1 September 2004

Was it President Truman who wanted to "cut the other hand" of every economist? Well, he didn't get to Paul Volcker. Anyone who thinks U.N. diplomats made tentative presentations should have observed the former U.S. Fed Chairman and U.S. banker "brief" the press on 7 August at the Beekman Hotel -- a measured distance from the U.N.

The "report" he presented was a collection of correspondence between him, the Secretary General and the Security Council. He explained it mainly covered "the process" (how revealing!). Substantive findings or statements will have to wait for NEXT YEAR. And that would only cover "the U.N.'s management" side. The entire investigation may take as long as FOUR YEARS. A complete investigation "would last well into the next century." Volcker thus inadvertently proved a claim by the father of modern capitalism William Maynard Keynes that in the long run we will all be dead!

The inquiry has collected some 10,000 boxes of U.N. documents and he is "making headway in terms of cataloguing and prioritizing." He already has 50 staff on board with "60 expected" -- not clear whether additional or total. Most investigators were Americans but he hoped to broaden the representation. He needs initially $30 million with offices in Paris and Baghdad, in addition to New York. It is not certain that the Assembly's Budgetary Committee will approve -- but Kofi Annan "had promised all the support we need." Thus, delegates could be conveniently blamed if the money and the "real" report were not forthcoming.

Volcker sensed good vibes from Baghdad's Interim Government. No, he had not seen Ahmet Chalabi's "original" list nor did he have a complete picture as to what original documentation was available in Baghdad. As there were several ongoing investigations, his inquiry will concentrate on "how the U.N. administered the Oil for Food Program." He will make information available "when we can do it without hurting the integrity of the investigation," and (rest assured!) not in a way to prejudice individuals. Volcker was even more reassuring to the Secretary General who appointed him. After some sort of "joke" about how the U.N. was "slow on its feet," he took pains to clarify that the U.N. Secretariat had very little say in all what took place. The oversight of the Program was under the Security Council, not the Secretariat, and U.N. agencies on the ground also did not answer to the Secretariat, "so you've got to keep those distinctions in mind." (Kofi Annan should be smiling; he is already off the hook.)

Answering N.Y. Times senior reporter Judity Miller, he explained he did not need subpoena authority: governments were co-operating, most companies involved were not American (how did he know?), and the press will hold non-co-operative countries feet to the fire. In response to Claudia Rosette, he suggested that she should give any information she had about suspicious financial links to the authorities. Rosette also asked about Kojo Annan, stressing Cotecna's central role, but Volcker said one had to distinguish between contractors of the U.N. like Cotecna and the bulk of the contractors in the Program who were not contractors with the U.N. but with the Iraqi government. When she pressed again on Kojo, Volcker responded that "we'll look at whatever we think is relevant." (Keep smiling, my friend.)

Volcker was introduced by Anna DiLello, his "communications director." His other colleagues Judge Goldstone and Mr. Pieth shared the podium. They kept silent.