January 28, 2005 -- Paul Volcker was picked by U.N. Sec retary- General Kofi Annan to head an "independent" panel to investi gate the Oil-for-Food scandal ostensibly because of the former Federal Reserve chairman´s international credibility.

But credibility, like fame, can be fleeting — and Volcker´s is fading fast.

Volcker hasn´t had much luck probing Oil-for-Food. He said, bizarrely, "There´s no flaming red flags in this stuff" — right before federal investigators found, well, a flaming red flag: a former agent for Saddam Hussein who pleaded guilty to taking millions from the program and who is now singing like the proverbial canary.

But maybe luck has had nothing to do with Volcker´s unimpressive results.

As Fox News Channel´s Jonathan Hunt reported yesterday, Volcker is smack in the middle of the interlocking global corporations that appear to lie at the very heart of the scandal.

Proceed slowly; it´s complicated:

* Volcker, along with a close friend named Paul Desmarais, Sr., sits on the advisory council of a Canadian company called the Power Corp.

* Power Corp. and a Belgian company co-own GBL — the largest shareholder in the French oil giant Total.

* Total just happens to have done nearly $2 billion worth of Oil-for- Food business.

* Total also has interests in BNP Paribas — the New York-chartered bank that underwrote nearly all Oil-for-Food transactions — and in Pargesa, another Power Corp. subsidiary.

* A BNP executive also happens to be on the board of Power — along with Volcker and Desmarais.

* Finally, Desmarais´ son, Paul Jr., is a director of Total (a position the elder Desmarais once held).

There is nothing to indicate that Volcker himself has broken any laws — or done anything overtly unethical.

But certainly the former Fed chairman´s relationships with individuals and companies implicated in the Oil-for-Food fiasco compromises his ability to render a credible report on the scandal.

Again, however, the links may explain Volcker´s ineptitude as a detective.

And they are significant enough to be advanced as a possible reason why Volcker gave an interview in December suggesting that Saddam made most of his money outside of the U.N. Oil-for-Food structure — pointing the finger instead at Jordan and Syria.

It was clear from the outset that any panel appointed by Annan would lack credibility; in that sense, Volcker´s entanglements just add details to the equation — critical though they may be.

Volcker would do everybody a huge favor by simply resigning the chairmanship of Kofi Annan´s phony panel and just disappearing — before he becomes "a flaming red flag." (Copyright 2005 NYP Holdings, Inc. 01/28/05)