This has been a wretched year for Kofi Annan. The U.N. secretary general has looked a forlorn figure on the world stage: Hugely overshadowed as a global leader by George W. Bush and Tony Blair, he has appeared weak and clueless in confronting major problems, including terrorism, WMD proliferation in Iran and elsewhere, and genocide in Sudan. At the same time, the massive scandal over the U.N.'s administration of the Iraq Oil for Food program has brought the world body's reputation to an all-time low. To cap it all, in the wake of a series of internal scandals, the U.N.'s own employee union has just passed a vote of no confidence in the U.N.'s senior management: a thinly veiled protest against Annan himself.

The secretary general is now an embittered spectator of world events, and lets barely a week pass without a sermon on the perils of America's supposedly unilateralist foreign policy. A spectacular failure, as well as a great mediocrity, Annan is looking increasingly ineffectual and isolated. His attacks on the U.S. over its decision to go to war with Iraq indicate a U.N. in steep, possibly terminal decline, struggling for relevance.

As for the Oil for Food scandal, it is more than just the biggest scandal in the U.N.'s history; it may well be the biggest financial fraud in modern times. Set up in the mid-1990s as a means of providing humanitarian aid to Iraqis, the Oil for Food program was subverted and manipulated by Saddam Hussein's regime, allegedly with the complicity of U.N. officials, to help prop up the Iraqi dictator. Saddam's dictatorship was able to siphon an estimated $21.3 billion from the program through oil smuggling and systematic thievery, by demanding illegal payments from companies buying Iraqi oil and kickbacks from those selling goods to Iraq. All this took place under the noses of U.N. bureaucrats: According to the report of U.S. weapons inspector Charles Duelfer, Benon Sevan -- Annan's appointee as executive director of the Iraq program -- received from Saddam a voucher for 13 million barrels of oil.

On Capitol Hill, Oil for Food has become one of the hottest investigative issues in years, with huge amounts of evidence indicating corruption and bribery on an epic scale. The program is now being investigated by no fewer than five congressional committees: the Senate Foreign Relations Committee; the Senate Permanent Subcommittee on Investigations; the House International Relations Committee; the House Subcommittee on National Security, Emerging Threats and International Relations; and the House Committee on Energy and Commerce. Several other committees are also likely to launch investigations. In addition, there are three U.S. federal investigations underway -- by the General Accounting Office, the Department of Justice, and the U.S. Treasury. In a further embarrassment for Annan, the Justice Department is investigating his son, Kojo, in connection with his role as a paid consultant to Cotecna Inspection SA, a Swiss-based company that received a contract for inspecting goods shipped to Iraq under the Oil for Food program.

Highly damaging questions are being asked regarding Kofi Annan himself: Did the secretary general turn a blind eye to U.N. mismanagement and corruption in overseeing the Oil for Food program? Did he sympathize with the efforts of Saddam and key members of the Security Council to lift U.N. sanctions against Iraq? Was he influenced in his decision-making regarding the program by his son's involvement with Cotecna? The secretary general's refusal to cooperate with congressional investigators has led to widespread anger and exasperation on Capitol Hill. Sen. Norm Coleman, the Republican chairman of the Senate Subcommittee on Investigations, and his Democratic counterpart, Carl Levin, accused Annan of "interfering with our ability to get information we need" from the U.N. Speaking to CNN, Coleman blasted the U.N. for "proactively interfering with our investigation."

Frustration is also growing in Congress with former Federal Reserve chief Paul Volcker, who was appointed by Annan to head the U.N.'s own "independent" investigation into Oil for Food. Volcker, possibly acting under instruction from his employer, has so far refused to release 55 internal U.N. audits of Oil for Food. The refusal to hand over these audits to congressional investigators suggests that their contents may be hugely damaging to the reputation of Annan and the U.N. leadership. Volcker has also rejected requests from the Senate for U.N. officials to be made available to testify before Congress.

The Volcker Commission has been plagued with controversy from the outset, highlighted by the resignation of Anna Di Lellio, Volcker's director of communications and a former U.N. employee. Di Lellio stepped down after it was revealed she had given a 2002 interview to London's Guardian newspaper, in which she implicitly compared President George W. Bush to Osama bin Laden: "I see the major threats coming from ourselves, rather than the east. I find deeply unsettling both the ascendance of George Bush and his puppeteers to the U.S. government, and the mix of self-serving hypocrisy and incompetence prevailing in European governments. I don't like it that the two nations whose citizenship I hold, Italy and the U.S., have leased their institutions to a couple of families. With defenders like W. and Berlusconi, largely unchecked by a sycophantic media, who needs bin Laden to destroy culture, personal freedom, respect for other human beings, integrity, and the rule of law -- all the things that make our lives worthwhile?"

Di Lellio was forced out, but the episode helped fuel doubt on the Hill regarding the supposed independence of the Volcker inquiry, which is completely funded by the U.N. to the tune of $30 million -- using funds from the Oil for Food program itself. The commission's operations are shrouded in secrecy, with little external oversight. For a commission designed to unearth corruption and malpractice on a huge scale, it is strikingly opaque. There is increasing suspicion in Washington that the "independent inquiry" may be no more than a whitewash exercise, controlled by the secretary general himself.

Annan needs to control the inquiry because he can ill afford further blows to his reputation. It is inconceivable that he was unaware of the scale of the fraud being carried out by Saddam Hussein; this, combined with Annan's record of failure over Iraq, his lack of commitment to confronting terrorism, and his rapidly declining credibility as a leader on the world stage, amounts to a powerful case for his resignation. Indeed, the man who did nothing to prevent the genocide in Rwanda when he was head of U.N. peacekeeping operations in the mid-1990s has been woefully out of depth ever since his appointment as secretary general in 1997. Annan has been a shameless appeaser of dictators, and his only legacy will be his organization's growing irrelevance.

If Annan were the CEO of a Fortune 500 company, with his organization facing allegations of serious corruption and mismanagement and a massive congressional investigation, he would have been forced to resign months ago. Only in a bloated bureaucracy such as the U.N., where a culture of arrogance and unaccountability has reigned for decades, can a leader remain in power in the face of such turmoil. Fortunately, the great sense of moral outrage on Capitol Hill over the Oil for Food scandal may bring this culture to an end. It is only a matter of time before senior senators and congressmen call for Annan's resignation. Congress holds the purse strings of U.S. funding for the U.N., and if it chooses to, it can force changes even in this most hidebound of institutions.

Future U.S. funding of the United Nations should depend on substantial, not cosmetic, reform. The outcry over Oil for Food may ultimately lead to a reformed, streamlined, and transparent U.N. Annan should get out, well before his term expires at the end of 2006; prospective candidates are already jockeying for position. The U.N. needs to clean up its act and make a fresh start; Annan's resignation may not be a cure for the U.N.'s ills, but it would be a step in the right direction.

Nile Gardiner, Ph.D., is a fellow in Anglo-American security policy at The Heritage Foundation.