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On Point

UNSCAM


by Austin Bay
May 26, 2004

Endemic poverty, that affliction of the so-called "developing world," is about starting over again every day. You see it at sunrise. There is no surplus from yesterday. There is no seed corn. There is only day-to-day survival.

Corruption by local state and tribal elites is one of the biggest contributors to this kind of perpetual poverty. One reason there is no seed corn is because it was stolen.

The United Nations' Oil For Food -- UNSCAM as some have dubbed it -- offers a window into the corruption of Third World and international elites, corruption that protects fossil political systems which stymie genuine economic progress. For that reason alone, it is an unforgivable shame the complex scandal is not getting the media attention it deserves.

It's a tough story, and Secretary-General Kofi Annan's "modified limited hangout" (Nixon's strategy for stonewalling Watergate) makes connecting the deceitful and the skimmed dollars very difficult. Former U.S. Federal Reserve Chairman Paul Volcker, the man tasked by Annan to conduct the "authorized investigation," is in an unenviable position.

Secrecy and lack of accountability in the U.N. system is nothing new. Volcker must confront that harsh historical fact.

"Lords of Poverty" by British journalist Graham Hancock (Atlantic Monthly Press, 1989) is a dated book, but a "must read" for Volcker. It chronicles the failure of Big Development in the Name of International Good. What? Funds siphoned off to First World contractors and Third World elites? It's happened before -- repeatedly.

Hancock's book indicts the international "poverty system" and charges that even in many legal programs, the real beneficiaries of aid grants and developmental funds aren't the Third World's poor, but the "international relief and development specialists."

In a section titled "Triumph of the Intermediaries," Hancock explains the system, and the deep?secrecy surrounding it:

"... we, the taxpayers of the wealthy nations, have arranged for the middle-men to act in our name to help the poor of the developing countries. The middle-men in question are the staff of the various institutions ... notably the bilateral and multilateral aid agencies, the U.N. technical assistance organizations and the various development banks and funds. Nobody really watches or controls any of these institutions; if they are accountable at all then they are accountable only to other institutions of the same type. Their excessive secrecy, their ?confidentiality,' their ?classified' and ?restricted-access' documents, and their closed access meetings all conspire to prevent any kind of public oversight of their doings. ... Even UNESCO, dedicated by its charter to promote ?human rights and fundamental freedoms' (to include freedom of speech), requires staff ?not to communicate to any person any information known to them by reason of their official position' -- an obligation that does not cease when they retire or resign."

USAID, Hancock notes, is relatively "open." It is held accountable by the U.S. Congress.

Hancock and I share the view that development aid must take place. He thinks, with a handful of exceptions, the entire system is thoroughly corrupted. I think it's salvageable. But a corrupting mindset dogs the current system. Hancock says, ironically: "It is the U.N. ... that offers the best prospect of a lasting compromise between altruism and self-interest. Whether you get a job in the Food and Agriculture Organization ... or in any of the other agencies of the system, you will be entering a career that pays you a colossal salary to go on doing ?humanitarian" and ?socially valuable' work and that, furthermore, does so against a backdrop of liberal and progressive ideas with which you can feel comfortable."

Perhaps the U.N. scandal story is too discomfiting for many who think that without the current system then nothing would be done.

That's not the case. The Oil for Food scandal is an opportunity to change the sick mindset that damages effective aid. Perhaps an enterprising trial lawyer will obtain a court venue in New York and launch a class action suit on behalf of the Iraqi people to recover the stolen, skimmed, laundered and filched funds. Out of this cleansing process a stronger, better developmental aid regimen will emerge.

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