Ex-U.N. official indicted in oil-food scam

A federal grand jury in New York yesterday indicted Benon Sevan, former administrator of the United Nations’ oil-for-food program, on charges of bribery and conspiracy to commit wire fraud, the first criminal charges filed against a U.N. official in connection with the humanitarian program.

The indictment, unsealed in U.S. District Court in New York, also named a brother-in-law of former U.N. Secretary-General Boutros Boutros-Ghali, New York businessman Efraim Nadler, a dual U.S.-Egyptian citizen.

Because both men are assumed to be abroad — Mr. Sevan in his native Cyprus and Mr. Nadler in Europe — the U.S. government has lodged arrest warrants with Interpol to extradite them to the United States for trial.

“The oil-for-food program was created to provide critical humanitarian aid to the Iraqi people,” said U.S. Attorney Michael J. Garcia in New York. “But the former government of Iraq thoroughly corrupted the program by employing undisclosed Iraqi agents in the United States to try to influence the terms under which the program was adopted and by demanding secret kickbacks from participants in the program during its operation.”

Mr. Sevan, 69, is accused of illegally receiving $160,000 “generated from the sale of Iraqi oil under the program — from Nadler on behalf of the government of Iraq,” according to the indictment.

Eric Lewis, an attorney for Mr. Sevan, dismissed the charges, saying the U.S. government is using his client “as a scapegoat and a distraction from the United States’ own massive failures and mismanagement in Iraq.” He said the money Mr. Sevan is accused of accepting as a bribe was reported to the United Nations years ago as family gifts.

Mr. Nadler, 79, was named on charges of helping an unnamed co-conspirator obtain the right to buy Iraqi oil under the oil-for-food program in exchange for commissions from the oil sales, and then diverting $160,000 of the commissions to Mr. Sevan.

The connections were first exposed in 2005 by the Independent Inquiry Committee — led by former Federal Reserve Chairman Paul A. Volcker — investigating the program.

U.N. Secretary-General Ban Ki-moon “would like to convey that the United Nations has been cooperating with the authorities about follow-up to the Volcker reports and the U.N. will continue to do so,” said spokesman Farhan Haq. “He reiterates his commitment to have the United Nations uphold the highest ethical standards.”

Former Secretary-General Kofi Annan waived Mr. Sevan’s immunity upon the request of prosecutors more than a year ago. If convicted, Mr. Sevan faces 50 years in prison and Mr. Nadler faces 112 years, prosecutors said.

Mr. Haq said U.N. officials could be allowed to testify in a case, depending on the circumstances.

The oil-for-food program was a seven-year $64 billion U.N. effort to sell Iraq’s oil and buy food and essential goods to alleviate civilian suffering caused by international economic sanctions imposed on Saddam Hussein’s government after his 1990 invasion of Kuwait.

The sanctions remained in place, with modifications, until the government was overthrown by U.S.-led coalition forces in 2003.

The program was administered by Mr. Sevan, but its rules were set by Security Council members and its contracts were awarded by Saddam’s regime.

Over time, companies were required to give kickbacks to Iraq to win contracts to sell merchandise or buy oil, creating a slush fund for the regime at a time of acute hardship for civilians.

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