UN finds mismanagement in Iraq oil scheme

Internal audits of the UN Iraqi oil-for-food programme found large contractors overcharging the body by several million dollars…

Internal audits of the UN Iraqi oil-for-food programme found large contractors overcharging the body by several million dollars and that one UN agency systematically mishandled funds in the field.

Fifty-eight reports were released by Mr Paul Volcker, the former US Federal Reserve chairman, who is conducting an independent investigation of the $64 billion programme.

The audits had been demanded by at least five US congressional committees examining wrongdoing in the now-defunct program

The reports from the UN watchdog, the Office of International Oversight Services, found "no irregular activities" or corruption on the part of UN staff.

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Nevertheless, they point to lapses in supervising the programme, especially in keeping a rein on contractors hired.

The reports indicate that Mr Benon Sevan, head of the programme, complied with many of the requests but it is not clear which ones. But the audits repeatedly criticised the Nairobi-based UN Habitat agency for ignoring recommendations.

The oil-for-food program began in December 1996 to allow Iraq to sell oil and purchase civilian goods, an effort to ease the impact on ordinary Iraqis of sanctions imposed after Iraq's 1990 invasion of Kuwait.

The reports, based on a slew of other UN internal audits, do not cover bribery conducted by then-President Saddam Hussein's government in the drawing up of oil deals, which it was allowed to do under UN Security Council resolutions.