Backstabbing for Beginners:

by Michael Soussan

  This meant that the French bank had to lie to the UN about the real source of funding for the oil purchase, thereby breaching the terms of its contract with the world organization, which obliged it to disclose the identity of buyers. The request even violated the BNP’s internal rules. But the BNP had no problem with Rich’s request.

  The oil would go to a “do-gooder.” Kaspereit’s self-anointed title was chairman of the Society for Support of Iraqi Children. Thanks to his help, Iraq’s children saw $1.83 million that might have gone to humanitarian aid vanish into the pockets of Saddam Hussein, via a Jordanian bank account. It is perhaps ironic that it also made Rich, a pro-Israel financier, and Kaspereit richer at these same children’s expense.

  Given Clinton’s involvement in pardoning, I began to wonder why the Bush administration didn’t jump on this opportunity to discredit the Clintons and the Democrats. Claudia Rosett, the first and best-informed investigative reporter working the Oil-for-Food scandal, had revealed the full extent of the link and given the White House a clear opening to score points in the run-up to the 2004 presidential election. But soon it became clear that the story involving Rich could not be exploited for political gain against the Democrats without boomeranging on the White House itself. Rich’s former lawyer in the United States had been none other than Scooter Libby—Dick Cheney’s chief of staff—who was by then being investigated for having leaked the name of CIA official Valerie Plame, whose husband had criticized the administration’s WMD claims before the war.

  The more Saddam’s secret list was studied, the more power brokers from all sides of the political spectrum feared becoming entangled. And for good reason. The threads that spread from Saddam’s secret list seemed endless.

  Soon it was revealed that during the sanctions years, Cheney, the former CEO of Halliburton, America’s supersized oil and war-effort contractor, had also been involved with Iraq’s oil industry. Halliburton wasn’t named on the Al-Mada list. But as reporters dug deeper, they realized there had already been news coverage of the company’s dealings with Iraq under the Oil-for-Food program. A 2001 Washington Post article by Colum Lynch cited confidential UN records and oil-industry executives saying Halliburton held stakes in two firms that signed contracts for more than $73 million to provide Iraq with oil-industry spare parts. Employees at Halliburton confirmed to Lynch that they were “certain Cheney knew about these Iraqi contracts.”

  In 1998 Halliburton bought Dresser Industries, which exported equipment to Iraq through French affiliates from 1997 to 2000. There was nothing illegal about trading with Iraq under the Oil-for-Food program. But had the contracts included the usual kickbacks for Saddam? Or had Halliburton been holier than the 2,400 companies found guilty of participating in the illegal kickback scheme?

  To be sure, the vice president was not interested in finding out the answer. Such kickbacks are routine, and it is doubtful that Cheney had any direct involvement in such a minor transaction. But increasingly, the Oil-for-Food debacle became less and less popular with the Bush administration. The U.S. coalition raided Ahmad Chalabi’s house in Baghdad and made off with records that he claimed were related to his Oil-for-Food investigation. Paul Bremer, the U.S. proconsul in Baghdad, also stopped funding for the KPMG investigation.

  But it was too late. Too many reporters, Congressmen, and justice officials around the world had started dipping their noses into the affair. The lid was off—well, almost.

  All the key documents that could confirm the information in the Al-Mada list and help trace those who had violated international law were locked up at the United Nations, about to be sent off to a humongous storage facility in Queens. The U.S. government, which should have had copies of all Iraqi contracts that went through the UN, was claiming to journalists that these had not been kept on file at either the State or Defense department. This, to me, sounded inconceivable. We had held meetings at the UN with the D.C.-based government analysts who reviewed Iraq’s contracts. Did these people throw the contracts in the trash after making a decision to block or clear them for export? Not likely. The whole point, from the Pentagon’s point of view, was to have specific records of everything Saddam purchased, in particular for those items that could potentially have “dual use” as weapons components.

  The whole point of Security Council oversight was to make these contracts available to members of the Council. How could the U.S. government claim it no longer had these documents?

  It soon became clear that neither the United States nor Britain nor France nor Russia nor China would open up their files. The United Nations was the official repository for all the records that might confirm the veracity of Saddam’s secret list and allow investigators to check the amount of money that had been stolen from Iraq’s most vulnerable civilians by the very same people and governments that had claimed to be out to help them.

  I felt I had to do something. In fact, I felt it was long overdue for me to take decisive action. I had failed to persuade the bureaucracy to follow up on clues to wrongdoing internally, and my multiple attempts to spark an investigation even after I had left were ignored. I had resigned, and insofar as I had decided not to rejoin the UN in the aftermath of the Baghdad bombing, I could now afford to break my rule about never burning bridges. I wouldn’t do it for pleasure. In fact, it would be a serious risk for me to step into what looked like a potential political bloodbath. For several days, I hesitated. Each day, new allegations would make headlines. The media was clamoring for the UN to open its records, but with no member of the Security Council wishing for it, the UN could claim confidentiality for another fifty years. What could I possibly do to change that?

  On February 29, 2004, I saw an opportunity to act. I came across an article by Susan Sachs in the New York Times, which quoted Ali Allawi, a former World Bank official now working as Iraqi trade minister, recalling how part of the corruption worked.

  “You had cartels that were willing to pay kickbacks but would also bid up the price of goods,” Allawi said. “You had rings involved in supplying shoddy goods. You had a system of payoffs to the bourgeoisie and royalty of nearby countries. Everybody was feeding off the carcass of what was Iraq.”

  I thought his description was exactly right. And then, a few paragraphs later, I found the opening I needed to intervene effectively in the unfolding scandal.

  According to Sachs, “United Nations overseers say they were unaware of the systematic skimming of oil-for-food revenues. . . . The director of the Office of Iraq Programs, Benon V. Sevan [Pasha] declined to be interviewed about the oil-for-food program. In written responses to questions sent by e-mail, his office said he learned of the 10 percent kickback scheme from the occupation authority only after the end of major combat operations.”

  Wrong answer!

  We had ample proof that kickbacks were being extorted. Sometimes they were even put into the contracts as blatantly unjustified “surcharges.” The practice was clearly illegal. But Pasha refused to make a fuss about them. At the time I blamed his failure to react on mere incompetence. I knew he wanted the program to stay away from the spotlight, to “fly under the radar,” and that he thought more goods would get into the country if we stayed away from controversy. But now that the operation was over and the truth was coming out in Iraq, I felt certain that the UN would do better to admit what had happened than to try to cover it up by lying to the New York Times. So I banged out a furious op-ed.

  The cat is out of the bag. Documents recently discovered by the Coalition Provisional Authority, and corroborated by interviews with former Iraqi officials, confirm that Saddam Hussein extorted cash kickbacks from companies trading with Iraq under the U.N. Oil-for-Food Program. The most damning document is a memo dated Aug. 3, 2000, by Iraqi Vice President Taha Yassin Ramadan (now in U.S. custody) instructing his ministers to tell their suppliers to inflate their prices by the “biggest percentage possible.” As a former employee of the program, I cannot say I was surprised by this news. What surprised me w
as the U.N.’s response to it.

  U.N. officials claim they were unaware of such fraudulent practices by the Iraqi regime until after the Iraq War. They would be better off telling the truth. By winter 2000, serious concerns had been raised about the use of front companies by the regime. We had heard allegations of a 10% kickback scheme, and were exceptionally well positioned to investigate the matter. Why did the U.N. fail to investigate?

  U.N. officials claim it was not their responsibility to hold the Iraqi regime accountable. False again. The whole point of putting the U.N. in charge of overseeing Iraq’s trade was to ensure that the country’s oil revenues were used exclusively to help its ailing population, not to fill Saddam’s personal coffers. And according to Security Council resolutions, the U.N. had a legal responsibility to report on any issue affecting the “adequacy, equitability and effectiveness” of the Oil-for-Food Program. Saddam’s kickbacks affected all three aspects. There were many instances in the time I was there when the U.N. preferred to look the other way rather than address obvious signs of what was going wrong.

  Take the medical sector. The regime’s decision to use kickback-friendly front companies to purchase drugs meant that hospitals often received medicines that were nearly expired or otherwise damaged from unscrupulous suppliers. Iraqi doctors would complain about the quality of the drug supply to our U.N. observers. Kurdish leaders raised similar concerns directly with high-level U.N. officials. We knew exactly how much the Iraqi government paid for any contract, and we had the authority to inspect each shipment when it crossed into Iraq. We had all the elements necessary to piece together a clear picture of what was going on and alert the Security Council to the fact that Saddam and his cronies were buying poor quality products at inflated prices and cashing in the difference. While the U.N. likes to claim this was the most audited program in its history, I never once read an audit report that raised questions about these practices—even though they were an open secret to anyone involved in the program. . . .

  As long as Saddam was in control, it was perhaps inevitable that he would have profited from any attempt to feed his population. But the least the U.N. could have done was denounce his practices. . . .

  The U.N. should not have been in the business of covering up for Saddam; and it should not now stonewall efforts to have an independent investigation look into which companies broke the law in their dealings with the regime and who profited from schemes to get around the restrictions set out under Oil-for-Food. If the U.N. fails to become a partner in the investigative process, it may end up as co-defendant in a scandal that has yet to reach its full-blown proportion.

  I sent the piece out to several editors. It was picked up by the Wall Street Journal and published on March 8, 2004. CNN, Fox News, ABC News, and the BBC packed my voicemail with messages asking me to come on the air. I declined most requests for interviews and spoke only on background to reporters I trusted, because the scandal had become intertwined with the election cycle in Washington. Republicans sought to use it to discredit the United Nations (which had opposed the war), and Democrats initially sought to dismiss the scandal as an attempt by Republicans to bring attention away from the failure to find WMDs in Iraq. Ultimately, the truth of this story would not reflect well on either party.

  A few days after my piece was published, I received a panicked call from my former Swedish director, who, though he had also left the UN, was now helping Kofi Annan manage the crisis on a pro bono basis. Annan’s major problem in dealing with the unfolding scandal was that he simply didn’t have enough helpers to work the spin cycle. His “war room” was filled with bureaucrats who were coming up with press releases that made sense only to insiders and had no impact on the wider public debate that was starting to take shape. The only two people who could put together compelling arguments in Annan’s defense were Shashi Tharoor, the head of public information, and Edward Mortimer, Annan’s chief speechwriter. But these people hadn’t been intimately involved with the Oil-for-Food program. They were playing catch-up with the facts. And two people hammering out replies to hundreds of articles and TV reports, not to speak of radio and Internet stories, hardly put a dent in the growing public perception of a massive cover-up. It would take Annan nine months to bring an additional qualified PR professional on board, in the person of Marc Malloch Brown. In the meantime, as the scandal edged toward a climax, public perception of the UN plummeted. Less than half of the U.S. public told pollsters they had a favorable view of the United Nations. This was down from 77 percent favorable opinions four years earlier.

  Things got significantly worse when Annan came under direct attack for letting the UN award a major contract under the Oil-for-Food program to a company that employed his son, Kojo Annan. I remembered receiving press queries about the incident back in 1998. The company in question was called Cotecna, and it was awarded a contract worth $4.87 million to inspect relief supplies going into Iraq. The company employed Kojo Annan as a consultant. The kid was twenty-four years old at the time, and Cotecna, which works in many countries that need help keeping track of their customs, said Kojo was working in the company’s Africa division. At the time of the initial press queries, I realized there was the appearance of a conflict of interest. But given the thousands of companies that contracted with the UN under the Oil-for-Food scandal, I didn’t think it would be fair, in principle, for Kojo to be barred from working for all of them. The key question was whether Annan had pressed the UN’s procurement division to give the contract to Cotecna, and I just didn’t think of Kofi Annan as that type of a guy.

  Well, there was a lot more to this story than I initially realized, but suffice it to say that my call for an independent investigation came at a very bad time for Annan and his team. Christer, one of my former directors, was asked to try to rein me in to avoid further damage. I was walking in noisy Midtown when I answered his call.

  “What the hell are you doing, Michael?”

  “What do you mean?”

  “Your article was very damaging!”

  “I’m not out to damage anybody. I advised an investigation for months! Nobody listened, so now I made the advice public. I figured it was the only way to get anyone’s attention over there.” I heard a sigh on the other end of the line, so I added, “If anything I said was untrue, let the UN respond publicly.”

  “But Michael, this is very embarrassing for the secretary general. He’s just finished dealing with the investigation into the bombing of UN headquarters. It’s difficult for him to order another investigation right now. And all that stuff with Kojo. He’s being dragged through the mud!”

  I hadn’t mentioned Kojo and Cotecna in my piece. But if anything, an investigation would help the secretary general establish his innocence.

  “I think an investigation is Annan’s only way out,” I said. “If he still thinks he has a choice, then he is being very, very badly advised.”

  “But why did you have to go public? Don’t you see it helps those who hate the UN?”

  Ah, yes. The famous “Conspiracy to Undermine the United Nations.” The way I saw it, the UN was doing a fine job of undermining itself all on its own.

  “Either the UN is transparent or it’s not. Either it’s accountable or it’s not. You know as well as I do that we tried to raise compliance issues internally many times. It never went anywhere, and now there’s a scandal, and the UN is lying to the New York Times. I won’t be part of a cover-up!”

  “There is no cover-up, Michael. . . .”

  “Yes, there is. . . . Either the UN opens up its files, or it’s a cover-up.”

  “Well,” said Christer, “Kofi Annan asked me to tell you that he would have much preferred if you had sent him a memo about this. . . .”

  “A memo?” I thought I heard him wrong. I was no longer working for the UN. And Rehan Mullick, the last person who had written a memo that rocked the boat, had been ignored, then fired.

  “Yes, a memo. . . .”

  “I’m sorry,�
�� I said. “I’m no longer in the business of writing memos.”

  The conversation ended on a cold note. I suddenly felt very alone. Christer and I had been very good friends. How many friends might I lose in this process? How many enemies would I make?

  Soon after I spoke to Christer, I got a call from his former secretary. She told me people had been asking for my personnel file.

  “They’re going to attack you, Michael.” She sounded panicked.

  “What kind of attack are they planning?” I asked. “Do I need to wear a helmet?”

  She laughed but soon became serious again.

  “Aren’t you worried?” she asked.

  Actually, I felt like I had just gotten a big load off my chest. A load of lies that had been building up for years. Until recently, I had managed to convince myself that our operation had actually been successful overall and that the compromises we had made were necessary evils. Even if that were true, the time had come to admit everything we knew. I was glad I was no longer working for an organization that valued its employees most dearly for their ability to hide their eyes, cover their ears, and shut their mouths in the face of gross incompetence and corruption.

  “Just remember,” said my former colleague, “not everyone has the option of doing what you are doing. Most people can’t afford to leave this place. They have nowhere else to go.”

  She was right. And I was grateful for the reminder. Most UN employees had come to the organization filled with passion for making a positive difference in the world, just like I had. I realized some of them might feel betrayed by my criticism of the organization, just like I had felt betrayed when Denis Halliday and Hans von Sponeck, our former humanitarian coordinators, had left the organization to speak their own minds. In an odd twist of fate, I had ended up following the same path as the people I had denounced most vehemently in the early days of my UN career.

  I suppose each of us hotheads could find justification in the words of Mark Twain: “Loyalty to petrified opinion never yet broke a chain or freed a human soul.”