UNITED NATIONS, 5 February 2005 — The United Nations vowed to discipline two officials implicated in a report that detailed conflicts of interest and flawed management in the UN oil-for-food program, while the man leading the investigation warned that more revelations were forthcoming.
The interim report, released Thursday, zeroed in on the chief of the oil-for-food program, Benon Sevan, saying Saddam Hussein’s regime awarded oil allocations in his name to a trading company between 1998 and 2001.
It said Sevan had “seriously undermined the integrity of the United Nations” and suggested he may have received kickbacks, possibly using an aunt to mask his trail.
Sevan has denied he ever received any money.
Based on the report, Secretary-General Kofi Annan will discipline Sevan and another UN official, Joseph Stephanides, who may have “tainted” bidding for an oil-for-food contract, said Mark Malloch Brown, Annan’s chief of staff.
Allegations that the United Nations itself was enmeshed in corrupt practices in the program led Annan to appoint former Federal Reserve Chairman Paul Volcker to investigate. Several US congressional teams are also looking into it.
Volcker told the Associated Press that the investigation found no “systematic mismanagement” of the oil-for-food program. But he said there were serious problems.
“It is not the whole story by a long shot,” Volcker said at a news conference to release the report.
Despite Sevan’s claims that he never recommended any companies for oil vouchers, Volcker’s Independent Inquiry Committee said it had evidence that Sevan asked Iraq to give a small Swiss-based oil company, African Middle East Petroleum Co. Ltd. Inc. the opportunity to buy oil. The company, known as AMEP, received the allocations and earned $1.5 million from them.
The report did not say Sevan received kickbacks, but said it was suspicious of $160,000 he said he received from his aunt in his native Cyprus from 1999-2003. The report questioned this “unexplained wealth.”
