More than half of the companies that traded with Iraq in the prewar oil-for-food program paid bribes and kickbacks to the government of then-President Saddam Hussein, according to the final report of a U.N.-appointed panel investigating corruption in the $64 billion operation.
Former Federal Reserve chairman Paul A. Volcker, head of the Independent Inquiry Committee, said the companies made nearly $2 billion in illegal payments. He will outline his findings in his fifth and final report on Thursday.
"The cumulative impact of this is pretty impressive," Volcker said in an interview. "Somebody should have stood up and said, 'Enough.' But they didn't, so it ended up being much more controversial than it should have been considering that the main objectives of the program were in a sense achieved."
The committee will publish the names of about 3,000 companies suspected of paying an illegal surcharge or abusing the program, according to senior investigators. The inclusion of the companies in the report does not amount to evidence of a crime, but it does represent a comprehensive account of the companies about which U.N. investigators discovered "some evidence of manipulation one way or another," one senior investigator said.
The investigator cautioned that the list of companies in the report is drawn from "Iraqi data, which we obviously consider not unreliable. But we can't vouch for everyone of them." He added that "some of these people may be innocent." The investigators solicited rebuttals to the charges from the companies and included the responses with no comment.
Thursday's report will mark the end of an 18-month, $30 million investigation that has uncovered widespread corruption and mismanagement in the United Nations' largest humanitarian aid program. The investigation has implicated the former head of the program, accusing him of accepting bribes from an Egyptian businessman who bought Iraqi oil.
The inquiry committee has also faulted Secretary General Kofi Annan, saying his son took advantage of his father's position to profit from the program, and it has criticized the U.N. Security Council for mismanaging the program.
Senior investigators say they believe the report will provide a starting point for prosecutors around the world to carry out their own criminal investigations. Federal and state prosecutors in New York have already charged at least a dozen businessmen and lobbyists with paying bribes to Iraq or with illegally lobbying for an end to sanctions on behalf of the Iraqi government.
But Volcker and other senior investigators remain concerned that U.N. members do not have enough political will to impose the committee recommendations for administrative reforms that would change the way the international organization does business.
"I'm just concerned that this could really end up gathering dust, together with many other reports over the years," said South African Justice Richard J. Goldstone, who helped oversee the committee investigation.
"I hope to reinforce the recognition of the need for reform," Volcker added. "There's a lot of nominal support for administrative reform, but whether they will actually carry out an effective reform is still very much in the balance."
The Bush administration has cited Volcker's findings in making its case in the U.N. General Assembly for establishing an independent auditor to oversee the organization's finances. But the United States has faced resistance from poor nations, who fear that Washington is trying to exert too much control over the international organization.
The oil-for-food program was created in December 1996 to provide assistance to Iraqis suffering under a U.N. trade embargo imposed after Iraq's 1990 invasion of Kuwait. The program allowed Iraq to sell oil and use the proceeds to buy food and medicine.
The final report Thursday will focus primarily on the dealings between the former Iraqi government and the companies it chose to sell oil to and buy humanitarian goods from.