Mr. Volcker, Where's the Beef?

Like many, I waited for, and read the second Volcker Commission Interim Report with great anticipation. I have now slugged through both interim reports, and all I can say is “Where’s the Beef!” Taken together the two interim reports appear to make the little things sound big, while missing the big things altogether. Let me start with the latest report. There’s really not that much in its 90 pages (144 pages with its appendix). It tells us only that:

1. Cotecna really shouldn’t have been selected by the UN because it was under investigation in Switzerland and Pakistan for making illegal kickbacks. The IIC does not address how Cotecna performed under its UN Contract or whether it carried out its contract responsibilities. Did they assure that the OFF goods conformed, and did they protect against the use of OFF contracts to cover contraband? Who is going to answer that one for us.

2. Cotecna’s hiring and retention of Kojo raises the appearances of a “conflict of interest” How trite. There is no convincing evidence, the report says, that there was actually a conflict of interest. No matter. I can’t get excited about this finding either way. With all the other great problems and questions surrounding the OFF program and its consequences, I don’t believe this question deserved the time and effort the Volcker Commission gave to it, especially if it comes at the expense of their dealing with the tougher issues.

3. Even if Kofi Annan wasn’t involved, he should have been more aware of what was going on with his son, and ought to have directed closer scrutiny over the renewal of Cotecna’s contract. That’s almost funny. It seems to me that Kofi Annan should have been aware of what was going on with the whole OFF program and the way it was being sabotaged to enrich Saddam and those willing to work with him. If we are going to tag Kofi Annan, it should be on that issue, not the issue of whether or not he followed up on a story about his son in a “The Sunday Times.”

4. Much of the real story about Kojo’s role is still unknown. That's probably right. But, hopefully the IIC will now turn to the bigger issues.

While I’m at it, let me pick at the earlier interim report. It did have more substance. But, I am troubled by its focus and conclusions. That report informed us that:

1. “The investigative record … is replete with convincing and uncontested evidence that the selection process for each of the three United Nations contractors …{BNP, Saybolt and Lloyd’s Register}did not conform to established financial and competitive bidding rules.” This came as no surprise to anyone. Everyone associated with the establishment of the OFF program was aware that the selection process was governed by “political factors. ” The selection of the contractors was the result of negotiations between the principal players. The real scandal here is that the Volcker Commission, the United Nations, and the countries involved have been willing to tag this all on Joseph Stephanides who was really one of the “good guys. ” He tried to make the Iraq sanctions work. I’m still waiting to see if any of the government officials involved stand up to the plate on this one.

2. “…Mr.Sevan, while employed as Executive Director of OIP, solicited and received on behalf of AMEP{African Middle East Petroleum Co) several million barrels of allocation of oil from 1998 to 2001. This IIC finding is serious and it confirms the strong suspicions that predated the IIC that Sevan dabbled also in the much bigger and broader international multi-billion dollar scam run by Saddam Hussein and his cronies to assure that they were the greatest beneficiaries of the Oil for Food Program. The question now is whether the IIC will delve more deeply into the extent of this enormous international scandal or leave it only with Sevan. Volcker and his team should help us understand how the international community and the United Nations allowed this to happen. What explains the failure of the officials in the United Nations overseeing the program to blow their whistles loudly, and what explains the absolute failure of government officials in the United States, Europe, Russia and elsewhere from cracking down.

Let’s hope that the final Volcker Commission Report goes beyond the parochial issues they have dealt with so far. Its time to get to the broader questions and issues that get to the true heart of this scandal.