20 May 2004


Press Briefing

Press Conference by Chairman of Panel to Investigate ‘Oil-for-food’ programme

The priority of the Independent Panel’s investigation of the “oil-for-food” programme was to “get after” allegations of corruption and misconduct within the United Nations itself and, more broadly, the question of the maladministration of the “oil-for-food” programme, stated Paul A. Volcker, Chairman of the Independent Panel, in a press conference today at United Nations Headquarters.

In the event of maladministration, he added, questions related to why that maladministration occurred, where responsibility for it lay, and what lessons learned could be drawn, would also be addressed.  The longest and most difficult aspect of the investigation would relate to what went on in Iraq itself in terms of contractors, overcharging and undercharging, kickbacks and smuggling.  Although they were peripheral to the investigation itself, the Panel could not help but touch upon those phenomena.

It was crucial for the Panel to establish a degree of control over the very important records held in Iraq, if its investigation was to be satisfactory, he continued.  To that end, a team had been sent to Baghdad to make contact -– at appropriate levels -– with the Bureau of the Supreme Auditor, which had responsibility for collecting and consolidating those records.  The team would explore ways and means of achieving and maintaining sufficient influence over and accessibility to those records.

The Independent Panel was in business, he concluded, although its work had barely begun.  Now possessing a skeleton staff and temporary quarters, both of which were to be expanded, the Panel also benefited from the assistance of Steve Zimmerman, Head of the Office of Institutional Integrity of the Inter-American Development Bank, who was helping to get the body off the ground and had participated, with the Panel and its staff, in four days of intensive meetings during which a broad plan of attack and the above priorities had been set, and staffing needs considered.

Recognizing that many would be ahead in examining available materials and encouraging the media to share information relevant to the investigation with the Panel, Mr. Volcker noted that his office now had a Web site, fax machines and an e-mail address –- and would add a working telephone number next week.

However, he cautioned, the sharing of information would be a one-way street for the time being.  The Panel would not be facilitating the flow of information in the other direction due to its responsibility to conduct as careful, unbiased and independent investigation as possible.  The report to be issued would reflect and put into perspective all available information.

As the investigation proceeded and an understanding of the substance and scope of relevant documentation was arrived at, appropriate disclosure, consistent with investigative requirements, would be considered, he continued.

Finally, in response to expressed concerns about the release of the final report, he said there was no doubt in his mind that it would be made public.  The report would go to the Secretary-General in the first instance, and he would pass it on to the Security Council.  However, as there was a clear possibility of receiving some information on the basis of it being kept confidential, the decision to retain such information as confidential would be made strictly by the Panel.

In response to a question about whether today’s raid on the house and offices of Iraqi Governing Council member, Ahmed Chalabi, had to do with the dispatch of the Panel’s team to Baghdad and attempts to get hold of documents there, Mr. Volcker said it had never crossed his mind that the action against Mr. Chalabi had anything to do with his team going to Baghdad. 

However, he was aware that there had been a tug-of-war going on in Baghdad over those records, which were of interest to many people, as well as the Independent Panel.  The Panel’s concern was to gain access to them in an unfiltered and unbiased manner, which was quite a challenge under the circumstances existing in Baghdad.  There were undoubtedly people with various motivations in terms of this investigation.  That provided the strongest possible reason for the Panel to protect against information going out on a piecemeal basis.  The danger was that isolated pieces of information, even large pieces, would not be put into context and interpreted appropriately.  It was normal in any investigation to keep information confidential.

Also asked to comment upon the suspicion of many at the United Nations that part of the motivation for bringing the present scandal to the fore was related to political forces in the United States who bore animus against the Organization and hoped to discredit it, Mr. Volcker said he was not prepared to speculate upon motivations.

Asked whether the three-member team sent to Baghdad had been successful in getting the audit bureau to agree to the Panel’s accessing the records, and whether that team had attempted to see Mr. Chalabi –- who had been conducting his own investigation -- he refused to comment upon exactly who the team had seen, but said that team members had met with a variety of people in Baghdad, at every appropriate level, including the Supreme Audit people.  The team had received indications of cooperation on all sides.  That cooperation would need to be implemented and tested, but no one had said no.

On the final submission of the Panel’s report, Mr. Volcker said the report would be released as written.  The Panel would make the final decision as to what information was contained, including by its decisions on the retention of confidential information.

Asked for an estimate on the report’s release date, he noted that the Panel was bound to deliver its interim report in three months.  He did not know whether there would be much to say at that point, but he hoped to clear up as much as possible about the allegations about internal United Nations staff in that range of time.  It was hoped that some judgement about the overall administration of the programme could be reached in six to eight months.  However, no one expected to finish the latter priority of chasing through the contractors and the money and reaching judgements there in less than one year.

Having noted that the most difficult aspect of the Panel’s investigation would be assessing what had gone on in Iraq itself, Mr. Volcker was asked whether, in compiling the Panel’s report, the chips would be allowed to fall as they might or whether the report would be written so as not to undermine further the political reality in Iraq.  In response, Mr. Volcker said that the Panel had been assigned to discover and follow the facts so far as it could.  That was what would be reported.

Declaring that there was a sense of fuzziness among reporters about the degree of Mr. Volcker’s independence -- given that decisions made prior to his appointment related to the control of documents had been subsequently supported, and given that while welcoming aggressive press coverage, he intended to control documents to ensure their appropriate interpretation –- one reporter commented that he seemed to be describing his mission as damage control, when the purpose of investigation was to get to the bottom of what had happened.  Why was lessons learned the most important part of his mandate?

In response, Mr. Volcker said he had cited the importance of lessons learned because he had raised the point with the Secretary-General at their first meeting.  They had agreed to do an investigation about the general management of the programme, with some conclusions about why it had been managed as it was and the effectiveness of that management.  He had felt it was then natural to come to certain conclusions and draw out lessons learned.

Asked about the need to secure the documents and to prevent other investigators, the United States Congress and the press from accessing them, he said a free-for-all would not lead to a straight report.  There would be lots of documents saying lots of things, which the Panel would like to examine.  Documents within the United Nations had been sequestered, and he had no reason to believe that had not been done well.  It might become appropriate to release those documents at some point, but not before the Panel had had the chance to look at them and evaluate their significance for the investigation.

Asked about the Panel’s capacity to produce a thorough and credible report without subpoena power, Mr. Volcker said he would love to have the power of the police, but instead the Panel would have to count a general desire to get at the facts.  Given the Security Council’s call for cooperation by Member States, the body at least had a moral foundation.  If there was a lack of cooperation, the Panel would have to make judgements about if and when to point that out.

Asked whether the Panel had within its possession all of the audits done on the “oil-for-food” programme, he said he had not personally seen them, but he was certain they had been segregated among United Nations documents and were available to the body.  He also felt certain of access to BMP documents, as they had been a client of the United Nations.  As for the decision to replace KPMG with Ernst and Young, he noted there had been some uncertainty in Baghdad over who would be sponsoring the Iraqi analysis of those records and responsibility for the decision had been turned over to the Bureau of the Supreme Auditor.  He declined to speculate on the motivation for the decision.

Also declining to put a time limit on the Panel’s access to documents, he reiterated the need for as full access as possible.  Some records might have been destroyed.  At this point, it was important that they be held as inviolate as possible, and not manipulated in any way.

Returning to the issue of a one-way street on information sharing, Mr. Volcker said it was not his attention to cut himself off from a potentially lucrative source of information, but that any decision to pass information back to the media would only be made as time went by.

Asked about cooperation with other investigations, he said the Panel’s investigation would be the central, authoritative one, or it would have failed its purpose.  Apparently there would be some kind of an investigation by the accounting firm chosen in Baghdad, and though he had indicated that an additional investigation was unnecessary, he had been assured that it was just an inquiry.

National authorities might also have decided to investigate the conduct of their own citizens or companies, he added, but those were not comparable investigations.  The only other broadly overlapping investigation was that being run from Baghdad, and indications of cooperation had already been made in that case.  Now, those indications should be formalized.

Asked whether the cooperation of past United Nations officials, such as former Secretary-General Boutros Boutros-Ghali, would also be requested by the Panel, Mr. Volcker said if Boutros-Ghali appeared to be relevant to the investigation, he supposed the answer would be yes.

Another reporter asked what role Richard Murphy had been hired to fill and was informed that Mr. Murphy had, in fact, volunteered.  Some people he knew well had asked Mr. Volcker what they could do to help and he had asked them to go to Baghdad.  They included Richard Murphy, Jack Hennessey and Walter McCormick.

Asked whether the Panel had been the originator of letters purportedly sent to Saybolt, Cotecna and individuals in the United Nations, urging them to limit their cooperation to the Panel’s investigation, he said the body had not authorized such a letter, but acknowledged that the Panel had an interest in seeing that sort of information was channelled to it as expeditiously and effectively as possible.

Acknowledging that concern about the forthcoming transfer of power in Iraq had increased his sense of urgency to firm up agreements on access to documents, he said he had no idea about what sort of documents had been taken from Ahmed Chalabi’s home, but that if they were relevant to the investigation, he would like to see them.

He also said, in response to a question about the entities, individuals and prominent party figures from a number of countries –- cited on a list published during an earlier investigation –- that that aspect of the Panel’s investigation fell into the third stage, in terms of reaching a conclusion in the broad report.  However, there would certainly be investigation in that regard and a more comprehensive list would hopefully be compiled eventually.

Asked whether arrangements had been made for him to speak to Benon Sevan, he said he would not be commenting on any meetings with individuals for obvious reasons.

In response to questions about the Panel’s methods of work, Mr. Volcker said he planned to work by consensus.  And while the term “gag order” was a bit harsh, the job of the Panel’s press officer would be to facilitate the flow of information in the direction of the Panel.

As he also noted, this was the second briefing he had held at United Nations Headquarters, however, he did not intend to hold regular briefings, nor would those held be at Headquarters.

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For information media. Not an official record.