March 22, 2005
UN Pledged Iraq Oil Cash to Pay Staffer's Legal Tab
By REUTERS 

Filed at 6:58 p.m. ET
UNITED NATIONS (Reuters) - The United Nations agreed to use money from Iraqi oil sales to pay the legal bills of the head of the scandal-tainted U.N. oil-for-food program, chief U.N. spokesman Fred Eckhard acknowledged on Tuesday.
Benon Sevan, the executive director of the now-defunct $67-billion program, was the sole U.N. employee authorized to have his legal bills paid, but the arrangement was cut off after Paul Volcker's Independent Inquiry Committee last month accused Sevan of a grave conflict of interest, Eckhard said.
Annan suspended Sevan with pay after he was named in a Feb. 3 report by Volcker, the former U.S. Federal Reserve chairman appointed by the United Nations to investigate the program.
The disclosure comes a week before the release of Volcker's second report, which is expected to deal with allegations of a conflict of interest involving Secretary-General Kofi Annan, whose son Kojo worked in West Africa for a firm that won a multimillion-dollar contract from the oil-for-food program.
Annan and his son have both denied any wrongdoing.
The first Volcker report accused Sevan of steering oil contracts to a firm in the Middle East linked to relatives of former Secretary-General Boutros Boutros-Ghali.
Sevan had retired but was reinstated a pay scale of $1 a year in order to retain his diplomatic immunity. U.N officials say Annan would lift immunity if criminal charges were filed against him, which has not yet occurred.
Neither Eckhard nor Sevan's lawyer Eric Lewis would divulge the cost of Sevan's legal fees.
The decision to pay them was made ``on an exceptional basis due to the importance that the (Volcker) committee placed on Mr. Sevan's cooperation to the conduct of the inquiry and the fact that he was a retired staff member who was not subject to the secretary-general's instruction to all staff to cooperate with the (committee) on pain of dismissal,'' Eckhard said in a statement.
Sevan was told in a Feb. 23 letter that the arrangement had been ended after he was named in the committee report.
None of the fees claimed by Sevan have yet been reimbursed because the United Nations is contesting some of the costs. If charges against Sevan ultimately are upheld, the United Nations reserves the right to seek the recovery of any funds paid, the statement added.
``No other present or former U.N. staff member who has been interviewed by the (Volcker committee) has either sought or received such a commitment,'' including Annan and his predecessor, Boutros Boutros-Ghali, Eckhard said.