Oil-for-Food Scandal Draws Scrutiny to U.N.

NEW YORK – It began as a U.N. humanitarian aid program called "Oil-for-Food," but it ended up with Saddam Hussein (search) pocketing billions to become the biggest graft-generating machine ever and enriching some of America's most forceful opponents at the United Nations (search).

Plus, some evidence suggests that some of the money ended up in the hands of potential terrorists who are opposed to the United States.

[Editor's Note: This is one in a series of articles about the U.N. Oil-for-Food program. Check back tomorrow for the next installment. For background information mentioned on FOX News Channel's "Breaking Point," click here.]

The roots of the scandal date back to 1991, when a U.N.-backed and U.S.-led coalition expelled Saddam from Kuwait following his hostile takeover of the neighboring country. Although Saddam lost the war, he walked away with one important victory -- he got to stay in power in Iraq.

Thirteen years later, a second U.S.-led coalition made of a smaller group of nations than the first effort finally knocked Saddam out of business. And it did so without the help of the United Nations, which failed to pass a resolution backing the U.S. effort.

As the death toll rises in Iraq -- the number of U.S. military casualties is now above 1,000 and Iraqi citizens continue to die daily from insurgent attacks -- the question arises: Can the United Nations help now?

A new FOX News poll finds that 54 percent of the U.S. public believes the United Nations does not reflect the values of average Americans. Only 29 percent say that U.N. policies reflect said values.

“I believe the U.N., parts of it, have been corrupt for years. But this went to a whole new level,” said Rep. Christopher Shays (search), R-Conn., chairman of the House Subcommittee on National Security, Emerging Threats and International Relations.

Shays is leading one of several Oil-for-Food probes by the federal government. The General Accountability Office has already pegged Saddam’s Oil-for-Food take at $10.1 billion. It could end up being a lot more.

Shays says Iraqis aren't the only victims -- Americans are too.

“We're talking about American lives that are being lost in an attempt to bring democracy to Iraq,” Shays said. If France, Russia, China and Germany had told Saddam it was time to back down and honor his commitments, Shays said it’s possible the United States may not have needed to go to war against Saddam.

But why did these countries really object to a second U.S.-led war against Iraq?

Some evidence suggests that those countries that said they were opposing the Bush administration on principle were actually making billions from Oil-for-Food.

“I think clearly, American blood is in the hands of a number of European countries, who could have put pressure on Saddam, who could've looked him in the eye and said, ‘the United States is coming in,'" Shays said. “And to me, some of the explanation clearly has to be the Oil-for-Food program.”

Shays added that there is a chance some of the insurgents now operating against the United States and the new Iraqi government are using Oil-for-Food money in their terror campaign.

“I think it's not only possible that insurgents are using Oil-for-Food money -- I think it's very likely,” Shays said.

One casualty was Ihasan Karim (search), the Iraqi official heading an inquiry into the Oil-for-Food program. On July 1, a bomb placed under his car exploded in Baghdad, killing him, and U.S. officials in Iraq told FOX News that they believe Oil-for-Food was the motive in the assassination. That wouldn't surprise Shays.

“I don’t know who murdered him. But I can tell you this: There are a lot of people who don't want this story to come out,” Shays said.

Shays places part of the blame on people inside the United Nations, even though U.N. officials authorized an independent investigation into the scandal.

“They’re doing this investigation, but only after they were outed by an Iraqi free press, and a government leak from the Iraqi governing council,” Shays said.

Shays said the man heading up the probe, former Federal Reserve Chairman Paul Volcker (search), has a tough job ahead.

“Paul Volcker is going to succeed or fail based on his power of persuasion and the good will of the U.N., but you're basically asking the member states to sign their own death warrant, and so it's kind of hard for me to imagine he's going to get the cooperation he wants,” Shays said.

Volcker said it will take until at least next spring to finish his report, and in the meantime, he doesn't seem willing to give Congress the cooperation it wants.

"There is a lot of smoke," Volcker told FOX News on June 23, when asked if he thinks the Oil-for-Food program was corrupt. "There are obviously big problems, and we want to see how big they were and why did they happen. Why did all this happen, in some sense, under everybody's noses?"

Shays and Sen. Norm Coleman (search) -- leaders of two of at least five federal Oil-for-Food investigations -- have started firing off subpoenas.

“We have just begun this process,” said Coleman, R-Minn. “But we’re trying to sort out this hornet's nest of corruption, of evil. And it’s going to take a little bit of time [and] patience.”

The problems at the United Nations have led some to question its value. A FOX News poll found that 64 percent of Americans say the United Nations has not been an effective partner in the War on Terror.

Yet Shays and Coleman both said in interviews they believe a role exists for an organization like the United Nations.

“I think we need the U.N. But we need it to be an honest institution,” Shays said. “When there are mistakes made, you have to uncover them and deal with them.”

Shays said that the very least, a major shakeup needs to take place.

“The U.N. is so important, we’ve been willing to look the other way when we see things we don't like. I think the Oil-for-Food program busted that.”

Coleman said he believes the United Nations had redeemable qualities, and he hoped the investigation would lead to greater transparency and more credibility for the world body.

“I’m not willing to kind of cash it in … they’re not the Evil Empire, the United Nations,” Coleman said.

For more information — including government documents, U.N. audits and past stories — click here.