Oil-for-food scandal engulfs Annan again
Inquiry into Secretary-General's role reopened by independent committee
By SHAWN MCCARTHY 
Tuesday, August 9, 2005 Page 
UNITED NATIONShttp://adcounter.theglobeandmail.com/servlet/AdletCounter?ad1=GAMstory_TPInternational_300x250 \* MERGEFORMATINET
Embattled UN Secretary-General Kofi Annan suffered a new setback yesterday in his effort to remain unsullied by the oil-for-food scandal as an independent inquiry reopened its investigation into his role in the affair.
The independent inquiry committee, headed by former Federal Reserve chairman Paul Volcker, issued a scathing report on UN management of the program, saying it had conclusive evidence that the top UN administrator, Benon Sevan, accepted kickbacks and that a senior UN procurement officer solicited bribes.
Both officials have been the subject of U.S. criminal investigations, and late yesterday, the U.S. Attorney's Office in New York announced that the procurement officer, Alexander Yakovlev, has been charged and pleaded guilty to several counts of fraud for accepting nearly $1-million (U.S.) in kickbacks on contracts unrelated to oil-for-food.
Mr. Annan, meanwhile, is again looking to clear his name. His critics have alleged that he used his influence to steer an oil-for-food contract to a Swiss company, Cotecna Inspection SA, which employed his son, Kojo.
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Five months ago, the Volcker committee issued a report saying it had not found sufficient evidence to conclude that Mr. Annan knew Cotecna was bidding on the contract, nor that the Secretary-General had intervened in the process. At the time, Mr. Annan appeared at a news conference and declared himself to be exonerated.
Yesterday, Mr. Volcker pointed to new evidence that Mr. Annan may have known more than he admitted. An e-mail from Cotecna vice-president Michael Wilson, who was a friend of both Annans, said he had met the Secretary-General in Paris and had a brief discussion about the status of Cotecna's negotiations with the UN.
Mr. Wilson concluded that the collective advice was that we [Cotecna] could count on their support. Although Mr. Wilson denied writing the e-mail, the Volcker committee report says it appeared to be authentic.
Mr. Annan, members of his staff, his son Kojo, and Cotecna officials all deny that the Paris meeting took place. The committee said that the investigation is continuing and it will present its conclusions in the major report on the oil-for-food program to be tabled next month, just before the leaders' summit.
Mr. Annan's chief of staff, Mark Malloch Brown, told reporters that the Secretary-General was disappointed that the Volcker committee had raised the new questions, and then left them hanging for a month.
Mr. Malloch Brown noted, however, that Mr. Volcker indicated there was no evidence to dispute the committee's earlier findings that Mr. Annan had not interfered with the awarding of the Cotecna contract.
Under the $67-billion (U.S.) program, which ran from 1996 to 2003, Iraqi oil revenue were funnelled through the UN to contractors and used to buy food, medicine and other necessities for the civilian population ravaged by UN sanctions.
Mr. Sevan, who had retired from the UN but remained on a $1-a-year contract pending the outcome of the investigation, submitted his resignation on the weekend, accusing the Volcker committee of using him as a scapegoat. The Cyprus native, who worked at the UN for 40 years, is believed to have returned to his home country.
Mr. Malloch Brown said the UN would revoke Mr. Sevan's diplomatic immunity -- which remains in effect for the period he was at the UN -- should U.S. prosecutors request such an action. Mr. Annan did revoke the immunity of Mr. Yakovlev, responding to a request for the U.S. Attorney's Office.
In its report, the independent inquiry committee provided a detailed picture of Mr. Sevan's alleged kickback scheme, concluding he had received more than $147,000 (U.S.) over four years.
Relying on the bank records of Mr. Sevan and his wife, Micheline, the committee indicated that the couple were living beyond their financial means, with growing debt and a bank account that was often in overdraft.
Former Iraqi oil ministry officials, backed by written records, recounted that Mr. Sevan had lobbied on behalf of African Middle East Petroleum, which was controlled by his close friends.
The company received six allocations of Iraqi oil, and payments were made into a Swiss bank account. Starting in December, 1998, until 2002, Mr. Sevan made numerous cash deposits into his account, always in $100 bills.
He said the money was given to him as a gift from his aunt when she came to visit him in New York. But the committee concluded his aunt, the retired government photographer, would not have had the means to give him $147,000 (U.S.). Investigators also noted Mr. Sevan's cash deposits were closely timed with his friend's withdrawals from the Swiss account, and with a flurry of telephone calls between the two men.