Annan Rejects Paying Sevan's Legal Fees

By Nick Wadhams
March 15, 2006
Houston Chronicle
Original Source: http://www.chron.com/disp/story.mpl/ap/nation/3726584.html

UNITED NATIONS (AP) - Secretary-General Kofi Annan rejected an internal appeals board's ruling that he pay legal fees to the former chief of the U.N. oil-for-food program, who is accused of taking $147,000 in kickbacks and damaging the integrity of the United Nations, according to documents obtained Wednesday. 

The U.N. had agreed to pay Benon Sevan's legal fees in 2004, when he became a subject of a U.N.-backed probe of fraud and waste in the $64 billion operation. Annan reversed that decision in March, 2005 when that very probe accused him of a role in the scandal, and Sevan appealed to the internal tribunal. 

The previously secret Feb. 6 ruling by the Joint Appeals Board, obtained by The Associated Press, upheld Sevan's appeal. 

In a March 3 letter, also obtained by the AP, U.N. Undersecretary-General Christopher Burnham said Annan would uphold his refusal to pay Sevan's legal fees, despite the board's ruling. 

The agreement to pay Sevan's fees was contingent upon the absence of wrongdoing, Burnham wrote Sevan in the letter. 

The board's decision to side with Annan was nonbinding. 

Sevan's lawyer, Eric Lewis, said he would appeal Annan's rejection to the U.N. Administrative Tribunal, a higher-level board whose decisions are binding.' 

You can't make an unconditional promise and then simply renege because you find it politically more convenient to do so, Lewis said. 

Last year, a disciplinary committee ruled Annan had wrongly fired a staffer over claims that he tried to influence contracts under the oil-for-food program. Annan later reversed his decision and the staffer was allowed to retire with his full pension. 

Sevan is also under investigation by the Manhattan District Attorney's Office in connection with oil-for-food. He resigned from the U.N. in August and returned to his native Cyprus, and could not immediately be reached for comment. 

Under the oil-for-food program, Iraq was allowed to sell oil provided most of the money went to buy humanitarian goods. It was a lifeline for 90 percent of the country's population of 26 million. 

But Saddam Hussein exploited the program by awarding contracts to people and companies he chose, including prominent politicians, journalists and U.N. officials. 

In August, the U.N.-appointed investigating committee pursuing claims of fraud and waste in the program accused Sevan of a conflict of interest in his handling of oil-for-food contracts. It also accused him of accepting $147,184 in kickbacks for steering the contracts to a company of his choice. 

Sevan, who had worked for the U.N. for 40 years, has repeatedly denied wrongdoing. He turned to the Joint Appeals Board not to argue the merits of his case, but because he claimed the U.N. had agreed to pay his legal fees no matter what. 

He sought $750,000 - five times more than the sum that investigators had claimed he took in kickbacks. 

Sevan cited conversations he had in late 2004 with Iqbal Riza, who was then Annan's chief-of-staff and agreed that the U.N. would pay his legal fees. But Riza's successor, Mark Malloch Brown, scrapped that deal in March, 2005 after the investigation led by former U.S. Federal Reserve chairman Paul Volcker found Sevan had violated U.N. rules. 

The three-member appeals board sided with Sevan, saying it had no evidence that Riza ever imposed conditions on the agreement. It scolded U.N. officials for never putting the deal into writing. 

The United Nations was sophisticated enough to know the perils of entering an oral agreement, the ruling said.