Annan defiant over his son's links to oil-for-food scheme

Kofi Annan's position as secretary general of the United Nations was further undermined after investigators said he failed to take sufficient action in 1999 when he found out that a company that had employed his son for several years had been awarded a big contract to oversee the oil-for-food programme in Iraq.

Kofi Annan's position as secretary general of the United Nations was further undermined after investigators said he failed to take sufficient action in 1999 when he found out that a company that had employed his son for several years had been awarded a big contract to oversee the oil-for-food programme in Iraq.

In its latest interim report yesterday, the committee investigating claims of corruption in the programme said it had found insufficient evidence to show Kojo Annan's connection to the firm in question, Cotecna Inspections, had skewed the bidding process that led to it being awarded the contract.

"There is no evidence that the selection of Cotecna in 1998 was subject to any affirmative or improper influence of the secretary general," Paul Volcker, former US Federal Reserve chairman, said. Mr Annan released a statement last night saying the inquiry had "cleared me of any wrongdoing".

But the cloud that the affair has cast over the secretary general will not be easily dispersed. Mr Annan was fully aware his son was working for Cotecna. What the investigators could not prove was that he knew the firm was competing for the oil-for-food programme in late 1998. He told investigators he only learned that Cotecna had sought and indeed won the contract from press reports in January 1999.

Mr Volcker was explicit, however, in his criticism of Mr Annan for failing to take credible action to investigate any possible conflict of interest once he had heard about Cotecna. He noted that the secretary general asked for only the briefest of investigations at the time from one of his senior aides. That lapse, Mr Volcker conceded, had "unfortunately considerable consequences".

Mr Volcker asserted that had a proper inquiry been carried out once the extent of Kojo Annan's ties with the firm were discovered, the contract with Cotecna would probably not have been renewed by the UN, as it was every six months until early 1993.

The White House issued a quick statement after the release of the report saying it still supported Mr Annan as UN secretary general. The French foreign ministry similarly gave him its backing.

But an analysis of the 94-page report suggests that the circumstances in which Cotecna winning the bid remain murky. It describes for instance how the secretary general twice forgot in interviews with investigators that he had met with principals of the firm. He only recalled the second of those meetings, shortly before the contract was awarded, when presented with evidence that it had taken place.

The report also reveals Kojo Annan travelled to New York to meet business contacts on the fringes of the annual General Assembly in September 1998 as his firm was preparing to bid for the Iraq contract. Indeed on the day bidding was opened by the UN, the son was staying at his father's residence.

There was stinging criticism also of Kojo Annan, 31, who lives in Nigeria. The report suggests that he had "actively participated in efforts by Cotecna to conceal the true nature of its continuing relationship with him". The report also baldly states that the son set out to deliberately deceive the father.

While Mr Volcker asserted he had no evidence that Cotecna received special treatment because of its ties with the secretary general's son, the impression left by the interim report can only add to the damage already inflicted on him and on the institution by the oil-for-food scandal. At the very least, it will boost critics of Mr Annan who accuse him of incompetence verging on negligence at the top of the UN.

Those critics include conservative Republicans on Capitol Hill in Washington.

What connects Kojo to Cotecna?

What is Cotecna?

Cotecna Inspections is based in Switzerland and offers goods-inspection services. It was awarded a $65m (£35m) contract from the UN in late 1998 to oversee the import of humanitarian goods into Iraq under the UN's oil-for-food programme.

What is Kojo Annan's connection to Cotecna?

The secretary general's son worked for it in west Africa from 1995 to 1997, and then as a consultant until 2000. After leaving, he remained on the payroll until 2004 on a contract to prevent him from working for a competitor. He was never directly connected to the firm's contract for the oil-for-food programme.

Has Kojo been forthcoming about his Cotecna ties?

No. Even his father has said he was misinformed about his son's activities with the firm, and the Volcker report says Kojo deceived him. Until very recently, he resisted disclosing the full extent of his Cotecna earnings.

Did the UN award the Iraq contract to Cotecna because of Kojo's ties to it?

No. Yesterday's report says Cotecna won the contract in the normal way. But the contract might not have been extended if Kofi Annan had investigated his son's involvement once he found out about it in January 1999.

Where does Kojo Annan fit into the wider oil-for-food investigation?

He is only a tiny part of it. The heart of the inquiry is how the UN allowed Saddam Hussein to receive billions in kickbacks from companies doing business in Iraq under the programme and how he took $8bn in oil illegally smuggled out. But the Kojo affair comes closest to touching Kofi Annan directly.

Is Kofi Annan fatally wounded?

No, because he has support of most countries as secretary general, even though he has problems with the US. But the report's conclusions are another factor in the gradual erosion of his credibility.