UN officials accused of kickbacks
Oil-for-food program
 
Steven Edwards
CanWest News Service

August 9, 2005

UNITED NATIONS - The former chief of the UN's scandal-plagued aid program for Iraq was accused yesterday of taking kickbacks of almost US$150,000 in deals involving relatives of Boutros Boutros Ghali, the Egyptian who headed the world body in the 1990s.
The findings against Benon Sevan are set out in an 88-page interim report by the inquiry into corruption in the US$64-billion program, launched in 1996 to relieve the suffering of ordinary Iraqis under sanctions targeting Saddam Hussein.
Mr. Sevan is the most senior UN official accused of taking illicit payments, and the report called for removal of his diplomatic immunity to open the way for criminal charges.
It also accused another senior UN official, Alexander Yakovlev, of working with a French businessman to solicit a bribe in connection with the program and taking almost US$1-million in additional kickbacks unrelated to the humanitarian scheme.
Within hours, Mr. Yakovlev surrendered to U.S. federal authorities and pleaded guilty to conspiracy, wire fraud and money laundering.
Paul Volcker, the inquiry's chairman, said its next report in early September will include findings of a renewed investigation into a possible conflict of interest involving Kofi Annan, the current UN Secretary-General.
In March, the initial probe concluded there was insufficient evidence to support allegations he had helped steer a multimillion dollar oil-for-food contract to a company that employed his son Kojo as a consultant.
Since then, two e-mails from an executive with the Swiss firm Cotecna have emerged suggesting the senior Mr. Annan may have at least known about the deal. One of them describes an alleged encounter between him and company officials.
The e-mails -- and some other lines of inquiry in relation to his son -- raise more questions, Mr. Volcker said. But he noted Mr. Annan and others say the e-mails are wrong.
The executive is Michael Wilson, an Annan family friend, whose company inspected goods entering Iraq under oil-for-food.
Mr. Volcker stressed that for now the panel's March finding stands and there is no evidence to suggest the Secretary-General was in a conflict of interest.
Next month's report will provide a comprehensive review of the management of the oil-for-food program and cap the year-long US$35-million inquiry. It will be released on the eve of the UN's 60th-anniversary summit, which Mr. Annan will use to push for adoption of his massive reform plans of the world body.
Would you want a report such as this raining on your parade two weeks before the summit? Mark Malloch Brown, Mr. Annan's chief of staff, said yesterday. In an ideal world, 'No.' ''
He claimed the report would help the UN by showing this is an organization that needs major management reform, and the Secretary-General believes it will enable him to convince the 191 members of the General Assembly to approve his proposals.
Mr. Sevan, who had worked for the UN for 40 years, resigned on Sunday.
The report says he steered business to an oil trading firm owned by Fakhry Abdelnour, a cousin of Mr. Boutros-Ghali, who headed the UN when the oil-for-food program was established.
According to investigators, African Middle East Petroleum transferred US$580,000 to the account of Fred Nadler, brother of Mr. Boutros-Ghali's wife, Leia. Mr. Nadler then deposited US$147,184 in the bank accounts of Mr. Sevan and his wife.
Mr. Sevan says the cash was a gift from his aunt in his native Cyprus, who died after falling down an elevator shaft.
Investigators accuse Mr. Yakovlev of trying to seek a bribe from the French firm Societe generale de surveillance, which sought an oil inspection contract. But they found no evidence the company agreed to the bribe.