|HOW IRAQ WAS REPAID FOR VOLCKER
9 September 2005
What an accounting coincidence. Oil-For-Food Investigator Paul Volcker had received an initial $34
million upon his request. The money was taken away from funds devoted originally for Iraq. The
new Iraqi regime -- that is, the last two governments -- had objected to the money being diverted to cover an
internal U.N. management problem. For the Iraqis, it looked like a double scandal: making money on their
misery and then making them pay again for the investigation into the foul-up. With the Volcker venture
approaching a concluding stage, the newly appointed U.N. Controller (Treasurer) Warren Sach discovered
that nine U.N. agencies will have to repay Iraq for overcharged administrative expenses. While U.N.
programs handling Oil-For-Food during 2003 had charged 3%, it was now stated that their expenditures
was closer to 1%. In financial terms that means about $40 million. In practical terms it means
returning to the Iraqi government the money diverted earlier to pay Mr. Volcker's team plus a
sweetening interest. A brilliant accounting stroke by a professional insider as one hand washes another
with no hard feelings.