Mr. SHAYS. Thank you. I am going to claim my time and just to one, to thank you Ambassador Bolton. Ambassador, you described the dysfunction of the U.N. before anyone else did. And now I think most people recognize it. You've been tremendously criticized over the years for doing that. I want to just say as one Member of Congress, I appreciate it. You are just being straightforward, and the irony is that now you want to reform the U.N.; some people say you want to destroy it. You know, you want the system to work properly. And we have had a golden opportunity to which I think we have used some of it well, to understand the significance as it relates to Iran and Sudan, if people don't want military force to be used, you have to be able to depend on sanctions. And I am struck by the fact though that you can never take off the table military force. I wish President Carter had not said we will not use military force to have Iran free the diplomats it took as hostages. What an outrage to have taken diplomats. They must have said, America, what a country. The bottom line is you had President Reagan come in and just say the truth. Something you might have said. He said taking diplomats is an act of war, and we will treat it as such. He didn't say what he would do. And the diplomats were returned. I happen to believe the Libyan president saw what happened to Saddam and said, you know what, I like diplomacy. But he knew behind there was the potential that he could have been replaced. So I happen to believe you can never take off the table your military force. If Saddam ever thought we would get him out of Kuwait, he never would have gone in. And I believe if he ever believed that we would remove him from power, he would like gladly be in the Riviera with his billions of dollars. But he didn't believe it because the French and Russians and others told him we weren't coming in. That is the tragedy of it. So I understand why you are reluctant to say, force is on the table. But you are the diplomat, but I hope we back up your diplomacy with strong potential to help people realize particularly the Europeans if you are not going to go along with sanctions, what do you leave as the end result, and then to know, my God they get the weapon. They get a nuclear weapon, then I am pretty sure that you will have Saudi Arabia and others say the same thing. So this is a huge issue. I wish we had focused a little more on that aspect of this because that is the bottom line for me. I have people who marched in my office very concerned about what has happened in Sudan. But if Khartoum does not believe that there is going to be action taken against them, I don't know how diplomacy works. And I guess what I would love is for you just to tell me in concluding with Iran and with the Sudan, you are working diplomatically to get an agreement. Do you feel that you are making headway? Do you feel that you are just kind of in Never Never Land right now? Where are we at? Ambassador BOLTON. Well, I think both in the case of Iran and really in the case of Darfur as well, that these constitute tests for the Security Council. In the case of Iran, this is a perfect storm of a country that for decades has been the leading state financier of terrorism, one of the leading state sponsors of terrorism in the world, providing funds and equipment and weapons to groups like Hamas and Hezbollah and Palestinian Islamic Jihad, at the same time a government that now seeks to acquire nuclear weapons and advance ballistic capability, it is a country led by a president who denies the existence of Holocaust, calls on Israel to be wiped off the map, who held a seminar last year called the world without the United States. This is not a man you want to have with his finger on the nuclear button, or with the capability of delivering nuclear weapons to terrorist groups that could transport them around the world. So if you believe, as we do, that terrorism and the proliferation of weapons of mass destruction are the two greatest threats to international peace and security that we face, this is a test for the Security Council to deal with Iran and to bring an end to its nuclear weapons program. In the Sudan, you have a government that has been responsible over the years for the deaths of more than 2 million of its citizens in the southern part of Sudan, that is now subject of a comprehensive peace agreement we hope will hold, but having engaged in genocide and murder and causing hundreds of thousands if not millions of people to have to leave their homes in the Darfur region, that has put off the Security Council in ways large and small. A couple of weeks ago, they refused, the government of Khartoum refused to give visas to four military planners from the U.N. Department of Peacekeeping Operations so they could get on to the ground in Darfur to do the kind of kicking of tires and looking_at the terrain and everything that would help facilitate planning. So, so far, the government has been able to withstand our efforts there. We will see if the sanctions that we recently imposed and other ones that may come might have an influence on their thinking. But the Security Council, in many respects, the same problem we faced in other situations, is the Security Council serious about its resolutions, or is it not? That is the test in Sudan. Mr. SHAYS. Well, I thank you very much for being here. You have been very responsive I think, and we appreciate, I appreciate deeply the work you do as an ambassador. We are going to have a 5minute recess and then convene with our second panel. Thank you. Ambassador BOLTON. Thank you Mr. Chairman. [Recess.] Mr. SHAYS. I would like to call this hearing to order again and to announce our second panel. We have Mr. Joseph A Christoff, Director, International Affairs and Trade Team, U.S. Government Accountability Office; Mr. Carne Ross, director, Independent Diplomat; Dr. George A. Lopez, senior fellow and professor of political science, the Joan B. Kroc Institute for International Peace Studies, University of Notre Dame. Gentlemen, thank you for being here. As is our custom, I need to swear you in. So if I could have you stand please. Raise your right hands. [Witnesses sworn.] Mr. SHAYS. I will note for the record our witnesses have responded in the affirmative. You all were at the first panel of this hearing, and so you have a sense of some of the questions, though some Members aren't here right now, particularly as they relate to the issue of sanctions and so on. I am going to invite each of you to make your statement. We will have whatever time we need to make sure we cover each of the territories. And if I don't ask you a question that needs to be asked, but you have heard this question earlier and you want to answer it, you can ask yourselves and then answer it. I want to make sure that we have on the record information about the significance of sanctions if they are going to work, how they work, when they fail, if we can do that, how you back up sanctions so that they do what we want to do. I will say this, I am very fearful that if sanctions don't work, we leave our government options that are not very tasteful. So with that, Mr. Christoff, we will have you start. STATEMENTS OF JOSEPH A. CHRISTOFF, DIRECTOR, INTERNATIONAL AFFAIRS AND TRADE TEAM, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; CARNE ROSS, DIRECTOR, INDEPENDENT DIPLOMAT; AND GEORGE A. LOPEZ, SENIOR FELLOW AND PROFESSOR OF POLITICAL SCIENCE, THE JOAN B. KROC INSTITUTE FOR INTERNATIONAL PEACE STUDIES, UNIVERSITY OF NOTRE DAME. STATEMENT OF JOSEPH A. CHRISTOFF Mr. CHRISTOFF. Thank you, Mr. Chairman, and thanks for inviting GAO to this important hearing. Today, I would like to discuss specifically a report that we issued last week on lessons learned from the Oil-for-Food Program and how some of these lessons learned bear not only on future sanctions but on U.N. reform efforts. My comments are based on three reports the GAO issued last week, both on the Oil-for-Food Program and U.N. reform issues. Let me summarize three lessons from the Oil-for-Food Program that highlight how a positive control environment can improve future sanctions. First, the sanctioned country should not be allowed undue control over the terms of the sanctions program. In the Oilfor-Food Program, the U.N. ceded control over key aspects of the program to the former regime. For example, the U.N. gave Iraq, rather than an independent agent, the authority to negotiate contracts with companies that purchased oil or supplied commodities. The second lesson learned, takes into consideration the economic impact that sanctions have on neighboring countries. U.N. member states, including those bordering Iraq, were responsible for enforcing the sanctions. However, Iraq's neighbors circumvented the sanctions because they were economically dependent on Iraq for trade. Trade agreements, for example, enabled Jordan to purchase heavily discounted oil from Iraq in exchange for up to $300 million in Jordanian goods. Iraq also smuggled oil through Turkey and Syria, and as a result, Iraq obtained $5 to $8 million in illegal oil revenues. The third lesson learned is that all aspects of sanctions must be enforced with equal vigor. The U.N. was successful in keeping mili tary items out of Iraq. However, the U.N. did not adequately examine contracts for inflated prices, which enabled Iraq to obtain between $1.5 and $3.5 billion in kickbacks. The Oil-for-Food Program also provides lessons for addressing U.N. reform issues. The first lesson is that agencies responsible for U.N. programs must have clear lines of authority. The U.N. managed the Oil-forFood Program with multiple entities having unclear lines of authority. For example, the Secretariat's Office of Iraq's program was not responsible for rejecting contracts based on pricing concerns. In addition, U.N. inspectors did not have the authority to inspect goods imported into Iraq to verify their price and quality. The second lesson learned is that risk must be assessed as programs expand in scope and complexity. In 1996, the Oil-for-Food Program began as a 6-month effort to deliver emergency food and medicine to Iraq. However, it expanded into a 6-year, $31 billion effort to build houses, construct irrigation systems, purchase oil equipment and fund sports and religious facilities. The U.N. did not assess how this expansion placed the Oil-for-Food Program at greater risk for waste, fraud and abuse. And finally, monitoring and oversight must be conducted continuously, for the $67 billion Oil-for-Food Program, the Office of Internal Oversight Services dedicated only two to six auditors. This contrasts with the 160 auditors that the Volcker Commission said this audit agency should have deployed. In addition, the independence of the internal auditors waş compromised. The Office of Iraq Program denied the internal auditors funds to audit the Oil-for-Food Program in central and southern Iraq where most of the money was being spent. So, in conclusion, the Oil-for-Food Program does offer several lessons for deciding future sanctions and strengthening existing U.N. programs. Of utmost importance is the need to establish and apply a sound internal control framework whereby roles are clearly articulated, risks are mitigated and oversight is continuous. Mr. Chairman, that concludes my statement. I will be happy to answer your questions. [The prepared statement of Mr. Christoff follows:] GAO For Release on Delivery Expected at 10:00a.m. EDT United States Government Accountability Office Testimony Before the Subcommittee on National Security, UNITED NATIONS Oil for Food Program Provides Lessons for Future Statement of Joseph A. Christoff, Director GAO-06-711T GAO Accountability * Integrity • Reliability |