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U.S.: Volcker Asks U.S. Congress to Drop Subpoena of Iraq Prober

The chairman of the U.S. House Committee on International Relations subpoenaed records last week and is pursuing his own probe of the UN program. ``My committee has an obligation to continue its inquiry,'' said the chairman.

by Bill Varner and Demian McLeanBloomberg
May 6th, 2005

Former U.S. Federal Reserve chief Paul Volcker, saying lives were ``at risk,'' asked Congress today to drop its subpoenas of an investigator who quit Volcker's probe of graft in the United Nations oil-for-food program in Iraq.

Volcker told reporters in New York that his committee had ``legal, practical and psychological'' ways to fight two subpoenas of former employee Robert Parton and ``can hire lawyers.''

``An overriding concern of the committee's is to safeguard the security of witnesses whose lives quite literally would be at risk if information about their cooperation became known,'' Volcker said, noting the dangers they face in Iraq. It's essential to ``protect the integrity and the confidentially'' of the investigation, he said.

Volcker said documents Parton had given to Congress must be returned and the subpoenas withdrawn. In return, Volcker said Congress could receive informal briefings on his inquiry and Parton could speak publicly about his objections to a March 29 report that played down criticism of UN Secretary-General Kofi Annan.

U.S. Representative Henry Hyde, chairman of the House International Relations Committee, subpoenaed Parton's records last week and is pursuing his own probe of the UN program.

``My committee has an obligation to continue its inquiry,'' Hyde, an Illinois Republican, said in an e-mailed statement. ``I consider Mr. Parton to be an honorable and courageous man who responded to a congressional subpoena as any citizen must.''

Delivered Records

Parton resigned from the Volcker panel two weeks ago in protest of the March 29 report and delivered his records to Hyde yesterday, the congressman's office said.

The UN's oil-for-food program was an exception to oil- trading sanctions imposed on Iraq after former dictator Saddam Hussein invaded Kuwait in 1990.

Hussein reaped $17 billion through smuggling and graft from the $64 billion program, which allowed him to sell oil to buy food and medicine from 1997 to 2003, congressional investigators said.

David Chalmers, a Texas oilman, and Ludmil Dionissiev, a Bulgarian oil trader living in the U.S., pleaded innocent April 18 to federal charges that they paid Hussein millions of dollars in kickbacks to win oil contracts.

After hearing Volcker's offer today, Representative Christopher Shays, Republican from Connecticut, dropped his subpoena for Parton to appear before Congress.

``I believe a voluntary presentation by Mr. Parton could meet Congress' legitimate need for information while maintaining the integrity of the Volcker committee's investigation,'' Shays said in an e-mailed statement.

`Constructive' Idea

Volcker said he spoke with the chairmen of three congressional committees investigating the program, and that each called his proposal ``constructive.''

U.S. lawmakers including Senator Norm Coleman have questioned the impartiality of Volcker's UN-funded probe. The Minnesota Republican suggested today that a threat to subpoena Parton before Coleman's Senate panel was less likely.

``I have spoken with Mr. Volcker, and he put forward a very constructive way for Mr. Parton to cooperate with the Senate Permanent Subcommittee on Investigation's inquiry while still addressing relevant confidentiality concerns,'' Coleman said in an e-mailed statement.

Lanny Davis, Parton's attorney, said in a statement that Parton ``provided information to Congress only because it compelled him to do so by subpoena.'' The UN and Volcker's Independent Inquiry Committee never directed Parton to defy a congressional subpoena, Davis said in the statement.

Parton and fellow investigator Miranda Duncan quit April 20 in protest, saying they felt the Volcker committee played down Kofi Annan's role in the awarding of an oil-for-food program contract to Geneva-based Cotecna Inspections SA, which employed Annan's son, Kojo. Volcker said there was no evidence that Kofi Annan influenced the decision to give the contract to Cotecna.

Volcker said today he was aware of ``no challenge'' to that conclusion.

The UN granted ``functional immunity'' from prosecution and congressional subpoenas to Volcker and his panel members, spokesman Stephane Dujarric said.





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