First U.N. Aide Pleads Guilty, Scandal Widens
BY BENNY AVNI - Staff Reporter of the Sun
August 9, 2005
UNITED NATIONS - The Volcker committee yesterday leveled its most serious charges to date against U.N. officials involved in the world body's oil-forfood program. Shortly afterward, in a Manhattan federal court, a former U.N. procurement officer, Alexander Yakovlev, entered the first guilty plea by a U.N. official since the scandal broke.
Mr. Yakovlev was immediately stripped of diplomatic immunity by Secretary-General Annan and was taken into federal custody just hours after the release of Paul Volcker's Independent Inquiry Committee report. It accused Mr. Yakovlev of taking up to $950,000 in bribes. But another man accused by the IIC of taking bribes, former oil-for-food chief Benon Sevan, might escape justice, as he was allowed by Mr. Annan to return to his homeland of Cyprus earlier in the summer.
An attorney for Mr. Yakovlev, Arkady Bukh, yesterday declined to comment on whether his client was cooperating with federal investigators. The decision to enter a quick guilty plea to charges of conspiracy, wire fraud, and money laundering was in the best interest of the client, Mr. Bukh told The New York Sun. The lawyer said he hoped assuming responsibility early could help his client receive a lighter sentence. Mr. Yakovlev, who was released yesterday on $400,000 bail, faces up to 20 years in prison and a maximum fine of $250,000.
The U.S. Attorney for the Southern District of New York, David Kelley, who announced Mr. Yakovlev's plea, said once he would drain the swamp of the United Nations. Mr. Yakovlev's familiarity with the procurement of Cotecna, the Swiss-based company that employed Kofi Annan's son, Kojo, might help Mr. Kelley's investigation of U.N. brass.
The Volcker committee report yes terday stated that investigators will continue to look into Mr. Yakovlev's role in the 1998 selection of Contecna to inspect goods as part of the U.N. oil-for-food program. A recently found email memorandum written by a childhood friend of Kojo Annan who was also a Cotecna officer, Michael Wilson, was authentic and clearly raises further questions about Secretary-General Annan's involvement in the scandal, according to the report.
The U.N. chief of staff, Mark Malloch Brown, expressed his optimism that the next Volcker report, expected in September, will clear Mr. Annan. Separately, Mr. Malloch Brown said that the United Nations' internal watchdog, the Office of Internal Oversight Services, had cooperated with Mr. Kelley's office.
Mr. Kelley thanked the OIOS, but he pointedly declined to mention the Volcker committee. Mr. Volcker said that his staff has been stonewalled by the federal prosecutor's office.
The one-time Federal Reserve chairman, however, said he cooperated with Manhattan District Attorney Robert Morgenthau, who, according to Mr. Volcker, is looking into criminal wrongdoings by the other principal target of yesterday's report, Mr. Sevan. Mr. Sevan, however, is currently in Cyprus, which like other E.U. members, excepting Britain and the Netherlands, does not extradite its citizens for criminal trials in America.
Mr. Sevan was allowed to leave America even though the United Nations repeatedly said it maintained Mr. Sevan on staff with a symbolic salary of $1 a year to ensure that he would not leave the country and that he would work with the Volcker committee. According to Mr. Volcker, Mr. Sevan has not cooperated with the U.N.-mandated committee for more than six months, refusing interviews and agreeing only to answer written questions.
The Volcker committee accused Mr. Sevan of corruptly receiving payments relating to the program he has headed. The committee found that Mr. Sevan had taken $150,000, at times depositing in his bank accounts large sums in $100 bills. Mr. Sevan resigned his U.N. post Sunday, accusing Mr. Volcker of scapegoating him, amid denials of accepting bribes. Mr. Volcker yesterday said that the documentation of banking transactions and phone conversations in his report speak for themselves.
According to the report, Mr. Sevan acted in concert with the two principal owners of a small Panamanian-listed trading company, Africa Middle East Petroleum, Efraim Nadler and Fakhry Abdelnour. Boutros Boutros-Ghali is not mentioned in yesterday's report, although Mr. Abdelnour is the former secretary-general's cousin and Mr. Nadler his brother-in-law.
In describing Mr. Nadler, an Egyptian-born Jewish businessman with residences in Geneva and New York, the report mentions two of his brothers, Emanuel and Henri (Enrico), as well as their mother, Pauline. None of these immediate family members is accused of wrongdoing. The one next-of-kin missing from the list is Mr. Nadler's sister, Leia Maria, who is the wife of Mr. Boutros-Ghali.
We are not necessarily saying everything in this report, a principal member of the Volcker committee, Mark Pieth, told the Sun. We decided to deal with two carefully circumscribed issues in this report. Anything else, any other issue will be in the next report.
Mr. Volcker said that a report expected next month will describe in greater detail the management of the oil-for-food program by the United Nations and its related organs and will answer remaining questions on the current and former secretaries-general. The timing of that report coincides with the annual General Assembly debate, which brings many heads of states to Turtle Bay, and which Mr. Annan hopes will concentrate on U.N. reform.
The fact that the head of the oil-for-food program received illicit, under-the-table payments from Saddam Hussein and that he successfully blocked an audit of his own office highlights the need for reform and new management at the U.N. said Senator Coleman, a Republican of Minnesota, who has previously called for Mr. Annan's resignation.