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Bremer office hampering oil for food corruption inquiry Original Source Link: (May no longer be active)
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2004/05/17/woil17.xml&sSheet=/news/2004/05/17/ixnewstop.htmlhttp://www.telegraph.co.uk/news/main.jhtml?xml=/news/2004/05/17/woil17.xml&sSheet=/news/2004/05/17/ixnewstop.html
Bremer office 'hampering oil-for-food corruption inquiry'
By Robin Gedye, Foreign Affairs Writer
(Filed: 17/05/2004)
An investigation into the biggest corruption scandal in the history of the United Nations is being hampered by the US-led administration in Iraq, according to congressmen and officials in Baghdad.
Serious reservations have been raised over the appointment of auditors Ernst & Young to investigate the disappearance of billions of pounds under the UN oil-for-food programme.
Much of the money is alleged to have been handed to Saddam Hussein's friends in the West.
Some 270 people and organisations were named in documents submitted to Congress including the MP George Galloway, the former French interior minister Charles Pasqua, the Russian nationalist Vladimir Zhirinovsky, and Benon Sevan, the UN official in charge of the programme.
Many of those named, including Mr Galloway, have denied any wrongdoing.
Concern centres on the motive for the appointment of Ernst & Young, a renowned firm of auditors, by Paul Bremer, the coalition's chief administrator in Iraq.
Ernst & Young's inquiry will duplicate work begun three months ago by the equally reputable accountancy firm of KPMG on behalf of Iraq's governing council (IGC).
"We have serious reservations about the way the investigation [into corruption] is being handled and are awaiting the answer to a range of questions we have put to the Bush administration," Christopher Shays, a Republican Congressman from Connecticut said.
In a letter to President Bush this month, Mr Shays expressed deep concern over the "apparent conflict between the coalition provisional authority (CPA) and the Iraqi governing council over the exercise of audit authority".
"The actual review of the records has been delayed for weeks. Some believe important documents are at risk of being altered or destroyed."
KPMG was appointed in February by the IGC to investigate suspected corruption in the UN-administered oil-for-food programme under Saddam. At least £6 billion is alleged to have gone into the pockets of individuals and companies.
In late March, however, Mr Bremer intervened, saying he would not release funds to pay KPMG, which had already made substantial progress in locating documents in Iraq, unless the contract was put out to tender. The IGC duly put out the contract and, on April 18, at a meeting attended by members of the coalition authority, KPMG's submission was deemed best. KPMG was appointed to lead the inquiry with a promise of £3 million to fund it.
Meanwhile, the CPA announced on April 9 that it would appoint its own auditors to investigate the allegations. Ernst & Young was formally appointed last Thursday to lead the CPA investigation.
"The CPA decided that after prior tender, the firm of Ernst & Young were the best qualified to pursue the necessary investigation," a CPA spokesman said.
Adam Bates, of KPMG, echoed congressional reservations about the CPA's intervention, "long after we had made substantial progress of our own". Should KPMG not receive the £3 million promised, its inquiry will stall.
US congressmen have become concerned and angry over the way Mr Bremer is running the CPA and Mr Shay's office demanded an explanation of his actions.
"Some of the problems may be the result of personal conflict between Mr Bremer and Ahmed Chalabi [one of the nine rotating presidents on the IGC]," said a congressional source.
"We know Bremer was unhappy about the leaking of a list of 270 people who received payments under the oil-for-food programme."
Claude Hankes-Drielsma, a management consultant for the IGC, accused Mr Bremer of "putting the brakes" on the running investigation "after it became headline news".
"Our concern is that with the CPA's auditors ordering the collection of all relevant documents in one place, we will lose not only time but vital links in the chain. The Iraqis kept meticulous records."
Mr Hankes-Drielsma claimed the IGC, with the help of KPMG, had already located "hundreds of millions" of pounds that came out of illicit oil-for-food profits in Middle East bank accounts.
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