Probe on Iraq Program Sharply Raps UN Staff
Thu Feb 3, 2005 12:13 AM ET
By Evelyn Leopold
UNITED NATIONS (Reuters) - A key probe into the U.N. oil-for-food program in Iraq was sharply critical of U.N. management and found that the U.N. official running the operation had steered oil contracts to a particular firm.
"We have found in each case that the procurement process was tainted, failing to follow the established rules of the organization designed to assure fairness and accountability," former U.S. Federal Reserve Chairman Paul Volcker wrote in Thursday's Wall Street Journal editorial page.
But Volcker said the administration of the program appeared to be "free of systematic or widespread abuse."
Volcker was appointed by the United Nations to head an independent inquiry into the now-defunct $67 billion program that was intended to ease the hardship of ordinary Iraqis under 1990 U.N. sanctions.
Volcker intends to release a preliminary report on the program on Thursday afternoon and a final one in June.
"The findings do not make for pleasant reading," he said.
But he said that allegations of conflict of interest by Secretary-General Kofi Annan, whose son Kojo had worked in West Africa for a firm under contract to the United Nations in Iraq, would not be part of a preliminary report.
Most damning for the world body is Volcker's description of Benon Sevan, the U.N. undersecretary-general in charge of the U.N. program, who is accused of steering oil contracts to a firm in the Middle East.
"The evidence is conclusive that Mr. Sevan, in effectively participating in the selection of purchasers of oil under the program, placed himself in an irreconcilable conflict of interest, in violation both of specific United Nations rules and of the broad responsibility of an international civil servant to adhere to highest standards of trust and integrity," Volcker wrote.
In documents Iraq released after the fall of Saddam Hussein, Sevan is accused of asking Iraq to give an oil contract to Africa Middle East Petroleum, a Swiss-based oil trading company. He is alleged to have received oil allocations that could be turned into cash from Iraq and has vigorously denied this.
Volcker made no mention of any bribes given to Sevan, a veteran U.N. employee in many of the world's trouble spots.
But he said that the U.N. audit process was "underfunded and undermanned" and unable to meet effectively "the challenge posed by a really unique, massive, and complex program of humanitarian assistance."
On the controversy over Annan's son, Volcker said the issue would be dealt with in another interim report, whose date he did not give but said the "inquiry was well advanced."
He said that his Independent Inquiry Committee was "consciously judging the United Nations against the highest standard of ethical behavior."
"Moreover, we believe that few institutions have freely subjected themselves to the intensity of scrutiny entailed in the Committee's work," Volcker wrote.
Annan on Wednesday told reporters he would adopt reforms suggested by the Volcker committee.
"Obviously there may be some harsh judgments on some of the things that we have done in this organization," he said. "We ourselves are taking measures to strengthen some of our management practices, and we will be making some announcements and taking some concrete action very soon" to make the world body more open and accountable, Annan said.