Friday, February 04, 2005

UN oil-for-food head criticised

"The chief investigator of the scandal-plagued UN oil-for-food program for Iraq has said that the program's procurement process was "tainted" and its former director Benon Sevan violated rules in selecting purchasers of Iraqi oil. Former US Federal Reserve Chairman Paul Volcker is due to release the first interim report on the probe into alleged fraud and corruption in the 67 billion-dollar oil-for-food program later in the day." (Xinhua)

"The program that was meant to help Iraq's poorest citizens survive international sanctions was reportedly rife with corruption and loopholes." (NPR)

"Secretary General Kofi Annan said he was instituting "disciplinary proceedings" against the aid program's former director, Benon Sevan, and another high-ranking United Nations official, Joseph Stephanides. Investigators said Mr. Stephanides had manipulated a contract.
"Should any findings of the inquiry give rise to criminal charges," Mr. Anan said in a statement, "the United Nations will cooperate with national law enforcement authorities pursuing those charges, and in the interests of justice I will waive the diplomatic immunity of the staff member concerned." He also said safeguards were being put in place to prevent recurrence of the abuses cited by the report." (New York Times)

"Secretary-General Kofi Annan ordered disciplinary action against the head of the U.N. oil-for-food program in Iraq on Thursday, after a report sharply criticized Benon Sevan for "undermining the integrity" of the United Nations through a "grave conflict of interest." (San Diego Daily Transcript)

"Investigators found "convincing and uncontested evidence that the selection process was tainted by irregularities for each of the first three contractors selected". (...) The first contract awarded in connection with the operation was with Banque Nationale de Paris, a French bank now known as BNP-Paribas, chosen to handle the money passing through the programme. (...) The next two were with Saybolt Eastern Hemisphere BV, a Dutch firm picked to conduct on-site inspection of oil exports, and Britain's Lloyd Register Inspection Ltd, chosen to inspect goods bought with programme funds as they entered Iraq." (Al-Jazeera.Net)

"According to the investigative report, between 1998 and 2001 Mr Sevan sought vouchers for several million barrels of Iraqi oil on behalf of a small company called African Middle East Petroleum. In return, he was expected to make a case for Iraq receiving cash to upgrade its crumbling oil facilities, which he and several security council members did. The Panamanian-registered firm was believed to have made a $1.5m (£800,000) profit on the vouchers.
"The most distinct finding is the accumulation of evidence that [Mr Sevan] did in fact solicit oil allocations for a small trading company," Mr Volcker said. "The Iraqis ... certainly thought they were buying influence." In addition, Mr Volcker cited financial records which show that Mr Sevan received $160,000 (£85,000) in cash payments from 1999 to 2003. "

In the best interest of the UN, swift actions should be taken against these officials. I am particularly chocked that the French bank BNP-Paribas is involved in this scandal.
What is not clear yet is - out of $69bn - how much money would have been diverted. From what I understand, there was at least millions of US$.
The political implications of this scandal could be high for Kofi Annan. The White House and republican congressmen would be more than happy to see the UN secretary-general being troubled by this scandal... He dared say - in a very diplomatic maneer - that the Iraq war was illegal. (The worst thing was that the Bush administration could not rebuke him because he said the truth)
The White House should not make too much noise about this scandal as the current occupation of Iraq is far from transparent either.


Xinhua, China:
NPR (audio), D.C.:
New York Times:
San Diego Daily Transcript, CA:
Al-Jazeera.Net, Qatar:, UK:,2763,1405833,00.html


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