UNITED NATIONS: An inquiry into the UN oil-for-food scandal has concluded that Secretary-General Kofi Annan has not interfered in the awarding of a contract to a firm that employed his son but faulted him for not investigating the issue properly.
The independent inquiry, led by former US Federal Reserve chairman Paul Volcker, released its second interim report on the oil-for-food program, this time on Annan and his son, Kojo, who worked for the Swiss firm Cotecna.
The company received a $US10 million ($NZ14 million) a year UN contract in late 1998 to certify goods coming into Iraq under the scandal-tainted $US67 billion ($94 billion) oil-for-food program, which began in late 1996 and ended in 2003.
"There is no evidence that the selection of Cotecna in 1998 was subject to any affirmative or improper influence of the secretary-general in the bidding or selection process," Volcker told a news conference.
"Based on the record and lack of evidence of impropriety, it is the finding of the committee that Cotecna was awarded the contract in 1998 on the ground that it was the lowest bidder," he said.
But Volcker's committee said a probe initiated by Annan himself into the Cotecna contract was inadequate and the case should have been referred to the UN watchdog agency for an independent investigation.
As for the younger Annan, the report said he "intentionally deceived the secretary-general" about his continuing financial relationship with Cotecna.
"Significant questions remain about Kojo and his actions during the fall of 1998 as well as the integrity of his business and financial dealings with respect to the oil-for-food program. The committee's investigation of these matters is continuing," the report said.
The Volcker committee accused Cotecna of making "false statements to the public, the United Nations and the committee by asserting that Kojo Annan had resigned his consultancy on October 9, 1998," when in fact he had been on a retainer afterward.
Some US congressman, particularly Senator Norm Coleman, a Minnesota Republican, have been pushing for Annan's resignation as a result of the scandal.
Coleman repeated his resignation call after the report was released. Referring to the secretary-general, he said "... His lack of leadership, combined with conflicts of interest and a lack of responsibility and accountability point to one, and only one, outcome: His resignation."
But Annan's resignation appears unlikely as none of the 191-UN member nations have demanded it, including the Bush administration.
Volcker will give a final report on the program in mid-year. His previous report accused Benon Sevan, the former head of the program, of steering oil contracts worth $US1.5 million ($NZ2.1 million) to a friend, an Egyptian trader.
The younger Annan was a trainee with Cotecna from late 1995 until the end of 1998, about the time the firm received the UN contract for inspecting goods in Iraq.
Kojo Annan did not immediately reveal that he continued to earn $US2500 a month from 1999 until February 2004 in return for not joining Cotecna competitors in West Africa.
Annan said he was misinformed about his son's activities.
Kojo Annan, now 31, lives in Lagos. He was educated in Switzerland and is fluent in French as well as English. He was 22 when he began to work for Cotecna.
Under the oil-for-food program, former Iraqi President Saddam Hussein was allowed to sell oil to buy civilian goods to ease the impact of 1990 sanctions on ordinary Iraqis.
Since the end of the 2003 war, Iraq has released lists of oil vouchers and kickbacks by the Saddam Hussein government. The lists are a who's who of political groups and individuals from whom the former Iraqi government wanted to buy influence while under UN sanctions.
The Saddam government siphoned nearly $US2 billion ($NZ2.8 billion) in kickbacks from companies conducting business under the program, according to a US report. The regime also made an estimated $US8 billion ($NZ11.3 billion) through oil exports outside of the program, which the UN Security Council, including the United States, knew about
The independent inquiry, led by former US Federal Reserve chairman Paul Volcker, released its second interim report on the oil-for-food program, this time on Annan and his son, Kojo, who worked for the Swiss firm Cotecna.
The company received a $US10 million ($NZ14 million) a year UN contract in late 1998 to certify goods coming into Iraq under the scandal-tainted $US67 billion ($94 billion) oil-for-food program, which began in late 1996 and ended in 2003.
"There is no evidence that the selection of Cotecna in 1998 was subject to any affirmative or improper influence of the secretary-general in the bidding or selection process," Volcker told a news conference.
"Based on the record and lack of evidence of impropriety, it is the finding of the committee that Cotecna was awarded the contract in 1998 on the ground that it was the lowest bidder," he said.
But Volcker's committee said a probe initiated by Annan himself into the Cotecna contract was inadequate and the case should have been referred to the UN watchdog agency for an independent investigation.
As for the younger Annan, the report said he "intentionally deceived the secretary-general" about his continuing financial relationship with Cotecna.
"Significant questions remain about Kojo and his actions during the fall of 1998 as well as the integrity of his business and financial dealings with respect to the oil-for-food program. The committee's investigation of these matters is continuing," the report said.
The Volcker committee accused Cotecna of making "false statements to the public, the United Nations and the committee by asserting that Kojo Annan had resigned his consultancy on October 9, 1998," when in fact he had been on a retainer afterward.
Some US congressman, particularly Senator Norm Coleman, a Minnesota Republican, have been pushing for Annan's resignation as a result of the scandal.
Coleman repeated his resignation call after the report was released. Referring to the secretary-general, he said "... His lack of leadership, combined with conflicts of interest and a lack of responsibility and accountability point to one, and only one, outcome: His resignation."
But Annan's resignation appears unlikely as none of the 191-UN member nations have demanded it, including the Bush administration.
Volcker will give a final report on the program in mid-year. His previous report accused Benon Sevan, the former head of the program, of steering oil contracts worth $US1.5 million ($NZ2.1 million) to a friend, an Egyptian trader.
The younger Annan was a trainee with Cotecna from late 1995 until the end of 1998, about the time the firm received the UN contract for inspecting goods in Iraq.
Kojo Annan did not immediately reveal that he continued to earn $US2500 a month from 1999 until February 2004 in return for not joining Cotecna competitors in West Africa.
Annan said he was misinformed about his son's activities.
Kojo Annan, now 31, lives in Lagos. He was educated in Switzerland and is fluent in French as well as English. He was 22 when he began to work for Cotecna.
Under the oil-for-food program, former Iraqi President Saddam Hussein was allowed to sell oil to buy civilian goods to ease the impact of 1990 sanctions on ordinary Iraqis.
Since the end of the 2003 war, Iraq has released lists of oil vouchers and kickbacks by the Saddam Hussein government. The lists are a who's who of political groups and individuals from whom the former Iraqi government wanted to buy influence while under UN sanctions.
The Saddam government siphoned nearly $US2 billion ($NZ2.8 billion) in kickbacks from companies conducting business under the program, according to a US report. The regime also made an estimated $US8 billion ($NZ11.3 billion) through oil exports outside of the program, which the UN Security Council, including the United States, knew about