HOW IRAQ WAS REPAID FOR VOLCKER - Paul Volcker, Oil-For-Food

 

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.