A team investigating allegations of corruption in the former UN-administered Oil-for-Food programme was in Iraq last week conducting interviews, US-led administrators revealed on Tuesday.
The team talked to workers at Iraq's Central Bank, the government-run Rafidain Bank and other government offices, Iraqi officials said. The team is looking into allegations that UN workers profited from the sale of Iraqi oil during the regime of former President Saddam Hussein. At least two investigation teams have taken documents from the State Oil Marketing Organization, according to an official there who declined to be named.
It is alleged that an after-service fee of 10 percent or more was added to all Oil-for-Food programme contracts since 1988.
The US $15 billion humanitarian programme was started to help ease suffering from international sanctions slapped on the former regime. In the Health Ministry alone, the kickbacks in 2003 would have amounted to $88 million, according to officials involved in investigations there.
Secret bank accounts holding money from kickbacks and bribes may still be open in neighbouring countries such as Syria, Jordan and Lebanon, an Iraqi bank official said.
UN officials in New York have referred questions to the office of former US Federal Reserve chairman Paul Volcker, who is heading the investigation. The Volcker team met members of the Board of Supreme Audit, an independent group of Iraqi judges expected to last beyond the 30 June mandate of the US-appointed Iraqi Governing Council (IGC), a senior coalition official told IRIN on Tuesday.
At the same time, auditing firm Ernst and Young has been named by US-led administrators to work on a $20 million contract to look into the Oil-for-Food corruption allegations, Coalition officials have announced. Ernst and Young will coordinate with the Volcker team and with the Iraqi Board of Supreme Audit, Coalition officials said on Tuesday. Ernst and Young replaces KPMG International, which was named in February by the IGC to investigate corruption allegations.
Already the Board of the Supreme Audit has gathered relevant Oil-for-Food documents and put them at the well-guarded Ministry of Oil building in Baghdad, a Coalition official said. While many Iraqi officials have said that virtually all key documents were destroyed in looting immediately following the US-led invasion of Iraq last spring, others say that some documents were taken home for safekeeping.
It is those documents that officials are now appealing for in the investigation, the Coalition official said. For example, Ahmed Chalabi, a member of the IGC, has said he has many of the documents, the official noted, adding that an investigation should have been done long ago.
To keep the Oil-for-Food programme going, a process that is now mostly in the hands of the Iraqi Ministry of Trade, $8 billion in contracts were "prioritised" during and after the US-led invasion, another official said. The UN World Food Programme remains responsible for $900 million in food distribution from the programme.
Other contracts were renegotiated, the other official said. Some 45 front companies were found during that process, companies that also are alleged to have illegally received funds from the programme.
This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions