Oil-for-food scandal: UN officials are linked to $64bn fiasco

THE INQUIRY into alleged corruption inside the six-year oil-for- food programme operated by the United Nations in Iraq widened further yesterday with new questions raised about the former Secretary General, Boutros Boutros-Ghali as well about "tainted" procedures for choosing contractors to run the scheme.

An interim report from an independent commission investigating the allegations also seriously undermined the credibility of the former UN official in charge of the programme, Benan Sevan, saying he repeatedly made unethical requests to Iraq to award oil export contracts to a single oil company.

The chairman of the commission, Paul Volcker, a former chairman of the US Federal Reserve, said that the interim report was "not the whole story by any long shot", however. A final report in the summer will try to identify what financial gain, if any, Mr Sevan received - which could imply straight bribes - and to resolve questions still surrounding Kojo Annan, the son of the current UN secretary general, Kofi Annan.

The 200-page report, issued last night, already describes a catalogue of lapses and shortcomings in the way the $64bn (pounds 34bn) programme was managed by the UN under both Mr Boutros-Ghali and Mr Annan. So far, however, Mr Volcker has not offered any evidence of actual corruption punishable by criminal charges.

The oil-for-food programme was designed to allow Iraq to export limited amounts of fuel to generate proceeds for the purchase of urgent humanitarian goods. Almost as soon as it was wound up in 2003 after the US-led war against Saddam Hussein, allegations began to surface that scores of individuals around the world had illegally benefited from the scheme to the tune of many millions of dollars.

The interim report focused on three specific problem areas, Mr Volcker said. Many pages are dedicated to describing how Mr Sevan "created a grave and continuing conflict of interest" for himself, specifically by repeatedly soliciting Iraqi officials to award oil export allocations to small oil trading firm run out of Switzerland called African Middle East Petroleum (Amep).

Mr Volcker contends, moreover, that under questioning by his investigators, Mr Sevan tried to deny any improper activities on behalf of Amep or making such requests to Baghdad. But the report states that "ample evidence" was found to suggest that Mr Sevan was not being candid.

Mr Sevan last night fired back, saying the panel had "succumbed to massive political pressure and now seeks to scapegoat" him.

Also highlighted are alleged violations of the rules of procurement, when the UN chose the three principle contractors to get the programme up and running in 1996. This was when Mr Boutros-Ghali was still UN secretary general - and Mr Volcker confirmed last night that he has been approached by the commission more than once to offer explanations.

The companies that awarded those contracts were the Banque National de Paris, to help handle the flow of funds, the engineering company Saybolt Eastern Hemisphere and London-based Lloyd's Register Inspection Limited, the firm chosen to oversee the delivery to Iraq of the humanitarian supplies.

The report also says that there was direct and improper contact between the UN official guiding the awarding of contracts and the British mission.

The choice of BNP bank of Paris was "clearly affected by political considerations", Mr Volcker said, adding that Mr Boutros-Ghali had already been responding to questions in this regard. He noted that Iraq at the time "would not sit still for an American or British bank" while the Americans, he added, had made clear they did not want a Swiss bank involved.

Not addressed in the report are possible additional connections between the oil trading company aided by Mr Sevan and Mr Boutros-Ghali. It has been reported that the man running Amep is a cousin of the former secretary general.

Still to come is further scrutiny of the part played in the affair by Kojo Annan, who has already acknowledged that he worked for a company that benefited directly from the programme and continued to draw a salary from the company some years after ceasing working for it.

Mr Volcker was clear last night that his investigators "had not found systematic misuse of funds dedicated to the running of the programme in the UN", which will offer some consolation to worried UN officials.

He added the continuing investigation was "a painful episode, I think, for everybody in the life of the UN".

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
TV
Voices
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Sport
Steve Bruce and Gus Poyet clash
football
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
News
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
TV
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
Life and Style
life
Sport
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
News
Amazon misled consumers about subscription fees, the ASA has ruled
news
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Lettings and Sales Negotiator - OTE £46,000

£16000 - £46000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Home Care Worker - Reading and Surrounding Areas

£9 - £13 per hour: Recruitment Genius: This is a great opportunity to join a s...

Recruitment Genius: Key Sales Account Manager - OTE £35,000

£25000 - £35000 per annum: Recruitment Genius: Have you got a proven track rec...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn