posted November 19, 2004 04:00 PM            

The UN staff union, in what officials said was the first vote of its kind in the almost 60-year history of the United Nations, was set to approve a resolution withdrawing support for Annan and senior UN management.

Annan has been in the line of fire over a series of scandals including controversy about a UN aid program that investigators say allowed deposed Iraqi dictator Saddam Hussein to embezzle billions of dollars.

Staffers said the trigger for the no-confidence measure was an announcement this week that Annan had pardoned the UN's top oversight official, who was facing allegations of favouritism and sexual harassment.

The union had requested a formal probe into the official, Dileep Nair, after employees accused him of harassing staff and violating UN rules on the hiring and promotion of workers.

Top UN spokesman Fred Eckhard announced on Tuesday that Nair had been exonerated by Annan "after a thorough review" by the UN's senior official in charge of management, Catherine Bertini.

Annan underlined that he "had every confidence" in Nair, Eckhard said, but UN employees ridiculed the decision and claimed that investigators had not questioned the staff union, which first raised the complaints in April.

"This was a whitewash, pure and simple," Guy Candusso, a senior member of the staff union, told AFP.

Candusso noted that Eckhard's declaration to the press had said that "no further action was necessary in the matter."

But in a letter sent to the union, a copy of which was obtained by AFP, Annan's chief of staff Iqbal Riza said Nair had been "advised that he should exercise caution" in future to "minimize the risk of negative perception."

In a resolution set to be adopted on Friday, the union said Riza's statement "substantiates the contention of the staff that there was impropriety" and that there exists "a lack of integrity, particularly at the higher levels of the organisation."

The draft resolution, also obtained by AFP, calls on the union president to "convey this vote of no confidence to the secretary general."

Staffers who asked not to be named, afraid that speaking out could damage their future in the United Nations, said the Nair decision was an example of corruption by Annan and his senior staff.

They noted that Riza, UN undersecretary general for information Shashi Tharoor and other top officials had served directly under Annan at least since 1994, when he was head of UN peacekeeping operations.

At the time, the United Nations was widely criticized for failing to stop the Rwanda genocide that left 800,000 people dead, even though UN peacekeepers were on the ground -- a catastrophe for which Annan has publicly apologized.

Annan could not be reached for immediate comment. He is currently in Africa on a mission aimed at ending the long-running civil war in Sudan.

But he faces unprecedented calls to resign over the burgeoning scandal about "oil-for-food," a UN aid scheme that US investigators say allowed Saddam to siphon off billions of dollars.

The program has tainted UN officials like Benon Sevan, who oversaw the operation and is now accused of pocketing Saddam's money in exchange for turning a blind eye to the Iraqi dictator's abuses.

Annan stands accused of obstructing US investigators, especially since his hand-picked official Paul Volcker this week rejected calls from the US Senate to turn over documents from the program and waive UN staff immunity.

Eckhard, his spokesman, on Thursday said that Annan is expected to serve out his term, which ends in 2006.

Veteran UN staff said this was the first time that employees had risen up to make a vote of no confidence in a sitting secretary general.

"Kofi Annan is surrounded by corruption, a gang of criminals responsible for some of the worst things that happened to mankind in the 20th century," said one angry staffer, referring to the Rwanda massacres.

posted November 20, 2004 12:37 AM            

Note, it was the bungling, incompetent zero Annan who was in charge of UN peace keeping forces when the Rwandan slaughter was taking place and it was the little zeros' peace keepers who were on the ground in Rwanda and stood by doing nothing to stop it.

Annan was Clinton's choice for Sec. General of the UN....in spite of the bungling.

This is the utterly corrupt body Kerry talks about when he says US security measures must pass the global test.

This is also the corrupt body Clinton had in mind when he was talking about nation states....like the United States becoming obsolete and surrendering their sovereignty to a world authority.

posted November 20, 2004 12:53 AM            

"This is like an onion: We just keep uncovering more layers and more layers," said Sen. Norm Coleman, R-Minn., whose Senate Committee on Government Affairs received the new information at hearing Monday.

The new figures on Iraq's alleged surcharges, kickbacks and oil-smuggling are based on troves of new documents obtained by the committee's investigative panel, Coleman told reporters before the hearing. The documents illustrate how Iraqi officials, foreign companies and sometimes politicians allegedly contrived to allow the Iraqi government vast illicit gains.
The findings also reflect a growing understanding by investigators of the intricate schemes Saddam used to buy support abroad for a move to lift U.N. sanctions.

Coleman said the probe was just beginning and that officials aim to discover "how this massive fraud was able to thrive for so long." He said he was angry that the United Nations has not provided documents and access to officials that investigators need to move ahead.

"Saddam Hussein attempted to manipulate the typical oil allocation process in order to gain influence throughout the world," Mark L. Greenblatt, a counsel for the Senate panel's permanent subcommittee on investigations, said in prepared testimony obtained by The Associated Press.

"Rather than giving allocations to traditional oil purchasers, Hussein gave oil allocations to foreign officials, journalists, and even terrorist entities, who then sold their allocations to the traditional oil companies in return for a sizable commission."

The reference to terrorist groups referred to evidence that the regime had allocated oil to such organizations as Popular Front for the Liberation of Palestine, and the Mujahadeen Khalq, a group seeking to overturn the government of Iran, Greenblatt said.

Previous estimates - one from the General Accountability Office and the other by the top U.S. arms inspector Charles Duelfer - concluded that Saddam's government brought in $10 billion illicitly from 1990 to 2003, when sanctions were in place.

But congressional investigators found that vastly more oil, totaling $13.7 billion, was smuggled out of Iraq than previously thought. Investigators also raised the GAO's estimate of $4.4 billion in oil-for-food kickbacks by $200 million, and said the regime made $2.1 billion more through a scheme where foreign companies imported flawed goods at inflated prices.

According to the documents, the Iraqi government signed deals to import rotting food and other damaged goods with the full understanding of the exporting companies, who accepted payments for top-quality products while kicking back much of the price difference to the Iraqi regime.

The panel estimated that such substandard goods accounted for 5 percent of all goods imported under the oil-for-food program, which was put in place in 1996 amid concerns that the Iraqi population was suffering from lack of food and medicines under the sanctions. The rough estimate "is drawn from anecdotal information provide by officials of the former Iraq regime, the United Nations, and U.S. government officials," the panel said.

The total estimate of illegal revenue also includes $400 million from interest earned from hiding illicit funds in secret bank accounts. Another $400 million in illicit revenue grew out of pricing irregularities and kickbacks in the Kurdish areas of northern Iraq.

The Senate panel is conducting one of several congressional probes into alleged illegal profiteering in the oil-for-food program after allegations of corruption came to light earlier this year when Saddam was driven from power during the U.S.-led invasion. Former Federal Reserve Chairman Paul Volcker heads a panel that's conducting an independent investigation.

France, Russia, China

The new documents offer examples of how Saddam's regime, sometimes the former Iraqi president himself, awarded lucrative oil allocations to garner political favors.

In one document, Russian ultra-nationalist politician Vladimir Zhirinovsky, who campaigned for the lifting of sanctions on Iraq, invites an oil company to negotiate a price for an oil allocation the Iraqi government awarded him.

Zhirinovsky and other foreign officials and political figures implicated in the scandal so far - mostly from Russia, France and China - deny any wrongdoing.

In Zhirinovsky's case, the Russian allegedly used his political party's letterhead to invite an international oil company to Moscow to negotiate a deal to buy oil allocated to him.

posted November 20, 2004 12:40 PM            

Since you didn't link a story to your comment, it leaves some questions unanswered.

This is a story appearing in the UN News for today, November 20.

Saturday November 20, 2004-- Shawal 07, 1425 A.H.
ISSN 1563-9479

UN staff to move no-trust motion against Annan

UNITED NATIONS: UN staff are expected to make an unprecedented vote of no confidence in Secretary-General Kofi Annan, union sources say, after a series of scandals tainted his term in charge of the world body.

The UN staff union, in what officials said was the first vote of its kind in the almost 60-year history of the United Nations, was set to approve a resolution withdrawing support for Annan and senior UN management. Annan has been in the line of fire over a high-profile series of scandals including controversy about a UN aid programme that investigators say allowed Saddam Hussein to embezzle billions of dollars.

Staffers said the trigger for the no-confidence measure was an announcement this week that Annan had pardoned the UN’s top oversight official, who was facing allegations of favouritism and sexual harassment.

The union had requested a formal probe into the behaviour of the official, Dileep Nair, after employees accused him of harassing members of his staff and violating UN rules on the hiring and promotion of workers.

Top UN spokesman Fred Eckhard announced on Tuesday that Nair had been exonerated by Annan "after a thorough review" by the UN’s senior official in charge of management, Catherine Bertini.

Annan underlined that he "had every confidence" in Nair, Eckhard said, but UN employees ridiculed the decision and claimed that investigators had not questioned the staff union, which first raised the complaints in April.

"This was a whitewash, pure and simple," Guy Candusso, a senior member of the staff union, told AFP. Candusso noted that Eckhard’s declaration to the press had said that "no further action was necessary in the matter."

But in a letter sent to the union, a copy of which was obtained by AFP, Annan’s chief of staff Iqbal Riza said Nair had been "advised that he should exercise caution" in future to "minimise the risk of negative perception."

In a resolution set to be adopted late on Friday, the union said Riza’s statement "substantiates the contention of the staff that there was impropriety" and that there exists "a lack of integrity, particularly at the higher levels of the organisation."

The draft resolution, also obtained exclusively by AFP, calls on the union president to "convey this vote of no confidence to the secretary general." Staffers who asked not to be named, afraid that speaking out could damage their future prospects in the United Nations, said the Nair decision was an example of corruption by Annan and his senior staff.

They noted that Riza, UN undersecretary general for information Shashi Tharoor and other top officials had served directly under Annan at least since 1994, when he was head of UN peacekeeping operations.

The story appeared on this site. http://jang.com.pk/thenews/nov2004-daily/20-11-2004/main/main6.htm

posted March 23, 2005 01:05 AM            

UNITED NATIONS (March 22) - Kojo Annan, the son of U.N. Secretary-General Kofi Annan, received at least $300,000 from a Swiss company that was awarded a contract from the U.N. oil-for-food program in Iraq, almost double the amount previously disclosed, two newspapers reported in Wednesday's editions.

The London-based Financial Times and the Italian business newspaper Il Sole 24 said the payments "were arranged in ways that obscured where the money came from or whom it went to."

The two papers, which conducted a joint investigation, also reported that the secretary-general met top executives of the company, Cotecna Inspection S.A., twice before the oil-for-food contract was awarded in December 1998 and once afterwards.

Former U.S. Federal Reserve Chairman Paul Volcker, who is conducting an independent investigation of alleged corruption in the oil-for-food program, is scheduled to release an interim report on March 29 detailing his findings about whether or not Kofi Annan and Kojo Annan committed any wrongdoing.

The secretary-general, his son, and Cotecna, all deny any wrongdoing.

A spokesman for Cotecna said the company has been cooperating fully in assisting the Volcker inquiry "to clarify any and all outstanding questions concerning payment to Kojo Annan."

Robert Massey, Cotecna's chief executive, met with Volcker and his investigators in New York on Monday to discuss the discrepancies in the reported payments to Kojo Annan and the company's ongoing audit to determine the correct amount, the spokesman said, speaking on condition of anonymity.

The spokesman confirmed the three contacts between Cotecna executives and the secretary-general and said they were reported to Volcker and other bodies investigating the $64 billion U.N. humanitarian program in Iraq.

The papers reported that Annan met in January 1997 with Massey and his father, Elie-Georges Massey, Cotecna's founder and chairman, on the sidelines of the World Economic Forum in Switzerland. The elder Massey also met Annan at U.N. headquarters in September 1998 and sought him out at a public event in Geneva in January 1999, the papers said.

A U.N. spokesman and Cotecna were quoted in the papers as saying the meetings with Annan had nothing to do with the contract to certify the import of goods under the oil-for-food program. The papers said the oil-for-food contract was ultimately worth about $60 million to the Swiss company.

U.N. spokesman Fred Eckhard had no immediate comment on the reports in the two papers. Both papers said Kojo Annan declined to comment.

Also Tuesday, Eckhard said that the United Nations agreed to reimburse Benon Sevan, the suspended head of the U.N. oil-for-food program, for legal fees he incurred during the investigation.

He said Sevan's fees are to be reimbursed with Iraqi oil funds set aside to help administer the program. That means Iraq oil money would essentially pay for Sevan to defend himself against charges that he bilked the program.

Eckhard said the United Nations had agreed to pay reasonable legal expenses up to Feb. 3, when Volcker's probe accused Sevan of a conflict of interest.

The plan to reimburse Sevan, first reported in the New York Sun on Tuesday, is almost certain to raise new questions about the United Nations' handling of the oil-for-food program and draw new criticism from U.S. Congressional investigators also examining its operation.

Annan's son, Kojo, worked for Cotecna in West Africa from 1995 to December 1997 and then as a consultant until the end of 1998, according to the company.

In November, Eckhard said Kojo Annan's lawyer had informed the Volcker investigation that the younger Annan continued to receive $2,500 a month - $30,000 a year - from Cotecna for more than five years through February 2004.

The secretary-general said at the time he was "very disappointed and surprised" that his son continued to receive money after 1998. Cotecna said the payments were made under a "non-compete" contract to prevent Kojo Annan from working for a competing company.

According to the Financial Times and Il Sole 24, Kojo Annan's non-compete contract did not appear to adhere to Swiss law which says such agreements cannot exceed three years, except in certain circumstances, and must be limited geographically - which his wasn't. The papers also reported that records provided by Cotecna and Kojo Annan to U.S. and U.N. investigators showed that the method of paying him changed several times.

The oil-for-food program, which ran from 1996 to 2003, allowed the former Iraqi government to sell oil in exchange for humanitarian goods, as an exemption from UN. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait.

In a bid to curry favor and end sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for Iraqi oil that could then be resold at a profit.

03/22/05 22:53 EST

posted March 23, 2005 09:28 PM              

bush sr.--"oh but these guys are just amateurs....just ask my son neil how he made out in the savings and loan industry in the 80's!!"

posted March 23, 2005 11:13 PM            

Let me know when you're ready to trot out that billion dollar bank balance with Neil Bush's name on the account. Until then, I'll consider you're blowing smoke rings out of the wrong orifice...as usual.

In the meantime, you can have a go at justifying the looting of the Oil for Food Program by the UN, it's executives and officers...along with the son of Kofi Annan. If you're up to it, you might also take a stab at justifying paying the legal expenses of the head of the program who, it appears had his hand in the cookie jar...and paying those legal fees with money skimmed off the sale of Iraq's oil. It seems to work like this Petron. First you rob a bank and it's an inside job, then when you're caught, you get the bank to pay your legal fees and give the bill to the depositors.

U.N. to Use Iraq Money to Reimburse Suspened Oil-for-Food Chief
NewsMax.com Wires
Wednesday, March 23, 2005

UNITED NATIONS —- The United Nations agreed to reimburse Benon Sevan, the suspended head of the U.N. Oil-for-Food program in Iraq, for legal fees he incurred during an investigation into allegations of fraud in the operation, a U.N. official said Tuesday.

Payment for Sevan's legal fees was to come out of the account containing the 2.2 percent of Iraqi oil revenues from the $64 billion program earmarked for its administration, U.N. spokesman Fred Eckhard said.

Sevan's fees are to be reimbursed with Iraqi oil funds set aside to help administer the program. That means Iraq oil money would essentially pay for Sevan to defend himself against charges that he bilked the program.
Eckhard said the United Nations had agreed to pay reasonable legal expenses up to Feb. 3, when an investigation led by former U.S. Federal Reserve Chairman Paul Volcker accused Sevan of a conflict of interest administering the program.

"When that report came out and made specific charges against Mr. Sevan, we informed him at that point that we would not reimburse him for any legal fees that he incurred subsequent to the leveling of charges against him," Eckhard said.

posted March 24, 2005 12:55 AM              

********

THE SILVERADO MONEY TREE (House of Representatives - July 18, 1990)

[Page: H4894]

Mr. ANNUNZIO. Mr. Speaker, money may not grow on trees, but it sure grew at the Silverado Savings & Loan , which collapsed and will cost the taxpayers $1 billion.

But apparently, one of the borrowers of Silverado has found a better scheme than a money tree. William Walters, who was a partner with Neil Bush, borrowed more than $85 million from Silverado and defaulted on the entire amount.

Mr. Walters testified before the Banking Committee recently that he had a zero net worth. Today, the Los Angeles Times, in an outstanding bit of reporting, carries a report that Mr. Walters, who has saddled the taxpayers on his own with more than $85 million in debt, and claims to have a zero net worth, is doing very well for himself.

According to the Times story, Mr. Walters is living in a $1.9 million home in Newport Beach, CA, described as a palace, complete with two Mercedes automobiles in the driveway. And has a beach house and plenty of servants.

Mr. Speaker, what I want to know is where the money came from. What happended to the money that Mr. Walters borrowed from Silverado and failed to repay?

The Federal Government should move immediately to get liens on all of Mr. Walters' possessions that he owns either directly or indirectly. If the Government can seize the assets of drug dealers, we certainly can seize the property of those who have cost the taxpayers millions of dollars in losses.

It is time to chop down the money tree at Silverado and get back the taxpayers' money.
http://thomas.loc.gov/home/thomas.html

posted March 26, 2005 01:12 AM              

The centerpiece of the controversy is the scandal involving the Italian government-owned Banca Nazionale del Lavoro (BNL ). It broke open on Aug. 4, 1989, when FBI agents and Federal Reserve officials, tipped off by two bank executives, raided BNL's Atlanta branch and confiscated thousands of documents. The branch had become Iraq's principal source of credit in the United States between 1984 and 1989, a period in which Iraq's eight-year-long war with Iran had turned Saddam's regime into a cash-starved and unreliable debtor.

According to interviews with knowledgeable officials, records made public by Gonzalez and documents obtained from other sources, it was soon apparent that Iraq was involved in a massive fraud to pump billions of dollars in illegal loans and credits out of BNL -Atlanta, far above the amounts reported to the Federal Reserve.

About half of the money allegedly went to finance the purchase of U.S. farm products, including $900 million guaranteed by the Agriculture Department's Commodity Credit Corp., but investigators said much of the rest had helped fuel Iraq's military buildup.

U.S. Customs Service reports dated Sept. 21, 1989, and Oct. 20, 1989, pointed out that BNL was suspected of financing shipments of industrial machinery, military-type technology and various controlled chemicals to Iraq and providing loans `to various U.S. firms for the illegal export to Iraq of missile-related technology.'

Federal prosecutors in Atlanta anticipated quick indictments. In Washington, records show, Agriculture Department officials learned in early October 1989 that the evidence indicated their $1 billion-a-year CCC program for Iraq was riddled with corruption, including kickbacks and bribes demanded by Iraqi government agencies and questionable consulting fees for Iraqi front companies in the United States.

There were also allegations, still unresolved, that food shipments destined for Iraq under the loan program never got there and may have been diverted to other countries in exchange for cash or goods. Investigators say they now believe some food may have been traded for weapons or Soviet bloc military assistance.

MORE CREDITS URGED
Despite that, Agriculture officials recommended an `interim' $400 million in additional food credits be granted Iraq under the CCC program, and this was approved by an interagency council Oct. 4, 1989, over the opposition of the Federal Reserve and Treasury representatives. A confidential State Department memo minimized the objections of the two agencies, saying they were made `at the behest' of the Office of Management and Budget, which State suggested was taking its role as `watchdog against scandal' too seriously.

But Iraq rejected the $400 million as insultingly low--Baghdad had received $1.1 billion the year before--and said such a relatively small amount would be `widely viewed as a U.S. vote of no confidence in Iraq debt policy.' On Oct. 6, according to a secret cable, Secretary of State James A. Baker III assured complaining Iraqi Foreign Minister Tariq Aziz at a meeting here that he would `look into the matter immediately.'

Sometime that same month, President Bush stepped into the fray, issuing National Security Directive 26 (NSD-26). Gonzalez said the order has been withheld from his committee on grounds of executive privilege, but other documents show that it ordered `pursuit of improved economic and political ties with Iraq .' A report to Baker, dated Oct. 26, 1989, cited the directive in recommending approval `on foreign policy grounds' of a $1 billion CCC program for Iraq , to be paid in two installments in light of the BNL investigation.

posted March 26, 2005 01:35 AM            

By YOCHI J. DREAZEN
Staff Reporter of THE WALL STREET JOURNAL
March 25, 2005; Page A1

An investigative panel probing the United Nations' oil-for-food program in Iraq will for the first time directly fault Secretary-General Kofi Annan for management lapses involving his son and a controversial contractor, according to people who have seen the contents of the panel's report.

Moreover, the panel, appointed by Mr. Annan and headed by former Federal Reserve Chairman Paul Volcker, will criticize Mr. Annan for failing to spot or take action to correct systemic failures in the U.N.'s internal bureaucracy that allowed problems inside the program to continue until 2003, these people said. The report is set to be released Tuesday.

Mr. Annan is particularly criticized for failing to pay enough attention to conflicts of interest involving his son, Kojo, who worked as a consultant for a Swiss company, Cotecna Inspection Services SA, that was seeking lucrative U.N. contracts, these people said.

At the same time, the panel has concluded that there is no evidence Mr. Annan rigged the U.N.'s procurement system in the oil-for-food program, exerted undue influence over contractors or ever sought or received improper financial benefits, these people said.

Mr. Annan's spokesman, Fred Eckhard, said the secretary-general would decline all comment on the report until its official release. The oil-for-food program operated from 1996 until late 2003, and was designed to allow the Saddam Hussein regime to sell oil and use most of the revenue to purchase humanitarian goods.

The study, the second of three to be released by Mr. Volcker this year, is likely to intensify the ongoing political debate over the U.N. and Mr. Annan's leadership of the world body. The institution has been buffeted by several controversies and crises in recent months, including several probes into the oil-for-food program that have found evidence of wide corruption and disclosures of widespread sexual abuse by U.N. peacekeepers in the Congo.

Critics complain that the world body's internal bureaucracy is too ossified to swiftly and effectively respond to emergencies outside its walls, such as the Dec. 26 tsunami in Asia, or corruption and wrongdoing within them. Several Republican lawmakers have called on Mr. Annan to resign.

Mr. Annan has responded aggressively in recent weeks, forcing out several long-serving bureaucrats and dispatching aides on what several of them privately describe as "charm offensives" in Washington with senior Republican leaders. Earlier this week, he unveiled a sweeping set of proposed changes for the 60-year-old organization. They included expanding the Security Council to include more voices and reconfiguring a controversial panel on human rights that has been criticized for allowing some offending countries to take advantage of their membership to protect each other from condemnation.

Mr. Annan's aides say he sees the proposals as a last chance to counter a tide of bad publicity and public criticism. But by extending detailed criticism all the way up to Mr. Annan himself, the coming report is likely to complicate that effort.

Investigators previously have reported that Saddam Hussein's regime managed to manipulate the program to receive billions of dollars in illegal cash kickbacks. A variety of investigations, including Mr. Volcker's panel and several Congressional probes, are investigating both the kickbacks and the possibility that some U.N. employees personally benefited from the program.

Separately, a federal grand jury in Manhattan is probing corruption allegations in the oil-for-food program. In January, in a plea bargain with federal prosecutors, an Iraqi-American admitted working as an unregistered agent for the Saddam Hussein regime who lobbied to loosen U.N. sanctions on Iraq.

In its first report, released last month, the Volcker panel accused the program's former head, Benon Sevan, of steering lucrative oil contracts to a small Panama-registered company, among other conflicts of interest, and of receiving $160,000 in cash payments that he couldn't adequately explain. Mr. Sevan, who was suspended after the first Volcker report, has denied any wrongdoing. The last of Mr. Volcker's planned reports, slated for summer release, will look more broadly at what companies, officials and countries benefited from oil allocations from the former Iraqi regime.

Next week's report will criticize Mr. Annan for holding at least four meetings with Cotecna executives beginning as early as 1992, before he became secretary-general, said people familiar with the report's contents. They include at least one in his U.N. offices and another on the sidelines of a U.N. meeting.

From 1998 to 2004, Geneva-based Cotecna received almost $10 million a year from the U.N. to inspect aid shipments being sent into Iraq under the auspices of the oil-for-food program.

In addition, Kojo Annan will be faulted in the report for trying to use his father's name and position for personal gain while he worked for Cotecna, which faced an investigation into bribery allegations involving Pakistani officials even as it was winning the U.N. contract, said people who have seen the report's contents. Those charges have since been dismissed.

Cotecna, a Swiss company that specializes in inspecting goods at ports and borders, has faced persistent questions over its employment of the younger Mr. Annan and the possibility that hiring him aided Cotecna's ultimately successful effort to win a lucrative U.N. contract. Kojo Annan and Cotecna have long denied wrongdoing and said his work at the company concentrated solely on seeking business in Africa, not at the U.N.

The Volcker report also concludes that Mr. Annan's relationship with his son apparently blinded him to his son's willingness to take advantage of the family name for personal gain and the benefit of his employers, and to be less than candid with his father about his professional dealings with Cotecna, said people who have seen the report.

Simon Smith, Kojo Annan's London-based lawyer, said he received questions on the report too late yesterday to receive comment from his client.

Cotecna already has acknowledged that Kojo Annan stayed on its payroll for a full year after it received the oil-for-food contract. People familiar with the matter said that the Volcker panel also has turned up information suggesting that the younger Mr. Annan received nearly $400,000 from Cotecna -- far more than the $160,000 that the company has so far acknowledged paying him for his work as a consultant and under a noncompete agreement. A spokeswoman for Cotecna confirmed the figures.

posted March 26, 2005 01:43 AM            

Schemes such as stealing pin codes and abusing a one-minute grace period before being charged for a connection accounted for the "irregularities".

The countries of those caught swindling their phone bills have been charged, but so far only $14,000 has been paid.

The UN Mission to Ethiopia and Eritrea (Unmee) said the process of unravelling the fraud was "painstaking and complex, involving the manual verification of 1.4m lines of computer billing data".

UN staff are affiliated to peacekeeping missions from their country's team at the UN headquarters in New York.

To avoid absorbing the cost itself, Unmee has forwarded $364,000 of confirmed bills to New York.

Since 2000, a 3,000-strong Unmee peacekeeping force has patrolled Eritrea's tense border with Ethiopia.

posted March 26, 2005 01:52 AM            

Former Federal Reserve Chairman Paul Volcker on Wednesday disputed a U.N. statement that the legal fees of the head of the world body's oil-for-food program were paid to get him to cooperate with the investigation of the $64 billion humanitarian program.

U.N. spokesman Fred Eckhard said Tuesday that Secretary-General Kofi Annan decided to pay Benon Sevan's legal fees "on an exceptional basis" due to the importance the Volcker inquiry placed on his cooperation.

Michael Holtzman, spokesman for Volcker's Independent Inquiry Committee, said Wednesday that "the rationale used by the United Nations to justify payment of Mr. Benon Sevan's legal fees ... is incorrect as it relates to the IIC."
"The IIC - as an exception - allowed Mr. Sevan to be accompanied by legal counsel during their interviews with him," he said. "However, the committee did so because Mr. Sevan was the single individual against whom the most serious and direct allegations of corruption had been made, as of that time."

"This exception was not motivated, as suggested by the United Nations' statement, by a desire to induce Mr. Sevan to cooperate," Holtzman said.

"The IIC has at no time proffered an opinion on the payment of Mr. Sevan's legal costs," he said.

In deciding to pay Sevan's legal costs, Eckhard said Tuesday that in addition to ensuring Sevan's cooperation, Annan also took into account the fact that Sevan is retired and not subject to his instruction to all U.N. staff to cooperate with the IIC "on pain of dismissal."

The secretary-general had previously stated, however, that Sevan was being kept on the U.N. payroll at the nominal salary of $1 a year to ensure his cooperation.

Eckhard said the United Nations would pay Sevan's legal fees until Feb. 3, when the Volcker investigation accused him of a conflict of interest in administering the program.

Almost immediately, the United Nations suspended Sevan and Joseph Stephanides, head of the U.N. Security Council Affairs Division, who was accused of interfering in the competitive bidding process for an oil-for-food contract, and charged them with violating U.N. rules.

Details of the reimbursement plan, first reported in the New York Sun on Tuesday, are almost certain to raise new questions about U.N. handling of the oil-for-food program and draw new criticism from U.S. congressional investigators also examining its operation.

Eckhard said officials were reviewing bills Sevan had already submitted from the time he answered questions from the Volcker investigation.

"We haven't paid for anything yet, but it is true that the secretary-general decided in principle to reimburse Mr. Sevan for what we called reasonable legal fees as determined by the United Nations," Eckhard said.

In the later statement, Eckhard said payment for the legal fees was to come out of the account containing the 2.2 percent of Iraqi oil revenue from the program earmarked for its administration. That means Iraq oil money would essentially pay for Sevan to defend himself against charges that he bilked the program.

The oil-for-food program was the largest U.N. humanitarian aid operation, running from 1996-2003. It was designed to let Saddam Hussein's government sell limited - and eventually unlimited - amounts of oil in exchange for humanitarian goods as an exemption from U.N. sanctions imposed in 1991 following Iraq's invasion of Kuwait.

In a bid to curry favor and end sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for Iraqi oil that could then be resold at a profit.

The issue has become a lightning rod for U.N. critics, who say the world body bungled the handling of the program and accused officials of massive corruption, though none has been proved.

The Volcker commission is expected to release a report March 29 on the activities of Annan and his son, Kojo, who worked in Africa for a company that had an oil-for-food contract. His final report is expected in midsummer.

posted April 06, 2005 02:50 PM            

NewsMax has learned that U.N. Secretary-General Kofi Annan has privately retained the services of celebrated Washington criminal defense attorney Greg Craig. The Annan move was first disclosed in a filing with the Paul Volcker panel released last month. The fomer Fed chairman currently heads an "independent" investigation into the activities of the scandal plagued U.N.-Iraq Oil-for-Food Program.

Craig is perhaps best known for his defense of Bill Clinton during his Senate impeachment trial in 1999.

He is also remembered as an attorney and "political" adviser to Juan Miguel Gonzalez, the father of "celebrated" Cuban shipwreck survivor, Elian. It is not known how long Annan has retained Craig's services, but it is believed he came on board shortly after Volcker launched his inquiry into the controversial Iraqi aid program in early 2004.

In a second "interim" report issued on March 29, Volcker cleared Annan of any "provable" criminal activity, but strongly criticized his management of the United Nations and the initial Oil-for-Food Program investigation.

Volcker also refused to "permanently" close the door on any additional investigations of Annan, pointing out that his "final" report is not due to be concluded before June.

Annan's son Kojo, a former employee of a U.N. contractor, Cotecna Inspections, may yet face criminal charges.

More than $6 billion is suspected of being directly embezzled from the U.N. program, according to Volcker.

Another $15 billion may have been made by illegal oil smuggling between Saddam and his Iranian, Syrian and Turkish neighbors, say U.N. investigators.

Kofi Annan has steadfastly denied any involvement or knowledge of any criminal activity and has vowed repeatedly to uncover any illegalities and take action against guilty parties.

So far, that has resulted in more than 75 percent of Annan's senior staff resigning, retiring or being fired.

When recently asked by a reporter if he would resign, Annan snapped, "Hell, no!"

Last week, Volcker confirmed that Annan's recently retired chief of staff, Iqbal Riza, had personally approved the destruction of more than three years of documents that could have influenced the Oil-for-Food investigation.

The surprise revelation prompted U.N. reporters to liken Riza to Rose Mary Woods, the Nixon secretary who erased the "infamous" 18 minutes of audiotape on the Watergate cover-up.

Meanwhile, the parade of senior Annan staffers continues its march to the exits.

The U.N.'s chief of internal affairs investigations, Dilip Nair, who is contesting allegations of sexual harassment, is expected to "vacate" his position by month's end, according to Annan's chief of staff Mark Malloch Brown. "It's inevitable," Malloch Brown confessed.