Cotecna link to Kojo Annan under scrutiny
By Claudio Gatt 
Published: March 22 2005 23:00 | Last updated: March 22 2005 23:00
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After being caught up in a bribery scandal in Pakistan and losing a big contract in Nigeria, Cotecna, a Geneva-based company that inspects exports and imports, was keen for new business.
One of the people it was counting on for help was Kojo Annan, who had been employed by the company since autumn 1995, working in Lagos.
His father, Kofi, had recently been appointed secretary-general of the United Nations.
The organisation was disbursing tens of millions of dollars under the oil-for-food programme, designed for Iraq to buy food and medicines with revenues from the sale of crude oil.
“They were in dire straits and in desperate need of new business,” confirms one of the many investigators now delving into allegations of corruption in the UN. “A UN contract would have been a major coup.”
In December 1998, by which time Koj
o had moved from a staff position to become a consultant, Cotecna won a contract to verify shipments to Iraq under the oil-for-food programme. In the course of six years, the contract was worth approximately $10m (¬ 7.6m, £5.3m) a year, roughly equivalent t
o 11 per cent of Cotecna's revenues.
For the last few months, investigators from the US Congress and the independent UN commission headed by Paul Volcker have been trying to determine whether Cotecna used Kojo and his family connections to obtain UN business.
Cotecna and Kofi Annan categorically deny any impropriety. Cotecna stresses it won its first tender for a UN contract in 1992, when Kojo was not on the payroll, and lost one in 1996, when he was.
Now, a joint investigation by Il Sole 24 Ore and the Financial Times brings to light further details of Cotecna and Kojo's financial relationship. It also reveals the secretary-general did not disclose last year that he had met Cotecna executives.
One of these meetings was in January 1997, when Elie-Georges and Robert Massey, Cotecna's chairman and chief executive respectively, and their spouses had tea with Kofi Annan and his wife at a hotel in Davos during the World Economic Forum. The main topic of conversation, says Robert Massey, was Kofi Annan's native Ghana, where Cotecna had a contract.
“It was a very short, rather social meeting. The idea was to keep contact with somebody [Elie-Georges Massey] had met before,” Cotecna explained.
In September 1998, three months before the oil-for-food contract was awarded to Cotecna, Kofi Annan received Elie-Georges Massey at the UN. Mr Massey suggested the UN should sponsor an international lottery.
According to Cotecna, a further meeting took place in early 1999 when “Elie-Georges Massey sought out Mr Annan at a public event in Geneva, following a Telegraph article”. In January 1999, the Sunday Telegraph of London had raised questions about the award of a UN contract to a company that employed the secretary general's son.
A UN spokesman confirmed that the three meetings took place. The first was “a brief social encounter”, the second “a courtesy call by an acquaintance”. At the third meeting, Elie-Georges Massey had sought to apologise for any embarrassment caused by the Telegraph article, the spokesman said.
He said: “The secretary-general made full disclosure to the Volcker panel and he expects it will confirm the casual nature of the meetings and the fact that they had nothing to do with the Cotecna contract.”
The main focus of scrutiny by investigators for the Volcker commission and the US Senate is the relationship between Kojo and Cotecna.
Cotecna says from January 1999 to February 2004 it had a “non-compete” contract with Kojo that paid $2,500 a month in fees, plus health insurance. The total payment over the years reached about $175,000.
“It was important Kojo would not work for the competition,” said Cotecna, and “$2,500 a month was not an expensive price to pay, considering the very important contracts at stake”.
But when monies transferred between different entities or accounts connected to Cotecna or Kojo Annan are added together, the total comes to more than $300,000.
“To all intents and purposes, it was as if they really kept him as a consultant,” comments one investigator.
Under both US and Swiss law, a non-compete agreement must be limited in time, geography and type of activity. Article 340a of the Swiss code says it cannot exceed three years, except in certain circumstances. Kojo's non-compete deal had no geographical limit and lasted more than five years.
Until August 2000, Kojo's expenses were reimbursed including his American Express bill in 1999 which was well into five figures, the FT/Il Sole have learnt.
Cotecna says payments were “delayed reimbursement of prior year expenses, when Kojo Annan was a consultant to the company”. But documents in possession of investigators refer to expenses incurred in October, November and December 1999.
In addition, it emerged from records Cotecna and Kojo provided to congressional and UN investigators that the methods of payment changed several times. The first three transfers were sent from the Cotecna UBS account to Kojo's Lloyds TSB account in London.
In early 1999, soon after the Sunday Telegraph article, Kojo started receiving payments from another entity owned by the Masseys called Meteor.
Cotecna's explanation is that “Kojo preferred to receive his monthly payment from a company that was not directly related to the Cotecna group, and we managed to provide him with this service”.
It acknowledged that the Sunday Telegraph article may have had “a link” to the change.
In January 2000, Kojo received $8,925.45 from Cofinter, a Swiss company also owned by the Masseys, which they had proposed using for the international lottery.
Cotecna describes this payment as “a mishap”.
The following month, instead of going to Kojo, the money started to be paid by Cotecna to Westexim, a company registered in London whose ownership is obscure.
In the company's records was found an entry, in French, for a transfer of $4,000 on April 19 2000 to a Ms Ama Annan. The older sister of Kojo Annan is called Ama.
The FT and Il Sole have no evidence that the money was received by Ama or that its source was Cotecna rather than Kojo. Cotecna says “it absolutely never paid or hired” Ama Annan, who lives in Lagos but declined to comment, or any other member of the family.
The FT and Il Sole asked Kojo's lawyer in London for comment, but were told that he “is not inclined to respond to your inquiry”.
Claudio Gatti is a New York-based investigative reporter with Il Sole 24 Ore, the leading Italian business daily