The report released on 8 August concludes that former oil-for-food head Benon Sevan took $150,000 in bribes from Fred Nadler, a friend and relative by marriage to a "Fakry Abdelnour," whom Sevan's lawyer has identified as the principal of the African Middle East Petroleum Company. The company earned some $1.5 million from oil allocations through the oil-for-food program.
Sevan resigned on 7 August in a letter to Kofi Annan, saying, "These charges are false and you, who have known me all these years, should know they are." He contended that the secretary-general and the UN abandoned him, making him a scapegoat rather than defending the program.
Annan has come under increasing pressure, particularly by the United States, in recent months after a series of scandals, including oil-for-food, marred his management of the world body. The United States, partly in response to allegations of UN mismanagement, appointed John Bolton as U.S. ambassador to the UN last week. Bolton is expected to push for UN reform. Annan Still Under Investigation?
The second quarterly report by the Independent Inquiry Committee, which is headed by former U.S. Federal Reserve Chairman Paul Volcker, was released in March. The report cleared Annan of allegations
related to his possible role in the oil-for-food scandal but criticized him for failing to thoroughly investigate charges of conflict of interest when they arose. At the time, Annan said his exoneration came as a "great relief" and disputed claims by his detractors that it was time for him to resign and allow for fresh leadership in the UN.
However, Annan may not be out of the woods yet. A 14 June statement by the Independent Inquiry Committee said it was looking into "newly disclosed information" concerning possible links between Annan and representatives of Cotecna Inspection, a Swiss contractor based in Geneva that bid for a contract under the oil-for-food program while Annan's son, Kojo Annan, was a consultant for the company.
The March report also the questionable behavior of several top Annan aides during the investigation, including Undersecretary-General for Oversight Services Dileep Nair, who was responsible for administrative oversight of the program. Nair reportedly misused funds to hire a special assistant in his office, although the assistant performed "virtually no [oil-for-food] program-related work during the two years that he was funded by the program." Nair was replaced in June by Swedish inspector and auditor Inga-Britt Ahlenius.
Benon Sevan has denied that he took kickbacks while administering the oil-for-food program, and contended that the $150,000 came as funds from a now-deceased aunt. Furthermore, as he stated in his resignation letter to Annan on 7 August, he would not have compromised his career for a mere $150,000.
Annan said earlier this year that he would take action against anyone identified as complicit in the corruption scandal. If he did so, it would go against a previous agreement between Annan and Sevan in which Sevan came out of retirement at a $1 annual salary that gave him diplomatic immunity from prosecution and allowed the UN to cover Sevan's legal fees with revenue existing from the now-defunct oil-for-food program (see "RFE/RL Newsline," 23 March 2005
). As part of the deal, Sevan was expected to cooperate with the Volcker investigation. However, investigators have said that Sevan refused to cooperate, and Annan later refused to pay the legal fees. Sevan's resignation would theoretically clear the way for prosecution. The Bilking Continues
While the oil-for-food program ended in the fall of 2003, the UN remained, as of February, in control of some $400 million in oil revenues from the program. Iraqi Ambassador to the UN Samir al-Sumaydi'i called on the UN that month to transfer the money into the formerly U.S.-administered (and now Iraqi-administered) Development Fund for Iraq.
Last year, the UN allocated some $30 million of revenues from the oil-for-food program to investigate fraud and corruption allegations related to its administration of the program (see "RFE/RL Iraq Report," 15 October 2004
In March, Iraq rejected attempts by the UN Monitoring, Verification, and Inspection Commission (UNMOVIC) to extend its mandate. UNMOVIC was established in 1999 to verify Iraq's compliance in ridding itself of its weapons of mass destruction. It, along with inspectors from the International Atomic Energy Commission (IAEA), pulled out of Iraq in March 2003 on the eve of Operation Iraqi Freedom. The IAEA briefly returned to Iraq in 2004 to carry out a limited inspection.
The Iraqi government argued in March that UNMOVIC costs the country $12 million annually. This is in addition to the $12.3 million Iraq will provide the IAEA over the next two years for its monitoring activities. It is unclear how the UN could justify continuation of the program, since UNMOVIC and IAEA inspectors found no evidence that Iraq possessed weapons of mass destruction before the war, and subsequent U.S. investigators working for the Iraq Survey Group came to the same conclusion (see "RFE/RL Newsline," 26 April 2005
Panel Accuses Sevan, Yakovlev Of Corruption In Oil-For-Food Program
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