- The Washington Times - Tuesday, August 9, 2005

The third report by the U.N.-commissioned Volcker committee has put a face on the fraud that compromised the $67 billion U.N. oil-for-food program, which was created to provide food and medicine to the Iraqi people while the country was under U.N. sanction. The head of the program itself, Benon Sevan, and a procurement officer are implicated by the report. Their apparent culpability is significantly damaging to the United Nations itself, indicating how fraud raged undetected for years. As troubling as the findings are for the United Nations, they do not finalize the Volcker investigation or other ongoing probes into the program.

The panel — headed by Paul Volcker, former head of the Federal Reserve Bank — found with a “reasonable sufficiency” of evidence that Mr. Sevan “corruptly benefited” from kickbacks while he headed the oil-for-food program, which was begun in 1996 to relieve some of the harshest effects of the sanctions. Mr. Sevan resigned from his post on Sunday but continues to proclaim his innocence.

According to the report, American Middle Eastern Petroleum, where Mr. Sevan had friends, allegedly bribed Mr. Sevan to help it secure oil contracts from Saddam Hussein, who was free to choose the sellers of oil and buyers of supplies under the program. Mr. Sevan was apparently paid a small percentage of oil sales made by AMEP. The commission uncovered about $160,000 in unusual bank deposits held by Mr. Sevan, which he claims came from his aunt.

The report also says U.N. procurement officer Alexander Yakovlev took hundreds of thousands of dollars from U.N. contractors and asked Societe Generale de Surveillance, an inspection contractor, for a bribe in exchange for secret bidding information. Yakovlev, stripped of his diplomatic immunity, pleaded guilty Monday to fraud and money laundering charges. U.N. Secretary-General Kofi Annan said he would also revoke Mr. Sevan’s immunity if requested to by federal prosecutors.

The committee will make its most anticipated report in September, in which it will examine whether Mr. Annan played any role in helping Swiss firm Cotecna, which employed Mr. Annan’s son, Kojo, win a key oil-for-food contract in 1998. The committee’s second report released in March said it did not find any reasonably sufficient proof of wrongdoing by Mr. Annan. More recently, though, an alleged e-mail by Cotecna Vice President Michael Wilson recounting a get-together with Mr. Annan and discussion of the firm’s prospects for the contract has appeared in the press. Mr. Wilson has claimed the e-mail is a fake.

The Volcker commission revealed what many have long suspected about the program. Congressional committees are also investigating corruption, as is the U.S. Attorney’s Office for the Southern District of New York. It’s unlikely the United Nations’ troubles are over.

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