UNITED NATIONS, Nov. 16 -- A U.N.-appointed investigator probing corruption in Iraq's oil-for-food program has rejected a request by a Senate committee to strip U.N. officials of their immunity so they can testify before Congress. The U.N. official agreed to release, at a time of his choosing, internal audits of the program and other confidential documents sought by Congress.
Paul A. Volcker, the former chairman of the Federal Reserve Bank, wrote in a letter to Sens. Norm Coleman (R-Minn.) and Carl M. Levin (D-Mich.) that asking U.N. officials to forgo diplomatic immunity and go before Congress "would plainly risk ending prospects of their cooperation with" his investigation.
Coleman, the chairman of the permanent subcommittee on investigations of the Governmental Affairs Committee, and Levin, the subcommittee's ranking Democrat, wrote to U.N. Secretary General Kofi Annan on Nov. 9 to ask that he reconsider barring release of more than 55 internal audits of the program and allow U.N. officials to testify to Congress. They criticized Annan for "hindering" their efforts to obtain documents from Lloyd's Registry Inspection Ltd., a British company that inspected goods imported into Iraq through the U.N. program.
Annan's spokesman, Fred Eckhard, said the U.N. chief intends to respond to Coleman and Levin but feels "bound to respect Volcker's position." Coleman was unavailable to comment Tuesday night, a spokesman said. Levin declined to comment through a spokeswoman.
The U.N. oil-for-food program was established in December 1996 to allow Iraq to sell oil and buy food, medicine and other humanitarian goods to ease the strain of economic sanctions.
Iraqi leader Saddam Hussein allegedly skimmed billions of dollars in illegal kickbacks and payoffs through the $64 billion program, triggering investigations by the United Nations, federal prosecutors and Congress. Charles A. Duelfer, a senior adviser to the CIA, alleged in a report last month that the program's director, Benon Sevan, received vouchers to purchase millions of barrels of Iraqi oil at a favorable rate. Sevan has denied any wrongdoing.
In defining his disclosure policy, Volcker said that all reports on malfeasance or mismanagement would be accompanied by "evidence bearing on those findings." He said, "We anticipate these disclosures will include the documentary evidence explicitly mentioned in the Senate letter, certainly including the internal and external audit reports." But he provided no timetable for releasing the documents.
Volcker said he plans to release his first interim report in January on "allegations of bribery and undue influence" in the United Nations' hiring of banks and inspection companies to monitor trade with Iraq. He said he aims to complete a "definitive report" on the United Nations' management of the program "by the middle of next year."
Volcker defended the U.N. decision to withhold documents, saying it had to balance the benefits of "transparency and disclosure" with its "need to maintain confidentiality in its internal deliberations." He pledged to respond to "specific requests" for cooperation.
Rep. Henry J. Hyde (R-Ill.), chairman of International Relations Committee, said in a statement that a French bank, BNP Paribas, that handled program funds may have failed to follow U.S. regulations. "Evidence seems to indicate that in some cases, payments in the oil-for-food program were made by BNP at times with a lack of full proof of delivery for goods and other necessary documents," Hyde said.
The bank's Washington-based attorney, Robert S. Bennett, disputed Hyde's allegations and said the bank followed federal regulations.
Investigators for Hyde's committee said Hussein manipulated the oil-for-food program to generate kickbacks that he may have used to pay as much as $25,000 each to families of Palestinian suicide bombers in Israel.
The committee, which will hold a hearing Wednesday on the program, is investigating how much money was involved, officials said.