Annan 'shocked' about report

2005-02-04 08:01

United Nations - The United Nations official who headed the former oil-for-food programme in Iraq obtained allocations of Iraqi oil and a series of unusual cash payments, according to a damning new investigation on Thursday.

The official, Benon Sevan, has denied any wrongdoing and his lawyers quickly denounced the enquiry as a politically motivated attempt to find a scapegoat for the scandal-tainted programme that has badly damaged the UN's image.

But UN Secretary General Kofi Annan immediately ordered disciplinary action and his chief-of-staff said the report appeared to have proven the allegations against Sevan, a Cypriot national.

"The secretary general is shocked by what the report has to say about Mr Sevan," said Mark Malloch Brown, Annan's chief-of-staff.

"He very much doubts there can be any extenuating circumstances to explain the behaviour which appears proven in the report," Malloch Brown told reporters.

Criminal charges could follow

The interim report from an independent panel, headed by former US Federal Reserve banking chief Paul Volcker, stopped short of saying Sevan took bribes or had engaged in criminal activity.

It said, however, that Sevan had repeatedly asked for allocations of oil from the regime of Saddam Hussein on behalf of a small trading company registered in Panama that then re-sold the oil.

The regime was hoping to buy influence through Sevan, Volcker said.

"In making such solicitations, Mr Sevan created a grave and continuing conflict of interest. His conduct was ethically improper and seriously undermined the integrity of the United Nations," the panel said.

It said Sevan had denied asking for the allocations for African Middle East Petroleum (AMEP), run by a relative of Boutros Boutros-Ghali, Annan's predecessor as secretary general of the United Nations.

But evidence from Iraqi officials contradicted his claims, the report said - a position that Sevan's lawyers ridiculed in a statement to the press.

"They have not found - because they cannot - that Mr Sevan ever accepted anything from anyone," the statement said. "Mr Sevan never took a penny."

The $64bn oil-for-food programme was intended to help Iraqis cope with international sanctions imposed over Saddam's invasion of Kuwait.

Under UN supervision, Baghdad was allowed to sell oil and use the revenue to buy humanitarian supplies like food and medicine. The scheme became the largest aid programme in UN history.

Sevan has already retired from active UN duty. Separate US investigations into the programme could eventually lay criminal charges.

Volcker stressed his report was just the first of an ongoing investigation.

It also detailed $160 000 in cash payments to Sevan which he claimed had come from an elderly aunt in Cyprus.

The Financial Times on Tuesday reported she fell down an elevator shaft and died before being questioned.

- AFP