U.N. STALLING IRAQ GOV'T PROBE OF $ECRET OIL ACCT.
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By NILES LATHEMMarch 24, 2004 -- WASHINGTON - U.N. bureaucrats are stonewalling requests from Iraq's new government for records from the scandal-plagued oil-for-food account set up in Saddam Hussein's handpicked French bank, officials said yesterday.
The mysterious activities over the handling of the U.N. account at the French banking giant BNP Paribas, where $100 billion worth of oil-for-food transactions flowed until the war, has emerged as a central focus of several investigations in the wake of the massive bribery-kickback scandal that has rocked the world body at its highest levels.
United Nations custody of the account was so secretive and unusual that even Saddam, who stole $10.1 billion from the program and bribed sympathetic pols with some of the proceeds, pressed unsuccessfully to have the account transferred out of the bank he originally insisted handle the program, said Claude Hankes-Drielsma, the British businessman advising Iraq's Governing Council on the issue.
"The key question in this investigation is, what was the relationship between the U.N. and this French bank?" Hankes-Drielsma added.
Hankes-Drielsma said serious questions arose shortly after the war ended, when files were found in Iraq's Oil Ministry indicating that four earlier audits of the account unearthed "discrepancies" in some of the oil transactions.
Saddam's Central Bank of Iraq was asking questions that the United Nations refused to answer, he said.
After the war, the U.S.-run coalition provisional authority and Iraq's new government began making similar inquiries of the United Nations, not only about the earlier audits, but also about issues like interest payments and whether any funds were transferred to other banks.
A spokesman for the United Nations said records had been turned over the coalition authority, although he was not sure whether the bank statements were included.
A spokesman for BNP Paribas could not be reached for comment, but the company said in a previous statement: "We believe we were appointed by the United Nations for this contract, because they were looking for a large European institution, and we are the largest bank in Continental Europe."
U.N. Secretary-General Kofi Annan last week said he wants an independent investigation to look into allegations of widespread graft within the program.
