Gaping Holes in Oil for Food Program

http://www.cnn.com/2005/ALLPOLITICS/...ood/index.html
Whistle-blower: 'Gaping holes' in oil-for-food

Former monitor says U.N. fired him for reporting corruption

From Phil Hirschkorn
CNN

Thursday, March 17, 2005 Posted: 6:50 PM EST (2350 GMT)

(CNN) -- A former United Nations monitor of the organization's oil-for-food program in Iraq told a congressional committee Thursday that the program had "gaping holes" and that large amounts of aid never reached the Iraqi people.

Rehan Mullick testified that by his estimate more than 20 percent of the shipments to Iraq, worth $1 billion a year, were not distributed properly, with many goods pilfered by the Iraqi military.

"A fourth or fifth of the supplies were not distributed," he said.

Mullick, 39, an American sociologist of Pakistani origin, appeared before the House International Relations Subcommittee on Permanent Investigations in Washington.

The subcommittee is one of a half-dozen congressional panels probing the program, which ran from 1996 to 2003, until the U.S.-backed invasion deposed the regime of Iraqi dictator Saddam Hussein.

Mullick worked for two years in Iraq as a data analyst for the program designed to permit Iraq, while under international economic sanctions stemming from its invasion of Kuwait in 1990, to export a limited amount of its crude oil reserves and import food, medicine and supplies screened by the United Nations.

"Soon after I started my job, it became amply evident that there were gaping holes in U.N.'s efforts to meet [its] objectives," Mullick told the committee in his written statement, though he read aloud only parts of it.

Mullick said in his statement that a database to track the humanitarian shipments was "muddled beyond repair," that survey techniques "were at best amateurish," and that statistics quoted by the United Nations were "misleading."

Over seven years in the program, Iraq sold 3.4 billion barrels of oil for $64.2 billion, which was deposited by buyers in a U.N.-controlled bank account.

More than two-thirds of the money was earmarked to buy goods, while the balance paid for program costs, weapons inspectors and reparations to Kuwait.

The United Nations would routinely send contract information for approved imports to Baghdad, and U.N. staff in Iraq were expected to ensure the goods reached their destination. But Mullick said "Saddam loyalists" with jobs at the U.N. mission corrupted the program's data.

"A lot of items that were held back or redirected by the government of Iraq were never observed," Mullick's statement said.

Mullick said Saddam stole supplies from the program to rebuild his military.

"The Iraqi military rebuilt its logistics by diverting thousands of trucks, pickups, 4-by-4s, et cetera that were delivered to Iraq under the oil-for-food program," he said. "It was common knowledge in Iraq that thousands of Toyota Camrys and Avalons imported under the program were promptly gifted to the functionaries of Iraqi intelligence and the Baath Party."

Whistle-blower says he was rebuffed

Mullick told the subcommittee that he repeatedly alerted U.N. officials of problems he observed but was rebuffed.

"Each suggestion resulted in my supervisors reducing my job responsibilities," Mullick said. "This continued to occur until my only job was to run the slide projector at staff meetings."

Mullick said he eventually submitted a 10-page report to U.N. headquarters in 2002 reporting that 22 percent of supplies imported under the program never reached Iraq's 27 million people.

"I heard nothing," Mullick said. "Finally I was contacted and told my contract was not being renewed."

Mullick received a doctorate from Iowa State University and is married to an American woman. He currently lives with his wife and daughter in Islamabad. Pakistan.

"The U.N. did nothing to act on his warnings, and they essentially fired him for his honesty," said California Rep. Dana Rohrabacher, the subcommittee chairman. "Doctor Mullick did the right thing and was treated as an outcast."

Besides the congressional probes, oil-for-food participants are also being investigated by the Justice Department, the Securities and Exchange Commission and an independent panel led by former U.S. Federal Reserve Chairman Paul Volcker.

Investigators have estimated Saddam extorted approximately $2 billion to $4.5 billion by imposing surcharges on the oil sales and kickbacks on the goods Iraq bought. In addition, Iraq earned an estimated $4 billion to $6 billion in oil sales outside the program to neighboring Jordan, Turkey and Syria, according to the U.S. Government Accountability Office. (Full story)

The U.N. said in February that the longtime head of the program, Benon Sevan, had been suspended from any remaining duties. (Full story)

Still, the United Nations found the program to be a success, saying, for example, that food delivered reduced the malnutrition rate among Iraqi children by 50 percent.

Mullick described the United Nations as having "old mafia-style management."

He added in his statement, "Had the U.N. chosen to listen to and offer protection to those who blow the whistle on bureaucratic injustice and corruption, a program like oil for food would have worked more in the interest of the impoverished Iraqi people rather than their detractors."