UN Oil for Food Scandal - Canadian Involvement
And who says that Canadians are irrelevant on the world stage?
Thu, March 31, 2005
UN scandal inquiry has Frechette questions
By GREG WESTON -- Sun Ottawa Bureau
An international commission probing the worst corruption scandal ever to rock the United Nations is training its sights on a former high-ranking Canadian government official.
The Volcker commission recently cited Louise Frechette, a former deputy minister in Jean Chretien's government, for helping to cover up damning internal UN audits of the organization's scandalous Oil-for-Food program.
Now she is back in the spotlight as the commission probes her role in the overall mismanagement of the $80-billion humanitarian scheme, a fiasco threatening to topple UN Secretary-General Kofi Annan. Frechette has been the UN's first-ever deputy secretary-general and Annan's chief administrator since 1998, making her one of the organization's most powerful mandarins during the worst years of the Oil-for-Food fiasco.
Investigators believe a staggering $8 billion was embezzled or otherwise disappeared from the humanitarian program between 1997 and 2003.
There is no evidence to date that Frechette was in any way connected to the massive wrongdoing that befell the UN program, nor how much she even knew about the widening problem of corruption.
But her key position atop the UN secretariat, and her involvement with internal auditors, have put her in the crosshairs of the Volcker inquiry.
The UN-administered program was intended to allow Saddam Hussein to export about $40 billion of embargoed Iraqi oil in return for a similar amount of desperately needed imports of food, medical supplies and other humanitarian aid for his country.
According to an interim report of the Volcker inquiry, released in February, UN auditors began smelling something amiss early in the program -- and ultimately produced a total of 55 audits of it.
But for almost four years, as the humanitarian scheme became riddled with kickbacks and mismanagement, the auditors were stifled by the program's now-disgraced director, Benon Sevan.
Finally in frustration, the chief spending watchdog announced in late 2000 that future audits would be sent over Sevan's head, directly to the UN Security Council.
This time, it was Frechette who intervened. The Volcker inquiry reports that Frechette personally telephoned the head of audits, "denying this proposal."
"(The auditor) then abandoned the effort to report directly to the Security Council on (oil-for-food) related matters."
The UN audits remained under wraps for another four years until the Volcker inquiry began making them public only weeks ago. (Frechette said recently she believed the audits "were a management tool to be used only by internal managers.")
Frechette was Canada's deputy minister of defence in 1997 when Jean Chretien's government shut down the Somalia inquiry. She is also no stranger to the man heading the Volcker team of 75 investigators and forensic accountants.
Reid Morden is the former director of the Canadian Security Intelligence Service.
He was also Frechette's boss in 1993, when she was a diplomat and he was deputy minister of Foreign Affairs.
In a wide-ranging interview with me yesterday, Morden said the inquiry has so far tried to follow the money from the sale of Iraqi oil and purchase of humanitarian aid.
"What we will do now is try to give an overall picture of the management, mismanagement and possible corruption within the program overall," Morden said.
"And in that, we will be following up with Louise Frechette on whatever her role might have been or was not. "What we'll try to focus on is ... was the management structure appropriate and sufficient for a program of that size and complexity? And I think it is more on that side that we will be taking a look at her role."