Holy shit, UN pays itself $1.1 bn!

[MKSheppard]

From that biased source called the Telegraph

Oil-for-food inquiry says 'key' is $1bn UN paid itself in fees
By Charles Laurence in New York and Inigo Gilmore
(Filed: 25/04/2004)

More than $1 billion (£560 million) collected by the
United Nations as its "commission" on Iraq's oil-for- food programme has become a fresh focus for the inquiry into the biggest scandal ever to engulf the organisation.



At least $1.1 billion was paid directly into UN coffers, supposedly to cover the cost of administering the $67 billion scheme, while Saddam Hussein diverted funds intended for the poor and sick of Iraq to bribe foreign governments and prominent overseas supporters of his regime.

Claude Hankes-Drielsma, a management consultant and adviser to the Iraqi Governing Council, who testified to the House Committee on Government Reform in Washington last week, said that tracking what happened to the estimated total of $1.1 billion in fees levied by the United Nations was a "key" to untangling the corruption scandal.

The Telegraph has learned that UN officials are being asked to provide detailed accounts of how the organisation's slice of Saddam's oil money was used and how much went to companies which were supposed to monitor the food and medicines imported by Iraq.

Although the UN Security Council approved the plan to levy a 2.2 per cent commission on each oil-for- food transaction, the huge sums this reaped for the UN have never been fully accounted for.

A senior UN official who is closely involved in uncovering evidence of the scandal admitted: "The UN was not doing this work just for the good of Iraq. Cash from Saddam's government was keeping the UN going for a few years.

"No one knows exactly what sums were involved because an audit has never been done. That is why they are wriggling and squirming now in New York."

Mr Hankes-Drielsma, a close associate of the controversial Iraqi finance minister Ahmed Chalabi, has played a pivotal role in bringing the scandal to light by challenging the United Nations with paperwork discovered in Baghdad files.

"What the UN did with these administration fees is a pointer to corruption on a scale never seen before," he said. "This programme was meant to be helping the Iraqi people, but was used by the UN for its own ends. There are so many different facets to this greatest scam in UN history."

The new line of inquiry comes after Paul Volcker, the former chairman of the US Federal Reserve, agreed to head the United Nations investigation. He announced last week that he was hiring a team of accountants, money-laundering specialists and lawyers to check thousands of contracts authorised by the UN.

The head of the oil-for-food programme, United Nations Deputy Secretary General Benon Sevan, is among those whose names have appeared on a list of 270 individuals, including one Briton, and companies who allegedly profited from a system in which Saddam granted them oil vouchers for personal gain in exchange for influence and co- operation. Mr Sevan has denied accusations of any wrongdoing.

Investigators are also focusing on a separate alleged abuse, under which Iraq's suppliers overvalued goods shipped into the country under the scheme and then paid a "kickback" to Saddam's regime, providing it with highly-prized hard currency.

Thousands of tons of food delivered under the UN programme were later revealed to have been rotten, and many of the medicines - particularly those imported from Russia - were found to be out of date.

Mr Volcker's inquiry has the Security Council's backing, but has no powers to compel witnesses to testify and will depend on co-operation from foreign governments, UN staff and former members of the Saddam regime.

After telling the Congressional committee that the UN programme "provided Saddam Hussein with a convenient vehicle through which he bought support internationally by bribing", Mr Hankes-Drielsma offered Mr Volcker co-operation from the Iraqi Governing Council, including access to the Baghdad oil ministry files which generated the first evidence of corruption.

Mr Hankes-Drielsma said: "We have files we can share with Mr Volcker, if in return we can explore UN files for our own investigation."

He said that Iraqi investigators had discovered "memorandums of understanding" suggesting that Saddam could decide which UN officials operated within Iraq. "They were either at his beck and call, or they were sent home," he said. "It seems that we have still only uncovered the tip of the iceberg."

[Admiral Valdemar]

The League of Nat... UN is undoubtedly going to feel this unless it explaines itself. The hypocrisy is quite evident.

[Knife]

The League of Nat... UN is undoubtedly going to feel this unless it explaines itself. The hypocrisy is quite evident.

Indeed. If for any other reason, I hope the Iraqi Govering Council holds together long enough so that they'll release the documents they say names the recipients of the oil vouchers.

I want names and I CAN handle the truth.

[Joe]

Here's some more stuff:

World leaders on list of oil recipients

To the outsider, it is hard to see what could link former French Interior Minister Charles Pasqua, President Megawati Sukarnoputri of Indonesia, Russian nationalist Vladimir Zhirinovksy and Benon Sevan, the U.N. official in charge of the Iraqi oil-for-food program.
    
According to testimony presented to the House Committee on Government Reform this week, there is at least one link: They appear on a list of 270 individuals and entities named in Iraqi oil ministry files as receiving vouchers allowing them to buy millions of barrels of oil.

According to Iraqi officials, two groups of people were allocated Iraqi oil for export - legitimate end users, usually defined as oil firms with their own refineries, and "non end users."

The list of "non end users" was drawn up late last year by officials at the Iraqi oil ministry, drawing on files held by various prewar ministries and the state oil marketing organization.

It was leaked to the Iraqi newspaper Al Mada on Jan. 25, triggering a mixture of heated denials and stony silence. Many have said if they received vouchers, it was payment for legitimate business deals under the program.

The list is an extraordinary collection of names, stretching from Paris to Moscow, from the Vatican to the Far East.

In France, those named include friends of President Jacques Chirac, among them Mr. Pasqua and Patrick Maugein, the head of the French oil firm Soco International. Mr. Pasqua has denied illicit oil trading.

Mr. Maugein has confirmed that he traded with Iraq under the program, but said, "None of it was illegal."

A former French ambassador to the United Nations, Jean-Bernard Merimee, is listed as receiving vouchers totaling 11 million barrels. Also on the list is a vocal friend of Iraq, Gilles Munier of the Franco-Iraqi Friendship Association.

At the Vatican, the Rev. Jean Marie Benjamin - a French priest who is reported to have arranged a meeting between the pope and Tariq Aziz, the former deputy prime minister of Iraq - is listed as receiving the rights to sell 4.5 million barrels.

The list is dominated by Russian citizens and organizations.

In addition to Mr. Zhirinovsky, the list names the former Soviet Prime Minister Nikolai Ryzhkov, the Russian Orthodox Church, the "office of the Russian president," President Vladimir Putin's Peace and Unity Party, and companies linked to the Communist Party.

In Indonesia, the list is headed by Mrs. Megawati, whose spokesman has said she is "aware of the allegations."

The files purportedly show vouchers being handed to socialist, communist and nationalist political parties in Ukraine, Belarus, the former Yugoslavia, Romania, and Slovakia.

There are also vouchers for the Palestine Liberation Organization and the Popular Front for the Liberation of Palestine.

A prominent British member of Parliament is listed, along with his Jordanian business partner.

In Syria, there are vouchers listed for Firas Mustafa Tlass, the son of a veteran Syrian defense minister and Ba'ath party elder. Gen. Tlass has said he bought oil only under the program.

Most worrying for the United Nations is the entry for Panama, a Mr. Sevan. Congress was told this week that the reference is to Benon Sevan, the U.N. official in charge of the program.

Mr. Sevan has denied any impropriety and said: "It was incumbent on those who published these allegations to provide the necessary documents."

Mr. Sevan returned to New York on Wednesday after a long vacation before his retirement next month. He has been asked to postpone his retirement until the conclusion of a U.N. investigation that began work yesterday.

An Excel File of recipients - Russia comes off pretty badly

Galloway's shit ruined?

[Admiral Valdemar]

Oh how'd I know that gobshite Galloway would be in this somewhere.

[Darth Wong]

I hate to ask silly questions, but what's the big deal about 1.6% administrative costs? $1.1 billion is just 1.6% of $67 billion, after all. That's better than just about any charity will give you, since the average charity takes at least 20%.

[Admiral Valdemar]

I hate to ask silly questions, but what's the big deal about 1.6% administrative costs? $1.1 billion is just 1.6% of $67 billion, after all. That's better than just about any charity will give you, since the average charity takes at least 20%.

Probably the fact that the good ol' UN is getting paid this much at all. It's not that overly a big number, I think it's how they get the cash that may irk some.

[0.1]

Hate to agree with Wong, but he's right. Who cares about just a billion dollars in fees, or even bribes. It's pocket change. Imagine the greater good done by the little bit of bribes on the side. The Iraqi people were much better off with the remaining 98.4%

[MKSheppard]

I hate to ask silly questions, but what's the big deal about 1.6% administrative costs? $1.1 billion is just 1.6% of $67 billion, after all. That's better than just about any charity will give you, since the average charity takes at least 20%.

I didn't know that it cost a billion dollars to run a charity program. I mean christ, it's not like we're paying these guys $200,000 individually to hand
aid to the Iraqis/

[General Zod]

Sounds like the media's trumping up the dollar amounts as to giving actual percentages. If they gave the percentages 1.6% wouldn't be nearly as shocking as 1.1 billion. How many people would care about the story if it said "UN claims it took 1.6% of funding for administrative costs!"

[Sharp-kun]

Oh how'd I know that gobshite Galloway would be in this somewhere.

You could tell the moment you read it I remember reading the Telegraph when this was first mentioned and it refered to a "prominant British MP". "Galloway" was the first person to spring to mind

[0.1]

Zod,

modestly intelligent people might actually bring up the question, 1.6% of how much funding? Of course, been that most of the world (up to 99.995% I'd say) is composed exclusively of idiots, that line might actually fly.

After all, it could be 1.6% of $100,000 of funding. And that's nothing... you could probably make that amount in a decade or so. heh heh.

[General Zod]

Zod,

modestly intelligent people might actually bring up the question, 1.6% of how much funding? Of course, been that most of the world (up to 99.995% I'd say) is composed exclusively of idiots, that line might actually fly.

After all, it could be 1.6% of $100,000 of funding. And that's nothing... you could probably make that amount in a decade or so. heh heh.

the actual amount isn't really too relevant, as they paid themselves a percentage of the total. So you have to look at the percent of what was taken out. It was only 1.6%, so naturally the higher used the higher the amount from the percent is going to be. 1.6% of anything is relatively miniscule.

[0.1]

Zod,

are you actually saying that if I gave you a choice of 1.6% between two unknown packages, you wouldn't like to know what each package was? In that vein, I think what you just told me is that 1.6% of $100,000 is not too different than from say 1.6% of $10 trillion.

Ok... that makes it clear.

[General Zod]

Zod,

are you actually saying that if I gave you a choice of 1.6% between two unknown packages, you wouldn't like to know what each package was? In that vein, I think what you just told me is that 1.6% of $100,000 is not too different than from say 1.6% of $10 trillion.

Ok... that makes it clear.

except that's not how most commission structures work. After all the fees/costs/profits/etc. have been tallied up at the end of each month (which, most of the time, is unknown) a fixed percentage of that take is given to the individual. When the end cost or profit isn't known and things are done on commission, percentages are the fairest methods to go by.

[Howedar]

Administrative costs do not increase linearly with total cashflow.

[Joe]

Administrative costs do not increase linearly with total cashflow.

There's usually a fixed component and a variable component.

[Darth Wong]

Administrative costs do not increase linearly with total cashflow.

Obviously, which is why they don't take 20% like a typical charitable organization does. But anyone who thinks that a billion dollars is an outrageous administrative cost should take a good long hard look at how much it costs to run a typical social program in the US.

[Joe]

Administrative costs do not increase linearly with total cashflow.

Obviously, which is why they don't take 20% like a typical charitable organization does. But anyone who thinks that a billion dollars is an outrageous administrative cost should take a good long hard look at how much it costs to run a typical social program in the US.

If a few corrupt individuals somehow enriched themselves by stealing a billion dollars from one of the U.S. government's social programs, you can be sure that would be considered outrageous. It may not be too much by the standards of a large body like the U.N. or the U.S., but it's still a hell of a lot of money going to the wrong hands.

[0.1]

Zod,

With most of the sales guys I know, at least in the high tech industry, commissions work like this. You have a base salary, call it 75K for simiplicity. You have a commission on top of that, call it another 25K.

Look at it for the whole year, you're supposed to achieve a certain quota on sales. If you achieve a full 100%, you get the full 25K commission. But whatever your commissions are, you get a percentage of your quota. i.e. 75% of quota means 75% of 25K, 150% of quota means 150% of 25K. This is a rather simplistic view of how high tech sales work, there are lots of variations on this, but mostly that's how that goes.

I've only rarely seen fixed percentage of the take (by which I assume you mean revenue generated by an organization) going to a salesman, may be that's how it is for car sales. But I don't know anything about that.

Now, that belies the fact that in this instance, a percentage is still a billion dollars. You know, if you've ever seen the movie entrapment, you'd know that the thieves were only after a fraction of a percent. But the base was on the order of trillions I think. You'd see how that might be a big deal. Heck, I know from experience that the monetary flow across various U.S. financial institutions are easily on the order of hundreds of billions a day. If only I can get a fraction of a percent for a day or two... heck, who'd notice? And then, I'd have my own island theocracy right in the Bahamas surronded by supermodels.

[PainRack]

Maybe we should compare it to how much money Haliburton is running through in Iraq?

[The Dark]

[the actual amount isn't really too relevant, as they paid themselves a percentage of the total. So you have to look at the percent of what was taken out. It was only 1.6%, so naturally the higher used the higher the amount from the percent is going to be. 1.6% of anything is relatively miniscule.

True. The average administrative overhead on government social programs in the US is ~40%, so 1.6% if extremely low by our standards.

[Stark]

True. The average administrative overhead on government social programs in the US is ~40%, so 1.6% if extremely low by our standards.

SHHH! People want to mindlessly bash the UN without analysis! :rolls:

[Joe]

Galloway again...the Sun has a sense of humor

[Sharp-kun]

Galloway again...the Sun has a sense of humor

I'm still waiting for us to try him for treason. Theres got to be some way we can do it...