NY prosecutor investigates UN oil-for-food head

By Jeanne King

NEW YORK (Reuters) – The Manhattan District Attorney,
Robert Morgenthau, has begun a criminal investigation of the
United Nations official who headed the $67 billion Iraq
oil-for-food program, a spokeswoman said Monday.

No details were given of the investigation of the official,
Benon Sevan, but Barbara Thompson, spokeswoman for Morgenthau
confirmed it was taking place.

Sevan, a Cypriot and veteran U.N. senior staff member, is
also the subject of an intensive investigation by Paul Volcker,
the former Federal Reserve chairman, for allegedly steering
allocations of Iraq oil to a trading company while he was in
charge of the program. Sevan has denied the charges.

Volcker, who heads a U.N.-appointed Independent Inquiry
Committee, did not say that Sevan received bribes but mentioned
that he had declared to the United Nations $160,000 in cash
from 1999 to 2003 from an aunt in Cyprus, who has now died.

A February interim report from Volcker’s inquiry said the
aunt’s lifestyle did not suggest wealth.

The Morgenthau investigation was first disclosed in the New
York Sun. Also investigating corruption in the program is the
federal U.S. Attorney’s office in the Southern District in New
York, which so far has not named any U.N. officials.

The oil-for-food program began in December 1996 and
terminated in 2003 after the U.S.-led invasion of Iraq. Under
the program, former Iraqi President Saddam Hussein could sell
oil to buy civilian goods to ease the impact of the sanctions
on ordinary Iraqis.

Since new Iraqi leaders came to office Iraq has released
lists of bribes from the Saddam government to political groups
and individuals in a quest to get the sanctions lifted. The
program is also the target of several corruption investigations
by Congress.