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Strong Implications

What the Park arrest portends.

Claudia Rosett
10th January 2006 - National Review Online

In the ever-more-amazing United Nations Oil-for-Food scandal, the arrest in Houston last Friday of South Korean businessman Tongsun Park brings us a step closer to understanding the origins of the largest humanitarian fraud in U.N. history. Not least, Park may be able to provide some answers to questions surrounding one of the top former U.N. officials with whom Park had dealings — the godfather of the Kyoto treaty, former potentate of the Canadian-power industry, and longtime eminence of U.N. policy, 76-year-old Canadian Maurice Strong.

Park is charged by New York federal prosecutors with acting secretly as an agent of Saddam Hussein's U.N.-sanctioned regime to try to influence to Saddam's advantage the shaping of the U.N. Oil-for-Food relief program for Iraq, which ran from 1996 to 2003. Park had not yet entered a plea as of Tuesday night. Allegations made against Park over the past year, some by federal prosecutors, some by Paul Volcker's U.N.-authorized probe into Oil-for-Food, are Byzantine. They involve tales of Park's trips in the mid-1990s to Baghdad, and his onward travel, allegedly carrying cardboard boxes of cash, plastic bags filled with cash, and paper bags filled with yet more cash. They also involve tales of Park's encounters with former U.N. Secretary General Boutros Boutros-Ghali, who has denied any wrongdoing.


Check This Out
But one of the most intriguing episodes in Park's alleged Iraq-related ventures, as recounted in a Sept. 7, 2005 report from the Volcker committee, involves a Jordanian bank check for $988,885, allegedly bankrolled by Saddam's regime, made out to "Mr. M. Strong," and delivered in August of 1997 by Park to Maurice Strong. . (To see a copy of the check, as reproduced in the Volcker report, click here).

When Strong endorsed this check, back in 1997, he was serving as a top aide to the newly promoted Secretary-General Kofi Annan, coordinating U.N. reform. Strong had just finished a stint in 1996 similarly advising Boutros-Ghali on reform issues. Asked last year by Volcker's team to explain this payment, Strong first denied any memory of the check. Then, when Volcker's investigators showed him his own signature on the cancelled check, he denied any knowledge of where the funds originally came from. Strong said he had done nothing wrong and that the check was meant solely to cover an investment Park wished to make in one of Strong's family-controlled companies, Canadian-based Cordex Petroleum Inc.

Volcker poked about in this story, noting that Park lost his investment when Cordex went bankrupt in 1998. Volcker also documented a number of meetings in New York during the formative years of Oil-for-Food, 1996 and 1997, between Strong and high-ranking Iraqi officials. These get-togethers included a meeting at the Iraq mission in April 1997, in which, by Strong's own account to the Volcker committee, Saddam's deputy prime minister, Tariq Aziz, tried to enlist Strong's sympathies, and invited him to visit Iraq.

Strong turned down the invitation, however. And in a series of statements last year he denied both directly and through his lawyers that he ever had anything to do with Oil-for-Food. On April 18, 2005, he declared: "I cannot recall a single instance in which I had any contact or discussion on the program with any of the officials responsible."

In a letter included in the Sept. 7 Volcker report, Strong's lawyers wrote: "Mr. Strong has stated and hereby declares to your committee that he was not involved, that he did not seek to be involved or influence the Programme." In that same report, Volcker concluded: "While there is evidence that Iraqi officials tried to establish a relationship with Mr. Strong, the Committee has found no evidence that Mr. Strong was involved in Iraqi affairs or matters relating to the Programme or took any action at the request of Iraqi officials."


Strong Suggestions
Maurice Strong may be entirely innocent, and nothing here is meant to suggest otherwise. But in the interest of accuracy, perhaps Paul Volcker, with his dozens of investigators and $35 million budget, should have looked more closely at the U.N.'s own public records. These show that according to Secretary General Kofi Annan himself, Strong was the chief coordinator of Annan's 1997 U.N. "reform" that among other things created the U.N.'s "Office of the Iraq Programme" — set up specifically to take over the management of Oil-for-Food.

A brief history: When Annan took over as U.N. Secretary General from Boutros-Ghali in January 1997, Oil-for-Food was just one month old. Set up as a temporary and ad-hoc effort to deliver relief to the citizens of Saddam Hussein's U.N.-sanctioned Iraq, the program was run at the start by two separate departments within the Secretariat. One dealt with the sanctions aspects of the program, another with the humanitarian-relief aspects. One of Annan's first acts, under the label of reform, was to reconfigure the Secretariat. Among the changes Annan made that first year was the consolidation of Oil-for-Food under a single newly created unit, called the "Office of the Iraq Programme," reporting directly to him, as secretary general.

The effect of this change was to tilt the supervision of Oil-for-Food away from the Security Council, strengthening the control and secrecy with which the program was run by the Secretariat. While the program still had to be renewed every six months by the Security Council, Annan presented report after report, based on information filtered selectively from the Iraq program office, urging not only that Oil-for-Food continue, but that it be radically expanded in size and scope, with Saddam allowed to spend billions in relief funds to revive his decrepit oil industry. As Oil-for-Food grew, the corruption grew too, into a multibillion-dollar extravaganza of kickbacks, smuggling, and payoffs.

The longtime U.N. staffer appointed by Annan to head the new office was Benon Sevan, who then ran the office for its entire duration, from 1997-2003. Sevan was alleged last year by both congressional investigators and Volcker's committee to have taken bribes from Saddam. (Sevan denies this. He was last reported to be in Cyprus, which has no extradition treaty with the U.S.)

The creation of the Iraq-program office does not figure in Volcker's chronology of Park's dealings with Strong, and the timeline that follows may well be a coincidence. Maurice Strong, whose old U.N. number now gives a forwarding message to an office in Canada, did not return a phone call requesting comment. But again, here is what the available records show:

When Annan sent to the General Assembly on July 14, 1997, his plan, "Renewing the United Nations: A Programme for Reform," which made the first mention of the change in Oil-for-Food's structure, Annan singled out for thanks one person by name, and that person was Strong: "I wish to acknowledge with gratitude the important contributions made to this effort by the Executive Coordinator for Reform, Mr. Maurice Strong, and his small but highly motivated team."

The reform plan included a single sentence outlining the future management structure of Oil-for-Food (the U.N. text mistakenly cited the year 1991 instead of 1995 as the date the program was approved by the Security Council): "The management of the Iraq Programme, established by the Security Council resolution 986 (1991), will be handled by a special unit within the secretariat."

This proposal was buried deep in the reform plan, as the last line of paragraph #187, on page 61 of a document running to more than 91 pages. A casual reader might have gone right by it. But to anyone with a strong interest in Iraq, and especially in Oil-for-Food, that single sentence would have come as significant news. In effect, it said that Oil-for-Food was no longer ad-hoc and "temporary," but about to be incorporated into the U.N. system as a special office under the secretary-general. This moved the program closer to terms that, according to Volcker, Iraq had angled for unsuccessfully in 1996 negotiations with the U.N. — with the Iraqi delegation arguing that the mechanics should involve what Volcker described as "an agreement between Iraq and the Secretary-General."

On July 16, 1997, Strong met with Park in New York, according to Volcker. That was two days after the reform package was announced. Within the week, again according to Volcker, Park traveled to Baghdad, picked up at least $1 million in cash, took it to Jordan and deposited it in a newly opened account in Amman's Housing Bank. From that account, the bank that same day issued the $988,885 check, made out to "Mr. M. Strong" and dated July 30, 1997.

A few days later, Park was back in New York, where, according to Volcker, Strong's calendar showed an August 4 meeting with Park. By August 5, Strong had endorsed over the check as part of a transaction transferring to Park from another businessman, Theodore Kheel, an interest in Strong's family-controlled company, Cordex — which soon after went bankrupt.

In September, 1997, according to Volcker, Park made another trip to Iraq, obtaining yet more cash, which he again deposited in a Jordanian bank — again converting some of it into a bank check made out to "M. Strong," this one dated Sept. 14, 1997, in the amount of $30,000. Volcker reports that Strong did not remember the payment. What became of this check is unclear.

A month after that, on Oct. 13, 1997, Kofi Annan announced that in keeping with his reform plan, the Iraq-program office was to be opened under longtime U.N. staffer Benon Sevan. Two days later, on Oct. 15, 1997, Sevan set up shop. Saddam went on to scam Oil-for-Food to the hilt, allegedly bribing Benon Sevan starting the following year, in 1998, and kicking out the U.N. weapons inspectors, while Annan urged the Security Council to radically expand the program. By the year 2000, Saddam was demanding increasing kickbacks on oil sales, a baseline ten-percent kickback on almost all relief contracts, funneling rising payoffs to select contractors, and was well into his strategy of trying to buy influence among U.N. Security Council members China, France, and Russia.

Strong remained at the U.N. until early 2005, although his further duties appear not to have involved the Oil-for-Food program. With the rank of undersecretary general, he served from 1998-2002 as Annan's special adviser on human security, and from 2003 until early 2005 as Annan's personal envoy to the Korean peninsula. Strong stepped aside last spring, when questions were raised about whether he might be the mysterious "UN Official #2" involved in meetings mentioned in an initial complaint against Park issued by New York federal prosecutors on March 21, 2005.

The Volcker committee's failure to note Strong's role in the U.N. restructuring that created the Iraq-program office may perhaps be ascribed to the fact that the executive director of Volcker's inquiry, former Canadian government official Reid Morden, recused himself from the portion of the investigation pertaining to Park and Strong. Morden did this because during the same years in which Oil-for-Food was taking shape, Morden himself, then running the Canadian government's atomic-energy company, had business contacts with both Strong and Park.

For example, in a footnote on page 100, volume II, Volcker's Sept. 7 report informs us that during that period Morden sent a letter dated Oct. 16, 1996, to both Strong and Park "requesting on behalf of the Canadian atomic energy company the support of Mr. Strong and Mr. Park for the sale of 'Candu 9' nuclear reactors during their upcoming meetings in Korea with Korean leaders." The Volcker report adds that the 1996 trip made by Strong and Park to Korea was not related to Oil-for-Food.

Morden is now supervising the archives of the Volcker committee, which ended its inquiry into Oil-for-Food in October, but has agreed to make some documentation available until at least March 31st to judicial authorities of countries conducting their own investigations (after which there is serious danger the Volcker committee may hand over the archives to the shredder-prone mercies of the U.N.). In reply to a query about whether Morden's current responsibilities might entail a conflict of interest, a Volcker committee spokesman says Morden "continues to recuse himself from any inquiries that touch on Mr. Strong."

Whatever the reason Volcker's needle skipped right over Strong's role in that 1997 transfiguring moment of Annan's Oil-for-Food "reform," other investigators, or perhaps Strong himself, might yet provide some better insight into that busy season. If Strong was not the author of the Iraq-program office, perhaps he can tell us who on his small team was. Best of all — improbable though it may sound in a U.N. universe — would be for the Volcker committee and the U.N. itself to allow public access to the archives. It would pose no threat to the innocent — and that may well include Maurice Strong — to let the public peruse the full records of whatever discussion went on inside the U.N. over the decision to create an "Office of the Iraq Programme," which pretty much conformed to what Saddam reportedly desired, and which Saddam then powerfully exploited to corrupt the biggest humanitarian effort in the history of the U.N.

— Claudia Rosett is a journalist in residence at the Foundation for the Defense of Democracies.

 

Tags

oil-for-food, united-nations