Oil-for-food probe has not cleared Annan, Volcker says

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Former Federal Reserve Board Chairman Paul Volcker says his investigation into the scandal-plagued oil-for-food program has not cleared U.N. Secretary-General Kofi Annan of wrongdoing, despite Mr. Annan's claims to the contrary.

In an interview aired yesterday with Fox News, Mr. Volcker took direct issue with Mr. Annan's insistence that he had been exonerated by investigators probing both his role in overseeing the Iraq aid program and conflicts of interest involving a key contract awarded to a Swiss firm that employed Mr. Annan's son.

"I thought we criticized [Mr. Annan] rather severely," Mr. Volcker said of his panel's interim report, released March 29. "I would not call that an exoneration."

Asked point-blank whether Mr. Annan had been cleared of wrongdoing in the $10 billion scandal, Mr. Volcker replied, "No."

Mr. Annan has faced calls for his resignation from U.S. critics in the wake of the oil-for-food scandal.

Under the seven-year program that ended in 2003, Iraq was allowed to buy food and other humanitarian supplies through tightly controlled sales of its oil.

But the congressional Government Accountability Office found that the regime of Iraqi dictator Saddam Hussein stole about $10 billion during the period, either through illegal oil sales outside the program or through corrupt deals and kickbacks within it.

Senior U.N. officials have been implicated in the scandal, and Mr. Annan himself faced harsh scrutiny when it was learned his son, Kojo Annan, had been employed by Cotecna, the Swiss firm that won a critical U.N. monitoring contract for the oil-for-food program in 1998.

Mr. Annan, who has fiercely resisted calls that he step down, immediately claimed vindication after the Volcker panel reported on March 29 that it had found "no evidence" that the secretary-general had used his influence to help Cotecna win the contract.

In a press conference that same day, Mr. Annan told reporters, "As I had always hoped and firmly believed, the inquiry has cleared me of any wrongdoing."

He has said he was "disappointed" to discover that his son had received hundreds of thousands of dollars in payments from Cotecna for several years after leading his father to think he had cut all ties with the U.N. contractor.

Asked whether he was considering resigning from his post before his term ends next year, Mr. Annan answered emphatically, "Hell no."

The Volcker investigators faulted Mr. Annan for what they said was an "inadequate," one-day investigation into the Cotecna contract after his son's job history with the firm came to light in 1999.

Had Mr. Annan demanded a "thorough and independent investigation," the Volcker panel concluded, "it is unlikely that Cotecna would have been awarded renewals of its contracts with the United Nations."

Mr. Volcker's panel, which was commissioned by Mr. Annan last year, has come under fire with the recent resignation of two of the panel's lead investigators, Robert Parton and Miranda Duncan, who left reportedly because they thought the reports released to date had gone too easy on Mr. Annan.

A spokesman for the Volcker panel said the two had left because their contracts had expired, but Mr. Parton has said in an e-mail released to the Associated Press that he left his job over "a matter of principle."

Efforts to reach the two investigators yesterday were unsuccessful.

Mr. Volcker, in the Fox News interview, said his panel "was not meant to be soft or hard" on Mr. Annan or the United Nations.

"We are out to get the facts, and I've said from the very beginning our responsibility is to follow the facts wherever they lead."