We will probably never know the full truth of the United Nations' oil-for-food scandal. We will probably never see any of those implicated in the scandal punished. And that's just the way the UN wants it.

The oil-for-food program began as a humanitarian plan to soften the sanctions against Saddam Hussein's Iraq. The UN would allow Iraq to sell a certain amount of oil each year, provided that the profits were used to buy food, medicine and other necessities for Iraq's people.

Instead, the oil was allotted to politically connected insiders, allegedly including the head of the oil program himself. The insiders got rich while Iraq's people suffered. One beneficiary of the program was UN Secretary-General Kofi Annan's own son, who was employed by a firm that played a key role in the scandal-plagued program.

After months of resisting questions, Annan last year relented and appointed former Federal Reserve chairman Paul Volcker to investigate. Just over a week ago, Volcker released a preliminary report. It found "grave" conflicts of interest in the program. A final report is due later this year.

Yet there is reason to doubt the finality of that final report.

Volcker's inquiry has been given sharply limited investigative powers. It can't subpoena documents, and it cannot force anyone to testify.

Many on the inquiry's staff are drawn from the UN's own ranks and seem to share its institutional prejudices: The inquiry's communications director had to resign in September after she gave an interview to a British newspaper in which she seemed to equate President Bush with Osama bin Laden.

Annan has said he will waive diplomatic immunity for any UN official who has done wrong. This promise means little. Which government would prosecute that official? Not the United States--the officials are not U.S. citizens, their offenses didn't take place on U.S. soil, and none of the documents in question was sworn under U.S. law. It's unlikely that Switzerland or Cyprus would wish to take action. And though the victims of the wrongdoing are the people of Iraq, the Iraqi courts are not exactly ready to indict, extradite and try suspects in a hugely complex financial conspiracy.

Meaningless 'reform'

The likeliest result of the inquiry, then, is that an official or two will be condemned in the final report--and that in lieu of prosecutions, the UN will commit itself to a round of "reforms" intended to prevent such scandals in the future.

But UN reform is also a mug's game. It should be remembered that Annan was once regarded as a reformer. President Clinton and Secretary of State Madeleine Albright engineered the retirement of Secretary-General Boutros Boutros-Ghali and his replacement by Annan in 1997, in hopes that Annan would usher in a new era of integrity and accountability.

Such hopes have been disappointed. Under Annan, scandals have continued to accumulate at the UN. Oil-for-food is only one entry in a list that also includes sex trafficking by UN officials in Bosnia and the Congo.

As for the clean break with the abuses of the past, that did not happen either: The Volcker commission names Boutros-Ghali as one of those who may have improperly profited from the oil-for-food program. (He dismisses the allegation as "silly.")

A Core of Corruption

It's time to wake up to reality: The UN scandals are not unfortunate accidents. They are not incidental blots on the reputation of an otherwise idealistic organization. The scandals are inherent in the very structure of the UN. It could be said that the UN itself is the scandal.

Since the 1990s, the United Nations has aspired to larger and larger responsibilities. From Bosnia to Cambodia, from Iraq to the Congo, UN officials have administered vast aid programs--and sometimes even taken over the functions of governments.

But these officials don't answer to taxpayers or voters. They answer to the UN secretary-general--who, in turn, answers to dozens of different governments. Many of these governments are authoritarian, corrupt and unaccountable themselves.

And their dirty ways of doing business are almost inevitably absorbed by the world bodies in which they are given a decisive role.

As a result, the office of the UN secretary-general acts like the management of an old-fashioned corporation before the advent of shareholder activism. It uses other people's money for purposes of its own. Senior managers engage in profitable side ventures that top management may or may not know about. Questions are dismissed as irrelevant and impertinent. (It was not until January, for example--and then only under extreme pressure--that the UN made any of its internal audits of the oil-for-food program available to U.S. congressional investigators.)

The problem is not merely that the individuals in charge of the corporation are bad or dishonest, although of course many of them are. The problem is that they are presented with perverse incentives--with few or no controls on misconduct.

The UN can sometimes be a useful forum for the world's governments to exchange views. But the idea that the UN secretary-general can act somehow as a global representative--or that the UN staff can function as an honest and effective international civil service--should be discredited forever by the oil-for-food scandal.

And the next time the world needs some humanitarian work done, let it be done by the International Red Cross.

David Frum is a resident fellow at AEI.