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Paul Volcker Addresses U.N. Oil-For-Food Scandal; Spike in Iraqi Insurgent Violence

Aired February 03, 2005 - 15:13   ET

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

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


KYRA PHILLIPS, CNN ANCHOR: As you know, the oil-for-food program allowed Iraqi oil sales for the purposes of buying food and other vital supplies in an atmosphere of U.N. sanctions. It's well-known that Saddam Hussein skimmed billions of dollars from that program, and now many others suspected involved with that also.
Overall mission, according to Paul Volcker with this report, in addition to a separate report with regard to Kofi Annan, head of the U.N., and his son's possible involvement, Kojo Annan, that is going to be an entirely different report, he said, addressing the involvement by those two. But, right now, this overall interim report, the mission, to restore integrity at the U.N.

MILES O'BRIEN, CNN ANCHOR: Paul Volcker's report is clear. The oil-for-food problem was poorly managed. But that's hardly news in and of itself. And the report singles out the program's top administrator, however, as the person responsible for its breakdown.

So, what next?

Joining us now, CNN senior U.N. producer Liz Neisloss -- Liz.

LIZ NEISLOSS, CNN SR. U.N. PRODUCER: Well, Miles, this is not the whole story by a long shot. And that is what Paul Volcker said.

And that is certainly true. This was an incredibly complex program, more than $64 billion worth of oil sold, a program so complex that, as one diplomat, an expert, told me, his own senior officials didn't even understand it. But Paul Volcker has taken on the job of plumbing through the depths of the oil-for-food mess and answering the U.N. critics.

And he did that in his press conference, also addressing the question of any ties that he might have to U.N. support organizations. And he basically called that irrelevant. But, as you pointed out, there was one official, Benon Sevan, who many people had wondered what his role might have been in the program. He was the one U.N. official who was named.

And it does turn out, according to this Volcker, that Benon Sevan sought and took allocations of Iraqi oil, basically bribes of Iraqi oil from the government and through a company called African Middle East Petroleum and was able to resell that oil. He did this several times and, apparently, was able to make approximately $1 million doing that -- Miles.

O'BRIEN: Liz Neisloss at the United Nations for us.

We're still watching Mr. Volcker's statements there, as well as others at the Helmsley Hotel. And we'll keep you updated on that as well.

Well, after a post-election lull, terrorist is a fresh wave of violence in Iraq. The latest on that straight ahead.

(COMMERCIAL BREAK)

O'BRIEN: Well, after a lull of three days, insurgent violence spiked again today in Iraq for the first time since the election. At the same time, Iraqi officials are raising expectations of a possible breakthrough in the effort to stem the killing.

CNN's Nic Robertson reporting from Baghdad.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, over the last few weeks, we've heard from Iraqi officials saying that they have caught several top lieutenants of Abu Musab al-Zarqawi. Often, this information is held for a period of weeks, so that the intelligence value can be gained from insurgents not knowing whether these leaders have been captured or killed.

Now, it appears, according to Iraqi officials, that they may very well be closing on Abu Musab al-Zarqawi himself.

UNIDENTIFIED MALE: I said we missed him by one hour maybe, something like that. You know, he's not staying in one place. He's moving from area to another. So we will get him very soon, hopefully.

ROBERTSON: The fact that Zarqawi appears able to move around Iraq does make it harder for both Iraqi security forces, U.S. security forces to track him down. But, in the last 24 hours, there has been now an uptick in the violence by insurgents. There was a lull following the elections of the weekend.

But on Wednesday evening, when a group of young Iraqi army recruits were returning from training about 70 kilometers, about 45 miles southwest of the town of Kirkuk, right in the northern tip of the Sunni Triangle, as they were on their way home from work in a bus, the bus was stopped by insurgents. The unarmed trainees were taken off the bus and shot one by one. We understand from local police officials they were unarmed as they were taken off that bus.

Also, we've heard that another two Iraqi army soldiers in Baghdad were shot while they were on duty. It was a drive-by shooting. They were sitting at home, we are told, unarmed in civilian clothes when they were shot. But also just outside of Baquba, a town about 45- minutes drive northeast of Baghdad, an Iraqi soldier shot in an ambush by insurgents there. In the vehicle with him as he was driving along were his father and sister. They were also killed.

And in the town of Baquba in the early hours of Thursday, a number of workers were going to work, on their way to work for a U.S. contractor. They were ambushed in their taxi on way to work by insurgents. Four of those contractors, four of those Iraqi contractors were killed and two of them wounded.

Nic Robertson, CNN, Baghdad.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O'BRIEN: There it is, the people's house, the White House. Right now in Washington, it is 32 degrees, the wind, four miles an hour to the northeast, humidity 92 percent and a little bit of the white stuff...

(CROSSTALK)

O'BRIEN: ... at the White House.

PHILLIPS: Miles O'Brien, weatherman/space geek...

(CROSSTALK)

O'BRIEN: Oh, yes, miss my calling. Nice wipe, by the way. Who is on the board today? That was a good wipe. Mike Mahalic (ph) with the excellent snowflake wipe.

PHILLIPS: Judy Woodruff now with "INSIDE POLITICS."

Oops, Judy, I saw you working on the computer there. I'm sorry. Did we catch you off guard?

JUDY WOODRUFF, CNN ANCHOR: Yes. You weren't supposed to -- you weren't supposed to watch me doing that.

O'BRIEN: I hope you have your mukluks and galoshes and stuff for the...

(CROSSTALK)

PHILLIPS: She's nice and warm in the bureau.

WOODRUFF: It looks like a great snowfall. Washington is beautiful.

O'BRIEN: Yes. And Washington a wonderful place to be when it snows. Everybody drives so well.

Anyway, we are going to send it over to you now because we're eating up your time. So sorry.

WOODRUFF: You are. Please stop talking.

(LAUGHTER)

WOODRUFF: Thank you, Miles. Thank you, Miles and Kyra. So, the president's State of the Union address proved to be a crowd-pleaser among a majority of Americans who watched it. We'll look at our latest poll numbers, as well as the ambitious agenda he set forth.

Plus, has Howard Dean locked up the DNC chairmanship? At least one man says, not so fast. We'll talk with Donnie Fowler, one of Dean's opponents, when "INSIDE POLITICS" begins in just a moment.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired February 3, 2005 - 15:13   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: As you know, the oil-for-food program allowed Iraqi oil sales for the purposes of buying food and other vital supplies in an atmosphere of U.N. sanctions. It's well-known that Saddam Hussein skimmed billions of dollars from that program, and now many others suspected involved with that also.
Overall mission, according to Paul Volcker with this report, in addition to a separate report with regard to Kofi Annan, head of the U.N., and his son's possible involvement, Kojo Annan, that is going to be an entirely different report, he said, addressing the involvement by those two. But, right now, this overall interim report, the mission, to restore integrity at the U.N.

MILES O'BRIEN, CNN ANCHOR: Paul Volcker's report is clear. The oil-for-food problem was poorly managed. But that's hardly news in and of itself. And the report singles out the program's top administrator, however, as the person responsible for its breakdown.

So, what next?

Joining us now, CNN senior U.N. producer Liz Neisloss -- Liz.

LIZ NEISLOSS, CNN SR. U.N. PRODUCER: Well, Miles, this is not the whole story by a long shot. And that is what Paul Volcker said.

And that is certainly true. This was an incredibly complex program, more than $64 billion worth of oil sold, a program so complex that, as one diplomat, an expert, told me, his own senior officials didn't even understand it. But Paul Volcker has taken on the job of plumbing through the depths of the oil-for-food mess and answering the U.N. critics.

And he did that in his press conference, also addressing the question of any ties that he might have to U.N. support organizations. And he basically called that irrelevant. But, as you pointed out, there was one official, Benon Sevan, who many people had wondered what his role might have been in the program. He was the one U.N. official who was named.

And it does turn out, according to this Volcker, that Benon Sevan sought and took allocations of Iraqi oil, basically bribes of Iraqi oil from the government and through a company called African Middle East Petroleum and was able to resell that oil. He did this several times and, apparently, was able to make approximately $1 million doing that -- Miles.

O'BRIEN: Liz Neisloss at the United Nations for us.

We're still watching Mr. Volcker's statements there, as well as others at the Helmsley Hotel. And we'll keep you updated on that as well.

Well, after a post-election lull, terrorist is a fresh wave of violence in Iraq. The latest on that straight ahead.

(COMMERCIAL BREAK)

O'BRIEN: Well, after a lull of three days, insurgent violence spiked again today in Iraq for the first time since the election. At the same time, Iraqi officials are raising expectations of a possible breakthrough in the effort to stem the killing.

CNN's Nic Robertson reporting from Baghdad.

(BEGIN VIDEOTAPE)

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, over the last few weeks, we've heard from Iraqi officials saying that they have caught several top lieutenants of Abu Musab al-Zarqawi. Often, this information is held for a period of weeks, so that the intelligence value can be gained from insurgents not knowing whether these leaders have been captured or killed.

Now, it appears, according to Iraqi officials, that they may very well be closing on Abu Musab al-Zarqawi himself.

UNIDENTIFIED MALE: I said we missed him by one hour maybe, something like that. You know, he's not staying in one place. He's moving from area to another. So we will get him very soon, hopefully.

ROBERTSON: The fact that Zarqawi appears able to move around Iraq does make it harder for both Iraqi security forces, U.S. security forces to track him down. But, in the last 24 hours, there has been now an uptick in the violence by insurgents. There was a lull following the elections of the weekend.

But on Wednesday evening, when a group of young Iraqi army recruits were returning from training about 70 kilometers, about 45 miles southwest of the town of Kirkuk, right in the northern tip of the Sunni Triangle, as they were on their way home from work in a bus, the bus was stopped by insurgents. The unarmed trainees were taken off the bus and shot one by one. We understand from local police officials they were unarmed as they were taken off that bus.

Also, we've heard that another two Iraqi army soldiers in Baghdad were shot while they were on duty. It was a drive-by shooting. They were sitting at home, we are told, unarmed in civilian clothes when they were shot. But also just outside of Baquba, a town about 45- minutes drive northeast of Baghdad, an Iraqi soldier shot in an ambush by insurgents there. In the vehicle with him as he was driving along were his father and sister. They were also killed.

And in the town of Baquba in the early hours of Thursday, a number of workers were going to work, on their way to work for a U.S. contractor. They were ambushed in their taxi on way to work by insurgents. Four of those contractors, four of those Iraqi contractors were killed and two of them wounded.

Nic Robertson, CNN, Baghdad.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

O'BRIEN: There it is, the people's house, the White House. Right now in Washington, it is 32 degrees, the wind, four miles an hour to the northeast, humidity 92 percent and a little bit of the white stuff...

(CROSSTALK)

O'BRIEN: ... at the White House.

PHILLIPS: Miles O'Brien, weatherman/space geek...

(CROSSTALK)

O'BRIEN: Oh, yes, miss my calling. Nice wipe, by the way. Who is on the board today? That was a good wipe. Mike Mahalic (ph) with the excellent snowflake wipe.

PHILLIPS: Judy Woodruff now with "INSIDE POLITICS."

Oops, Judy, I saw you working on the computer there. I'm sorry. Did we catch you off guard?

JUDY WOODRUFF, CNN ANCHOR: Yes. You weren't supposed to -- you weren't supposed to watch me doing that.

O'BRIEN: I hope you have your mukluks and galoshes and stuff for the...

(CROSSTALK)

PHILLIPS: She's nice and warm in the bureau.

WOODRUFF: It looks like a great snowfall. Washington is beautiful.

O'BRIEN: Yes. And Washington a wonderful place to be when it snows. Everybody drives so well.

Anyway, we are going to send it over to you now because we're eating up your time. So sorry.

WOODRUFF: You are. Please stop talking.

(LAUGHTER)

WOODRUFF: Thank you, Miles. Thank you, Miles and Kyra. So, the president's State of the Union address proved to be a crowd-pleaser among a majority of Americans who watched it. We'll look at our latest poll numbers, as well as the ambitious agenda he set forth.

Plus, has Howard Dean locked up the DNC chairmanship? At least one man says, not so fast. We'll talk with Donnie Fowler, one of Dean's opponents, when "INSIDE POLITICS" begins in just a moment.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com