- The Washington Times - Monday, February 7, 2005

NEW YORK — There is little the United Nations can do to punish Benon Sevan, the focus of the Volcker report on mismanagement in the oil-for-food program for Iraq: He was supposed to have retired and is staying on at $1 a year to help with the investigation.

U.N. spokesman Fred Eckhard said yesterday that Mr. Sevan and another veteran staffer, Joseph Stephanides, would learn this week of the specific charges against them. Both were suspended with pay on Friday.

But short of criminal charges filed outside the U.N. system, Mr. Sevan appears safe from punishment. Authorities said even his pension was beyond the reach of the U.N. system.

“The punishments range … from summarily dismissing them to putting a note in their files,” Mr. Eckhard told reporters. “Or, [U.N. Secretary-General Kofi Annan] could find them not guilty.”

The pensions are a “separate” matter, the spokesman added, and “cannot be touched.”

The report, released Thursday by the Independent Inquiry Committee, accused Mr. Sevan of steering oil-for-food contracts to companies run by a friend. The committee is led by former Federal Reserve Board Chairman Paul Volcker.

Mr. Sevan has denied wrongdoing and says he has been made a scapegoat in a politically motivated investigation.

The Volcker panel also said Mr. Stephanides, a Security Council liaison, attempted to steer an inspection contract to the British firm Lloyd’s Register.

Mr. Stephanides has not commented on the charges. He is nearing retirement and is expected to leave the organization within the year. He has been placed on leave, at full salary, while the matter is under investigation.

The initial charges against Mr. Sevan and Mr. Stephanides, both nationals of Cyprus, are separate from any criminal charges that may be filed by a U.S. district attorney or prosecutors in other countries.

Mr. Annan has pledged to lift the diplomatic immunity of any U.N. employee charged with a crime in connection with the oil-for-food scandal.

The Manhattan District Attorney’s Office confirmed that it has “assisted” the Volcker investigation, but declined to say whether it is pursuing indictments against U.N. officials or others in connection with the program.

Federal prosecutors also are investigating the program, but have not indicted any U.N. staffers or contractors.

The men will have two weeks to file a defense against the charges.

While under suspension, the two will barred from U.N. property, except to retrieve documents relevant to their defense, Mr. Eckhard said.

The Security Council created the oil-for-food program in 1996 to ease the effect of economic sanctions imposed on Iraq after the 1991 Persian Gulf War.

Under the program, Iraq was permitted to export oil and import food and other humanitarian goods with the proceeds.

All contracts were vetted by council members and implemented by an office inside the U.N. Secretariat.

The Iraqi government demanded the right to price the oil and to determine who bought it.

Under these rules, it was easy for companies to buy low-priced oil and make enough profit to kick back cash to the regime.

Similar schemes allowed Saddam Hussein and friends to benefit from the purchase of food staples, medicine and other products.


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