Audit: UN overpaid for Gulf war losses

The UN has overpaid individuals, companies and Gulf states for losses in Iraq's 1990 invasion of Kuwait by as much as $5 billion.

    Iraq's occupation of Kuwait led to huge compensation claims

    Some 19 internal audits of the UN Compensation Commission (UNCC) relating to the compensation scheme were posted on its website on Monday.

    The audits of the Geneva-based UNCC, carried out by the UN Office of Internal Oversight Services (OIOS) from July 1997 to December 2004, did not identify any corruption.
    But they did raise questions about the approval system governing awards for damages, and concluded overpayments had been made.

    Along with exchange rate and other issues, the audits pointed to a total overpayment of about $5 billion, officials said.
    Pre-empting criticism

    The documents have been made public a day before a total of 56 audits were to be released by an independent panel led by former US Federal Reserve chairman Paul Volcker.
    Volcker's panel is investigating the oil-for-food programme that the UN operated when Iraq was under international sanctions. The US Congress is probing alleged corruption in the programme.
    The UNCC confirmed it had issued the audits after being tipped off that the Volcker panel was going to make them public without including the UNCC's responses to each audit's findings.
    "Our goal is to show that the Office of Internal Oversight Services' audits have been easily rebutted," said UNCC deputy executive secretary Mike Raboin.
    "Since we are not part of oil-for-food, we are at a loss as to why these documents were given to the Volcker committee."

    UNCC strikes back
    Senior UNCC officials have strongly denied any overpayment and dismissed the auditors' conclusions, saying they had exceeded their mandate by delving into legal issues. 

    "Since we are not part of oil-for-food, we are at a loss as to why these documents were given to the Volcker committee"

    Mike Raboin,
    UNCC deputy executive secretary

    The UNCC also posted a confidential decision by UN legal counsel Hans Corell, who ruled in November 2002 that the UN auditors had gone "beyond the proper scope of audit" by trying to reopen legal issues.
    The UNCC was set up by the UN Security Council in 1991 to compensate individuals, companies and governments for losses from Iraq's invasion and seven-month occupation of Kuwait.
    Compensation scheme

    It has received claims totalling $350 billion and to date has approved $51.8 billion in compensation.
    Awards are made after panels of experts examine claims and make recommendations on payment.

    These amounts must be endorsed by the UNCC's governing council, comprising the same 15 member states as the UN Security Council.
    The UNCC was never part of the oil-for-food programme, set up in 1996 to ease the impact of UN sanctions by allowing Baghdad to sell limited amounts of oil and buy relief items.
    But Iraqi oil revenues were used to fund both the UNCC and the programme.
    Volcker comment

    Volcker said in an interview published in the New York Times on Friday that the internal audits, while professionally done and very detailed, "don't prove anything".
    Staff of the US Senate's Permanent Subcommittee on Investigations estimated ousted president Saddam Hussein pocketed $21 billion by cheating over the oil-for-food deal.
    Volcker has rejected the figure, saying most of the money came from oil smuggling outside the UN programme.

    SOURCE: Reuters


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