Corruption

UN programme chief ‘solicited oil from Baghdad’

Mark Turner and Claudio Gatti
Financial Times
February 3, 2005

Benon Sevan, head of the United Nations office that administered Iraq’s multi-billion dollar oil-for-food programme, “repeatedly solicited” oil allocations from Baghdad, a UN-appointed inquiry said yesterday. “Iraqi officials provided such allocations for the purpose of obtaining Mr Sevan’s support on several issues, particularly their desire for funds to repair and rebuild the Iraqi oil infrastructure,” it found.

The conclusions, in an interim report from an independent committee led by Paul Volcker, deal a severe blow to the United Nations and to Kofi Annan, its secretary-general.

Critics of the international body in the US Congress and elsewhere accuse it of allowing Saddam Hussein’s regime to develop illicit sources of funding as a result of corruption in the programme.

The Volcker report identified failings in the way the programme, set up in 1996 to alleviate shortages created by international sanctions, was administered and audited.

Mr Volcker also noted that the most serious violations of the sanctions occurred outside the programme, and involved oil smuggling.

But the “most disturbing” findings concerned Mr Sevan’s role, which “created a grave and continuing conflict of interest”.

“His conduct was ethically improper and seriously undermined the integrity of the United Nations.”

The Financial Times revealed on Tuesday that the UN investigation was targetting Mr Sevan’s efforts to steer lucrative contracts for Iraqi oil to African Middle East Petroleum, a Panama-registered company owned by a Swiss-based oil trader.

The report says Mr Sevan “was not forthcoming to the committee when he denied approaching Iraqi officials and requesting oil allocations on behalf of AMEP”. He also “failed to disclose the full nature and extent of his contacts” with Fakhri Abdelnour, AMEP’s boss.

The report also queries declarations made by Mr Sevan about the source of additional cash income – disclosed in a UN disclosure form – between 1999-2003. Mr Sevan said the $160,000 (€123,000, £85,000)received over that period came from an aunt in Cyprus.

The woman, the Volcker report says, was “a retired government photographer living on a modest pension”. Mr Sevan’s explanation was “not adequately supported” by the information reviewed by the committee.

A separate line of inquiry, into investigations into the procurement of a contractor that employed Mr Annan’s son, Kojo Annan, were “well advanced” and would be the subject of a further interim report.

Writing in The Wall Street Journal yesterday, Mr Volcker said UN procurement procedures were “tainted, failing to follow the established rules of the organisation” and that “political considerations intruded in a manner that was neither transparent nor accountable”.

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