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RE: Paul Volcker HA-7-205

Charges: Genocide, Deprivation of Relief Benefits, Orchestrating State Failure, Maliscious Espionage against the health and welfare of the Iraqi People (and in the USA), fraud regarding the false representation of these maliscious crimes.

Remedy: 1. Fire Paul Volcker as UN investigator
2. Reinstitute the administration of cash assistance from oil sales at the Iraqi Central Bank.

An investigation led by former Federal Reserve Chairman Paul Volcker accused Sevan in an interim report released Thursday of a "grave conflict of interest," saying his conduct in soliciting oil deals from Iraq was "ethically improper and seriously undermined the integrity of the United Nations."

The conflict of interest is clearly an American invention.  Nowhere else does anybody stress financial relationships in that fashion.  Paul Volcker is clearly representing the interests of warmongers to deprive the Iraqis of their welfare benefits and is doing so through espionage, the breeching of confidentiality of the financial records and fraud - the false representation of the Oil For Food program as anything but a successful cash assistance welfare program that fed 60% of the populace.  Mr. Volcker has defrauded nearly 20 million Iraqis to incite genocide and foment revolution at the behest of the most murderous officials in the world.  Mr. Volckers must be tried, punished and the welfare state restored to the Republic of Iraq.  Because Volcker is such an annoying and persistent advocate of genocide the most effective method of correcting this offender would be stripping him of his diplomatic credentials as he has utterly failed in that capacity by falsely representing himself as anything but the cause of state failure.  This state failure was recently tried in the United States in January when the majority of state institutions were robbed.  For these reasons and more Hospitals & Asylums is considering totally severing relations with the federal government of the United States of America that orchestrates nothing but genocide and state failure at home and abroad.

A.  Secretary-General Kofi Annan announced April 21 the appointment of former U.S. Federal Reserve System Chairman Paul Volcker to head an independent panel to investigate allegations of mismanagement in the Oil-for-Food Program, and the U.N. Security Council unanimously backed his decision with a resolution calling for full cooperation from all involved. The Executive Director of the Oil for Food Program, Mr. Benon Sevan, handed operations and responsibilities to the Coalition Provision Authority (CPA) on Friday, effective as of midnight 21 November, 2003, he continues to serve the Secretary-General as Executive Director of the Iraq Program .  The Iraqi Oil for Food Program was the largest investment managed by the United Nations who are chastised for their permissive behavior to colonial suppression, oppression and foreign occupation. The Coalition Provisional Authority, however is dissolved, therefore forfeiting all claims to debt, ownership or frozen assets that should belong to the Iraqi Government as administrated from the Iraq Reconstruction and Development Fund.  Other nations may also choose to forfeit their debts and prior encumberances upon Iraq and invest together in a new future, where the United Nations only makes 1% of the Gross Domestic Product of the Oil Industries and foreign corporations only 10% of those new industries that they found.  We hope that the articles of association and deed of incorporation can be conveyed in one Report to the Secretary General, not scheduled for 2005 and no later than 2007 when Iraq shall honor those debts they find to be valid.  For the time being the United Nations shall not tax Iraq and shall recognize the importance of oil revenues for the health and welfare of the Iraqi people by continuing clever distribution systems to bring free food to 60% of the populace.

B. The Oil For Food Program has been Iraq's principal source of revenues since the Iraq Kuwait War, it is operated by the Office of Iraqi Program . About 60% of Iraq's 27 million people have been wholly dependent on food provided through a food ration system program largely supplied by goods imported under the United Nations' Oil for Food (OFF) program, which began operations in 1996. Every Iraqi is supplied a monthly ration of staples such as wheat, rice, dried milk, sugar, tea, and soap. This is distributed through a network of about 45,000 local grocers and other agents, with the food imported (with some local procurement) and supplied to the distribution network through Iraq' s Ministry of Trade .  The heavy taxation of the Sanction Committee encouraged smuggling and left Iraq vulnerable to persecution, primarily by the United States, complicating the receipt of humanitarian goods. On May 22, 2003 the Security Council adopted Resolution 1483 reaffirming Iraqi sovereignty and responsibilities to the United Nation by limiting embargoes against Iraq to arms ensuring the supply of humanitarian and trade resources, calling for a Development fund to be established with the Central Bank of Iraq in co-operation with International Financial Institutions to be managed in a transparent fashion to meet the humanitarian needs of the Iraqis and calling for the alleviation of sovereign debt.  Until 2007 Iraq oil revenues shall be free from taxation, judgment and encumbrances of all sorts .  Resolution 1483 transferred all assets owned by the Oil for Food Program to the Coalition Provisional Authority. On November 24, 2003 the Security Council adopted resolution 1518 reaffirmed the decision to abolish the Security Council Sanction Committee established pursuant to resolution 661(1990).  The complete Council is now responsible for arms sanctions and black lists under resolution 661 (1990) .  On April 21, 2004 the Security Council adopted Resolution 1538 to provide a full and fair investigation into bribery, kickbacks, surcharges and illicit payments to procure humanitarian goods.  Concerned with allegations of abuse affirms that illicit contracts by UN officials are unacceptable the resolution emphasizes full co-operation with investigators, the Coalition Provisional Authority and Member States and welcomes the appointment of a high level inquiry into the Oil for Food Program .  In summary, with the dissolution of the Coalition Provisional Authority all assets earned from the Oil for Food Program shall be owned by the Interim Government and funds earned from Iraqi oil sales shall be deposited in the Iraqi Central Bank Fund.  Future Iraqi oil sales shall be conducted on the open market without any quotas or price fixing other than that of the market itself.

C. The oil industry was nationalized by the Ba'ath party in 1972, prior to 1990 Oil revenues created a welfare state with considerable benefits.  Iraq possesses the world's second largest proven oil reserves, currently estimated at 112.5 billion barrels, about 11% of the world total and its gas fields are immense as well. Many experts believe that Iraq has additional undiscovered oil reserves, which might double the total when serious prospecting resumes, putting Iraq nearly on a par with Saudi Arabia. Iraq's oil is of high quality and it is very inexpensive to produce, making it one of the world's most profitable oil sources.  Iraq produces crude oil for export. 

D. The Oil for Food Program was begun in a UN mission to Iraq led by Sadruddin Aga Khan in 1991 concluded that Iraq needed $22 billion that year to provide civilian services at pre-war levels that is acknowledged in UN Security Council Resolution 706 that called for oil sales not to exceed $1.6 billion over 6 months to be placed in an escrow account deducting 30% of these revenues for a Compensation Commission for Kuwait.  Resolution 712 on September 19, 1991 approved the deal ensuring that $900 million for the Iraqi people disregarding the Secretary-General's request that the cap be raised.  On December 10, 1996 the Oil for Food Program began and has been renewed every six months since.  Various agencies, including UNICEF, presented reports to the Council, cataloguing the suffering, but the US and the UK used their diplomatic weight and threatened use of the veto to block remedial action beyond the Oil-for-Food program. The Council's Oil-for-Food program eased the worst of the food shortages as supplies began to arrive in mid-1997, but reports from the field suggested that the situation remained very serious. By 1998 Oil-for-Food sales cap increased to $5.256 billion per six months. 

E. Compensating victims of the invasion of Kuwait has been a priority in the Oil for Food Program.  The Council set up the Compensation Commission with Resolution 692 and in Resolution 705 it set the deductions from the Oil-for-Food account at the very high level of 30%, against the advice of the Secretary General. The Compensation Commission has considered a very large number of claims, including claims on behalf of many individuals. According to the Commission's web site, the Commission received approximately 1,356,500 small individual claims and settled them all with payments of approximately $16 billion. Many of the claimants had been migrant workers from Egypt and other countries, working in Iraq and Kuwait at the time the war broke out. A strong case can be made for compensating these individuals. The Commission wisely gave priority to their claims.  Corporations and governments have made most of the remaining claims, which come to an additional sum of about $290 billion. This includes claims by various Kuwait government ministries and by the Kuwait Oil Company concerning wartime losses. Considering the wealth of Kuwait and the absence of humanitarian problems there, the deduction of a large share of Iraq's oil sales for war reparations to such claimants appears punitive and not attuned to Iraq's urgent humanitarian and reconstruction needs.
F. While the compensation fund received an allocation of about 29% of the oil proceeds on average, it actually awarded a total of $38 billion in compensation as of April 2002 compared to just $47 billion in humanitarian supplies ordered by Iraq as of the same date, putting the compensation fund awards at 45% vs. humanitarian orders placed at 55%. At of the same date, the compensation fund had paid out $16 billion to settle claims, while the humanitarian program had received only $21 billion in goods, putting the compensation fund at 43%, while the actual humanitarian outlays came to just 57%.

G. Surveying throughout the 1990s by the Food and Agriculture Organization and World Food Program documented the lack of food in Iraq and its effect on vulnerable groups. In 1996 the World Health Organization reported on health, morbidity and mortality data for 1989-1994 and commented to increase the Oil sales cap:
In marked contrast to the prevailing situation prior to the events of 1990-91, the infant mortality rates in Iraq today are among the highest in the world, low infant birth weight affects at least 23% of all births, chronic malnutrition affects every fourth child under five years of age, only 41% of the population has regular access to clean water, 83% of all schools need substantial repairs.  Infant mortality rose from 47 per 1000 live births during 1984-89 to 108 per 1000 in 1994-99, and under-5 mortality rose from 56 to 131 per 1000 live births. 800,000 Iraqi children are chronically malnourished, 21% of children under five are  underweight, 20% are stunted due to chronic malnutrition and 9% are wasted due to acute malnutrition.

H. Investigation of the principal cause of this poverty shows that it results from the imposition of sanctions by the fifteen Council members, of whom only two made regular use of holds: the United States and the UK. The United States imposed the overwhelming majority. As of February 2001, the US was solely responsible for over 93% of all holds, the US and the UK together for 5%, and the UK alone for 1%, while 1% was attributable to all other Council delegations, past and present.  As of July 19, 2002, no less than $5.4 billion in contracts were on hold, up from $3.7 billion on May 14, 2001. Holds have blocked vital goods. They have affected water purification systems, sewage pipes, medicines, hospital equipment, fertilizers, electricity and communications infrastructure, oil field equipment, and much else. Sometimes just a small part of these contracts is alleged to have dual use. On December 18, 2001, the OIP weekly update noted that  The total value of contracts placed on hold by the 661 Committee continued to rise . . . The "holds" covered 1,610 contracts for the purchase of various humanitarian supplies and equipment, including 1,072 contracts, worth $3.85 billion, for humanitarian supplies and 538 contracts, worth $527 million, for oil industry equipment. During the week, the Committee released from hold 14 contracts, worth $19.8 million. However, it placed on hold 57 new contracts, worth $140.6 million.

I. Rethinking sanctions Secretary-General Boutrous Ghali issued a report in January 1995 calling sanctions a, "blunt instrument" and on April 14, 1995 UN Security Council Resolution 986 allows Iraqi government $2 billion in oil sales every six months.  13% of total available funds were set aside for UN use in the northern governorates.  The 661 sanctions committee was expected to review and approve all supplies purchased through the escrow account.  In May to June of 2001 the UK, French and Russian presented draft resolutions to propose various new approaches to overcoming the US embargo and the UK proposed a Goods Review List to alleviate sanctions, whereas the decision for land based border monitoring was vacated.  On August 12, 1999 UNICEF reports that, "an additional half million children under five who would be alive under normal circumstances had died in Iraq between 1991 and 1998."  Resolution 1284 offered to improve the Oil-for-Food program and expressed its intention to suspend sanctions with the "fundamental objective of improving the humanitarian situation in Iraq".  The Oil sales cap was lifted and some prohibited items were permitted to enter Iraq.  In February 2000 UN Secretary General Kofi Annan expressed doubts of his own. At a meeting organized by the International Peace Academy and in the presence of most Council ambassadors he concluded that:

The record of the "Sanctions Decade" has raised serious doubts not only about the effectiveness of sanctions, but also about their scope and severity when innocent civilians often become victims not only of their own government, but of the actions of the international community as well.

When robust and comprehensive economic sanctions are directed against authoritarian regimes, a different problem is encountered. Then, tragically, it is usually the people who suffer, not the political elites whose behavior triggered the sanctions in the first place. ...Sanctions remain a blunt instrument, which hurt large numbers of people who are not their primary targets.

J. In conclusion, the Oil for Food Program has been dissolved, and its assets transferred to the Central Bank of Iraq Fund.  Debt payments to Kuwait and other nations in accordance with the International Compensation Commission have ceased, however the United States recognizes their responsibility under 22USC(62)5323  that encourages the United States to extend international debt relief to third world debtor nations in order;

(1) to expand the world trading system and raise the level of exports from the United States to the developing countries in order to reduce the United States trade deficit and foster economic expansion and an increase in the standard of living throughout the world;

K. The procedure for establishing the need for and the viability of international debt relief 22USC(62)5333 requires that the Secretary of the Treasury be informed of;

(1) the review and analysis of the debt burden of the developing countries, with particular attention to alternatives for dealing with the debt problem including new
lending instruments, rescheduling and refinancing of existing debt, securitization and debt conversion techniques, discounted debt repurchases by both the International Monetary Fund and World Bank Group member, the International Bank for Reconstruction and Development.

L. SEC. 2215. REPORTS ON IRAQ AND AFGHANISTAN. (a);
(1) The Coalition Provisional Authority (CPA) shall, on a monthly basis until September 30, 2006, submit a report to the Committees on Appropriations which details, for the preceding month, Iraqi oil production and oil revenues, and uses of such revenues.
(2) The first report required by this subsection shall be submitted not later than 30 days after enactment of this Act .
(3) The reports required by this subsection shall also be made publicly available in both English and Arabic, including through the CPA's Internet website.
(b) The Secretary of State, in consultation with the heads of other relevant Federal agencies, shall submit a report to the Committees on Appropriations not later than 90 days after enactment of this Act detailing:
(1) the amount of debt incurred by the Government of Saddam Hussein in Iraq, the impact forgiveness of such debt would have on reconstruction and long-term prosperity in Iraq, and the estimated amount that Iraq will pay, or that will be paid on behalf of Iraq, to a foreign country to service such debt during fiscal year 2004  ;

(2) INSERTED.  One key to the successful reconstruction of Iraq is to secure a multilateral debt reduction arrangement that the new Iraqi government could ratify after the political transition. Of the approximately $120 billion in Iraqi debt, roughly one third of it is held by Paris Club countries such as Japan, Germany, Russia, France and the U. S., about a third is with Gulf countries (mostly Saudi Arabia), and the rest is divided among non-Paris Club countries, the private sector, and International Financial Institutions .  $82,620,139,000 is directly from the International Compensation Commission .  The best way to purchase this $120 billion Iraqi debt appears to for the Paris Club Nations to totally forgive their $40 billion of the debt as they wish to plead victory in war reparations to such an extent that they are a likely source of a bank loan to, Saudi and Kuwait oil refining companies who might be interested in investing their $40 billion portion into 10% ownership of oil refining technology on site in Iraq. 

M. OPEC is an international Organization of eleven developing countries which are heavily reliant on oil revenues as their main source of income. Membership is open to any country which is a substantial net exporter of oil and which shares the ideals of the Organization. The current Members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela . At end-2001 world proven crude oil reserves stood at 1,074,850 million barrels, of which 845,421 million barrels, or 78.7 per cent, was in OPEC Member Countries.

N. According to the reference case of OPEC's World Energy Model (OWEM), total world oil demand in 2000 is put at 76 million barrels per day, As world economic growth continues, crude oil demand will also rise to 90.6m b/d in 2010 and 103.2m b/d by 2020, according to the OWEM reference case figures.  Oil comprises roughly 40% of the world energy fuel shares and gas 25%; hydro & nuclear account for 10% and solids for 25% for a total of 100%. The countries with the largest crude oil reserves are; (1) Saudi Arabia with 262,697 million barrels, (2) Iraq 112,500, (3) Iran 99,080,  (4)United Arab Emirates 97,800 and (5) Kuwait with 96,500. 
O. Oil exploration can cost tens or hundreds of billions of dollars.  The actual costs depend on such factors as the location of possible oil reserves (i.e. on land or in deep water), how large the oil field is expected to be, how detailed the exploration information must be, and the type and structure of the rock below the ground.
Exploration requires careful mapping of the surface in order to locate suitable sites (ie, types of geological structures), deep formation surveys (eg, with two and three-dimensional seismic techniques), and test-drilling. It is not easy to determine a typical cost of such activities. OPEC has the lowest average production costs in the oil industry. This is partly because some OPEC Member Countries have large amounts of oil in reasonably accessible locations. Yet OPEC Members will still need to spend tens of billions of dollars in future to meet the growing need for oil .  Similar investments will also be required for gas exploration in Iraq.  It is estimate that for a bank loan of $25 billion USD Iraq, Kuwait and United Nations could begin exploiting both the copious natural gas deposits in Iraq and improve human resources by investing in an environmentally sound petroleum refining industry to improve revenues from the sale of crude oil. It is recommended to wait for such an expensive development project at least until 2005 when constitutional democracy has been restored or 2007 when Iraq is advised to begin making payments on their sovereign debt again by the UN Security Council.  It is expected that the Iraqi Oil industry will be much more independent from the United Nations Security Council. 
P. The United Nations should wait until 2005-2007 to settle for a long term shareholding of perhaps only 1% of the Gross Domestic Product of Iraqi oil refining and natural gas pipelines that can be estimated at as much as 25% the market value of oil reserves.  Essentially if Iraq invested in natural gas they could swiftly earn $2.5 billion USD a year and if Iraq invested in petroleum refining corporations, both fuels and plastics, they could conceivably earn $1 to $10 billion USD a year.  With the nationalized natural gas industry mixed with international corporate investment in natural gas, fuel and plastic manufacturing the State of Iraq could conceivably earn $2.5 to $5 billion in revenues and be 89% owner of the foreign owned banking association, loan, valued at between $10 and $20 billion.  Shareholders shall continue to receive payments after 2007.  They are encouraged to forgive their claims against Iraq.   They should consider a long-term bank loan that could be paid back in 50 years directly from natural gas speculation, fuel and plastic industry investment in 89% Iraqi owned corporations that employ 11% foreign consultants approved by the US Backed World Bank and European Backed IMF when peace has been restored to a sovereign Iraq.  These industries could swiftly show a $2 billion profit for the state of Iraq and make $500 million of payments on the loan but should not be started until peace has been restored by a sovereign Iraqi Constitutional Council (INC) in 2005 or when they shall honor their $120 billion international debt again in 2007.  It is recommended for international claimants to discard the $40 billion US Paris Club, the $40 billion Saudi, Kuwait, and the $40 billion United Nations Security Council Compensation Commission and forgive Iraq debts to the international community that has become increasingly obligated to support Iraq as the result of breaches of peace by Coalition Forces.

Q. The World Bank is predicting Iraqi oil production will recover almost to prewar levels later this year to around 2.7 million barrels per day compared to 2.8 million daily before the war. Right now, Iraq is bringing in revenues by exporting around 1.8 million barrels a day compared to more than 2 million barrels a day in exports in early 2003 .

For more information go to www.title24uscode.org/IraqIII.doc

Certificate of Service title24uscode@aol.com 7 February 2005

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