Annan tries to limit oil slick damage to UN

Edmonton Journal (Alberta)
February 5, 2005 Saturday
Final Edition

Annan tries to limit oil slick damage to UN: Action threatened
against oil-for food managers; Iraqi government wants money returned

by Steven Edwards, CanWest News Service

UNITED NATIONS – UN Secretary General Kofi Annan scrambled Friday to
limit the damage from a report that says “unethical conduct” by top
UN managers helped Saddam Hussein skim huge sums from the
organization’s $67-billion US oil-for-food program in Iraq.

He said he would “take action promptly” against the managers — one
of them the former head of the aid program, and a man Annan has
described as a friend.

But in Baghdad and at the UN, Iraqi government officials demanded a
return of stolen funds, saying the program had done more to prop up
Saddam’s regime than help ordinary Iraqis.

In Washington, Annan faced a mixture of criticism and praise. Some
Republicans in Congress said the report will lead to the downfall of
both Annan and the UN. But the Bush administration said it showed
Annan was committed to making the organization accountable.

The 200-page report by former U.S. Federal Reserve chairman Paul
Volcker amounted to a damning indictment of the UN’s management of
the world’s largest humanitarian aid program.

It said oil-for-food chief Benon Sevan had “undermined the integrity”
of the UN by bargaining with Saddam on behalf of an oil company run
by an Egyptian relative of former UN secretary general Boutros
Boutros-Ghali. It also criticized UN senior manager Joseph
Stephanides for manipulating a UN contract.

Volcker added at a press conference that the report is only the “tip
of the iceberg” of what was wrong with the program, saying two
subsequent reports would focus not only on additional activities by
Boutros-Ghali, but also roles played by Annan and his son, Kojo, who
worked for a company that landed a lucrative oil-for-food inspection

Launched in 1996, the oil-for-food scheme was meant to get food and
medicine to ordinary Iraqis at a time when sanctions against the
country aimed at forcing Saddam and his regime to comply with UN
disarmament demands.

“We are as determined as everyone to get to the bottom of this,”
Annan said Friday. “We do not want this shadow to hang over the UN,
so we want to … take appropriate measures to deal with the gaps.”

But it remained unclear what disciplinary measures could be taken
against the retired Sevan, and Stephanides, who is five months from

While both men are Cypriots, Sevan is of Armenian heritage, and his
success in his 40-year career at the UN has seen him hailed as a hero
on Armenian websites, alongside tennis star Andre Agassi and
entertainers Charles Aznavour and Cher.

But he, Stephanides and others named in the report were accused of
having “not an iota of shame” Friday by Iraq’s human rights minister,
Bakhtiar Amin.

“They profited as parasites on the misery of an impoverished nation,”
he said in Baghdad.

He said Saddam had been able to manipulate the oil-for-food program
to “fund terrorism,” adding Iraqis should now be compensated.

“These people shouldn’t get away with the money and live the rest of
their lives in luxury,” he said. “A lesson needs to be made of them.
They benefited by stealing the bread of others.”

Iraqi officials are particularly angry that the UN is using $30
million US raised from the sale of Iraqi oil to fund the Volcker

The UN has turned over to Iraq $9.3 billion US of remaining
oil-for-food money since the program ended with the fall of Saddam in
2003, but has retained $37 million for “administrative” spending on
Iraqi matters, in addition to the money to pay for the Volcker

Anger over the UN’s failure to back the war in Iraq led to increasing
criticism of the organization by some U.S. Republicans, who saw the
report as more reason for the United Nations to be closed down.

“I am reluctant to conclude that the UN is damaged beyond repair, but
these revelations certainly point in this direction,” said Rep. Henry
Hyde, chairman of the House international relations committee.