Congress Steps Up Pressure on Annan   BY BENNY AVNI - Special to the Sun March 31, 2005 NY Sun UNITED NATIONS - With increased outside pressure, in the wake of damaging findings by the Volcker committee, and under renewed Congressional threats to cut funding, U.N. officials displayed some of the organization's weaknesses as they struggled yesterday to address new and old scandals. Washington legislators are examining ways to tie future American funding, consisting of more than a quarter of the U.N.'s budget, to more meaningful reform than Secretary-General Annan has offered so far. Mr. Annan vowed Tuesday to begin re-evaluating his own reform plan, the same day he claimed Mr. Volcker exonerated him from any wrongdoing in the oil-for-food scandal. Capitol Hill aides plan to visit Turtle Bay today on a fact-finding mission meant to develop a set of reform demands that would be tied to a critical Congressional vote next month on the Foreign Relations Authorization Act. The legislation funds the State Department's budget for international bodies, including the United Nations. The legislators will arrive at a critical time, demanding more accountability on the part of the United Nations as the organization attempts to pull itself out of a series of scandals. U.N. officials tried to address some of the more adversarial findings in the Volcker report yesterday, including, most notably, the citation for wrongdoing by Dileep Nair. The U.N. official is responsible for the current level of scrutiny, which members of Congress would prefer to see strengthened and performed by more independent investigators. In a situation peculiar to the United Nations, however, Mr. Nair, who prior to the Volcker report was formally accused by staffers of abuse of power, asserted on Monday that since he is an independent investigator, the secretary-general has no right to investigate allegations against him. Recognizing the explosive political ramifications of burying staff complaints, and reeling from public allegations made by the Volcker committee, top U.N. officials struggle to find ways to address the stalemate regarding Mr. Nair prior to his expected retirement at the end of next month. The Bush administration expressed new concerns yesterday after studying the second interim report by the committee investigating the oil-for-food scandal. State Department Spokesman Adam Ereli called some of Mr. Volcker's findings regarding Mr. Annan troubling, citing particularly the failure to recognize the appearance of a conflict of interest. Several key European and other diplomats began to privately wonder whether Mr. Annan could survive the onslaught and his term in office. They can say that he was exonerated as much as they want, a senior African diplomat told the Sun, referring to Mr. Annan's spokespersons. But he is certainly wounded. Fearing retribution from Congress, U.N. leaders were addressing new scandals as well. A critical report on management failures in the electoral assistance division, which was leaked to the pan-Arab newspaper Ashraq al Awsat and the Mexican agency Notimex on Monday, gained attention at the same time that the Volcker report was still studied. A Republican staffer in the House of Representatives told the Sun yesterday that to increase accountability, new legislation would tie funds to demands such as strengthening the U.N. Office of Internal Oversight Services, to make it more vigilant and independent. OIOS has to grow, said the staffer, who asked for anonymity. The current OIOS chief, Mr. Nair, however, has been cited by Mr. Volcker for wrongly using oil-for-food funds to hire a fellow Singaporean, who told the committee his job had little to do with the program. Last Thursday, Mr. Nair had a crucial meeting with Mr. Annan to address five allegations against him made in a formal staff union complaint. Spokesman Fred Eckhard has since declined to address press questions on the meeting. Yesterday, he said that addressing the Volcker findings on Mr. Nair supersedes those made in the staff allegations. On Tuesday, Annan's chief of staff, Mark Malloch Brown, said that inevitably disciplinary proceedings would be taken against Mr. Nair as a result of the Volcker report. The investigations - and any ultimate decision on disciplining Mr. Nair - have been stalled, however, as Mr. Nair contested the right of the secretariat to reprimand him. As a safeguard designed to assure independence, the OIOS was created as a general assembly body not answerable to the secretary-general. In an internal letter distributed on Monday to key employees and supporters, Mr. Nair cited a 2002 assembly resolution that he says shields him from investigations by the secretariat. An investigation against him, he wrote, can only be construed as seeking to impugn my integrity and that of my independent office. The Nair accusations have lingered since last year, when the staff union passed a vote of no confidence in the U.N. senior management after investigations described by staffers as whitewash. Mr. Nair was cleared of any wrongdoing, along with the head of the refugee agency, Ruud Lubbers, who since has been fired. The resolution noted at the time that while the OIOS is granted operational independence, it is not exempt from staff rules and regulations.