The U.N. Security Council and Secretary-General Kofi Annan will both face sharp criticism for allowing corruption and waste to overwhelm the Iraq oil-for-food program, according to a probe of the $64 billion operation.
The Independent Inquiry Committee's definitive report, to be released Wednesday, will fault U.N. management for allowing Saddam Hussein to manipulate the program.
The committee, led by former U.S. Federal Reserve Chairman Paul Volcker, calls for widespread reform to take on such tasks in the future. It questions whether the United Nations is even capable of running such massive operations.
"Neither the Security Council nor the Secretariat leadership was clearly in command," the preface to the report said. "When things went awry - and they surely did - when troublesome conflicts arose between political objectives and administrative effectiveness, decisions were delayed, bungled or simply shunned."
The preface called for four central reforms, including the creation of a chief operating officer at the United Nations. The U.N. General Assembly should demand that the changes go into force no later than a year from now, the preface said.
Annan's failure to properly manage the $64 billion program will be a central focus, but there is no new "smoking gun" linking him to an oil-for-food contract awarded to a Swiss company that employed his son Kojo, said one official with knowledge of the final report, speaking on condition of anonymity because the report had not been released.
Meanwhile, the Italian business newspaper Il Sole 24 Ore and the London-based Financial Times were to report in their Wednesday editions that Kojo Annan received more than $750,000 from oil trading companies being scrutinized by oil-for-food investigators.
The newspapers said the payments appeared to be linked to oil deals in West Africa. Kojo Annan's lawyer, Clarissa Amato, denied the payments were connected to oil-for-food, but said Annan was a director of a Nigerian company called Petroleum Projects International.
The Independent Inquiry Committee's report will say the oil-for-food program succeeded in providing minimal standards of nutrition and health care for millions of Iraqis trying to cope with tough U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait.
After it turned out that Deputy Prime Minister Andrei Belousov included the Fonbet betting company in the list of backbone enterprises that can count on state support, everyone started talking about these bookmakers.