Ex-U.N. official pleads guilty to soliciting bribes

Second former official is accused of taking Iraq oil-sales kickbacks

August 09, 2005|By Maggie Farley | Maggie Farley,LOS ANGELES TIMES

UNITED NATIONS - A former U.N. official pleaded guilty yesterday to soliciting hundreds of thousands of dollars in bribes from companies seeking U.N. contracts under the oil-for-food program, the U.S. attorney's office in New York said.

Secretary-General Kofi Annan waived diplomatic immunity for Alexander Yakovlev, a senior procurement officer, so that he could be prosecuted in U.S. courts. Yakovlev pleaded guilty to conspiracy, wire fraud and money-laundering. Each offense is punishable by up to 20 years in prison.

The 52-year-old Russian resigned in June after separate revelations that he helped his son get a job with a company doing business with the United Nations. Annan's office notified investigators of Yakovlev's further suspected corruption last month, said Annan's top aide, Mark Malloch Brown.

Annan said he would also rescind immunity, if requested, for the former chief of the U.N. oil-for-food program, Benon Sevan, who has been accused of taking kickbacks from Iraqi oil sales.

Sevan, who has denied wrongdoing, resigned Sunday and has returned to his native Cyprus, which does not have an extradition treaty with the United States.

Also yesterday, the U.N. Independent Inquiry Committee, led by former Federal Reserve Chairman Paul A. Volcker, released an 88-page report that alleged wrongdoing by the two officials.

`Persuasive evidence'

The report said there was "persuasive evidence" that Yakovlev received nearly $1 million in kickbacks from companies that had won about $79 million in U.N. contracts outside the oil-for-food program.

Investigators said Yakovlev had about $1.3 million in a West Indies bank account under the name Moxyco Ltd. They have traced about $950,000 to companies doing business with the United Nations.

Yakovlev also was accused of soliciting payments from a French inspection company seeking an oil-for-food contract, offering secret bidding information to help it win the contract.

Investigators found no evidence that the company, Societe General de Surveillance S.A., paid a bribe and noted that the company cooperated by passing on correspondence detailing the solicitation.

Yakovlev denied the charge, but a former FBI handwriting analyst said notations on the letters were made by Yakovlev. One of the charges Yakovlev pleaded guilty to yesterday concerned the oil-for-food bribe solicitiation.

Volcker also said his panel had uncovered e-mail messages suggesting that Annan was aware that Cotecna Inspection S.A, the Swiss company that employed his son, was seeking a U.N. contract. The secretary-general has told investigators that he denies that.

Volcker said those questions would be explored in another report, expected early next month, but he added that there is no evidence that Annan influenced the awarding of the contract to Cotecna.

Panel set up last year

Annan set up the Volcker commission last year to look into allegations of corruption by U.N. officials in the oil-for-food program and charges of conflict of interest regarding his son's employer.

The $64 billion program was meant to help ordinary Iraqis weather international sanctions imposed on Iraq after it invaded Kuwait in 1990. Under U.N. oversight, Iraq was allowed to sell oil to buy humanitarian goods.

The program succeeded in providing food and medicine to Iraqis, but its secrecy and complexity provided opportunities for kickbacks and corruption.

In the report released yesterday, its third, Vocker's commission alleged that Sevan accepted payments from an Egyptian oil dealer to steer lucrative Iraqi oil contracts his way. The cash was routed through a trading company owned by Fakhry Abdelnour, a cousin of former Secretary-General Boutrous Boutrous-Ghali, the report said.

The company, African Middle East Petroleum, transferred $580,000 to the account of Fred Nadler, Boutrous-Ghali's brother-in-law, the report said. Nadler then deposited $147,184 in New York bank accounts controlled by Sevan and his wife, it said.

Accusations denied

Sevan has said the money was a gift from his aunt, who has since died. Volcker called that claim "not credible" and recommended that Sevan's diplomatic immunity be lifted to allow a criminal investigation. The Manhattan district attorney's office has said it is looking into the case but would not comment further yesterday.

In a resignation letter to Annan on Sunday, Sevan said he was innocent and accused his old friend of making him a scapegoat him for political reasons.

"The charges are false, and you, who have known me all these years, should know they are false," Sevan wrote in the letter, which was released by his lawyer, Eric L. Lewis.

The Los Angeles Times is a Tribune Publishing newspaper.

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