Next Volcker Report on U.N. Ready to Roll

Tuesday, March 29, 2005
Fox News
Original Source: http://www.foxnews.com/story/0,2933,151750,00.html

NEW YORK — Paul Volcker on Tuesday will release the next report in his continuing investigation of the Oil-for-Food program, this one looking at who is to blame for its mismanagement and abuse. It's a report that could cause more questions as to whether U.N. Secretary General Kofi Annan is fit to run the world body.
Annan is scheduled to receive an advance copy of the report at 9 a.m. EST while Volcker is expected to brief reporters at noon. Annan and his chief of staff, Mark Malloch Brown, will offer their take on it around 3 or 3:30 p.m. EST.
The report comes at a time when the United Nations continues to try to regain its balance after allegations of gross mismanagement of the $64 billion Oil-for-Food program and accusations of sex abuse on U.N. peacekeeping missions.
Last week, U.N. officials laid out plans to reform the organization and its peacekeeping operation. The secretary-general introduced a sweeping reform plan that he wants member states to agree to at their meeting in New York in September.
But in the meantime, Volcker and his committee have plugged along, slogging though mountains of audits and other U.N. documents, as well as interviewing numerous officials in their effort to get to the bottom of the scandal. Volcker's Independent Inquiry Committee (IIC) was hand-picked by Annan to probe the program.
Officials have said that the Volcker report will, for the first time, criticize Annan for not properly addressing his son Kojo's employment by Swiss company Cotecna Inspection S.A., which won the U.N. contract to certify the import of goods under the Oil-for-Food program.
The IIC will also criticize the secretary-general for failing to detect shortcomings in the United Nations' internal bureaucracy that allowed problems in the Oil-for-Food program to continue until 2003, officials said.
But the Volcker committee will also say that based on its evidence — which included extensive interviews and examination of phone and e-mail records — the secretary-general did not interfere in the awarding of contracts or exert excessive influence over those awarded contracts, officials said. The report will also state that Annan didn't seek or receive any financial benefits from the program.
Under the Oil-for-Food program, in effect from 1996 to 2003, Saddam Hussein's government was allowed to sell limited — and eventually unlimited — amounts of oil in exchange for humanitarian goods as an exemption from U.N. sanctions imposed after Iraq's 1990 invasion of Kuwait.
In a bid to curry favor and end sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for Iraqi oil that could then be resold at a profit.
U.S. congressional investigators claim Saddam's regime may have illegally made more than $21 billion by cheating the Oil-for-Food program and other sanctions-busting schemes.
Kofi Annan, his son, and Cotecna all deny any link between Kojo Annan's employment and the awarding of the U.N. contract to the company.
I don't think we want to comment until we see what the actual report is, U.N. spokesman Fred Eckhard said Monday.
He added: The secretary general has no intention, no intention of resigning. He expects to be cleared of any wrong-doing by Mr. Volcker. He has put forward an ambitious reform program that he expects to culminate this September, that I think is going to be his legacy at the United Nations.
The U.S. State Department also did not want to comment Monday. Let's wait until the next Volcker report comes out, spokesman Adam Ereli said in Washington.
But some U.S. lawmakers, like Sen. Norm Coleman, who has previously called for Annan's resignation over the scandal, repeated his call on Tuesday.
His lack of leadership, combined with conflicts of interest and a lack of responsibility and accountability point to one, and only one, outcome: His resignation, the Minnesota Republican said in a statement.
While Kofi Annan may not be responsible for the acts of his son, he is responsible for failing to reveal a serious conflict of interest. Specifically, he permitted the U.N. to give massive contracts to the company that employed his son. This egregious conflict of interest is simply inexcusable and further damages the credibility of the organization he leads.
Kojo Annan worked for Cotecna in West Africa from 1995 to December 1997 and then as a consultant until the end of 1998 — when the Oil-for-Food contract was awarded. He remained on the Cotecna payroll until 2004 on a contract to prevent him from working for a competitor in Nigeria or Ghana.
Kojo Annan got more than $365,000 from the company — about $200,000 as a full-time employee and consultant from 1995-1998 and more than $165,000 from 1999 until February 2004 under the so-called non-compete contract, Cotecna spokesman Seth Goldschlager told The Associated Press.
Goldschlager also disclosed that Volcker sought payment records from five companies linked to the firm for the years 1996 to 2004. The Swiss accounting firm BDO Visura is currently conducting an audit, which is expected to be completed at the end of April, to look for any payments related to the Oil-for-Food program.
Goldschlager also confirmed newspaper reports that there had been several meetings — at least four — between Kofi Annan and Cotecna executives, but all in social settings.
In a previous interim report on Feb. 3, Volcker's committee accused former Oil-for-Food program chief Benon Sevan of serious wrongdoing in his handling of the operation.
The report accused Sevan of a grave conflict of interest, saying his conduct in soliciting oil deals from Iraq seriously undermined the integrity of the United Nations.
Sevan's attorney has said he did nothing wrong.
The United Nations on Monday reversed its decision to pay Sevan's legal fees related to the investigation. The plan to pay Sevan's fees had stirred controversy because of the seriousness of the allegations against him and because U.N. officials said the reimbursements would be paid with money from Iraqi oil sales used to finance the Oil-for-Food program itself.
Several congressional committees are also conducting their own investigation into the Oil-for-Food scandal.
The Associated Press contributed to this report.