Monday, January 10, 2005

Mismanagement in Iraq Oil-Food Deal

UNITED NATIONS (Reuters) - Internal U.N. audits of the Iraqi oil-for-food program found large contractors overcharging the world body by several million dollars and said one U.N. agency systematically mishandled funds in the field.

Fifty-eight reports were released on Sunday by Paul Volcker, the former U.S. Federal Reserve chairman, who is conducting an independent probe of the $64 billion program.

One report, dated July 21, 1999, on Lloyds Register reported possible overcharges of $1.38 million because inspectors, who earned $770 a day, were not at their posts for 1,800 days. The British Lloyd Inspections firm, later replaced by the Swiss-based Cotecna Inspection SA, inspected goods entering Iraq so vendors could be paid.

Cotecna, which took over from Lloyds in 1999, also maintained a lower staff than was required by its contract, although it charged less per inspector than Lloyd's did.

The reports advocated reclaiming an "appropriate amount" of money from Cotecna based on its under performance."

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