the name of CIA official Valerie Plame, whose husband had criticized the administration’s WMD claims before the war.
The more Saddam’s secret list was studied, the more power brokers from all sides of the political spectrum feared becoming entangled. And for good reason. The threads that spread from Saddam’s secret list seemed endless.
Soon it was revealed that during the sanctions years, Cheney, the former CEO of Halliburton, America’s supersized oil and war-effort contractor, had also been involved with Iraq’s oil industry. Halliburton wasn’t named on the Al-Mada list. But as reporters dug deeper, they realized there had already been news coverage of the company’s dealings with Iraq under the Oil-for-Food program. A 2001 Washington Post article by Colum Lynch cited confidential UN records and oil-industry executives saying Halliburton held stakes in two firms that signed contracts for more than $73 million to provide Iraq with oil-industry spare parts. Employees at Halliburton confirmed to Lynch that they were “certain Cheney knew about these Iraqi contracts.”
In 1998 Halliburton bought Dresser Industries, which exported equipment to Iraq through French affiliates from 1997 to 2000. There was nothing illegal about trading with Iraq under the Oil-for-Food program. But had the contracts included the usual kickbacks for Saddam? Or had Halliburton been holier than the 2,400 companies found guilty of participating in the illegal kickback scheme?
To be sure, the vice president was not interested in finding out the answer. Such kickbacks are routine, and it is doubtful that Cheney had any direct involvement in such a minor transaction. But increasingly, the Oil-for-Food debacle became less and less popular with the Bush administration. The U.S. coalition raided Ahmad Chalabi’s house in Baghdad and made off with records that he claimed were related to his Oil-for-Food investigation. Paul Bremer, the U.S. proconsul in Baghdad, also stopped funding for the KPMG investigation.
But it was too late. Too many reporters, Congressmen, and justice officials around the world had started dipping their noses into the affair. The lid was off—well, almost.
All the key documents that could confirm the information in the Al-Mada list and help trace those who had violated international law were locked up at the United Nations, about to be sent off to a humongous storage facility in Queens. The U.S. government, which should have had copies of all Iraqi contracts that went through the UN, was claiming to journalists that these had not been kept on file at either the State or Defense department. This, to me, sounded inconceivable. We had held meetings at the UN with the D.C.-based government analysts who reviewed Iraq’s contracts. Did these people throw the contracts in the trash after making a decision to block or clear them for export? Not likely. The whole point, from the Pentagon’s point of view, was to have specific records of everything Saddam purchased, in particular for those items that could potentially have “dual use” as weapons components.
The whole point of Security Council oversight was to make these contracts available to members of the Council. How could the U.S. government claim it no longer had these documents?
It soon became clear that neither the United States nor Britain nor France nor Russia nor China would open up their files. The United Nations was the official repository for all the records that might confirm the veracity of Saddam’s secret list and allow investigators to check the amount of money that had been stolen from Iraq’s most vulnerable civilians by the very same people and governments that had claimed to be out to help them.
I felt I had to do something. In fact, I felt it was long overdue for me to take decisive action. I had failed to persuade the bureaucracy to follow up on clues to wrongdoing internally, and my multiple attempts to spark an investigation even after I had left were ignored. I had resigned, and insofar as I had decided not to rejoin the UN in the aftermath of the Baghdad bombing, I could now afford to break my rule about never burning bridges. I wouldn’t do it for pleasure. In fact, it would be a serious risk for me to step into what looked like a potential political bloodbath. For several days, I hesitated. Each day, new allegations would make headlines. The media was clamoring for the UN to open its records, but with no member of the Security Council wishing for it, the UN could claim confidentiality for another fifty years. What could I possibly do to change that?
On February 29, 2004, I saw an opportunity to act. I came across an article by Susan Sachs in the New York Times, which quoted Ali Allawi, a former World Bank official now working as Iraqi trade minister, recalling how part of the corruption worked.
“You had cartels that were willing to pay kickbacks but would also bid up the price of goods,” Allawi said. “You had rings involved in supplying shoddy goods. You had a system of payoffs to the bourgeoisie and royalty of nearby countries. Everybody was feeding off the carcass of what was Iraq.”
I thought his description was exactly right. And then, a few paragraphs later, I found the opening I needed to intervene effectively in the unfolding scandal.
According to Sachs, “United Nations overseers say they were unaware of the systematic skimming of oil-for-food revenues.… The director of the Office of Iraq Programs, Benon V. Sevan [Pasha] declined to be interviewed about the oil-for-food program. In written responses to questions sent by e-mail, his office said he learned of the 10 percent kickback scheme from the occupation authority only after the end of major combat operations.”
Wrong answer!
We had ample proof that kickbacks were being extorted. Sometimes they were even put into the contracts as blatantly unjustified “surcharges.” The practice was clearly illegal. But Pasha refused to make a fuss about them. At the time I blamed his failure to react on mere incompetence. I knew he wanted the program to stay away from the spotlight, to “fly under the radar,” and that he thought more goods would get into the country if we stayed away from controversy. But now that the operation was over and the truth was coming out in Iraq, I felt certain that the UN would do better to admit what had happened than to try to cover it up by lying to the New York Times. So I banged out a furious op-ed.
The cat is out of the bag. Documents recently discovered by the Coalition Provisional Authority, and corroborated by interviews with former Iraqi officials, confirm that Saddam Hussein extorted cash kickbacks from companies trading with Iraq under the U.N. Oil-for-Food Program. The most damning document is a memo dated Aug. 3, 2000, by Iraqi Vice President Taha Yassin Ramadan (now in U.S. custody) instructing his ministers to tell their suppliers to inflate their prices by the “biggest percentage possible.” As a former employee of the program, I cannot say I was surprised by this news. What surprised me was the U.N.’s response to it.
U.N. officials claim they were unaware of such fraudulent practices by the Iraqi regime until after the Iraq War. They would be better off telling the truth. By winter 2000, serious concerns had been raised about the use of front companies by the regime. We had heard allegations of a 10% kickback scheme, and were exceptionally well positioned to investigate the matter. Why did the U.N. fail to investigate?
U.N. officials claim it was not their responsibility to hold the Iraqi regime accountable. False again. The whole point of putting the U.N. in charge of overseeing Iraq’s trade was to ensure that the country’s oil revenues were used exclusively to help its ailing population, not to fill Saddam’s personal coffers. And according to Security Council resolutions, the U.N. had a legal responsibility to report on any issue affecting the “adequacy, equitability and effectiveness” of the Oil-for-Food Program. Saddam’s kickbacks affected all three aspects. There were many instances in the time I was there when the U.N. preferred to look the other way rather than address obvious signs of what was going wrong.
Take the medical sector. The regime’s decision to use kickback-friendly front companies to purchase drugs meant that hospitals often received medicines that were nearly expired or otherwise damaged from unscrupulous suppliers. Iraqi doctors would complain about the quality of the drug supply to our U.N. observers. Kurdish leaders raised similar concerns directly with high-level U.N. officials. We knew exactly how much the Iraqi government paid for any contract, and we had the authority to inspect each shipment when it crossed into Iraq. We had all the elements necessary to piece together a clear picture of what was going on and alert the Security Council to the fact that Saddam and his cronies were buying poor quality products at inflated prices and cashing in the difference. While the U.N. likes to claim this was the most audited program in its history, I never once read an audit report that raised questions about these practices—even though they were an open secret to anyone involved in the program.…
As long as Saddam was in control, it was perhaps inevitable that he would have profited from any attempt to feed his population. But the least the U.N. could have done was denounce his practices.…
The U.N. should not have been in the business of covering up for Saddam; and it should not now stonewall efforts to have an independent investigation look into which companies broke the law in their dealings with the regime and who profited from schemes to get around the restrictions set out under Oil-for-Food. If the U.N. fails to become a partner in the investigative process, it may end up as co-defendant in a scandal that has yet to reach its full-blown proportion.
I sent the piece out to several editors. It was picked up by the Wall Street Journal and published on March 8, 2004. CNN, Fox News, ABC News, and the BBC packed my voicemail with messages asking me to come on the air. I declined most requests for interviews and spoke only on background to reporters I trusted, because the scandal had become intertwined with the election cycle in Washington. Republicans sought to use it to discredit the United Nations (which had opposed the war), and Democrats initially sought to dismiss the scandal as an attempt by Republicans to bring attention away from the failure to find WMDs in Iraq. Ultimately, the truth of this story would not reflect well on either party.
A few days after my piece was published, I received a panicked call from my former Swedish director, who, though he had also left the UN, was now helping Kofi Annan manage the crisis on a pro bono basis. Annan’s major problem in dealing with the unfolding scandal was that he simply didn’t have enough helpers to work the spin cycle. His “war room” was filled with bureaucrats who were coming up with press releases that made sense only to insiders and had no impact on the wider public debate that was starting to take shape. The only two people who could put together compelling arguments in Annan’s defense were Shashi Tharoor, the head of public information, and Edward Mortimer, Annan’s chief speechwriter. But these people hadn’t been intimately involved with the Oil-for-Food program. They were playing catch-up with the facts. And two people hammering out replies to hundreds of articles and TV reports, not to speak of radio and Internet stories, hardly put a dent in the growing public perception of a massive cover-up. It would take Annan nine months to bring an additional qualified PR professional on board, in the person of Marc Malloch Brown. In the meantime, as the scandal edged toward a climax, public perception of the UN plummeted. Less than half of the U.S. public told pollsters they had a favorable view of the United Nations. This was down from 77 percent favorable opinions four years earlier.
Things got significantly worse when Annan came under direct attack for letting the UN award a major contract under the Oil-for-Food program to a company that employed his son, Kojo Annan. I remembered receiving press queries about the incident back in 1998. The company in question was called Cotecna, and it was awarded a contract worth $4.87 million to inspect relief supplies going into Iraq. The company employed Kojo Annan as a consultant. The kid was twenty-four years old at the time, and Cotecna, which works in many countries that need help keeping track of their customs, said Kojo was working in the company’s Africa division. At the time of the initial press queries, I realized there was the appearance of a conflict of interest. But given the thousands of companies that contracted with the UN under the Oil-for-Food scandal, I didn’t think it would be fair, in principle, for Kojo to be barred from working for all of them. The key question was whether Annan had pressed the UN’s procurement division to give the contract to Cotecna, and I just didn’t think of Kofi Annan as that type of a guy.
Well, there was a lot more to this story than I initially realized, but suffice it to say that my call for an independent investigation came at a very bad time for Annan and his team. Christer, one of my former directors, was asked to try to rein me in to avoid further damage. I was walking in noisy Midtown when I answered his call.
“What the hell are you doing, Michael?”
“What do you mean?”
“Your article was very damaging!”
“I’m not out to damage anybody. I advised an investigation for months! Nobody listened, so now I made the advice public. I figured it was the only way to get anyone’s attention over there.” I heard a sigh on the other end of the line, so I added, “If anything I said was untrue, let the UN respond publicly.”
“But Michael, this is very embarrassing for the secretary general. He’s just finished dealing with the investigation into the bombing of UN headquarters. It’s difficult for him to order another investigation right now. And all that stuff with Kojo. He’s being dragged through the mud!”
I hadn’t mentioned Kojo and Cotecna in my piece. But if anything, an investigation would help the secretary general establish his innocence.
“I think an investigation is Annan’s only way out,” I said. “If he still thinks he has a choice, then he is being very, very badly advised.”
“But why did you have to go public? Don’t you see it helps those who hate the UN?”
Ah, yes. The famous “Conspiracy to Undermine the United Nations.” The way I saw it, the UN was doing a fine job of undermining itself all on its own.
“Either the UN is transparent or it’s not. Either it’s accountable or it’s not. You know as well as I do that we tried to raise compliance issues internally many times. It never went anywhere, and now there’s a scandal, and the UN is lying to the New York Times. I won’t be part of a cover-up!”
“There is no cover-up, Michael.…”
“Yes, there is.… Either the UN opens up its files, or it’s a cover-up.”
“Well,” said Christer, “Kofi Annan asked me to tell you that he would have much preferred if you had sent him a memo about this.…”
“A memo?” I thought I heard him wrong. I was no longer working for the UN. And Rehan Mullick, the last person who had written a memo that rocked the boat, had been ignored, then fired.
“Yes, a memo.…”
“I’m sorry,” I said. “I’m no longer in the business of writing memos.”
The conversation ended on a cold note. I suddenly felt very alone. Christer and I had been very good friends. How many friends might I lose in this process? How many enemies would I make?
Soon after I spoke to Christer, I got a call from his former secretary. She told me people had been asking for my personnel file.
“They’re going to attack you, Michael.” She sounded panicked.
“What kind of attack are they planning?” I asked. “Do I need to wear a helmet?”
She laughed but soon became serious again.
“Aren’t you worried?” she asked.
Actually, I felt like I had just gotten a big load off my chest. A load of lies that had been building up for years. Until recently, I had managed to convince myself that our operation had actually been successful overall and that the compromises we had made were necessary evils. Even if that were true, the time had come to admit everything we knew. I was glad I was no longer working for an organization that valued its employees most dearly for their ability to hide their eyes, cover their ears, and shut their mouths in the face of gross incompetence and corruption.
“Just remember,” said my former colleague, “not everyone has the option of doing what you are doing. Most people can’t afford to leave this place. They have nowhere else to go.”
She was right. And I was grateful for the reminder. Most UN employees had come to the organization filled with passion for making a positive difference in the world, just like I had. I realized some of them might feel betrayed by my criticism of the organization, just like I had felt betrayed when Denis Halliday and Hans von Sponeck, our former humanitarian coordinators, had left the organization to speak their own minds. In an odd twist of fate, I had ended up following the same path as the people I had denounced most vehemently in the early days of my UN career.
I suppose each of us hotheads could find justification in the words of Mark Twain: “Loyalty to petrified opinion never yet broke a chain or freed a human soul.”