July 26, 2005

Two UN officials focus of new oil-for-food report

By Evelyn Leopold

UNITED NATIONS (Reuters) - The next report on the
scandal-tainted Iraqi oil-for-food program will focus on two
U.N. officials -- the head of the program and a key purchasing
officer, a spokesman for the inquiry said on Tuesday.

But the report will leave substantial discussions of
Secretary-General Kofi Annan and his son, Kojo, to a later
date, the spokesman, Michael Holzman said in an interview.

The Independent Inquiry Committee, headed by former U.S.
Federal Reserve chairman, Paul Volcker, intends to release
another interim report on Aug. 5 on whether Benon Sevan, the
U.N. director of the $67 billion program for Iraq, made any
money from his position.

The report also will analyze the actions of Alexander
Yakovlev, a senior procurement official, involved in awarding a
series of contracts in the program, including one to a firm
that employed Kojo Annan investigators disclosed.

"In addition to Mr. Sevan, the committee will produce
findings with respect to the role of Mr. Yakovlev," Holzman,
said. "This interim report will tie up several loose ends from
previous reports." But he did refused to say if Yakovlev would
be accused of any wrongdoing.

Yakovlev, a Russian, resigned last month after the United
Nations said he was under investigation for possible conflict
of interest. Fox News had reported he had helped his son get a
job with a company that did business with the United Nations.

The Volcker inquiry then sealed Yakovlev's office. Law
enforcement investigators are looking into his personal
financial records, sources close to the probe said.

One issue is whether a contract awarded to the Swiss firm,
Cotecna Inspection Services under the oil-for-food program, was
awarded legitimately. The company had employed Annan's son
Kojo, who often visited the procurement office to see a
childhood friend from Ghana.


Holzman said the committee would release a comprehensive
report in late August or early September "to cover the overall
management and performance of the program," and a last one in
late September. The Aug. 5 interim report will not deal in
depth with Annan.

"While there be some mention of the secretary-general and
Kojo Annan, it is more likely that those issues will be dealt
with more substantively in the comprehensive report due at the
end of August or early September," Holzman said.

On Sevan, Volcker in an interim report in February, accused
the Cypriot official, a veteran U.N. employee, of a "grave
conflict of interest" by allegedly soliciting oil allocations
for a firm run by a cousin of former Secretary-General Boutros

Sevan has denied he received any money for the transaction
and the Volcker inquiry has not accused him of receiving funds
and may not do so in the new report. Separately, the Manhattan
district attorney, Robert Morgenthau, has opened a criminal
investigation of Sevan.

Sevan had declared to the United Nations he received
$160,000 in cash, which he said came from a now-deceased aunt
in Cyprus. The Volcker committee concluded it was doubtful the
aunt could have saved that much money.

The Volcker panel was commissioned by Annan to examine
charges of corruption in the program, that began in December
1996 and ended in 2003. It was designed to ease the impact on
ordinary Iraqis of U.N. sanctions, imposed in mid-1990s after
Iraqi President Saddam Hussein's troops invaded Kuwait.