Ex-oil-for-food chief quits U.N. ahead of report

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[color="red"]Ex-oil-for-food chief quits U.N. ahead of report[/color]
[b]Accused of getting kickbacks, Sevan blasts Annan in resignation letter[/b]


[url="http://www.msnbc.msn.com/id/8863425/"]http://www.msnbc.msn.com/id/8863425/[/url]

[quote]Updated: 6:49 a.m. ET Aug. 8, 2005
UNITED NATIONS - The former head of the scandal-tainted oil-for-food program resigned from the United Nations on Sunday, hours before he is expected to be accused of getting kickbacks from the $67 billion operation.

A U.N.-established Independent Inquiry Committee, led by former U.S. Federal Reserve Chairman Paul Volcker, plans to release on Monday its third interim report on allegations of corruption in the humanitarian program for Iraq, which began in 1996 and ended in 2003.

Benon Sevan, the former executive director of the program, is to be accused of getting cash for steering Iraqi oil contracts to an Egyptian trader and of refusing to cooperate with the Volcker panel, his attorney Eric Lewis said. Sevan has denied the allegations.

On Sunday, Lewis distributed a letter from Sevan, 67, to U.N. Secretary-General Kofi Annan resigning from his current job, which he was given after he retired.

The $1-a-year post carries immunity and was meant to ensure he would cooperate with the probe. But Sevan may have preempted a dismissal from this arrangement as the United Nations in the past has taken action against staff fingered in the Volcker report.

Sevan blamed the secretary-general and his staff for not defending the program and making him a scapegoat.

“I fully understand the pressure that you are under, and that there are those who are trying to destroy your reputation as well as my own, but sacrificing me for political expediency will never appease our critics or help you or the Organization,” Sevan wrote.

He said that the program, which supplied food and other goods to 27 million Iraqis, was often caught between conflicting mandates given by the U.N. Security Council, which supervised it, and national interests of those trying to do business with Iraq.

The Volcker panel was commissioned by Annan to examine charges of corruption in the program, which was designed to ease the impact on ordinary Iraqis of U.N. sanctions imposed in August 1990 after Baghdad’s troops invaded Kuwait.

Payments questioned
The panel, in a Feb. 3 interim report, expressed suspicion about four payments, amounting to $160,000, that Sevan had declared to the United Nations as funds from his now-deceased aunt.

But Sevan noted on Sunday it was not credible he that would have compromised his career for $160,000 after handling billions of dollars in the program.

“The charges are false and you, who have known me all these years, should know that they are,” Sevan wrote to Annan, recalling the 40 years he had worked at the world body.

Lewis on Thursday began releasing Sevan’s side of the story after receiving a letter from the Volcker panel outlining “adverse findings” that the report would contain.

Sevan, a Cypriot, is alleged to have taken bribes “in concert with” the brother-in-law of former Secretary-General Boutros Boutros-Ghali, Lewis said.

“The IIC claims that Mr. Sevan received money from African Middle East Petroleum in concert with Fred Nadler, a friend, and a relative by marriage of Mr. (Fakhry) Abdelnour, the principal of AMEP,” Lewis said.

Nadler is the brother of Leia Boutros-Ghali, wife of the former secretary-general. Abdelnour, the owner of AMEP, is a cousin of Boutros-Ghali, U.N. chief from 1992 to 1996. Boutros-Ghali himself has been questioned by the panel but is not linked to the bribe allegations.

AMEP earned some $1.5 million from oil allocations that the panel says Sevan steered to the Egyptian trading firm.[/quote]

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[url="http://www.cnn.com/2005/WORLD/meast/08/08/oil.food/index.html"]cnn.com[/url]

[quote][b]Apparent arrest in oil-for-food probe[/b]

Monday, August 8, 2005; Posted: 3:17 p.m. EDT (19:17 GMT)


Paul Volcker announces the latest findings of the probe into corruption in the oil-for-food program. 


UNITED NATIONS (CNN) -- A former U.N. procurement officer apparently has been arrested in connection with allegations he solicited bribes from companies seeking oil-for-food contracts, an aide to Secretary-General Kofi Annan said Monday.

U.N. officials lifted Alexander Yakovlev's diplomatic immunity at the request of a U.S. prosecutor in New York, and "we believe Mr. Yakovlev is already in custody," Mark Malloch Brown, Annan's chief of staff, told reporters.

Yakovlev, a senior procurement officer for the United Nations, resigned in June amid allegations that he helped get his son a job with a firm doing business with the world body.

There was no immediate comment from U.S. authorities on the report.

Earlier, Paul Volcker, the head of the U.N.'s Independent Inquiry Committee, announced that the probe found that Yakovlev solicited a bribe from a French company that bid unsuccessfully on an oil-for-food contract.

The report found no evidence the company paid the desired bribe -- but it found that more than $1.3 million had been wired to a bank account Yakovlev controlled on the Caribbean island of Antigua since 2000.

"More than $950,000 of these payments came from various companies or persons affiliated with such companies that collectively won more than $79 million in United Nations contracts and purchase orders," the report found.

There was no apparent connection between those payments and the oil-for-food program, however.

A U.N. investigative panel on Monday said that the former head of the oil-for-food program allegedly received more than $147,000 in kickbacks from oil sold under the program.

The panel's report concluded that Benon Sevan "corruptly derived substantial financial benefits" from a company that purchased Iraqi oil under the program, which supplied Iraq with food and medicine during years of international sanctions.

The money was used to shore up Sevan's "precarious" personal finances from 1998 to 2002, the report concluded.

Sevan resigned Sunday from the United Nations.

In his resignation letter, Sevan called his management of the program "transparent" and denied any wrongdoing. (Full story)

But Volcker said investigators had "reasonably sufficient evidence" for their findings.

"In these cases, we clearly believe that standard has been met, and our conclusions are obviously significant and troubling," said Volcker, the former chief of the U.S. Federal Reserve Bank.

The committee concluded the money was funneled to Sevan through an oil-for-food contractor, African Middle East Petroleum.

One of the company's partners, Fred Nadler, made a series of cash withdrawals during the period in question from a Swiss bank account, and there was "a high degree of correlation" between those withdrawals and deposits of $100 bills made days later in accounts held by Sevan and his wife in New York, the report concluded.

The withdrawals were made in amounts of less than $10,000 -- meaning the transactions would not have to be reported to authorities.

The committee found Sevan's explanation for the deposits -- that he received the money from his late aunt -- "not credible."

"There was no relationship between the timing of those deposits and when his aunt was in New York," Volcker said.

Sevan was executive director of the oil-for-food program from 1997 until 2003, when the program disbanded after the U.S.-led invasion of Iraq. He was suspended in February after an interim report by Volcker's committee concluded he had benefited improperly from his position.

Monday's report ties up "two important loose ends in our inquiry," Volcker said, "But they are by no means the end of this investigation."

Sevan's lawyer, Eric Lewis, told CNN his client is in Cyprus and has "lost confidence" that he would be treated fairly by the Volcker probe or by Annan.

In his three-page resignation letter to Annan, Sevan said he was being hung out to dry by the world body, "but sacrificing me for political expediency will never appease our critics or help you or the organization."

"As I predicted, a high-profile legislative body invested with absolute power would feel compelled to target someone, and that someone has turned out to be me," he wrote. "These charges are false, and you, who have known me all these years, should know that they are false."

Volcker said Sevan has turned down previous requests to meet with investigators, and he rejected Sevan's call to be allowed to answer questions from the committee in writing.

CNN Producers Phil Hirschkorn and Liz Neisloss contributed to this report.[/quote]