Probe on Iraq oil for food raps UN staff

  1. 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.
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  3. by   URO-RN
    Oil-for-food chief accused of receiving bribes

    UNITED NATIONS (CNN) -- The man who was in charge of the United Nations oil-for-food program sought and took bribes from Iraq, according to an initial investigative report released Thursday.

    According to investigating commission chairman Paul Volcker, the probe showed that between 1998 and 2001, Benon Sevan "repeatedly solicited," on behalf of a company called African Middle East Petroleum, several million barrels of oil worth about $1 million.

    A "definitive report" is due by midsummer, and that report also will look at the role of U.N. Secretary-General Kofi Annan and his son, Kojo, who worked in the 1990s for Cotecna, a Swiss-based firm that won a contract to authenticate U.N.-approved shipments entering Iraq.

    Talking to reporters Thursday, Volcker said, "The most disturbing finding is that the accumulation of evidence that the director of the office of the Iraq program -- Mr. Benon Sevan -- in fact did repeatedly solicit oil allocations for a small trading company."

    "The Iraqi government, in providing such allocations, certainly thought they were buying influence," he added.

    "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 said.

    In 1998, the report says, Sevan received an allocation of 1.8 million barrels of oil.

    In 1998, it says the company did not take possession of the oil but sold it to two other companies for a profit of almost $300,000. In 1999, Sevan, on behalf of AMEP and Fakhry Abdel Nour -- who represented the company -- contracted for 2 million barrels which they sold for an almost $500,000 profit.

    According to the report, "Over the next two years -- [2000 and 2001] -- AMEP continued to receive more oil allocations."

    Iraq oil ministry records indicate the sales were under Sevan's name, without indicating the company's involvement.

    In one instance in October 2001, AMEP paid an illegal surcharge of $160,000 to an Iraqi-controlled bank account in Jordan.

    The report notes that according to U.N. financial disclosure forms, Sevan received $160,000 in four cash payments from 1999 to 2003. He listed them on his financial disclosure forms as cash from an aunt who lived in Cyprus and who was a retired government photographer.

    "According to a longtime family friend, she never had shown signs of having access to large amounts of cash," says the report.

    According to a statement from the committee, Iraq provided the oil to Sevan in an effort to gain his support on several issues, including paying to repair and rebuild Iraqi infrastructure.

    "It's clear ... that a major source of illicit funds to Iraq and the Iraq regime resulted from sanction violations that were outside the framework of the oil-for-food program -- so-called smuggling to Jordan, to Turkey, eventually to Syria then to Egypt," Volcker said.

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  4. by   Mkue
    I'm glad to see that the UN scandal is still being investigated, thanks for the info.
  5. by   SmilingBluEyes
    ah but that all scandals should be prosecuted so extensively , hmmm?
  6. by   Mkue
    Especially a program that was set up to provide Humanitarian assistance with "highest standards of trust and integrity".
  7. by   SmilingBluEyes
    yes and many OTHER things, as well.