The United Nations suffered grave damage to its international reputation on Thursday after it emerged that the official who headed the oil-for-food programme for Iraq sought and obtained bribes from Saddam Hussein’s regime.
In a highly critical report, Benon Sevan was rebuked for actions which were ”ethically improper and seriously undermined the integrity of the UN”.
”This is a painful episode for everyone in the UN,” said the head of the investigation, former US Federal Reserve chief Paul Volcker.
He went on to accuse Sevan of offering to use his influence at the UN in return for the granting of vouchers to purchase Iraqi oil at favourable prices on behalf of a small Panamanian-registered firm. ” Sevan created a grave and continuing conflict of interest,” he said.
Sevan, a Cypriot who has spent 40 years as a career diplomat at the UN, has denied wrongdoing.
However, the UN Secretary General, Kofi Annan, issued a statement later on Thursday saying the UN would take disciplinary action against Sevan and Joseph Stephanides, the former chief of the UN sanctions branch, who was also criticised in the report.
”Should any findings of the inquiry give rise to criminal charges, the UN will cooperate with national law enforcement authorities pursuing those charges, and in the interests of justice I will waive the diplomatic immunity of the staff member concerned,” he said.
The oil-for-food scam allegedly saw Saddam exploit loopholes in the system, offering lucrative oil allocations or vouchers that could be sold on for profit in an attempt to bribe leaders round the world.
According to the investigative report, between 1998 and 2001 Sevan sought vouchers for several million barrels of Iraqi oil on behalf of a small company called African Middle East Petroleum. In return, he was expected to make a case for Iraq receiving cash to upgrade its crumbling oil facilities, which he and several security council members did. The Panamanian-registered firm was believed to have made a $1,5-million profit on the vouchers.
”The most distinct finding is the accumulation of evidence that [Sevan] did in fact solicit oil allocations for a small trading company,” Volcker said. ”The Iraqis … certainly thought they were buying influence.”
In addition, Volcker cited financial records which show that Sevan received $160 000 in cash payments from 1999 to 2003.
Although the allegations against Sevan were the focal point of Thursday’s report, Volcker said the inquiry did not find systematic misuse of funds. However, he also found that three UN contractors for the programme were selected without going through a competitive bidding process.
The White House and Republican congressmen are exploiting the oil-for-food row to undermine Annan, who opposed the US-led war in Iraq. Earlier on Thursday, a UN official described Sevan as ”a good man being made a scapegoat”.
Volcker is planning to produce another interim report before the summer into Cotecna, a company that benefited from the programme and employed Annan’s son, Kojo. He said work on that was well advanced. The final report is due in June.
Annan stressed on Thursday that the UN was already taking action to improve the organisation’s procedures.
At the height of the oil-for-food programme, set up in 1996 to alleviate the impact of sanctions on ordinary Iraqis, the roads to Jordan and other Iraq neighbours were full of tankers carrying illicit oil. Although Annan’s secretariat ran the programme, ultimate responsibility rested with the security council, which included the US. – Guardian Unlimited Â