- The Washington Times - Wednesday, June 1, 2005

NEW YORK — U.N. Secretary-General Kofi Annan has fired a high-ranking staff member for “serious misconduct,” the first dismissal related to the sprawling oil-for-food investigation, the United Nations announced yesterday.

Joseph Stephanides, the former director of the Security Council Affairs Division, was suspended with pay in February after the U.N.-authorized investigation found that he had tainted the bidding process on an inspection contract.

“Mr. Stephanides was advised accordingly yesterday and was separated from service with immediate effect,” U.N. spokesman Stephane Dujarric said yesterday, noting that there had been a “thorough investigation.”

Mr. Stephanides, 59 and a native of Cyprus, had been set to retire from the organization in September, after a 25-year career with the world body.

“I am devastated by this; it makes me very sad,” Mr. Stephanides said. “I consider this action to be unwarranted, arbitrary and unfair.”

He said he plans to file an appeal.

Mr. Stephanides and oil-for-food administrator Benon Sevan, also of Cyprus, were criticized in the first report of the Independent Inquiry Commission (IIC), headed by former Federal Reserve Chairman Paul Volcker, for misconduct in the running of the humanitarian program.

Mr. Sevan is accused of soliciting oil vouchers from Saddam Hussein’s oil ministry, which the panel said “created a grave and continuing conflict of interest.” But he has retired from the organization and is largely beyond the disciplinary reach of the United Nations, although congressional investigators and the district attorney’s office remain interested in his case.

Firing remains the most serious action in the United Nations’ basket of punishments for misbehaving staff members, under U.N. staff regulations. U.N. pensions cannot be touched.

However, the secretary-general has promised to lift the diplomatic immunity of any staff member if a national court seeks to press charges.

Mr. Stephanides, who also served as chief of the Sanctions Branch, is accused by the IIC of steering an early contract to British firm Lloyds Register Inspection, which had come in with the second-lowest bid for the inspection job.

The U.N. official readily concedes that he told the British Mission that Lloyds had demanded $900,000 more than a French competitor to do the job, and noted that in August 1996 the council was not eager to award a third major contract to a French company.

Lloyds was advised to cut its price, and won the contract.

“The organization saved money and the best company got the contract,” Mr. Stephanides said.

He has not been accused of profiting by the effort.

The Security Council created the oil-for-food program in 1996, after years of negotiating the terms with the former Iraqi regime. Under the program, Iraq was permitted to export oil and import food and other humanitarian goods with the proceeds. Tens of thousands of contracts, about $64 billion in oil sales and $46 billion worth of imports were vetted by council members, and implemented by an office inside the U.N. Secretariat.

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