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December 1, 2004
OIL FOR FOOD 
Debate Grows Over Payouts by Firm to Son of U.N. Chief
By JUDITH MILLER
The chairman of a House subcommittee investigating the United Nations' oil-for-food program in Iraq said in a statement yesterday that Secretary General Kofi Annan's son received reimbursements for health insurance coverage through June of this year from a Swiss inspection company that is being investigated for alleged fraud and abuses in the program.
Mr. Annan's son, Kojo Annan, was employed from December 1995 until the end of 1998 by Cotecna Inspection Services, a company based in Geneva that was involved in the oil-for-food program.
On Monday, the United Nations confirmed that Kojo Annan received nearly $2,500 a month after leaving the company, payments that did not cease until February 2004.
Information about the company's financial relationship with Kojo Annan has emerged over time, as various investigations into the oil-for-food program have progressed.
On Nov. 15, a Senate subcommittee investigating the program estimated that during 13 years of international sanctions, Saddam Hussein's government made at least $21.3 billion illicitly - more than double previous government estimates.
In an op-ed article in today's Wall Street Journal, Senator Norm Coleman, a Minnesota Republican who is chairman of the Senate's Permanent Subcommittee on Investigations, calls for the secretary general to step down.
Kofi Annan said Monday that although he and his son had discussed his son's relationship with Cotecna, a major United Nations contractor, he was disappointed that he had apparently not been told the full story about the payments.
He also denied any wrongdoing, saying he had no role in granting the inspection contract to Cotecna or any other contractor.
But he acknowledged that disclosure of the payments to his son and the scandal that has engulfed what was the United Nations' largest aid program had created a perception of conflict of interests and wrongdoing.
Pressed by reporters on Monday, John C. Danforth, the American ambassador to the United Nations, specifically declined to say he had confidence in Mr. Annan's leadership.
Mr. Danforth said only that the United States took the accusations of United Nations corruption very seriously, and that people should not rush to judgment until all of the facts are in.
The statement yesterday about Kojo Annan's health insurance coverage was made by Representative Christopher Shays, Republican of Connecticut, the chairman of the House subcommittee on national security, emerging threats and international relations.
It retracted an assertion Mr. Shays made Monday that Cotecna had misled his panel by failing to disclose that Kojo Annan had received the payments, totaling as much as $150,000, from Cotecna after he had left the company in December 1998 as part of an agreement not to compete with the firm in West Africa.
Mr. Shays's statement said that although the documents provided by Cotecna did not explicitly assert that the monthly payments were part of the noncompete agreement he signed in 1999, the subcommittee is satisfied that Cotecna has, to date, complied with the subpoena for all documents relevant to our investigation.
The company said the payments were legal and required by Swiss law in such agreements.
Seth Goldschlager, a spokesman for Cotecna in Paris, said yesterday that the health care coverage was part of that noncompete compensation package.
The company had no comment on the amount of the health care payments, except to say they were quite moderate, or why they continued through June when the other payments ended in February.
Fred Eckhard, the United Nations spokesman, said that he had not been aware of the health insurance payments to the secretary general's son.
In his statement yesterday, Mr. Shays said that Cotecna had listed monthly payments of $2,390 to Kojo Annan for Marketing Expenses - Africa, and said they were made from April 2000 through February 2004.
Initially, both the company and the United Nations said the company's relationship with Kojo Annan had ended in December 1998, the same month that Cotecna won a $4.8 million contract to monitor the import of aid items to Iraq under the oil-for-food program, which permitted Iraq to sell oil to buy goods to offset the effects of sanctions between 1996 and 2003.
The Wall Street Journal reported in September that Cotecna had paid Kojo Annan some $2,500 a month after he had left the company, but The New York Sun reported Friday that the payments had continued through February.