U.N. oil-for-food probe clears Annan

Some say he should resign in light of contract scandal

`Hell, no,' leader replies

March 30, 2005|By Stevenson Swanson | Stevenson Swanson,CHICAGO TRIBUNE

UNITED NATIONS - A panel investigating the United Nations' scandal-scarred oil-for-food program for Iraq said yesterday that it found no evidence that U.N. Secretary-General Kofi Annan had influenced the award of a lucrative inspection contract to a company that employed his son.

But the panel criticized Annan for not aggressively investigating the apparent conflict of interest when he learned about it shortly after the $10 million annual contract was awarded to Cotecna Inspection S.A. of Geneva, Switzerland.

The committee conducting the investigation, led by former Federal Reserve Chairman Paul Volcker, also noted that Annan's chief of staff last year authorized the shredding of documents covering the period when the contract was awarded.

The papers were destroyed after Annan had issued an order barring such actions pending the Volcker commission's investigation into the oil-for-food program, which was intended to allow Saddam Hussein's Iraq to sell oil so it could buy humanitarian supplies.

The oil-for-food program has become a prime exhibit for U.N. critics in Washington of what they regard as the world body's corrupt and inefficient ways. The program's well-publicized lapses have resulted in calls for Annan to resign, especially by conservatives angered by his labeling the U.S.-led invasion of Iraq as "illegal" during last year's presidential election.

Despite the commission's criticisms, Annan hailed the report, saying it exonerated him of misconduct. The secretary-general, who last week laid out a plan to reform the United Nations' management procedures to make them more transparent, defiantly rejected the suggestion that the report's revelations of mismanagement and bad judgment might make it impossible for him to run the world body.

"Hell, no," he shot back, when asked if he planned to step down. "It is not unusual that in an institution of this size ... that problems do arise. You deal with the problem and draw the lessons and move on. I have lots of work to do, and I'm going to go ahead and do it."

Volcker said it is too soon to say whether the United Nations was guilty of more than mismanagement of the $64 billion Iraq program. The panel's final report, to be issued in mid-summer, will review how the program was run, and the role of the Security Council and its member states, including the United States, in overseeing it.

"This institution is in the process of being scrubbed very hard," Volcker said at a news conference.

The report was sharply critical of Annan's son, Kojo, and of Cotecna, which was paid to inspect goods imported into Iraq under the program to make sure they could not be used for military purposes. Investigators said Kojo Annan and Cotecna concealed the fact that Annan continued to receive payments from Cotecna after he left the company in 1998, misleading investigators and the secretary-general. From 1999 to 2004, the younger Annan received at least $178,187 from Cotecna as part of a "non-compete" agreement that the company had with him, but the money was routed through three companies in an apparent effort to disguise the origin of the payments, according to the Volcker commission.

Investigators found evidence that Cotecna might have paid Kojo Annan as much as $484,492, but Cotecna executives deny that. Following an interview by investigators in October, the younger Annan has refused to cooperate with the Volcker commission.

In a statement issued by his lawyer, Kojo Annan expressed regret for the embarrassment he has caused his father. "I am an independent businessman, and I do not represent the U.N. or the U.N. secretary-general," he said. "My father has an excellent reputation and his conduct and integrity has always been impeccable, and this report does not alter that."

The Chicago Tribune is a Tribune Publishing newspaper.

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