UNITED NATIONS — It was the summer of 1990, and Saddam Hussein's Republican Guard had just stormed into oil-rich Kuwait. The U.N. Security Council, hoping to induce Iraq to withdraw and disarm, responded by imposing sanctions.
Nearly 15 years, two wars and a regime change later, those sanctions and the multibillion-dollar "oil-for-food" program that followed them still shadow the United Nations. Eight investigations are underway in Washington and New York into how Hussein subverted and the U.N. mismanaged a program that was meant to deny the Iraqi dictator funds for weapons but instead buoyed his regime.
The 15 members of the U.N. Security Council, including the United States, were at best complacent and at times complicit in Hussein's exploitation of the program, diplomats and U.N. officials say. Competing national interests and economic stakes in one of the world's biggest oil producers chilled the council's willingness to scrutinize the program, which allowed Iraq to sell oil in exchange for cash intended to be used only to buy food, medicine and other essentials.
Systemic corruption on Hussein's part, inaction of world governments and mismanagement by the United Nations combined to allow one of the greatest frauds in U.N. history.
In the seven years of the program, which took effect in 1996, Security Council members had many opportunities to plug the holes that allowed money to continue flowing into Hussein's coffers. But they often chose to look the other way, or even actively block reforms, say diplomats who were on the program's sanctions committee. The members made a Faustian bargain: Hussein's side deals were the price to pay for keeping him from rebuilding his weapons program.
Instead, Hussein used the program to amass billions of dollars and consolidate his control. Although the program helped feed the Iraqi population and blocked Hussein from massive re-arming, the skimmed windfall helped pay for the very weapons it was designed to block: missile components, surveillance equipment and tank barrels.
Hussein "was playing the international community like a violin," Condoleezza Rice said last month during her confirmation hearings for secretary of State. "And we can't let that happen again."
All five permanent members of the Security Council diminished the sanctions. Even the United States, Iraq's most implacable adversary, made a crucial compromise when the original sanctions were put in place. For 12 years, citing national interests, Washington exempted Turkey's and Jordan's substantial illegal trade from a law that would have blocked U.S. aid to countries that violated the sanctions on Iraq.
The U.S. and Britain also looked the other way when their citizens and businesses traded favors for oil and brought it into the country in ways that skirted legality, say U.N. officials who oversaw oil contracts.
Russia was Iraq's best customer and most powerful ally on the Security Council; it blocked several U.S. and British attempts to tighten controls on Iraqi imports and told Hussein's government in advance when and where U.N. weapons inspections would take place, a former U.N. official said.
China was a consistent opponent of sanctions and interference with another country's sovereignty, wary of precedents that could be used against it.
France fought attempts to reduce kickbacks that traders paid to Hussein's regime for the right to buy discounted oil, and sent charter flights to Baghdad in a brazen challenge to sanctions it had voted to enact.
To prevent a recurrence and to pinpoint blame, the eight pending investigations, five of them launched by Congress, will try to unravel the failures of the oil-for-food program, including the possibility that U.N. officials accepted Iraqi bribes to tolerate illicit trade or to block efforts to tighten the sanctions. A preliminary report by former Federal Reserve Chairman Paul Volcker, in an investigation commissioned by U.N. Secretary-General Kofi Annan, is expected to be released today.
An opinion piece in today's Wall Street Journal previews Volcker's findings: The awarding of contracts to firms responsible for monitoring the program was "tainted," the U.N.'s internal audit process was ineffective, and the program's chief, Benon Sevan, helped pick oil purchasers, an "irreconcilable conflict of interest."
Problems Began Early
But to understand what went wrong with the oil-for-food program, it is necessary to understand what went wrong with the sanctions program that predated it. Even in the earliest days of the sanctions, Hussein exploited diplomatic fissures, foreshadowing his skillful upending of the oil-for-food program.