Thursday, November 11, 2004

U.N. legal advisers deliberated yesterday about whether to release four European companies from confidentiality agreements that prohibit them from cooperating with a congressional investigation in the oil-for-food program scandal.

But they neither announced their decision nor responded to a letter from two U.S. senators that accuses the United Nations of failing to provide documents and witnesses to the Senate panel investigating the $64 billion program.

Sens. Norm Coleman, Minnesota Republican, and Carl Levin, Michigan Democrat, stated in a letter sent Tuesday to U.N. Secretary-General Kofi Annan that the United Nations is blocking the permanent subcommittee on investigations from interviewing U.N. officials and reviewing documents related to possible bribery, conflict of interest and fraud in the humanitarian program.

The senators said Mr. Annan has refused to release to the subcommittee 55 internal audit reports on the Iraqi program, and that U.N. conduct raises questions about its management of the program and ability to enforce similar sanctions in the future.

Secretariat officials spent most of yesterday behind closed doors with staff members of the inquiry led by Paul Volcker, the former chairman of the U.S. Federal Reserve, to decide whether to hold the companies to the secrecy clause in their U.N. contracts.

The organization has said repeatedly that it would cooperate fully with Mr. Volcker’s inquiry, and urged competing national investigations launched by the new government in Iraq, the U.S. Treasury and several congressional subcommittees to wait until the Volcker panel reaches its own conclusions sometime in 2005.

The four companies — the French bank BNP Paribas, the Swiss customs agent Cotecna Inspection, British insurer Lloyd’s Register, and Dutch oil- services firm Saybolt International — were involved in the administration of the program, but did not supply goods and services to Saddam Hussein’s regime.

U.S. investigators say that Saddam and regime loyalists were able to skim as much as $10 billion from the seven-year program, mostly from surcharges and bribes and inflated “service contracts.”

Many inside the Secretariat want to see the secrecy waived, allowing the companies to cooperate with the U.S. investigation if they agree. They say informally the United Nations should not be taking the heat for impeding outside investigations.

One May 2003 internal U.N. audit report that was made public revealed that millions of dollars from the program could not be accounted for.

The internal audit also disclosed that Swiss-based Cotecna was awarded a $4.8 million contract several months after Mr. Annan’s son, Kojo Annan, had a consulting assignment with the company.

The Iraqi Survey Group, which searched for Saddam’s hidden arms programs, stated in a comprehensive report made public last month that Saddam secretly skimmed $10.9 billion from the U.N. oil-for-food program. Some of the money was used to buy military goods, according to the 1,000-page report.

The senators have asked to question Benon Sevan, head of the U.N.’s Office of the Iraq Program, which directed the oil-for-food program.

The Iraqi Survey Group report stated that Mr. Sevan was granted special vouchers used by Saddam to reward supporters with lucrative oil deals.

In addition to the Senate, two House committees also are investigating the oil-for-food program. Congressional aides have said the United Nations also has failed to cooperate with those panels.

• Betsy Pisik reported from U.N. headquarters in New York

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