Iraqis: U.S. Officials Stalling 'Oil-for-Food' Probe

NEW YORK – U.S. officials charged with managing Iraq until June 30 are facing accusations that they are trying to hinder the investigation into what happened to millions of dollars from the United Nations oil-for-food program (search).

Some members of the now-dissolved Iraqi Governing Council claimed that coalition administrator L. Paul Bremer (search) has been hindering the investigation to prevent any revelations that might embarrass the U.N. during the critical transition of power in Iraq.

But coalition officials strongly deny the claim.

"We believe it is critical that this investigation be done seriously, that people are held accountable," Bremer spokesman Dan Senor (search) told Fox News.

"Iraqis want to hold people accountable. They want to get to the bottom of this and they want it to be done professionally. And the approach that Ambassador Bremer has taken, at the behest of Iraqis, fits that model."

But lawmakers on Capitol Hill probing the oil-for-food scandal have also questioned Bremer's decision to give control of the investigation to the Iraqi Board of Supreme Audit (search), a Saddam Hussein-era body.

Rep. Christopher Shays, R-Conn., sent a letter to Bremer on May 21 raising questions about entrusting the investigation to figures who may have allegiances to Saddam.

"Why are officials from the Saddam era more trustworthy stewards of an investigation of oil for food than the coalition-appointed Iraqi Governing Council or its successor?" Shays wrote.

Coalition officials have not been able to provide the names of the 1,100-member group that critics say is certain to have some holdovers from the old deposed regime.

Click to read the letter from Rep. Hyde to Kofi Annan (pdf).

Click to read letters from Benon Sevan, Cotecna (pdf).

Click to read the U.N. internal audit of the oil-for-food program (pdf).

But Senor insisted to Fox News that the BSA is untainted by corruption.

"We did a thorough vetting of the individuals on that body and anybody who was involved in any of the shenanigans or the crimes of the former regime were cleared off it," Senor said.

To deal with the allegations that companies and individuals — including the former Iraqi dictator — siphoned off billions of dollars from the program meant for the Iraqi people, U.N. Secretary-General Kofi Annan named a three-member panel led by Paul Volcker to lead an investigation. Volcker is the respected former chairman of the U.S. Federal Reserve.

Annan has said that he expects Benon Sevan (search), the former head of the program, and other U.N. staff members to cooperate with the investigation. But Sevan's office has sent letters to some of the companies involved in the program not to release any documents or to talk to investigators without prior approval.

Ahmad Chalabi (search), the Iraqi Governing Council member who has fallen out of favor with U.S. officials because of allegations he passed U.S. secrets to Iran, said protecting the United Nations is exactly what Bremer is doing.

Chalabi said the raid on his home and offices in Baghdad two weeks ago was another part of that cover up.

A London-based consultant to Chalabi and the Governing Council, Claude Hankes Drielsma, also told Fox News last week that his computer was hacked into and all its files destroyed on the same day that Chalabi's offices were raided. Drielsma describes it as a strange coincidence.

Meanwhile, Sevan — who has refused to answer Fox News' questions about the embattled program — has written an e-mail to friends admitting there were problems but blaming the Security Council. In the e-mail, obtained by The New York Times, Mr. Sevan writes, "It could have been better administered had we been allowed by the member states to do so."

Fox News' Jonathan Hunt contributed to this report.