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Report Criticizes UN Oil-For-Food Program Manager

4 February 2005 -- An investigation of the UN oil-for-food program has concluded that program chief Benon Sevan repeatedly solicited and received allocations of oil from Iraq under the program.

The head of the investigative panel, former U.S. Federal Reserve Chairman Paul Volcker, told a news conference that Sevan's conduct was troubling.

"The Iraqi government providing such allocations certainly thought they were buying influence. But whatever the result in terms of actual behavior, I think it is a fact that Mr. Sevan placed himself in a grave and continuing conflict of interest situation that violated explicit UN rules and violated the standards of integrity essential to a high-level international civil servant," Volcker said.

The report said that Sevan lobbied Baghdad on behalf of a Swiss-based trading firm -- the African Middle East Petroleum Company -- for the allocations. But the report did not say Sevan personally received money from the later sale of the oil.

UN Secretary-General Kofi Annan said in a statement following the report that he had already initiated disciplinary action against Sevan.

The investigation into corruption in the oil-for-food program focuses in part on how some companies may have paid some UN officials and Hussein's regime kickbacks in exchange for the right to sell Iraqi oil. The U.S.-led Iraq Survey Group has concluded that Hussein clandestinely earned $1.5 billion dollars through such kickbacks.

Sevan has repeatedly denied any wrongdoing in his management of the oil-for-food program. The program was set up to allow Iraq to sell oil to buy humanitarian goods as an exception to UN-imposed trade sanctions on Hussein's regime.