NEW YORK (AP)–Investigators probing claims of wrongdoing in the Iraq oil-for-food program accused its former chief–Benon Sevan–of corruption for taking illegal kickbacks and recommended his immunity be lifted for prosecution.
The investigators said a former UN procurement officer sought a bribe and should have his immunity lifted as well. Alexander Yakovlev was also accused of collecting nearly $1 million in kickbacks outside the oil-for-food program.
The third report by the Independent Inquiry Committee–led by former Federal Reserve Chairman Paul Volcker–was a new blow to the scandal-tainted $64 billion program. For the first time–it gave a motive for Sevan’s actions–saying his finances were "precarious" shortly before his alleged misdeeds.
Some critics have accused the United Nations of squandering millions– even billions–of dollars in its mismanagement of the program. Yet Volcker’s team found that Sevan appeared to have received kickbacks of just $147,184 from December 1998 to January 2002.
The report touched briefly on UN Secretary-General Kofi Annan and his son–Kojo. New e-mails suggesting Annan knew more than he said about his son’s involvement in the program raised questions that would be answered in the committee’s final report–expected in September.
Yakovlev resigned earlier this year and Sevan announced his resignation on August 7. He criticized investigators–Annan–the UN Security Council and the UN critics who have cited oil-for-food as emblematic of perceived 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," Sevan wrote. "The charges are false–and you–who have known me for all these years–should know that they are false."
Though both men have quit–diplomatic immunity would cover their actions when they were employed. Volcker’s recommendation that Annan waive that immunity was a strong indication of his conviction about the claims against them.
Sevan–a Cypriot citizen believed to be in Nicosia–was being investigated by the Manhattan District Attorney’s office. There is no known criminal probe against Yakovlev so far.
The oil-for-food program–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 programs in history. By most accounts–it achieved what it set out to do–becoming a lifeline for 90 percent of the country’s population of 26 million.
Under the program–Saddam’s regime could sell oil–provided the proceeds went to buy humanitarian goods or pay war reparations. Saddam allegedly sought to curry favor by giving former government officials–activists–journalists and others vouchers for Iraqi oil that could then be resold at a profit.
The program became the subject of several Congressional investigations–as well as probes by a federal grand jury and the Securities and Exchange Commission.
On August 4–Sevan’s lawyer Eric Lewis revealed that the committee would conclude that Sevan got kickbacks for steering contracts under oil-for-food to a small trading company called African Middle East Petroleum Co. Ltd. Inc.
The report went further–describing how Sevan and his wife repeatedly had overdrawn their bank accounts before Sevan first sought to steer oil allocations to AMEP.
It also found that two men helped Sevan: Fred Nadler–an AMEP director and brother-in-law of former UN Secretary-General Boutros Boutros-Ghali; and Fakhry Abdelnour–the president of AMEP.
Volcker’s team recommended that the United Nations assist in their possible prosecution as well.
As for Yakovlev–investigators found that he secretly tried to bribe a company called Societe Generale de Surveillance SA–which was seeking an oil inspection contract under oil-for-food.
They said Yakovlev passed secret bidding information along to a friend in France–Yves Pintore–who then approached SGS to check if it would "work with" him and "influential people in the UN in New York."
Volcker’s team found no evidence that the company agreed to the bribe. However–it noted that Pintore essentially agreed to its characterization of his involvement.
The committee found "persuasive evidence" that Yakovlev took some $950,000 from other UN contractors outside oil-for-food.