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UN: Inquiry Clears Annan, But Faults Management On Iraq Program

UN Secretary-General Kofi Annan. (file photo) An inquiry into the Iraqi oil-for-food program has found that United Nations Secretary-General Kofi Annan did not improperly influence a contract for a company that employed his son. But the independent inquiry raises new criticisms of UN management of the Iraqi humanitarian program. The report could bolster UN critics in the United States who have called for Annan's resignation. A defiant Annan told reporters he had clearly been exonerated and was committed to pressing on with system-wide reforms of the organization.

United Nations, 30 March 2005 (RFE/RL) -- The central finding in the latest investigation of the oil-for-food program was that there is insufficient evidence linking Kofi Annan to the awarding of a multimillion-dollar contract won by a Swiss inspection firm in 1998.

Annan has denied for many months that his son's affiliation with the firm -- Cotecna -- led to improper actions on his part.

He told reporters yesterday that the findings should put to rest charges that he personally profited from a program meant to help Iraqi civilians.

"After so many distressing and untrue allegations have been made against me," Annan said, "this exoneration by the independent committee obviously comes as a great relief."

Asked if he should resign to give the organization fresh leadership, Annan said, "Hell, no."

But the report raised new questions about UN management of the scandal-tainted program. The commission criticized Annan for failing to thoroughly investigate charges of conflict of interest when they arose, and it cited several top aides for questionable behavior.

It was the second time in two months that the commission raised concerns about UN management of the $64 billion program. In February, it found the head of the program, Benon Sevan, had directed contracts to a friend.

Former U.S. Federal Reserve Chairman Paul Volcker, who headed the inquiry, said the latest probe involved extensive questioning of Annan and persons associated with the UN's procurement practices.

The inquiry found that Annan appeared to be unaware in 1998 that Cotecna was bidding on a humanitarian inspections contract. But Volcker repeatedly said a later one-day investigation into a possible conflict-of-interest -- initiated by Annan -- was inadequate.

"We have had no suspicion of evidence from anybody we talked to that he interfered with the selection process for Cotecna," Volcker said. "The adequacy of [Annan's] investigation, I am sure, is a subject that has consequences, and how that will come up again in the future I don't know."

The report said Annan's son, Kojo, and Cotecna deceived the secretary-general about an ongoing financial relationship from 1999 to 2004. Annan said he has asked his son to cooperate with the commission.

"I love my son and have always expected the highest standards of integrity from him," Annan said. "I am deeply saddened by evidence to the contrary that has emerged and particularly by the fact that my son had failed to fully cooperate with the inquiry. I have urged him to cooperate, and I urge him to reconsider his position and cooperate."

Among the new details to emerge in the report was that Annan's former chief of staff, Iqbal Riza, last year destroyed three year's worth of documents linked to the investigation.

Riza said in a letter to the committee that the papers destroyed were extra copies of documents filed elsewhere and that shredding them was routine UN practice.

But Volcker said it was necessary to cite this in the report.

"It happened to take place just about the time this committee was formed and notices were going out about the need for a committee and for confidentiality," he said. "So that obviously raises a question which we felt we had to report. Whether that material contained any evidence that we could not otherwise get from UN files more generally, of course, is not known."

Annan's new chief of staff, Mark Malloch Brown, said Riza's explanation seemed plausible but that the circumstances surrounding the shredding of such documents required further inquiry.

"It was imprudent to have done this and clearly not consistent with the secretary-general's own memo on this, so we have to look further into it," he said.

The report also faulted Dilip Nair, the director of the Office of Internal Oversight Services. It accused Nair of hiring a man for a job that would be paid for by money from the oil-for-food program but was not directly related to the program.

Nair denied any wrongdoing.

A U.S. senator who heads a subcommittee investigating the oil-for-food program, Norm Coleman, said the latest report affirms his concerns about UN management under Annan and repeated his call for his resignation.

But a U.S. State Department spokesman, Adam Ereli, reaffirmed Bush administration support for Annan. Ereli said Washington expected Annan to address the problems covered in the report and that the United States was committed to working together with the secretary-general on his reform agenda.

The Volcker commission is due to issue a final report on abuses of the oil-for-food program this summer, detailing the actions of the UN Security Council and member states. U.S. investigators charge that the previous Iraqi regime profited by nearly 10,000 million dollars from corruption in the program.

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