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The Times (London)
February 4, 2005, Friday
Iraqi oil brought these girls food-and the UN its biggest scandal
by James Bone
The head of the $ 64 billion aid scheme is accused of conniving with
Saddam, James Bone reports from New York.
AN EXPLOSIVE report by the UN's own inquiry into the Oil-for-Food
scandal charged yesterday that the head of the programme secretly
received oil allocations from Saddam Hussein. The report also raised
questions about the role of relatives of the former UN
Secretary-General Boutros Boutros Ghali.
The revelations threw the UN into crisis by adding credence to
allegations of widespread corruption in the largest humanitarian
effort in the organisation's history.
The three-member commission of inquiry, led by Paul Volcker, the
former Chairman of the US Federal Reserve, accused Benon Sevan, the
head of the programme, of "a grave and continuing conflict of
interest" and said that it was "basically improper" for him to have
solicited oil allocations from Iraq.
"He was positioned to affect matters of substantial interest to the
Government of Iraq, and the Government of Iraq hoped that he would
act favourably in return for the allocations that he was granted,"
the report said.The panel also provided previously unknown details
about the part played by the brother-in-law and a cousin of Dr
Boutros Ghali.
The commission did not, however, answer questions about alleged
pay-offs to political leaders in Russia, France and other countries,
or offer a verdict about the role of Kofi Annan's son, Kojo.
The investigation found that Mr Sevan had requested and received
allocations of millions of barrels of oil on behalf of a
Panama-registered trading company called African Middle East
Petroleum Co (AMEP), owned by Dr Boutros Ghali's cousin Fakhry
Abdelnour.
The report stopped short of accusing Mr Sevan of having taken a
bribe, but it did report unexplained cash transfers of $ 160,000 that
he said came from an elderly aunt, who was a retired Cyprus
government photographer living on a modest pension until her death in
Nicosia last year. Mr Volcker's team said that Mr Sevan was "not
forthcoming" when he denied approaching Iraqi officials to request
oil allocations. Although Mr Sevan originally claimed that he had met
Dr Boutros Ghali's cousin only once, investigators found phone logs
of numerous conversations and even discovered two of Mr Abdelnour's
business cards in a search of his UN office.
Mr Sevan and Mr Adbelnour acknowledged having a friendship with Fred
Nadler, Dr Boutros Ghali's brother-in-law.
Mr Sevan said that he met Mr Nadler at UN receptions or meetings
where Dr Boutros Ghali spoke. Records show that Mr Sevan was in
"close contact on an almost weekly basis" with Mr Nadler from at
least 1998 until last year.
Mr Abdelnour described himself as a "good friend" of Mr Nadler and
said one of his uncles was the Nadler family lawyer.
"On multiple occasions, at key periods in the programme and in AMEP's
dealings with SOMO (Iraq's state oil marketing organisation), the
phone records show calls between the numbers for Mr Sevan and Mr
Nadler within a few minutes of calls between the numbers for Mr
Nadler and Mr Adbelnour," the report said.
The commission said it was continuing to investigate "the full scope
and nature of the involvement of Mr Sevan, Mr Abdelnour and other
individuals".
At a press conference, Mr Volcker said that Dr Boutros Ghali, who was
UN Secretary-General from 1991 to 1996, had been interviewed by
investigators on several occasions.
Responding to the report, Mr Sevan issued a statement yesterday
denying wrongdoing and asserting that he "never took a penny".
Mr Annan, the UN Secretary-General, reacted to what he called
"extremely troubling evidence of wrongdoing" by initiating
disciplinary proceedings against Mr Sevan, a retiree who continues to
serve the UN on a dollar-a-year contract.
Mr Annan also plans to discipline a UN official called Joseph
Stephanides, who is accused by the Volcker panel of shortcutting a
competitive bidding process to award a 1996 UN border inspection
contract to the British firm Lloyd's Register.
The UN chief reiterated his pledge to lift diplomatic immunity in the
event of any criminal charges against UN staff. "No one found to have
broken any laws will be shielded from prosecution," he said.
Mr Annan has himself been interviewed three times as part of the
commission's investigation of his son, Kojo, who was employed by a
Swiss company, Cotecna Inspection SA, that won a UN contract in Iraq.
Mr Volcker said that the investigation of Kojo Annan was well
advanced. Kofi Annan said that he awaited its outcome "with a clear
conscience".
The Volcker commission plans to issue an update on Kojo Annan soon
and to ready its final report by mid-summer.
Lacking subpoena power, Mr Volcker's team has been struggling to keep
up with rival congressional and criminal inquiries in the United
States.
Federal prosecutors in Manhattan recently made a breakthrough in the
case when they secured a guilty plea and a promise of co-operation
from Samir Vincent, an Iraqi-American businessman who acted as a
go-between for Saddam and had been paid off by Iraq for a role in
drafting the original Oil-For-Food scheme so that it favoured Saddam.
THE KEY MEN
BENON SEVAN
A Cypriot of Armenian descent, Mr Sevan recently retired after a
four-decade career at the UN. He ran the Oil-For-Food programme
throughout its six-year existence, but stands accused of receiving
millions of barrels of "oil allocations" on behalf of a trading
company run by a cousin of the former UN Secretary-General Boutros
Boutros Ghali.
BOUTROS BOUTROS GHALI
A former Egyptian Foreign Office minister who served as UN
Secretary-General from 1991-96. Often outspoken, he fell out with the
United States and was vetoed for a second term. During his tenure,
the UN negotiated the terms of what was to become the Oil-For-Food
programme, including allowing Saddam Hussein to choose which
companies he did business with.
FAKHRY ABDELNOUR
An Egyptian cousin of Boutros Boutros Ghali, Mr Abdelnour is an
oil-trader based in Switzerland. He owns a Panama-based trading
company called African Middle East Petroleum (AMEP). According to the
report, Mr Abdelnour went to Iraq to handle "oil allocations" for Mr
Sevan. It accuses AMEP of lifting about 7.3 million barrels of oil at
a profit of more than $ 1.5 million.
FRED NADLER
The brother-in-law of Boutros Boutros Ghali and a friend of Mr Sevan
and Mr Abdelnour. Mr Nadler was related to Mr Boutros Ghali, a Copt,
through the former UN chief's Jewish wife, Leah, whose father owned
the Nadler sweets factory Alexandria. Mr Sevan said that he met Mr
Nadler at UN receptions at which Mr Boutros Ghali spoke. Mr Abdelnour
describes him as a "good friend".
One of Mr Abdelnour's uncles is the lawyer for the Nadler family. The
report describes Mr Nadler as "the likely intermediary between Mr
Sevan and Mr Abdelnour."
February 4, 2005, Friday
Iraqi oil brought these girls food-and the UN its biggest scandal
by James Bone
The head of the $ 64 billion aid scheme is accused of conniving with
Saddam, James Bone reports from New York.
AN EXPLOSIVE report by the UN's own inquiry into the Oil-for-Food
scandal charged yesterday that the head of the programme secretly
received oil allocations from Saddam Hussein. The report also raised
questions about the role of relatives of the former UN
Secretary-General Boutros Boutros Ghali.
The revelations threw the UN into crisis by adding credence to
allegations of widespread corruption in the largest humanitarian
effort in the organisation's history.
The three-member commission of inquiry, led by Paul Volcker, the
former Chairman of the US Federal Reserve, accused Benon Sevan, the
head of the programme, of "a grave and continuing conflict of
interest" and said that it was "basically improper" for him to have
solicited oil allocations from Iraq.
"He was positioned to affect matters of substantial interest to the
Government of Iraq, and the Government of Iraq hoped that he would
act favourably in return for the allocations that he was granted,"
the report said.The panel also provided previously unknown details
about the part played by the brother-in-law and a cousin of Dr
Boutros Ghali.
The commission did not, however, answer questions about alleged
pay-offs to political leaders in Russia, France and other countries,
or offer a verdict about the role of Kofi Annan's son, Kojo.
The investigation found that Mr Sevan had requested and received
allocations of millions of barrels of oil on behalf of a
Panama-registered trading company called African Middle East
Petroleum Co (AMEP), owned by Dr Boutros Ghali's cousin Fakhry
Abdelnour.
The report stopped short of accusing Mr Sevan of having taken a
bribe, but it did report unexplained cash transfers of $ 160,000 that
he said came from an elderly aunt, who was a retired Cyprus
government photographer living on a modest pension until her death in
Nicosia last year. Mr Volcker's team said that Mr Sevan was "not
forthcoming" when he denied approaching Iraqi officials to request
oil allocations. Although Mr Sevan originally claimed that he had met
Dr Boutros Ghali's cousin only once, investigators found phone logs
of numerous conversations and even discovered two of Mr Abdelnour's
business cards in a search of his UN office.
Mr Sevan and Mr Adbelnour acknowledged having a friendship with Fred
Nadler, Dr Boutros Ghali's brother-in-law.
Mr Sevan said that he met Mr Nadler at UN receptions or meetings
where Dr Boutros Ghali spoke. Records show that Mr Sevan was in
"close contact on an almost weekly basis" with Mr Nadler from at
least 1998 until last year.
Mr Abdelnour described himself as a "good friend" of Mr Nadler and
said one of his uncles was the Nadler family lawyer.
"On multiple occasions, at key periods in the programme and in AMEP's
dealings with SOMO (Iraq's state oil marketing organisation), the
phone records show calls between the numbers for Mr Sevan and Mr
Nadler within a few minutes of calls between the numbers for Mr
Nadler and Mr Adbelnour," the report said.
The commission said it was continuing to investigate "the full scope
and nature of the involvement of Mr Sevan, Mr Abdelnour and other
individuals".
At a press conference, Mr Volcker said that Dr Boutros Ghali, who was
UN Secretary-General from 1991 to 1996, had been interviewed by
investigators on several occasions.
Responding to the report, Mr Sevan issued a statement yesterday
denying wrongdoing and asserting that he "never took a penny".
Mr Annan, the UN Secretary-General, reacted to what he called
"extremely troubling evidence of wrongdoing" by initiating
disciplinary proceedings against Mr Sevan, a retiree who continues to
serve the UN on a dollar-a-year contract.
Mr Annan also plans to discipline a UN official called Joseph
Stephanides, who is accused by the Volcker panel of shortcutting a
competitive bidding process to award a 1996 UN border inspection
contract to the British firm Lloyd's Register.
The UN chief reiterated his pledge to lift diplomatic immunity in the
event of any criminal charges against UN staff. "No one found to have
broken any laws will be shielded from prosecution," he said.
Mr Annan has himself been interviewed three times as part of the
commission's investigation of his son, Kojo, who was employed by a
Swiss company, Cotecna Inspection SA, that won a UN contract in Iraq.
Mr Volcker said that the investigation of Kojo Annan was well
advanced. Kofi Annan said that he awaited its outcome "with a clear
conscience".
The Volcker commission plans to issue an update on Kojo Annan soon
and to ready its final report by mid-summer.
Lacking subpoena power, Mr Volcker's team has been struggling to keep
up with rival congressional and criminal inquiries in the United
States.
Federal prosecutors in Manhattan recently made a breakthrough in the
case when they secured a guilty plea and a promise of co-operation
from Samir Vincent, an Iraqi-American businessman who acted as a
go-between for Saddam and had been paid off by Iraq for a role in
drafting the original Oil-For-Food scheme so that it favoured Saddam.
THE KEY MEN
BENON SEVAN
A Cypriot of Armenian descent, Mr Sevan recently retired after a
four-decade career at the UN. He ran the Oil-For-Food programme
throughout its six-year existence, but stands accused of receiving
millions of barrels of "oil allocations" on behalf of a trading
company run by a cousin of the former UN Secretary-General Boutros
Boutros Ghali.
BOUTROS BOUTROS GHALI
A former Egyptian Foreign Office minister who served as UN
Secretary-General from 1991-96. Often outspoken, he fell out with the
United States and was vetoed for a second term. During his tenure,
the UN negotiated the terms of what was to become the Oil-For-Food
programme, including allowing Saddam Hussein to choose which
companies he did business with.
FAKHRY ABDELNOUR
An Egyptian cousin of Boutros Boutros Ghali, Mr Abdelnour is an
oil-trader based in Switzerland. He owns a Panama-based trading
company called African Middle East Petroleum (AMEP). According to the
report, Mr Abdelnour went to Iraq to handle "oil allocations" for Mr
Sevan. It accuses AMEP of lifting about 7.3 million barrels of oil at
a profit of more than $ 1.5 million.
FRED NADLER
The brother-in-law of Boutros Boutros Ghali and a friend of Mr Sevan
and Mr Abdelnour. Mr Nadler was related to Mr Boutros Ghali, a Copt,
through the former UN chief's Jewish wife, Leah, whose father owned
the Nadler sweets factory Alexandria. Mr Sevan said that he met Mr
Nadler at UN receptions at which Mr Boutros Ghali spoke. Mr Abdelnour
describes him as a "good friend".
One of Mr Abdelnour's uncles is the lawyer for the Nadler family. The
report describes Mr Nadler as "the likely intermediary between Mr
Sevan and Mr Abdelnour."