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International-UN-NGOs

Conflicts of Interest and Institutional Corruption

2004-12-16

EFL: Critics of the United Nations who hold Secretary-General Kofi Annan responsible for failing to identify and halt corruption in the U.N. Oil for Food Program, say he also showed poor judgment in selecting former U.S. Federal Reserve Chairman Paul Volcker to investigate the allegations of fraud and bribery. Volcker's previous and extensive relationships with the United Nations and its affiliated agencies could appear to be conflicts of interest, sources told CNSNews.com, and they said Annan should have chosen someone else.
Political figures and career civil servants in and out of the U.S. government said Volcker is a man "above reproach." Nevertheless, those sources wondered why Annan did not choose someone less involved with the U.N. and the international finance community to chair the "Independent Inquiry Committee into the United Nations Oil for Food Program."
"It appears, based on [those relationships], he probably should have," said U.S. Rep. Howard Coble (R-N.C.), who chairs the House Judiciary Subcommittee on Crime, Terrorism and Homeland Security, is one of 59 House members to co-sponsor a resolution calling on Annan to resign. But Coble was quick to point out that he does not question Volcker's integrity - just the decision by Annan to appoint the former Federal Reserve Board chairman.
"I hold Volcker in very high regard. Unfortunately, I do not have the same sterling endorsement for the United Nations," Coble said. "I'm not that high on the U.N., but I am that high on Volcker." The Oil for Food scandal, Coble said "is as bad as it has been portrayed."I'm very disappointed," he added, "and I think some heads should roll at the U.N."
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CNSNews.com has learned that Volcker has various relationships with at least one Non-Governmental Organization (NGO) that lobbies the U.N., another independent agency of the U.N., and an indirect connection to at least one energy corporation that has billions of dollars worth of oil development contracts pending in Iraq.

Volcker is:

Chairman of the board of trustees of the Group of 30, "a private, nonprofit, international body" that studies and attempts to influence decision makers in the areas of international economics and finance. The Group of 30 is a registered United Nations NGO. The Department of Public Information at the U.N. credits NGOs with "giving the U.N. invaluable links to people around the world."

A member and former co-chairman of the Bretton Woods Committee. The BWC was founded, "to increase public understanding of international financial and development issues and the role of the Bretton Woods institutions." One of those institutions is The World Bank Group, which is "an independent specialized agency of the U.N. as well as a member and observer in many UN bodies." According to the World Bank Group website, "In addition to a shared agenda, the Bank and the U.N. have almost the same membership."

Former chairman and CEO of Wolfensohn & Co., Inc., an international investment firm previously headed by James D. Wolfensohn. Wolfensohn is now president of the World Bank Group, which, as previously reported, is a U.N.-affiliated agency.

A member of the international advisory council of Montreal-based Power Corporation of Canada. Power Corporation Chairman and Co-CEO Paul Desmarais, Jr., serves on the board of directors for French oil conglomerate TotalFinaElf. The company holds $4 billion worth of contracts to develop the Majnoon oil field in Iraq.

Richard Lessner, executive director of the American Conservative Union, told CNSNews.com that despite the appearance of a number of potential conflicts of interest, he is giving Volcker the benefit of the doubt. "I think he's sincere in wanting to get to the bottom of the scandal," Lessner said. "I'm sure that he feels as though he's committed his personal integrity to the outcome of this investigation." But Lessner echoed other critics of the limitations under which Volcker must operate.
"Without subpoena powers, he will never know if he's gotten to the bottom of the investigation," Lessner continued. "No matter how far he follows this, he'll never know for certain that he's run down every lead, followed every trail and dug out every mole that's burrowed into the bureaucracy of the United Nations." Lessner said he believes the limitations placed on Volcker were purposely designed to handicap the investigation.
"I don't think this is a matter of mismanagement. I don't think Kofi Annan's problem is one of incompetence," Lessner concluded. "This [investigation] is all for show. This is to give Kofi Annan cover. I think this was all intentional."