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DIPLOMATIC LICENSE

Current Events at the United Nations

Aired October 28, 2005 - 21:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEO CLIP)
PAUL VOLCKER, U.N. INVESTIGATOR: That's where the program got corrupted rather generally, and there should have been a reaction and there wasn't. Now, why wasn't there?

UNIDENTIFIED MALE: This is true confessions time now for the government of Syria. No more obstruction. No more half-measures.

(END VIDEO CLIP)

RICHARD ROTH, CNN ANCHOR: The Oil For Food man who came in from the cold. Paul Volcker makes his last walk to the United Nations to hand in a final report on the scandal-ridden humanitarian program, a report loaded with names that will now be stained until judicial systems decide to act.

Welcome to DIPLOMATIC LICENSE. I'm Richard Roth.

The fact that there have been four other reports in the last year didn't lower demand for this volume. The press lined up to get their copies. They unfortunately are handed out only a half-an-hour before reporters get their chance to ask questions to the Volcker panel.

Paul Volcker said the Oil For Food Program was working until 2000, when Saddam Hussein told thousands of companies if you want to play, you have to pay.

(BEGIN VIDEO CLIP)

VOLCKER: It became serious in a financial sense with money flowing back to Iraq, was when the surcharges and the kickbacks became generalized. And at that point I think it was facilitated by his initiative, but at that point it should have been caught.

(END VIDEO CLIP)

ROTH: Hours after Volcker spoke, these two men were still talking about the report, the U.N. Secretary-General and his chief of staff Mark Malloch Brown. They attended an unusual briefing Volcker gave the member countries of the General Assembly. It seemed like 10 minutes went by before any nation had a question. Two were asking from copies of the report.

Volcker had blasted the Security Council primarily for not cracking down on corruption it was aware of and the secretary-general too was blamed for not acting.

(BEGIN VIDEO CLIP)

KOFI ANNAN, U.N. SECRETARY-GENERAL: I think there are lessons for all of us to learn and, obviously, we are going to learn from the lessons, take measures to strengthen the organization, and we already have proposals for reforms that will insure that in the future we are better equipped to handle this sort of program.

(END VIDEO CLIP)

ROTH: We are now going to read all 623 pages in the last Oil For Food report followed by the list of companies in the annex, available only on CD ROM. To help me with them, joining me now is Richard Goldstone of the U.N. Oil For Food investigation, the latest notable job in a long career which includes being the first prosecutor for the International War Crimes Tribunal for the Balkans and Rwanda. And Mark Pieth, also a member of the Oil For Food investigation committee. In his pre-Oil For Food days he was already known as a top money laundering and organized crime prober.

Judge Goldstone, Mark Pieth, thank you for joining us. I'm not sure Oil For Food is indeed over, though your commission, after a month, is going out of business.

Let me ask you about an interview published on Friday with Paul Volcker done by the "Los Angeles Times" correspondent Maggie Farley. This article says that Secretary-General Annan and his lawyer asked Paul Volcker at a meeting before the last report to change language about business dealings with Kojo Annan and Cotecna, I think, the company that he worked for, that they thought could force his father's resignation. Volcker agreed. It was merely part of the due process, he said.

When asked about whether Annan indeed knew about his son's attempts to use his father's connections, "Was Annan's connections used? To this day I still don't know."

What is your comment on that? Was the language changed?

JUDGE RICHARD GOLDSTONE, OIL FOR FOOD COMMISSION: Well, the language was changed. But this is part of normal practice, and one of the reasons that we have given -- what we call adverse notification to people against whom allegations are being made in our reports, we give them the opportunity of meeting with the committee, with one or in some cases all three members of the committee, and we discuss their problems.

And here the wording was changed, but let me emphasize the substance was not changed in any way.

ROTH: What was the wording that was changed?

GOLDSTONE: Well, the wording that we were asked to change was really dealing with two separate issues together, and we separated them.

ROTH: Well, most of the companies didn't get as much direct contact or they sent letters. There comments were put in and they didn't have the same chance.

GOLDSTONE: No, no. They did.

MARK PIETH, OIL FOR FOOD COMMISSION: They did, actually, yes, and the crucial point here, which was just made by Judge Goldstone, was that two issues which were totally separate, which was one was relating to the performance of the secretary-general and the other issue was relating to his family business, were bundled together in one sentence. And we felt after hearing him that it was fairer, actually, to take them apart. That's the whole change.

ROTH: Was anything deleted? Language that would determine his political fate?

GOLDSTONE: Certainly no language was deleted dealing with the facts or the findings of the committee.

ROTH: Any company that had similar treatment that you can give an example of?

PIETH: Yes, well, in fact --

GOLDSTONE: Well, AWB is one of them that comes to mind immediately. Their very senior members met with Mr. Volcker and the wording was changed. But there have been others, individuals and corporations, and it's part of the procedure which was adopted by the committee. We wanted a fair process and for people to be able to make submissions to us.

PIETH: It's actually a very good example, this AWB, because this company paid -- this is undisputed -- more than $200 million so-called surcharges, illicit payments to Iraq. The only question that was open, whether they knew about it, and after hearing them we said, well, they did not actually know, but they maybe should have known, and that was quite a substantial change, as you can see.

ROTH: This is the Australian agricultural business?

PIETH: The Australian Wheat Board.

ROTH: Do you think it shows that the Oil For Food Program was a corporate looting scheme or, when you look at the report, let's say Daimler-Chrysler, it's $7,000, yet the headlines say "Daimler-Chrysler involved," something you even said, Volcker said, the company wasn't even aware of the dealings of one staff member. Is that fair or not fair?

GOLDSTONE: I think that's fair. But Daimler-Chrysler is there because of its importance, because of the size of the corporation, and we wanted to show just how deep and how far and how relevant the machinations of Saddam Hussein's regime went.

ROTH: Can you tell our viewers about other companies? Siemens and Volvo and others.

PIETH: Maybe if I could say for a moment with this Daimler-Chrysler example --

ROTH: Yeah, sure.

PIETH: -- because I think you're right. It's a very petty sum that we're talking about, but the example is absolutely blatant. You have somebody trying to sell a truck and he's asked to inflate the price of the truck by 10 percent, which he does. He claims the 110 percent from the official escrow account and then he passes the 10 percent back in a secret way. He actually promises that even beforehand in a so-called side letter.

So we have an employee of the company signing, yes, we will pay 10 percent back to you outside illegally.

ROTH: Now, all of these companies are denying your work. I mean, who is right here? Is every -- are all of them -- is it fair? They're saying -- the Russians are saying the signatures were forged when it comes to Russian companies.

GOLDSTONE: Well a lot of the companies have in fact admitted. In response to our letters, some companies -- I don't want to exaggerate the number, but there were at least 10 or a dozen companies that have admitted that --

ROTH: But I think, didn't the report say even a tiny number responded to your --

GOLDSTONE: Well, it was, but the number that responded came to a couple of hundred.

ROTH: So you're saying -- what are you alleging about Siemens, Volvo, all of these -- Volvo Group International. What are you alleging?

GOLDSTONE: Well, with respect to Siemens, the allegation is that they paid over $1.6 million by way of so-called after-sales services. You see, the way it worked was that the Iraqi people charged after-sales service. They charged for transportation, which was really a sham, it was a charade.

And some of these companies are saying, well, we didn't know it was a charade, we really thought -- as in the case of AWB senior management, they said they thought they were paying these tens, hundreds of millions of dollars for actual transportation fees. In fact, it was to a sham front company set up in Jordan by the Iraqi government.

We have said, because of the huge amounts involved and the way these amounts, the transportation fees, escalated out of all proportion, it should have alerted them to the fact that there was something amiss.

PIETH: Maybe I could add a word here on Siemens on how the methodology of detecting works. You know, we established a paper trail. We have the goods trail and the paper trail, so we can see the company pays the agent and the agent pays Iraq.

Now, the company will say we didn't really want to pay the agent so that he would pay a surcharge. We not we were merely paying his salary. And, obviously, that's for national law enforcement agencies to find out, what their motivation was.

ROTH: There is a limited time left here. I mean, you were on organized crime expert. Are you surprised that there was such a paper trail or did you think these companies were just hoping, well, Saddam is going to be there forever, no one is going to find this?

PIETH: I think that's what they thought. Otherwise, they would not have signed 1,600 side letters, letting evidence lying around of their agreement to actually pay bribes.

ROTH: I mean, some of the companies, and others named, the people named, from George Galloway to Charles Pasqua (ph), former French interior minister, Oscar Wyatt, oil trader, business tycoon. Some of them I think are going to say, whether they go to court or not, and Wyatt was arraigned this week in New York on federal U.S. government charges, that many of your witnesses -- the footnotes say Iraqi official, Iraqi senior official. I mean, these are people, some of them I presume, facing possible war crimes. Are they to be trusted?

GOLDSTONE: Well, if you look carefully, we didn't rely only on Iraqi documents. We relied on Iraqi documents, in particular that were confirmed by U.N. documents, by banking documents that we got from a number of countries, and really the paper trail consisted greatly of more than Iraqi documents.

PIETH: Maybe a word on the Iraqi witnesses. Most of these people we are not naming are the people who would face very, very serious danger. They're usually mid-ranking officials, out of prison, but they would be in the extreme case killed.

ROTH: And you've heard it, I'm sure, before, this is the way business is done in that part of the world.

GOLDSTONE: And my experience over many years as a judge indicates to me that many businessmen scoff behind their hands at the law and morality and all of these things, but I think that counties, wherever they are, whether they're on my continent of Africa or Asia or Europe or United States or wherever, have to accept that there's an international universally accepted morality and way of doing business.

ROTH: Okay, just very brief answers. You said that nobody, it seemed, on your committee could believe that the U.N. membership let this go on. I could, in a way, watching the United Nations in action, but --

PIETH: Well, we gave the answer in our last report. Structural failure, the Security Council highly politicized, was not up to it, and on the level of the secretariat.

GOLDSTONE: And nobody with a whistle and having a duty to blow it.

ROTH: And Kofi Annan, Paul Volcker says we don't really know. To this day, I still don't know about the Annan connection.

PIETH: Well, that's a different issue. That's his family business. I think we're talking about we have different issues with him on management. That's for me the much more serious issue, did he do a good job as a manager. That's where we put a question mark.

ROTH: But it's still unsettled. You could never really prove. The conclusion was you never really had enough evidence to make a conclusion that Annan knew about the contract and did something to steer it.

GOLDSTONE: No, no, no. What we didn't know -- we knew and gave a very clear judgment, Annan did not do anything to influence the grant of the contract. That's clear. What there was doubt about was whether at material times he was in a conflict of interest situation by knowing that his son's company had made an application for the contract. That was the issue.

ROTH: And we have covered that on the program before.

Gentlemen, I want to thank you both for coming in, Mark Pieth, expert member of the U.N. independent inquiry Oil For Food probe; and judge Richard Goldstone has been here before in many capacities, I'm wondering in which venue he will pop up again.

Thank you very much.

Some predicted, not me, on this program that Kofi Annan would resign last September. He did not. Barring any new revelations or witness surprises, it looks like he'll be the U.N. leader until December 31, 2006. But many of his senior assistants and former aides have been either censured by the Volcker panel or criticized for mismanagement or shredding documents. Kofi Annan, who recently said when asked about Oil For Food, "Move on, chap," seemed ready to do that again after the final Volcker report.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Mr. Secretary-General, some of the findings have been, of course, very harsh toward you, but also very harsh about certain members of your staff, include, Louise Frechette, Iqbal Riza, Benon Sevan, of course, who worked for you. What are you going to do about your staff itself in terms of reform, in changes?

ANNAN: I think I have taken all the action necessary and I have nothing further to add. Thank you very much.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: When a rocket is launched, it goes through, as it picks up speed and moves down range, it goes through a period of aerodynamic turbulence, and much like Security Council resolutions; we're now in the period of aerodynamic turbulence.

(END VIDEO CLIP)

ROTH: The flight of a resolution, by aviator Ambassador John Bolton of the United States.

A resolution is in front of the Security Council as we speak to each other. Well, you just have to listen here on DIPLOMATIC LICENSE.

The Security Council, pushed by the United States and France, is moving on Syria because of this conclusion by a U.N.-backed investigator who looked into who blew up Rafik Hariri, former Lebanese prime minister.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The conclusions, as they are in the report, is that the assassination was organized by Syrian and Lebanese security officials.

UNIDENTIFIED MALE (through translator): Finding the culprits and those behind them is a Syrian imperative as much as it is a Lebanese imperative.

(END VIDEO CLIP)

ROTH: Joining me now, Ghida Fakhry, United Nations bureau chief for "Al-Sharq Al-Awsat", a London-based newspaper. And over at our CNN U.N. office, Talal Al-Haj, the United States bureau chief of the Al-Arabiya television network.

Ghida, your name did not come up in the Oil For Food report, so we're going to continue with this Lebanon story. Does Syria have something to worry about based on Security Council action?

GHIDA FAKHRY, "AL-SHARQ AL-AWSAT": I think Syria has a lot to worry about, Richard.

First of all, we see that this investigation has really taken on a life of its own. It's not just a criminal investigation, a technical investigation, as Kofi Annan keeps reminding us, but it seems to me it's becoming increasingly a political process. We've seen the way the United States and France have rushed through a draft resolution that they're hoping to vote on as early as next Monday.

The critical appointment in this whole process is that it's going to threaten sanctions against Syria if it doesn't comply with demands made of it.

ROTH: Talal, sanctions? The U.N. Security Council? It feels like 2003, and some of the clothes I'm still wearing are from that era. But, go ahead, what do you think?

TALAL AL-HAJ, AL-ARABIYA: Yes, I think it reminds many people, many observers in the Middle East that it is deja vu. We've seen it before, in the autumn of 2002. You remember, Richard, when we were standing there burning the night oil, 1441, the same scenario.

ROTH: The resolution.

AL-HAJ: The resolution.

ROTH: Not my apartment address.

AL-HAJ: Absolutely. And it passed through, and then there was a material breach, as --

ROTH: But they're not going to go into Syria, are they?

FAKHRY: All options are on the table, Richard.

ROTH: But they say that all the time.

FAKHRY: You heard President Bush himself say just a few days ago, that although he wants to go through the United Nations system on this, but all options are on the table.

ROTH: And now Scooter Libby is gone. He has one less option -- Talal.

AL-HAJ: Well, John Bolton was asked this question, are you excluding article 42, which allows the use of force. And he said absolutely not.

So, indeed, under chapter 7 article 42 can be invoked.

ROTH: Oh, I'm in chapter 7. I'm going to go to the Oil For Food report here. That means that this resolution is backed by force -- Ghida.

FAKHRY: The importance of this is also to keep in mind that all resolutions that were enforced with regard to Iraq were also under chapter 7, which at the time the United States was able to use by suggesting it was given the authority to use force unilaterally without the second resolution that was required in the Security Council, because it was chapter 7, which gives an enforcement mechanism.

ROTH: Go ahead, Talal. I mean, they have the votes, don't they?

AL-HAJ: They think they have the votes. I'm speaking to some diplomats here, including Americans. They think they have the nine votes needed. They want to have unity of the Council to stress the unity and the purpose, that Syria must cooperate.

What they are saying now, Richard, that we are not imposing sanctions, we the threatening sanctions to insure the Syrian cooperation, and if Syria is saying they will cooperate fully, what is the problem? Then there is no problem. But we all know, come December 15, come January, we'll be talking about the non-compliance of Syria, we'll be talking about article 41 and maybe even --

ROTH: So you don't think that the Syrian government is going to allow Mehlis to interview people and they're going to detain the president's brother-in-law and brother and allow interviews to be conducted out of the country -- Ghida.

FAKHRY: I think they very well might, but, I mean, Mehlis may not even insist so much on conducting interviews outside the country as Blix had done in the case of Iraq when he wanted to interview scientists outside the country, because first and foremost if officials are involved in this case, and only if they are involved in this case, it won't make much of a difference whether they're interviewed in the country or not.

AL-HAJ: What I think, Richard, the limits will be pushed further and further. We have heard Bolton already speaking about interviewing the president of Syria, Bashar Al-Assad, saying if he has time to give the media interviews, he has time to talk it Mehlis. I think they'll be pushing the Syrians to the limit. At that stage, the Syrians might say no, then this constitutes non-cooperation.

FAKHRY: I think an important question is raised, Richard, about the integrity of this whole process. Because of the premature release of this interim report, nothing in resolution 5095 asks the commission or Mehlis to release a report or to report to the Council on his investigation before it is completed. And I did challenge Mehlis on this point, and he did concede to me that this was the case, that the decision was taken by Council members.

Now, I went and asked a few Council members if they were even consulted on this issue and they said no, so I wonder if Mehlis didn't just mean the United States, Britain and France.

ROTH: Is Syria totally missing the boat and not watching the tea leaves in the region and that there has been much more accountability. There is an International Criminal Court set up and perhaps there was not a follow up on Security Council actions in the past, but now sometimes things could happen, and Assad blew it.

AL-HAJ: Richard, I think the Syrians are very worried. I think there are differences within their leadership. The so-called suicide of Kanaan is maybe an indicator of that. I think they're very worried. They're trying to avoid the issuing of a resolution under chapter 7, the inclusion of article 41. They're trying, but I think the reading is --

ROTH: That's the suicide you mentioned of a key official who was questioned by Mehlis, who then allegedly killed himself.

AL-HAJ: I did ask him that question during the conference, as you remember, Richard, and he said he is waiting for the autopsy, to read it, and he will make his own personal views about it. He did not refute that it could have a link to the investigation. Neither he did confirm it.

FAKHRY: There is no doubt, though, that the circumstances relating and revolving around the release of this report gave rise as well to a lot of questions.

ROTH: They always see there is a conspiracy in the other part of the world and then --

(CROSSTALK)

FAKHRY: -- the names that were deleted, of these Syrian and Lebanese officials, and the United Nations saying that it was a clerical error, now there are some who beg to differ and think that it may be a bit more cynical and that the United Nations actually to step up pressure --

ROTH: -- Oil For Food, Annan and the Annan's son. I've got to stop you there. We'll be back to follow this story next week.

Ghida Fakhry, welcome back, thank you very much, bureau chief for "Al- Sharq Al-Awsat," London-based newspaper. And Talal Al-Haj, bureau chief for Al-Arabiya, in the United States, and now at the CNN office, stopping by for us, thank you.

The United Nations acted swiftly to condemn Iran for remarks by its president. Secretary-General Annan condemning the remarks made by the Iranian president, saying Israel should be wiped off the face of the earth. And for that, says Israel's Ambassador Dan Gihlman (ph), Israel thinks Iran should be wiped off the roster of U.N. member countries.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I certainly think that a country whose head of state calls for the destruction of another member state of the United Nations does not deserve a seat in this very civilized organization of the United Nations.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROTH: The United Nations officially turned 60 this past week. Monday was United Nations Day when the organization opened its doors and the first Oil For Food contract was signed in 1945 in San Francisco. To honor all of this they turned the lights out at U.N. headquarters.

If you would like to write in to complain how I handled that last item or reveal possibly a CIA agent's name, please email us at Diplomatic.License@CNN.com. Once again, the computer world address is Diplomatic.License@CNN.com.

That's the program for this week. New York City area audiences can find the show once again on Sunday afternoons at 4 p.m. local time. The rest of you hang on, as usual, check that dial.

That's DIPLOMATIC LICENSE. I'm Richard Roth in New York. Thanks for watching.

END

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