Weapons of Mass Destruction (WMD)

DATE=4/21/2004

TYPE=CORRESPONDENT REPORT

TITLE=U-N/OIL FOR FOOD (L-O)

NUMBER=2-315241

BYLINE=PETER HEINLEIN

DATELINE=UNITED NATIONS

CONTENT=

VOICED AT:

/// EDS: THIS C-R IS EXPANDED FOR USE BY DATELINE, AND SHOULD BE TRIMMED WHERE INDICATED FOR OTHER USE ///

INTRO: The U-N Security Council has unanimously approved an independent investigation of the scandal-plagued Iraq oil-for-food program. From U-N headquarters, Peter Heinlein reports former U-S Central Bank chief Paul Volcker will head the probe.

TEXT: Mr. Volcker will head a three-member panel charged with investigating allegations that Saddam Hussein siphoned off 10-billion dollars from the humanitarian program under the noses of U-N administrators. Published reports have also implicated at least three U-N employees, including the former head of the program, Benon Sevan, and officials of several governments.

As he took up the job Wednesday, Mr. Volcker told reporters he has been assured of the world body's full cooperation in his probe.

/// VOLCKER ACT ///

I am assured that adequate financing will be available, that the records, personnel, other records within the U-N will be available; that if diplomatic immunity has to be waived in circumstances, it will be waived as appropriate; that records in Iraq, which are obviously important, will be made available.

/// END ACT ///

Secretary General Kofi Annan selected the highly respected Mr. Volcker to lend credibility to the probe. Allegations of widespread corruption in the oil-for-food program have already damaged the U-N's reputation, and spread all the way to the secretary general himself. He has acknowledged that his son, Kojo Annan, worked for a firm alleged to have been involved in an oil-for-food kickback scheme.

/// OPT FOR DATELINE ///

Mr. Annan told reporters Wednesday Mr. Volcker's appointment should be seen as evidence that he takes the allegations seriously. He expressed hope that the accusations would not damage the U-N's credibility among Iraqis at a time when the world body is preparing to take on a lead role in the country's transition to democratic rule.

/// ANNAN ACT ///

I hope the Iraqis realize that even if there have been wrongdoings by certain members on the U-N staff, the U-N, as a whole, did make a genuine effort to filling their humanitarian needs. And there were hundreds of U-N staff who worked very hard and diligently with the Iraqi regime to establish the food distribution system.

/// END ACT /// END OPT FOR DATELINE ///

Mr. Volcker made clear Wednesday he plans to, in his words, "follow the money" wherever the trail may take him. He said he had insisted on a Security Council mandate authorizing the investigation to ensure the highest level of cooperation from governments and officials who may come under the view of the probe.

/// 2nd VOLCKER OPT ACT FOR DATELINE ///

I wanted a resolution to make sure member governments and member states knew what they were getting into, but at the same time, inevitably, I'm not the F-B-I, I'm not the C-I-A, not an official agency of any government. I don't have police powers that come naturally to a government, so you have to conduct the investigation with the cooperation of people who have authority.

/// END ACT /// END OPT FOR DATELINE ///

Even as Mr. Volcker spoke to reporters, the Security Council unanimously approved a resolution endorsing the probe. It stopped short, however, of any language that would have compelled member states to submit to the inquiry.

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The 76-year old Mr. Volcker, who served as U-S Federal Reserve Board chairman under five presidents, said his main reason for accepting the demanding task was that such important allegations both within and outside the United Nations deserve immediate attention.

/// 3rd VOLCKER ACT ///

The U-N is an important institution, and these questions, once raised, I think have to have a deliberate and full investigation and an answer, so that the U-N can, in fact fulfill the responsibilities and take advantage of the opportunities that arise to contribute not only to the situation in Iraq but situations that are bound to come along in rest of world.

/// END ACT /// END OPT ///

Mr. Volcker will be joined in the investigation by two other highly respected figures. South African human rights Judge Richard Goldstone earlier served as the first prosecutor on the U-N Balkan War Crimes Tribunal. Swiss attorney and investigator Mark Pieth is considered one of the world's leading experts on international bribery and money-laundering.

/// REST OPT ///

The inquiry is to begin immediately, and is charged with issuing an interim report within three months. Mr. Volcker said, however, that he expects a full investigation of the 67-billion dollar oil-for-food program to take much longer.

He said his first priority will be hiring a staff to conduct what is expected to be a tedious task of going through millions of documents amassed over the life of the program, which began in 1996 and ended late last year. (Signed)

NEB/NYC/PFH/RH/KL