Wednesday, October 19, 2005

Volcker asks U.S., allies to link U.N. budget to reform - The Washington Times

Former Federal Reserve Chairman Paul A. Volcker told a Senate Foreign Relations Committee hearing that he opposed a unilateral U.S. withholding of U.N. dues, but that a "de facto alliance" of nations demanding reform could cut through the world body's "culture of inaction." The message, he said, should be: "Look, if the organization isn't ready to reform itself, that has budgetary implications."
. . .
Mr. Volcker's investigators have faulted the design of the oil-for-food program, the way contractors were hired to run it, the absence of clear financial and managerial controls during its seven-year history, and conflicts of interest and outright corruption by senior U.N. officials charged with administering the program. "As things stand, the U.N. has simply lost the credibility and the confidence in its administrative capacities necessary for it to meet large challenges that seem sure to arise in the future," Mr. Volcker said.
. . .
Mr. Volcker said his investigators estimate that Iraq earned about $12.8 billion in illicit payments under the oil-for-food program: $10.2 billion in smuggled oil sales to Jordan, Turkey and Syria, and $2.6 billion from bribes, kickbacks and other related scams. The overall figure is about $2.8 billion higher than a widely cited Government Accountability Office estimate given to Congress last year.

Mr. Volcker took issue with those who say the program was still a "success" for the United Nations because it averted a humanitarian crisis in Iraq, preserved international sanctions against Baghdad, and helped prevent Saddam from acquiring nuclear and other weapons of mass destruction.

Mr. Volcker said any achievements had come at a huge cost to the reputation of the United Nations. "Spreading reports of maladministration, ethical lapses and growing corruption reaching even into the U.N. itself have eroded confidence in U.N. competence and have heavily damaged its credibility," Mr. Volcker said.


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