UN Oil Scam continues

Oil money pledged to official
By Marc Carnegie at the UN
March 23, 2005
From: AAP
News.com.au

THE UN is facing new questions about the Iraqi oil-for-food program after admitting it agreed to use Iraqi money to pay the legal fees of a UN official under investigation.
Benon Sevan, who ran the scandal-tainted program, has already been accused of serious violations of UN conduct after an enquiry found he got oil allocations from the Iraqi regime of Saddam Hussein for an acquaintance.
The UN said overnight that it had pledged to reimburse Mr Sevan for "reasonable" legal fees while he was under investigation by the enquiry headed by former US Federal Reserve banking chief Paul Volcker.
The money was to come from an escrow account containing 2.2 per cent of Iraqi oil revenues used to run the defunct $US64 billion ($82bn) oil-for-food program, the largest aid scheme in UN history.
Fred Eckhard, the spokesman for UN Secretary-General Kofi Annan, said the arrangement was halted last month when an initial report from Mr Volcker's commission, known as the IIC, charged
No money had been paid and the UN was questioning the legal bills Mr Sevan had presented for payment, Mr Eckhard said.
"Although Mr Sevan has subsequently submitted legal fees, the amount he is seeking is currently being questioned by the UN on the grounds that not all costs releate to his co-operation with the IIC," he said.
Since Saddam was ousted by US forces two years ago, Iraq has repeatedly said the UN should turn over the remaining money in the so-called 2.2 account.
Instead, part of it has been used to pay the costs of the Volcker investigation, estimated to be $US30m.
Mr Annan appointed Mr Volcker to head the probe in a bid to head off charges of fraud and corruption in the oil-for-food program, which he said had cast a shadow over the UN.
Mr Volcker's next interim report, due to be released next week, is expected to focus on questions about Mr Annan and his son Kojo, who worked for a company that had contracts under the oil-for-food program.
The Oil-for-food program, which ran from December 1996 to November 2003, was intended to ease the effects of international sanctions on Iraqis, allowing Iraq to sell oil and use the revenue to buy humanitarian supplies.
An Iraqi newspaper last year published a list of individuals it said had received allocations of oil from Saddam's regime.
Last month, the Volcker panel said Mr Sevan had steered oil allocations to a firm linked to a relative of Mr Annan's predecessor as secretary-general, Boutros Boutros-Ghali, and that the regime was trying to buy influence through Mr Sevan.
The panel stopped short of saying Mr Sevan had taken bribes or committed a crime, but it raised questions about cash payments he claimed had come from a relative - and said the investigation into his affairs would continue.
Mr Sevan's behaviour "created a grave and continuing conflict of interest", the panel said.
"His conduct was ethically improper and seriously undermined (UN) integrity."
Mr Eckhard, who said Mr Annan personally decided to authorise paying for Mr Sevan's legal fees, said the UN reserved the right to get any money back from the accused if the charges against him were upheld.
The oil-for-food debacle has embarrassed the UN and the latest revelations, first reported in the New York Sun, came just one day after Mr Annan pledged UN reforms to improve accountability and transparency