HELMSLEY HOTEL, NEW YORK CITY, AUGUST 8, 2005
It was a chaotic media circus. Some thirty camera crews and more than a hundred journalists stepping over one another, arguing over seating arrangements and microphone spots, in a conference room at the Helmsley Hotel, on Forty-Second Street, a few blocks from the United Nations. Paul Volcker had chosen a site outside the UN for his press conference to emphasize his independence from the organization.
Volcker was a giant in reputation and stature. When Kofi Annan called him, he took a quick glance at the Oil-for-Food fiasco and asked the secretary general what part of that mess he was supposed to investigate. Annan was eager to have the allegations against his own person cleared as a matter of priority, and he very much hoped the bribery accusation against Pasha was baseless. But the big question was how the UN had allowed Saddam Hussein to get away with a multibillion-dollar heist at a time when that money was meant to alleviate the “urgent humanitarian needs of the Iraqi people.”
Volcker quickly figured out the political implications of the probe. In his previous investigation of the Swiss banking scandal, he had shown no hesitation about accusing the Vatican itself of financial fraud. He was not afraid to dive into this challenge. But he understood that he would need a clear mandate, and legal authority, before proceeding.
He told Annan he would do it, but only if he was appointed by an official Security Council resolution.
The nerve.… It’s not anybody who can just walk into the UN and demand a Security Council resolution before getting to work.
This put the UN Security Council in somewhat of a bind. All members understood that if a man of Volcker’s caliber stuck his nose into the secret proceedings of their sanctions committee, where all the wheeling and dealing had occurred, he’d find evidence that would make all of them look very bad.
Russia, the country that did the most business with Saddam, denounced the effort publicly. “This is the first time that the American media is imposing such a thing on the UN,” said the Russian ambassador.
Well, yes, it was. And now members of the Security Council had to contend with Volcker himself. The new sheriff in town had the diplomats backed into a corner. If they turned down his request for a resolution, it would be the PR equivalent of O.J. Simpson fleeing justice in his white Bronco.
France calculated that it had better get behind this probe. French diplomats were in the process of doing damage control after Foreign Minister Dominique de Villepin had sparked a wave of anti-French sentiment in the United States in the lead-up to the war. France knew that if it refused to back the investigation, it would be in for another public flogging in the U.S. media. France’s public enthusiasm for the probe was almost comical, in that it was a 180-degree reversal from its long-standing efforts to loosen UN oversight of the Oil-for-Food program. But it was also a critical, defining decision, as it left Russia cornered. Finally, in April 2004, Russia caved under pressure from the media. Resolution 1538 was adopted unanimously. However, as was tradition when it came to Iraq issues, it would not be complied with unanimously.
After getting his way in the Security Council, Volcker gave its members an ominous warning. He said he wanted to make sure they understood what they were “getting into” here. He had ambassadors from the most powerful nations on earth looking down at their feet.
Thirty million dollars and sixty investigators. Those were Volcker’s next demands. Where would the money come from? As usual, Iraqis were asked to foot the bill. Actually, they weren’t even asked; they were forced. There was money left over from the Oil-for-Food accounts. Without waiting for the Iraqis to consent, the Security Council allocated this money to the investigation. None of the countries on the Council would dip into their own pocket for funding.
The Iraqis had paid the UN to oversee the Oil-for-Food program, and now they were going to pay the UN to investigate itself for having screwed it up. Some Iraqi politicians were outraged by this development. But they had no voice, no seat at the table.
It took Volcker a long time to get his shop up and running. After experiencing firsthand the frustrations of dealing with the UN, he assembled a team of people from outside the organization and went to work.
The day of the press conference, he was scheduled to brief the press on his initial findings. By then, I had made a transition to journalism. I attended the briefing as a freelancer.
I should have arrived earlier. There was no place to sit. Among the early birds were familiar faces—members of the UN press corps and some journalists who had made it to New York from around the world especially for the occasion, from countries where indictments had started to fly. In Australia, Prime Minister John Howard had come under investigation for the role the Australian Wheat Board—a governmental body—had played in sending kickbacks to Saddam. Germans were interested in the fate of companies like Siemens and Mercedes-Benz, which had clearly also gone along with the kickback scheme. Swedish carmaker Volvo had been cited as well, as had Danish water and sanitation companies, Jordanian pharmaceutical traders, South African construction firms… the scheme seemed to have reached every corner of the globe.
I trusted Paul Volcker to get to the bottom of this affair. Others, however, did not.
The independent panel Volcker headed was seen by many conservatives to be too soft on Annan. Lawmakers in Congress had set up their own investigations to bring extra pressure to bear on the secretary general. Several Republican lawmakers had already called for Annan’s resignation. In addition, investigations had been launched by the FBI, the CIA, the District Attorney’s offices in New York and Texas, as well as a string of international judges—a total of twelve were up and running, all competing to scoop one another as reporters were racing for the ultimate prize.
Calls for Annan to step down were getting louder with every one of Volcker’s interim reports. But the UN secretary general was determined to hang on. When CNN’s Richard Roth asked him point-blank if the time had come for him to resign, Annan replied, “Hell no!”
Of all the corruption charges that had been brought against the United Nations, the ones against Annan were the most speculative. He had neither taken a bribe from Saddam nor given him a kickback, which made him less guilty than more than 2,300 companies worldwide and hundreds of international power brokers.
Yes, he had mismanaged—or, rather, refused to get personally involved in—the Oil-for-Food operation, despite the fact that it was the largest financial scheme the organization was asked to manage under his tenure.
As the UN’s official CEO, he had presided over the most corrupt enterprise in the organization’s history without once moving a finger to set it right before it was too late. And the political forces that the secretary general had enraged by calling the invasion of Iraq “illegal” were not about to let him off the hook. The presidential campaign was in full swing, and the Bush administration was subject to intense public scrutiny. The absence of significant stockpiles of WMDs in Iraq, the Abu Ghraib debacle, the Scooter Libby investigation into the outing of CIA agent Valerie Plame—all were dogging the White House. The scandal at the UN provided a welcome reprieve.
The problem with the Oil-for-Food affair, from Annan’s point of view, was that as revelations gradually trickled out over time, they would not necessarily grab the front page. But they would appear frequently enough to stay in the public eye and require mainstream news editors to assign reporters to the “UN scandal beat” for extended periods of time. Once journalists started digging into the gutter of the UN’s relationship with Iraq, they came across a wealth of material, including an old story involving a possible conflict of interest by Annan himself. In 1998 the London Telegraph had reported that the UN had wrongly awarded a contract to Cotecna, the company that employed Kofi Annan’s twenty-four-year-old son Kojo. The company was in charge of certifying the arrival of humanitarian supplies at the Iraqi border. The story had been leaked to the Telegraph by Lloyd’s Register of London, which lost the bidding war to Cotecna.
Had Kofi Annan intervened in favor of the company that employed his son? It was a legitimate question to ask. Kojo had indeed been roaming around the UN’s procurement department (where secret bids are accepted on all UN contracts), and there were rumors describing him as something of a “player” who liked to use his father’s name to get ahead. But that in itself is not a crime, and ultimately, no solid proof emerged that Kofi Annan had tried to influence the procurement process in favor of his son. Perhaps some people, including Pasha, helped Cotecna along to gain favor with the secretary general, but that would assume they knew Kojo was employed at Cotecna, which was not a proven fact.
Nonetheless, some of the Volcker Committee investigators believed Annan had lied to them during one of his interviews. Confidential documents from the Volcker Committee were leaked to Congress, then to Fox News. They included a transcript of a conversation between Volcker and Robert Parton, one of his investigators. When the discussion turned to how truthful Kofi Annan had been under questioning, Volcker said, “Well, my general feeling about the report is that if you accuse him of lying, he is gone”—meaning Annan would be forced to resign. “I don’t know if we have the evidence to make that accusation. But we have a lot of unexplained business. The facts will speak for themselves. We can’t conclude he lied. But other people may conclude that.”
Volcker had spoken. But Parton, the investigator who had questioned Annan, saw the situation from a reverse angle: “You start adding up a collection of individual points—maybe none of them is sufficient alone, but when you add them together I don’t believe him on our standard of proof.”
“What is our standard of proof?” asked Volcker, to which Parton replied, “More likely than not.”
Volcker argued that this was not a standard to which the committee agreed. “I am not prepared to hang Kofi Annan on that,” he said. Volcker said he required “reasonably sufficient evidence.”
Following the release of the first report, Kofi Annan made an appearance in the UN press room to announce he had been vindicated. Now that was certainly not true either. But the fact was, the accusation that might have toppled him was not related to the heart of the Oil-for-Food bribery scandal. Annan had not taken a bribe, nor had he put undue pressure on colleagues to approve a contract for the firm that employed his son.
Did Annan receive special treatment from Volcker? Parton believed so. In his testimony behind closed doors to the House panel, Parton argued that “reasonably sufficient evidence” was not a legally accepted term because it was too subjective and that Volcker’s committee had previously agreed to judge each of the other individuals under investigation on the commonly used “more likely than not” standard of proof. After he failed to get his way, Parton resigned from the investigation in protest. (At least someone had the guts to resign in this whole affair.) But ultimately, whether one agrees with Volcker or Parton on the credibility of Kofi Annan’s testimony, both men had to agree they lacked solid proof to reach a definitive conclusion about Annan’s guilt. Conflict of interest there was. But a case for legal prosecution there was not.
Still, the image of Kofi Annan had been thoroughly ruined. The average man in the street thought there was something fishy going on. The New York Post published a cartoon of a Kofi Annan statue (looking ominously like a Saddam Hussein statue) being toppled, about to fall into barrels of oil. The vagaries of his son Kojo provided plenty of mud for the media to sling at Kofi. They portrayed Kojo as a flashy playboy who had tried to get into all sorts of shady business deals. And there was no question that Kojo had lied to investigators about the length of his employment with Cotecna or that he had used his father’s name to get a good deal on a Mercedes-Benz sedan, which he imported to Ghana without paying tax duties.
My answer to journalists who focused on such questions was, “Who cares? This is about what the international community did to the Iraqi people, not about what Kojo did using his father’s name!”
It was quite obvious that the secretary general was learning about Kojo’s screw-ups at the same time as the public did. This, of course, was all the more fun for the press. UN officials were telling journalists, “Don’t blame the father for the sins of the son,” only to see the media exploit the potential for a family feud reality show.
Short of resigning, all Annan could do to salvage what was left of his image was submit to what Volcker called “a good scrubbing” in full view of the public.
The name of the game had changed. The challenge for the secretary general was no longer merely to keep the UN’s member states happy. The challenge was to fight a media war for which the UN was thoroughly unprepared. Until the scandal broke, Annan had applied every one of the cardinal rules that normally kept bureaucrats out of trouble. He had not made it to the top of the UN bureaucracy by taking risks. Annan put a perfect potential scapegoat in charge of the Oil-for-Food program (Pasha) and built an extra layer of protection by delegating all oversight responsibility to his deputy, Louise Fréchette.
As Donald Rumsfeld, the perennial political survivor, once put it, “Move decisions out to the cabinet and agencies. Strengthen them by moving responsibility, authority, and accountability in their direction.” Yet even he submitted his resignation twice to President Bush after the Abu Ghraib fiasco.
Of course, in the case of Kofi Annan, who was he to submit his resignation to? The Security Council, members of which had made millions in illegal revenues in defiance of their own resolutions? Certainly, none of the Security Council’s veto-yielding members were in a position to throw Annan the “first stone.” Annan asked for a vote of confidence in the Security Council for his continued stewardship. The United States abstained. Russia, China, Britain, and France backed him up.
With Annan barely out of the woods, the investigation had turned to the allegations against other UN officials, the most important of which concerned Pasha. Had the head of the UN operation been on Saddam’s payroll?
In my various testimonies—to Congress, the New York District Attorney’s office, the Volcker Committee, and even in some articles I wrote for The New Republic and Salon—I had been protective of Pasha, occasionally insisting that the charges against him were “highly unlikely” and most often concentrating my fire on the UN’s larger systemic flaws. I had gone back and researched the original vision that gave birth to the UN and previous institutions like the League of Nations, and even the Concert of Europe (which followed the Napoleonic wars). I ultimately ended up studying Immanuel Kant’s “Philosophical Sketch” on “Perpetual Peace.” Back in 1795, this Prussian philosopher had outlined a vision for an international institution that might be trusted to perpetuate peace among its members. In Kant’s vision, all members of such an institution would need to be democratic republics in order for it to work reliably as a conduit for the peaceful resolution of conflicts. The United Nations aspired to universalism and aimed to include every state in the world as a member, irrespective of whether a given state could be trusted to play by the rules outlined in its Charter and Declaration of Human Rights. As a result of this widespread lack of accountability in the system, few states, including the democracies, were inclined to respect the institution’s rules when these were not convenient to their interests. In this conclusion I found a core explanation for what had happened.
Now, in a historical first, the UN’s highest officials had become subject to real public scrutiny and accountability. Would Pasha survive this process?
While we waited for Volcker to step up to the microphone, the tension in the packed room rose sharply, as a strange mix of reporters from diverse backgrounds angled for position. A fight broke out between a Korean camera crew and a French sound guy as we were waiting for Volcker to appear.
“Merde alors, quel bordel!” said the Frenchman, replying to what must have been an insult in Korean. And it was, indeed, a bit of a bordel. Well-groomed, UN-accredited, diplomatic correspondents were pitted against loud and pushy paparazzi types. Reporters who might find it bold to ask an ambassador to “please elaborate on the substance” of his discussions were wrestling for position with hacks from the “Hey Jacko! Lose the umbrella!” school of journalism.
Enter the giant.
The room fell silent, except for the camera flashes, as Paul Volcker strode toward the podium. He seemed relaxed, almost aloof to the excitement that permeated the room. He had just wrapped up an investigation of the Enron scandal. That firm had tanked after it suddenly revealed losses of some $600 million. In this case Volcker was not even sure how many billions of dollars had gone missing, but he had discovered enough fraud by Saddam that we could safely add another zero to the Enron figure.
Volcker’s towering presence (six feet eight inches!) made us look like a bunch of Lilliputians. He’d seen audiences like this before. He smiled calmly at us as he adjusted his glasses before lowering his tortoiselike head to read his statement.
“Some principal findings based on evidence presented in the report are…”
I sat on the edge of my seat, as Volcker cleared his throat.
“One: that Mr. Sevan corruptly derived personal pecuniary benefit from the program through cash receipts from the sale of oil allocated by Iraq to Mr. Sevan and bought by African Middle East Petroleum Company Limited. Two: the participants had knowledge that some of the oil was purchased by paying an illegal surcharge to Iraq in violation of United Nations sanctions.…”
As Volcker laid out his case, connecting events I had experienced firsthand with events I could not have imagined, vivid memories flashed to life inside my head.
Volcker spoke too slowly to respond to all the questions that tumbled around in my mind. Copies of the report had been distributed at the press conference, and as I was racing through it, one sentence caught my eye: “During one of his meetings with Oil Minister Rashid, the Executive Director of the Oil-for-Food program asked him for an allocation of oil.”
Wait a minute.… I was there during Pasha’s meetings with the oil minister… and something relevant to the investigation had indeed taken place during one of those meetings, something I had failed to mention to Congress or even to the investigators, for fear that I might have to testify against Pasha in court. The report said Pasha asked for an oil gift from the Iraqis in “one of his meetings.” Well, that’s not exactly how it happened.
Cut to Baghdad, summer of 1998. It was our second visit to Iraq. Pasha had been invited to lunch by the Iraqi minister of oil, Amir Mohammed Rashid, at the Baghdad Hunting Club—a members-only club used by Saddam Hussein to throw parties for the Baathist elite. In later years, it had been one of Uday Hussein’s hangouts; I had read various anecdotes that testified to the kind of festive mood that kid could get into. On one occasion, Uday had apparently barged into a wedding and kidnapped and raped the bride. The groom was left to close down the party by putting a bullet through his own head. A charming little anecdote to give one an appetite for lunch.
The red-carpeted stairway led into a plush dining room, where Rashid treated Pasha, Bo, and me (plus three Iraqi oil technocrats) to a four-course meal. I was surprised by this development, because the last time we had met him, near the northern city of Kirkuk, he had gotten so angry that he all but spat in Pasha’s face. My notes from that meeting stopped suddenly, with these last scribbled words: “Wow—minister royally pissed off!!! Telling us to go back to New York!”
What had prompted Rashid’s outburst had been a suggestion, by Pasha, about how the UN should monitor the oil-industry spare parts that the UN Security Council had recently approved for Iraq.
After the UN raised the ceiling on how much oil Iraq was allowed to export, earlier that year, the Iraqi government had asked for the permission to import more spare parts to maintain its oil industry. The problem was that Iraq had started construction on an oil pipeline to Syria, which everybody knew would be used to export oil illegally for the sole profit of Saddam Hussein. So before the Security Council could agree to the request for oil-industry spare parts, we needed to set up a new “monitoring” system, to make sure the equipment wouldn’t be used to bust the sanctions. This required fielding monitors on location to Iraq’s oilfields. But the oil minister would allow us to position monitors only in Baghdad, where there were no oil facilities. From there, our inspectors would not be in a position to monitor much except their own fingernails. So Pasha had to insist, causing the minister to lash out in anger and call us spies.
Then something strange happened. Pasha had said something about “a friend” who was interested in buying Iraqi oil. He first mentioned his “friend” in a conversation with the Iraqi foreign minister, Mohammed Said al-Sahaf, during a visit to the Foreign Ministry. This question by Pasha had somehow provoked a dramatic change in atmosphere in our relations with the Iraqi government.
“How does it work,” Pasha had asked the foreign minister, right in front of me, “if someone wants to buy Iraqi oil?” It was a good question, though perhaps a strange one coming from the head of the UN Oil-for-Food program. Shouldn’t Pasha know this?
The minister’s eyes creased. “I’m sorry?”
“Well, I have this friend who wants to buy Iraqi oil, and he was asking me how to do it, you know.…”
“Aha.…” Sahaf nodded, adding, after a brief pause, that he would get back to us on the matter.
It was soon thereafter that we received this invitation to lunch from the Iraqi oil minister—a dramatic change in approach by the Iraqis, who had, until then, treated Pasha with glaring contempt. I felt rather uncomfortable at the prospect of sitting down for lunch at the Baghdad Hunting Club. Having coffee with these criminals was part of our job. Having lunch was not.
As we got out of the car, Pasha told me to leave my bag inside. He would not need me to take notes. We were served fancy salads and fish from the Tigris River by a staff of older men dressed in traditional black-and-white bistro attire. Pasha strayed away from official business, commenting on how good the food was. Rashid boasted that all ingredients were local, at which point my stomach said, Oh, really?
Or some such sound. Pasha and Rashid got along brilliantly, as far as I could tell, between my various excursions to the men’s room. Every time I returned, Pasha would grimace at me discreetly, as if berating me for offending our host. Then he would encourage me to eat more, even though it had to be clear to anyone present that I had lost complete control over my digestive process.
Years later, when investigators would grill me about the substance of the discussions that took place at that lunch, I would be hard-pressed to come up with anything useful to them. But now that Volcker was putting the pieces together, I suddenly realized what all these investigators were fishing for—an indication that a deal had been struck between Pasha and Iraq’s oil minister.
In fact, the oral transaction the investigators were looking to corroborate happened right after lunch. We were walking down the red-carpeted staircase with the Iraqi oil minister when Pasha again mentioned his “friend.” He said his “friend” had tried to buy Iraqi oil and had sent a faxed inquiry to the Iraqi government but had not heard back from the ministry.
Rashid turned his head to look at Pasha, then at me, and then said nothing until we stepped out of the building. “What is your… friend’s name?” asked the minister, once outside.
Pasha said something incomprehensible. The man’s name was Fakhry Abdelnour, but with Pasha’s elocution, such a name stood no chance at being communicated.
“Tell your friend to contact us again,” said the oil minister. It was the first time I had seen the man smile.
And that was it, the beginning of another beautiful relationship. Before everyone started hugging, I went back to the car, where I had left my bag containing my Imodium pills. After swallowing a few I looked back at the crowd of jovial dignitaries shaking hands like old friends. Bo, my director, left the lunch party and walked back to the car briskly and sat beside me in silence for a few beats.
“Who’s this friend he keeps talking about?” he asked.
“I don’t know,” I said. “Fackrablanour, or something.”
“This is not the proper way to conduct official business,” said Bo before the driver got back into the car.
That much seemed obvious. But since neither of us was yet aware of the specific practices that surrounded the oil trade, we couldn’t imagine that Pasha might stand to profit from this introduction. Besides, even after I found out more about the corruption involved in that trade, I figured Pasha wouldn’t do something so blatant as to put his foot in it right in front of me!
As it happens, the Iraqi oil minister did not catch the name of Pasha’s “friend” any more than we did. So he instructed Iraq’s deputy ambassador in New York, Muwafaq Ayoub, to check with Pasha. Pasha had nicknamed Muwafaq “Bumblebee” because he was always buzzing around our office, uninvited, in search of information. He would ask for advance copies of reports, and he rather disliked me because I regularly declined his requests. Bumblebee would then buzz on, to see if someone else in the office would slip him a copy or if he could simply pick up documents that were lying around.
“Keep an eye on Bumblebee,” Spooky had told me. “He’s spying on us right under our nose.” Increasingly, Pasha would agree to meet with Bumblebee alone. The proper counterpart for Pasha would have been the Iraqi ambassador himself, and protocol would have demanded the presence of a note-taker. But on more and more occasions, Bumblebee would show up unannounced, and Pasha would let him into his office, telling me, “No, it’s OK,” as I instinctively rushed over with a notepad in my hand. I was a bit surprised by this development, but again, I could not conceive of Pasha engaging in corruption so openly.
What happened next would take place in great secrecy but would be detailed in carefully preserved Iraqi Oil Ministry files and eventually would be reconstructed by Volcker.
In a letter dated August 10, 1998, the oil minister was informed by his marketing manager that a company called Africa Middle East Petroleum (AMEP) had asked to buy Iraqi oil. The company was owned by Fakhry Abdelnour, Pasha’s “friend.” Here’s how this information was communicated to Iraq’s oil minister by one of his aides:
Dear Minister [… ]
Mr. Muwafaq Ayoub of the Iraqi mission in New York informed us by telephone that the abovementioned company [AMEP] is the company that Mr. Sevan, director of the Iraq Program at the United Nations, mentioned to you during his last trip to Baghdad.
For your consideration and proportioning.
In his own handwriting, the Iraqi oil minister then added that, following consultation with Saddam Hussein, “the permission of the Vice President of the Republic was received in a meeting of the Command Council on the morning of 15.8.1998. for the sale of 1.8 million barrels of oil” in the name of Mr. Sevan.
It was a done deal.
Pasha had probably hoped that all communications between himself and the Iraqi minister had stayed oral, en passant, and free of note-taking. But his poor elocution forced at least two additional communications, one by telephone and one by letter, to be inscribed into the meticulous records of the Oil Ministry before his friend could be helped.
In a telex dated August 18, 1998 (eight days after the Iraqis confirmed that Abdelnour was indeed Pasha’s “friend”), Abdelnour was invited to visit Baghdad “to discuss matters related to the crude oil supply.”
Abdelnour received Pasha’s allocation for 1.8 million barrels of crude oil. He immediately resold that voucher to Shell and pocketed a net profit of $300,000. Shell would take care of sending a ship to pick up the barrels. Abdelnour had made a quick (though illegal) killing. And it would be the first of many deals to come, as Pasha would repeatedly solicit the Iraqis for oil allocations on his behalf.
In total, Abdelnour was given vouchers for 7.3 million barrels of Iraqi oil, which he swiftly resold for an estimated total profit of $1.5 million—money he could never have made without Pasha’s intervention. Between 1999 and 2003, Pasha repeatedly solicited oil allocations from the Iraqis, even demanding increases for his friend Abdelnour. The Oil Ministry’s records left no doubt. In their eyes, the recipient of these allocations was Pasha. And AMEP, the Panama-registered company owned by Abdelnour, was merely a front.
This was the same period in which Pasha isolated our Program Management Division, as we kept trying to blow the whistle on other types of Iraqi fraud. The same period during which he made a great push for the United States to allow more contracts through the system. The same period in which he undertook sudden trips abroad, to Geneva, Vienna, Lebanon, and Cyprus—even flying in for “consultations” with the Iraqi oil minister without note-takers. Pasha, who never used to take a single day of vacation, was now traveling the world and acting increasingly paranoid with his colleagues at the office upon his return.
According to Volcker, Pasha might have received money through various intermediaries, possibly including his aunt, who lived in Cyprus. He was supposedly given $160,000 in cash from his aunt, a retired government employee in Cyprus, who lived a modest life and was not reported to have had access to such sums. Interviews with friends, neighbors, and employees at her bank suggested that this money could not have come from her own government-issued retirement checks, which barely allowed her to get by. She had no other known sources of revenue.
Pasha reported these cash payments from his aunt as “reimbursement” for letting her stay with him at his New York apartment for a few months. Who makes his aunt pay for staying with him? Pasha’s relationship with his aunt was a close one, too. She had taken care of him like a mother when he was a child. According to a relative who spoke with a journalist from the Times of London, Pasha was an illegitimate son whose father had apparently refused to recognize him. His mother was shunned by his father’s family and was forced to leave little Pasha in the care of his aunt.
In April 2004, just as the Volcker Committee started investigating the Oil-for-Food program, Pasha’s eighty-four-year-old aunt fell down an elevator shaft. She went into a coma. The same month, Pasha closed a bank account they had held jointly. She died in June in a hospital, having never emerged from her coma. Her tragic death prevented the investigators from interviewing her and prompted speculation about whether the old woman had in fact been pushed down that elevator shaft.
It looked really, really bad. The suggestion, made by some observers, that Pasha’s aunt’s death might not have been so accidental, given her unique role as a witness in this affair, was never substantiated. But this didn’t stop journalists from speculating or even joking about the tragic event. One particularly acerbic journalist declared that the United Nations’ credibility was plummeting “as fast as” Pasha’s aunt “down the elevator shaft.”
A rather distasteful image.
While Pasha’s aunt’s untimely death prevented Volcker from proving that Pasha used her to funnel money from Abdelnour, investigators found other evidence to corroborate the bribery charge. In fact, the Volcker Committee proved that he had made use of a secret bank account in Switzerland held by Abdelnour (who also happened to be Boutros Boutros-Ghali’s cousin). Together with another influential Egyptian businessman named Fred Nadler (who happened to be Boutros-Ghali’s brother-in-law), they formed a trio that allegedly split the profits derived from Iraq’s underpriced oil allocations to Pasha.
Boutros-Ghali was the UN’s chief back in 1996, when the Oil-for-Food program was adopted. An extensive examination of his bank accounts revealed no evidence that he had ever taken a bribe. Then again, the $10 million in cash that Saddam had given Korean lobbyist Tongsun Park to create “goodwill” at the UN for an Oil-for-Food program might never have entered the banking system.
We would probably never know if Boutros-Ghali ever touched any of the money allocated to bribes by Saddam at the outset of the program. But Pasha’s fate was now sealed.
Through his lawyer, Pasha denied having received “a cent” from Abdelnour’s oil transactions. But Pasha did not help his case by lying to Volcker about the nature of his relationship with the man.
At first, Pasha denied having met with the Egyptian oil trader more than once. Their only meeting was supposed to have occurred in March 1999 at an OPEC conference in Vienna. When confronted with his own mobile phone records, which showed multiple calls between the two men, Pasha’s story changed, and he admitted they had a second “chance” meeting in Geneva (that would explain the second business card for Abdelnour, which investigators found in Pasha’s cigar box when they searched his office). The second business card had a different address for Abdelnour’s company, following a relocation of his business to Monaco. This suggested at least two separate meetings. Eventually, when pressed by investigators, Pasha admitted to having developed an “acquaintance” with the oil trader, and later admitted to a “friendship” that had lasted several years.
“I came to like the guy,” said Pasha. “He is an interesting character, you know, he’s been around the world.” A minute before, he had never heard of the guy. His story was falling apart fast.
Then came the question of what Pasha was doing at the March 1999 OPEC meeting, since he had no official business being there. According to Volcker, Pasha had gone there to ask the Iraqi oil minister for an increase in Abdelnour’s oil allocation. This was according to the Iraqi minister himself, who was now in U.S. custody. When pressed on this question by the Volcker team, Pasha contradicted himself again:
Investigator: In the meeting in Vienna, did you ever have any discussions with the oil minister about lifts for this particular company [AMEP]?
Investigator: Or the amount of lifts that this particular company would get?
Pasha: Well, like I said, the guy wants more oil.
Investigator: You would have said that?
Pasha: I might have said, yeah. I don’t know. I don’t remember.
Unfortunately, the Iraqi oil minister remembered. It’s incredible how much people remember when they sit in jail. And records showed an increase in the allocation to AMEP after this crucial meeting.
The facts were in. Pasha had solicited and gotten a total of five allocations, for millions of barrels of oil, for his friend. And each time, these allocations would be duly noted in the Iraqi Oil Ministry’s records and approved personally by Saddam. The Iraqi oil minister explained that they had given these allocations to Pasha because he was “a person of influence.” The oil minister even boasted about having Pasha in his pocket to his associates in the Iraqi government, whom the Volcker Committee also interviewed.
Suddenly, the many pieces of my Kafkaesque UN experience started falling into place. For example, one day in 1999, we received a call from a Swedish company that wanted to export trucks to Iraq.
“The Iraqis are demanding 10 percent in kickbacks on the contract,” the company’s representative said to Christer, my newly appointed Swedish director. “Is that… ehh… legal?”
Christer stormed into my office to inquire.
“No, of course it’s not legal,” I said.
“So what do we do?” he asked.
“We tell the Security Council!”
“But we’re no longer allowed to communicate with the Security Council,” said Christer.
“Damn Cindy!” I said.
This was during my own paranoid phase, when I was blaming Cindy for manipulating Pasha into isolating our office.
I had it all wrong. Pasha was always firmly in control. Cindy was only his tool, and he knew exactly how to use her. The reason he didn’t want our office communicating with the Security Council was that we were constantly raising issues of noncompliance by the Iraqi regime.
After the Swedish manufacturer was informed that it would need to pay a 10 percent kickback to the Iraqi regime, the company had, naturally, sought help from the UN. But after an absurd exchange of memos between my director and Pasha’s office, the company was told it had come to the wrong window.
Pasha had squashed an attempt to denounce Saddam’s fraud. And yet none of us held Pasha directly responsible. The ongoing turf war in the office allowed him to cover his tracks and kept us busy blaming each other, every step of the way.
“Don’t underestimate me!” Pasha used to say. He repeated that warning to the journalists who hounded him following the publication of his name on the list of Saddam’s bribe recipients. And indeed, how could one underestimate a man who had managed to fool everyone around him for years, even as he skimmed money off the fund he had been charged with safekeeping?
Had it not been for the war, Pasha would never have been caught. He had not made a single obvious mistake. No money had been transferred directly to his account. He had withdrawn the money in cash from Switzerland, then fed it into his bank account in New York in smaller sums of less than $10,000, which triggered no alarm bells at the Treasury Department. And his political maneuvers in the UN Security Council had not even gotten the United States or Britain angry, or even suspicious of him. He had not taken any political stance in favor of lifting the sanctions, as others had. (Of course, this would have been bad for his little business.) He had flown under the radar and had everybody around him, including me, convinced of his innocence right up to the day of Volcker’s briefing, which found him guilty of fraud that presented “a grave conflict of interest and… seriously undermined the integrity of the United Nations.”
When Volcker was done with his account, he was assaulted with questions from the press. I had a million questions for him myself, but I just sat there, in the middle of the media frenzy, emotionally knocked out.
As I looked around the room, the whole situation seemed unreal, almost fictional.
“Would you say that Mr. Sevan took a bribe?” came the question from CNN’s Richard Roth (for whom I had worked right after college, before I joined the UN). It was much worse than that. Pasha had actually asked for a bribe. Many bribes.…
Why, Pasha?
I recalled an evening in the fall of 2000. An impending storm had kept me in the office late. It was one of those massive New York tempests that gather steam all day long and wait until people leave the office to wreak havoc on the city.
As I waited for the tempest to break, I decided to visit with some colleagues in the office. Cindy had recently sent a memo around reminding all staff that it was “against UN rules” to accept any gifts from contractors doing business under the program. Since Cindy never sent out memos without a reason, I was trying to find out whom she might be suspecting. She had sent the memo right before going on extended leave, so I didn’t have the luxury of asking her directly. At the time, I assumed she was probably setting the stage for another one of her power grabs. But in retrospect, there was only one explanation: she knew what Pasha was up to. And this was her way of letting him know.
Had her memo been a subtle way of blackmailing him? Or was she simply trying to do what she could with the means that she had? Memos were our only tools. We were in business with one of the most corrupt regimes on earth, and we were expected to enforce international law with memos.
It didn’t help, of course, that the man who ultimately controlled the flow of these memos was on Saddam’s payroll. And I can only imagine how stressed Cindy would have felt if she had indeed come across clues that Pasha was dipping in the pot. Whom could she confide in? Her drive to consolidate her power in the office had been successful, but it had left her all alone in a position of enormous responsibility. Pasha had let her have her way. You want control? Take it. It’ll keep you busy while I run my little business on the side.
Cindy eventually had a breakdown, which explained why she was away from the office that stormy night. Officially, the problem was with her lower back. She functioned on double doses of Valium, painkillers, and muscle relaxants, and had gained a lot of weight before finally throwing up her arms and going on sick leave. What I didn’t realize at the time was that she, too, was going through hell in this office. Everybody who worked for Pasha eventually went the same route. And rarely did they realize that he was the source of what ailed them. They would blame other colleagues but never Pasha. He played stupid all along, even as he was sowing division around his shop.
In retrospect, I’d say nobody played stupid better than Pasha. He had elevated it to an art form. His outbursts of anger, irrational as they seemed, were never improvised. Even his incomprehensible elocution often worked in his favor. He could sound clear when he wanted to. But occasionally his blurry words allowed him to remain noncommittal when it suited him, to be evasive when necessary, and to bait his interlocutors. He would sometimes say just one word, without bothering to make a sentence, just to see one’s reaction. And that was what he did that night, when he surprised me in a colleague’s office as I was conducting my little investigation into the reasons for Cindy’s memo.
“Happy now?” Pasha said, after slapping me on the neck by surprise.
“Oh, hello, sir.”
“Happy now, huh?”
“Why should I be happy?”
“Your friend Cindy is in the hospital!”
“She is? Why? What’s wrong?”
“Her back’s facked ap!”
“Shit.…”
“So your director is officer-in-charge!”
“Why, you leaving?”
“Yeah, I have to go to this…” (didn’t bother to finish the sentence). “But keep an eye on your boss, eh? I don’t want no shit while I’m gone. It’s not because Cindy’s in the hospital that he can do whatever he wants! These two, really, they’re like cats and dogs!” Pasha continued, as if he had no role in setting his underlings up for a permanent conflict. “You should see the shit I have on my desk. Back and forth, back and forth, they never stop with the facking memos.”
I followed him to his office to see what he was on about, but when we arrived, Pasha’s mind had flipped the channel.
“Scotch?” asked Pasha.
The storm was now pounding the building. A thousand little red lights down on First Avenue told me traffic was hell. So I slipped into the leather chair facing Pasha’s desk and took a burning sip of scotch. It had been a long time since we had sat down one-on-one like this. Since isolating our side of the shop, he had kept interactions to a minimum. But the moment he had said “scotch” that night, I got the feeling he had something to tell me.
“Look at all this shit,” said Pasha, pointing to a bunch of bills on his table. “I spend all my time on this facking program,” he complained. “Everybody’s making millions, and me, I don’t even have time to pay my bills!”
I had heard him say this before. But that night, he seemed more stressed than usual. His daughter was applying to college—Boston University. Thirty thousand bucks a year. And the thirty-eighth floor was sitting on his contract renewal, raising the prospect that he might soon have to retire. Pasha, of course, had no desire to leave his throne.
“I spent my whole life for this organization and this is how they thank me!” he said, relighting his cigar. The guy was worried about his financial future. He made a respectable $186,000 a year, tax-free, owned an apartment in New York and a house in the Hamptons, but his social status was linked to his job. In retirement, he wouldn’t have a diplomatic passport, nor would he be able to expense his travels.
“If I had wanted to, I could have been a millionaire,” he said. “With all the people I know… trust me… it would not have been a problem!”
“I’m sure,” I said.
“You don’t believe me?”
“No, I do.”
“You better believe it! Millions!”
The man who could have been a millionaire looked around his office, contemplating the remains of his career—native artwork from the Pacific islands, a picture of Pasha in his thirties with a naked cannibal from Papua New Guinea, a political cartoon by Plantu of Le Monde from his days in Afghanistan. He had served as the top UN envoy there during the fall of the Communist regime in Kabul. On the floor was a Shisha pipe from his days in Lebanon. Though his office was larger than the apartments of most of his employees, he didn’t have enough room on the wall for all his paintings. Gifts, for the most part.
For an Armenian kid from Cyprus, whose father rejected him at birth, he had come very far in life. He had enjoyed a fascinating UN career and had reached the top of the pyramid with his appointment as under secretary general, now in charge of the largest operation in UN history.
“Ah, yeah.…” said Pasha, nodding at the past.
“You’ve had some great experiences,” I said.
“Ha!” said Pasha, reminiscing.
During his stint in Afghanistan, the Pakistani government had lent him a luxury jet plane with a mini-bar and all the amenities. Those were the days. UN officials used to get respect in this world.…
“It used to be good money, too,” said Pasha. “Now? Forget it!”
UN officials could still travel the world without putting their hand in their pocket, but the bubble of prosperity that had enveloped New York in the 1990s had sent prices skyward and left the world’s civil servants relatively poorer. They used to be able to afford large apartments in the city and lavish dinners at the hottest nightspots. The system was now populated by top managers who hated one another. Pasha could hardly mention the name of another high-level official without disgust. His enemies were numerous, and soon, they would band together to force him into retirement. Or so he feared.
“I bet the secretary general will renew your contract,” I said.
“Oh, really?” said Pasha, his eyes getting smaller. “Why? Who are you talking to on the thirty-eighth floor?” Pasha made his suspicious face.
“It’s not about the thirty-eighth floor. You have enemies there—they may be delaying your contract. But ultimately, it would be a headache to replace you. There’s too much money at stake now. Every member of the UN Security Council would want their own man at the wheel. Kofi Annan doesn’t need the headache.”
Pasha puffed on his cigar for a beat, taking in the logic. “But Riza is up to something,” he said, mentioning his main enemy, Kofi Annan’s chief of staff, by name.
“Maybe,” I said. “But Kofi Annan needs to pick his battles. He’ll get rid of you only if Council members press for it. And nobody’s pressing for it.”
The Americans had issues with Pasha, but at least he wasn’t an anti-sanctions activist, like other high-level UN officials. The French and the Russians would have preferred someone more outspoken in this post. But Pasha was good for business. He never fussed about front companies or kickback allegations. Obviously. And you never knew with political hotheads like Halliday. They might just get incensed one day and denounce the corruption of a well-oiled business.
“You’re irreplaceable,” I said to Pasha.
“Nobody’s irreplaceable!” said Pasha, holding up his cigar as he repeated the old bureaucratic mantra. “But I don’t care, anyway,” he lied. “If they want this mess they can have it. I’ve worked my ass off to make this facking program work! Billions of dollars! And I don’t even have time to pay my bills!”
The bills again.…
“And you think anybody’s going to thank me? Huh?” Pasha asked.
“I guess not. But that’s the system.…”
“The system? What system?” Pasha shouted. “They don’t give a shit about me or you or anybody! It’s every man for himself, Kid.… Every man for himself!”
And so it was.
After thirty years in the UN system, Pasha had seen it all: member states violating their own resolutions over and over, vast sums of money changing hands, political favors rewarded with hard currency. Why should everybody be getting rich except him?
He had spent hours at meetings of the Security Council sanctions committee. That was where the Iraqi contracts were approved—where the real haggling took place. It was a multibillion-dollar diplomatic bazaar. A typical trade might involve the Russian representative agreeing to certain language in a given UN resolution, in exchange for the United States and Britain approving $300 million worth of (overpriced) Russian contracts. The United States and Britain would then play good cop/bad cop to get further concessions out of the Russians. The latter would then seek help from the French or the Chinese, who would raise new issues and complicate the equation further, until finally, a deal would be struck. The United States and Britain would get their tough language reprimanding Saddam, and the Russians, the Chinese, and/or the French would get their contracts approved.
As the man in charge of this bazaar, Pasha felt he deserved a cut. The money he declared as gifts from his spinster aunt would just about pay for four years of college plus expenses for his daughter (the rest of his profits were likely kept abroad, according to the Volcker Committee). Pasha knew his days at the UN were numbered. So he raked in what he could, using the influence of his office, and went into retirement a richer man.
I don’t think his little business stopped him from sleeping at night. But I do believe he felt the need to justify himself that evening. The man who had shed tears in front of a dying kid at an Iraqi hospital had to know it was wrong to dip in the pot of money that was specifically designed to help such children. But the man who could have been a millionaire felt cheated by the system—a system in which he had long since stopped believing, yet which he had figured out how to play better than anybody, to the point where he became truly difficult to replace.
Pasha had played his cards with great skill. As he sat there talking to me that evening, he had already pocketed a nice cash prize. And he felt confident enough to go ask for more. He could not possibly have foreseen, back then, that his business partners in Iraq would be toppled; that the Kurdish and Shiite rebels, whom he had treated so arrogantly, would end up in power; that they would find his name on a bribe-takers list; that they would publish it in a free Iraqi newspaper, sparking a scandal, which the kid now sitting in front of him would react to by calling for an investigation that would nail him.