Oil-for-food bribe crisis grows

Published on 09/08/2005 00:15

THE former head of the United Nations oil-for-food programme, Benon Sevan, was accused yesterday of getting nearly $150,000 (£84,000) in kickbacks funnelled to him by a relative of the former UN secretary-general Boutros Boutros-Ghali.

An independent investigative committee headed by the former United States Federal Reserve chairman, Paul Volcker, recommended that the current secretary-general, Kofi Annan, waive Mr Sevan's immunity for "purposes of a criminal investigation".

Mr Sevan, who has denied any wrongdoing, resigned from the UN on Sunday.

In its third interim report, the committee also accused a UN purchasing officer, Alexander Yakovlev, of soliciting a bribe from a contractor that did business with the now-defunct 37 billion UN humanitarian programme for Iraq.

According to the inquiry, Mr Sevan worked with a cousin of Mr Boutros-Ghali, Fakhry Abdelnour, an Egyptian who owned a small trading firm called African Middle East Petroleum (AMEP). The company transferred 325,000 to the account of Fred Nadler, the brother of Mr Boutros-Ghali's wife, Leia.

Of this amount, Mr Nadler then deposited more than 82,000 in cash to the New York bank accounts of Mr Sevan and his wife.

"Mr Sevan corruptly and in concert with Nadler and Abdelnour derived personal pecuniary benefit through the programme through cash receipts from the sale of oil allocated by Iraq to Mr Sevan and bought by African Middle East Petroleum Co," the report said.

"The participants had knowledge that some of the oil was purchased by paying an illegal surcharge to Iraq in violation of United Nations sanctions and rules of the programme."

The committee also touched briefly on Mr Annan and his son, Kojo. It said new e-mails suggesting Mr Annan knew more than he said about his son's involvement in the programme "clearly raises further questions" that would be answered in its final report, expected in September.

Mr Sevan, meanwhile, criticised investigators, Mr Annan, the UN Security Council and critics who have cited oil-for-food as emblematic of perceived UN bungling and outright corruption.

"As I predicted, a high-profile investigative body invested with absolute power would feel compelled to target someone, and that someone turned out to be me," Mr Sevan wrote. "The charges are false, and you, who have known me for all these years, should know that they are false."

Although both Mr Sevan and Mr Yakovlev have resigned, diplomatic immunity would cover their actions when they were employed by the UN.

Mr Volcker's recommendation that Mr Annan waive that immunity is a strong indication of his conviction about the claims against them.

Mr Sevan, a Cypriot citizen believed to be in Nicosia, is being investigated by the Manhattan district attorney's office. There is no known criminal investigation against Mr Yakovlev so far.

The oil-for-food programme, launched in December 1996 to help ordinary Iraqis cope with UN sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait, was one of the largest humanitarian projects in history. By most accounts, it achieved what it set out to do, becoming a lifeline for 90 per cent of the country's population of 26 million.

Under the programme, Saddam's regime could sell oil, provided the proceeds went to buy humanitarian goods or pay war reparations. Saddam allegedly sought to curry favour by giving former government officials, activists, journalists and others vouchers for Iraqi oil that could be resold at a profit.

• Saddam Hussein's family has scrapped the international team of lawyers claiming to be representing him and is to pick a new team to defend him against war-crimes charges.