CTV.ca News Staff
 
Updated: Wed. Jun. 16 2004 11:33 PM ET

The former head of Canada's spy agency will lead an investigation into the billions of dollars allegedly skimmed from the United Nations' oil-for-food program in Iraq, The Globe and Mail reported.

Reid Morden, 63, headed the Canadian Security Intelligence Service from 1987 to 1991, and was also Canada's deputy foreign minister in the mid-1990s. He was chosen by the UN's Independent Inquiry Committee, led by former U.S. Federal Reserve chairman Paul Volcker.

The oil-for-food program was set up to ease the effects of sanctions on Iraq imposed after the 1991 Persian Gulf war.

The probe into the allegations of corruption and fraud in the $67-billion program was ordered by the Security Council after the Iraqi Oil Ministry released documents in January listing more than 200 individuals, and agencies that allegedly received kickbacks under the program.

The list included the director of the UN's Office of Iraq Programs and a company tied to the son of Secretary General Kofi Annan. Both have denied any wrongdoing.

"I think it's potentially important for the UN to either learn some lessons or to have the names of a number of people cleared -- one of the two," Morden told The Globe.

U.S. officials say the regime of former Iraqi dictator Saddam Hussein pocketed $5.7 billion smuggling oil into its neighbours and $4.4 billion extracting illicit surcharges and kickbacks on otherwise legitimate contracts.

"There's a lot of threads and there's a number of things to do," Morden said.

"There's a kind of -- in my own construct -- three or four concentric circles which have some overlap, at the centre of which of course is the allegation of corruption and maladministration of the program itself within the UN.

"And then there's the alleged kickbacks and money that was improperly dispensed, shall we say, with respect to the oil sales and the commodities and medicines imports. And on top of that, there's the question of the actual smuggling of oil beyond the sanctions."

Morden will oversee the day-to-day operations of the probe. He has been hired on a one-year contract and will move to New York, where he earlier was posted as a diplomat with Canada's mission to the UN.