NEW YORK, AP – The former head of the United Nations oil-for-food program in Iraq could face charges after a U.N.-backed committee investigating the scandal-tainted program said it had found enough evidence of a kickback scheme to support prosecution.
The committee released its findings on the program”s former director, Benon Sevan, on Monday. Hours earlier, another U.N. official involved in the $64 million humanitarian program was charged in federal court in Manhattan for allegedly soliciting a bribe from a company seeking an oil-for-food contract.
Alexander Yakovlev, a Russian procurement officer, was the first U.N. official to be charged in the scandal. He was also accused of wire fraud and money laundering for allegedly accepting nearly $1 million in bribes from U.N. contractors in his work outside the program.
Yakovlev pleaded guilty Monday to the charges and surrendered to FBI agents in Manhattan but was later released on $400,000 bail. He could face up to 20 years in prison for each of the three counts.
Sevan, a Cypriot citizen, is under investigation by the Manhattan District Attorney”s office, for his role in the scheme. He said Sunday he was resigning his post at the United Nations, a symbolic gesture given that the world body was paying him just $1 a year to keep him on payroll so he would cooperate with the committee. But it did remove his diplomatic immunity and could leave him open to prosecution.
The Independent Inquiry Committee led by former U.S. Federal Reserve chairman Paul Volcker reported Monday that it had also uncovered enough evidence to prosecute two of Sevan”s friends who are related to former U.N. Secretary-General Boutros Boutros-Ghali. They are suspected of helping the ex-director in a kickback scheme.
The committee, which is a fact-finding body and cannot file criminal charges, accused Sevan of steering lucrative Iraqi oil contracts to a company run by the two Egyptians and accepting $147,184 in kickbacks. For the first time, it gave a motive, saying his finances were "precarious" before the kickbacks started.
Sevan dismissed Volcker”s charges as "false." He lambasted U.N. Secretary-General Kofi Annan and the U.N. Security Council, which set up the oil-for-food program. And he accused the inquiry committee of a "witch-hunt."
At the urging of Volcker”s investigators, Annan waived Yakovlev”s immunity on Monday after David Kelley, the U.S. attorney for the Southern District of New York, requested that he do so.
The investigators also asked Annan to assist in the possible prosecution of Fred Nadler, a brother-in-law of Boutros-Ghali who is a director of African Middle East Petroleum Co. Ltd. Inc., and Fakhry Abdelnour, the Swiss company”s president and a cousin of the former secretary-general.
The inquiry committee found Yakovlev secretly tried to bribe a company called Societe Generale de Surveillance S.A., which was seeking an oil inspection contract under oil-for-food. But they also came across more explosive evidence of wrongdoing — that Yakovlev took at least $950,000 in kickbacks from companies that had won some $79 million in U.N. contracts unrelated to oil-for-food.
Volcker said his investigators were still looking into Yakovlev”s participation in the selection of the Swiss company Cotecna Inspection S.A. in 1998 to inspect goods entering Iraq under the oil-for-food program.
The results will be included in a final report in early September that will examine the U.N. management of the oil-for-food program. The report will also cover Boutros-Ghali”s role and new evidence suggesting Annan knew more about the contract awarded to Cotecna, which employed his son, Kojo. Both have denied any wrongdoing, Volcker said.
The oil-for-food program, launched in December 1996 to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam Hussein”s 1990 invasion of Kuwait, was one of the largest humanitarian programs in history. It was a lifeline for 90 percent of the country”s population of 26 million.
Under the program, Saddam”s regime could sell oil, provided the proceeds went primarily to buy humanitarian goods and pay war reparations. Saddam allegedly sought to curry favor by giving former government officials, journalists and others vouchers for Iraqi oil that could then be resold at a profit.
The program has become the subject of several congressional investigations, as well as probes by a federal grand jury and the Securities and Exchange Commission.