Annan vows action against UN staff in Iraq program (Agencies) Updated: 2005-02-04 09:24
A probe into the U.N. oil-for-food program for Iraq said the director of the
operation got oil allocations for a firm run by a friend, and U.N.
Secretary-General Kofi Annan vowed to discipline him.
Benon Sevan, who ran the humanitarian program, was accused in a report from
Paul Volcker, the former head of the U.S. Federal Reserve, of soliciting and
getting the allocations for a trading firm connected to the family of former
Secretary-General Boutros Boutros-Ghali.
![A February 10, 2002 file photo shows executive director of the oil-for-food program Benon Sevan, at the U.N. Headquarters in Baghdad. [Reuters/file]](xin_510202040925824165175.jpg) A February 10, 2002
file photo shows executive director of the oil-for-food program Benon
Sevan, at the U.N. Headquarters in Baghdad.
[Reuters/file] | A second official, Joseph
Stephanides, now director of Security Council affairs, was alleged to have
intervened in selecting large contractors for the program he helped organize in
1996, before Sevan took over in late 1997.
Annan said he too would be disciplined and that if criminal acts were
committed, diplomatic immunity would be lifted.
The oil-for-food program, which began in December 1996 and ended in November
2003, allowed Saddam Hussein's government to sell oil in order to buy
humanitarian goods. It was intended to ease the life of ordinary Iraqis under
1990 U.N. sanctions.
The fraud allegations have cast a shadow over the world body and Annan
himself, who chose Volcker to lead an independent investigation.
![United Nations Secretary General Kofi Annan, left, walks with Benon Sevan, executive director of the United Nations Office of Iraq Program, following a meeting at U.N. headquarters in this April 3, 2003 file photo. [AP/file]](xin_560202040927668161216.jpg) United Nations Secretary General Kofi Annan,
left, walks with Benon Sevan, executive director of the United Nations
Office of Iraq Program, following a meeting at U.N. headquarters in this
April 3, 2003 file photo. [AP/file] | "I think it
is a fact that Mr. Sevan placed himself in a grave and continuing conflict of
interest situation that violated explicit U.N. rules and violated the standards
of integrity essential to a high-level international civil servant," Volcker
told a news conference.
Sevan, a Cypriot, issued his own statement.
"Mr Sevan never took a penny," his lawyer Eric Lewis said. "Unfortunately, in
the current political climate, the Independent Inquiry Committee needs to find
someone to blame."
But Annan, who took over the top U.N. post from Boutros-Ghali in January
1997, said in a statement the report contained "extremely troubling evidence of
wrongdoing" by Sevan, who has retired from the United Nations but gets a token
salary because of the inquiry.
'THE SECRETARY-GENERAL IS SHOCKED'
"The secretary-general is shocked by what the report has to say about Mr.
Sevan," Annan's chief of staff, Mark Malloch Brown, told a news conference. "He
very much doubts there can be any extenuating circumstances to explain the
behavior, which appears proven in the report."
But he noted, "we got a thumbs up" on administration of the program and Iraq
should be encouraged that the funds were used as intended.
Volcker said few institutions had subjected themselves to such "intensity of
scrutiny."
The report also cited "convincing and uncontested evidence" that three firms:
Banque Nationale de Paris; the Dutch Saybolt Eastern Hemisphere and Britain's
Lloyd's Register Inspection were awarded contracts without competitive bidding
in 1996.
But Volcker said in the interim report -- the final one will be in June --
the most serious violations of the U.N. sanctions involved illegal oil sales
outside oil-for-food.
"And there is no question that those sales were known by the U.N. Security
Council," which included the United States.
A CIA investigation in September found Saddam earned $1.7 billion via
kickbacks on goods and oil under the program. He got an additional $8 billion in
oil sales to Jordan, Turkey and Syria, which were known to the council.
Volcker said he was concentrating on wrongdoing by U.N. officials.
Specifically, the report said Sevan had convinced Iraq to sell oil allocations
to African Middle East Petroleum company, an obscure trading firm registered in
Panama with offices in Switzerland and Monaco.
The company is headed by Egyptian Fahkry Abdelnour, a cousin of
Boutros-Ghali. The deal was also helped along by Fred Nadler, the former
secretary-general's brother-in-law, the report said.
He also questioned Sevan's assertion that an aunt in Cyprus, now deceased,
had given him some $160,000 over several years. The trading firm, according to
Iraqi records, netted a profit of $1.7 million, the report said.
Volcker said allegations of conflict of interest by Annan would be handled in
a later report. Annan's son Kojo once worked in West Africa for a Swiss firm
Cotecna, under contract to the United Nations in Iraq.
Annan has said he had no hand in assigning contracts and his son says he had
left the company when the deal was made.
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