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Annan: Iraq 'Oil-for-Food' Program Likely Riddled with Corruption

U.N. Secretary-General Kofi Annan says it is likely that the Iraq Oil-for-Food program was riddled with corruption. Mr. Annan is calling for a full independent audit of the program, in addition to the internal probe already underway.

The secretary-general told reporters Friday he is consulting with Security Council countries about broadening the probe into the U.N.-administered oil for food scheme.

"I think we will need to have an independent investigation, an investigation that can be as broad as possible to look into all these allegations which are being made and get to the bottom of this, because I don't think we need to have our reputation impugned," he said.

The Security Council established oil-for-food in 1996 to ease the impact of U.N. sanctions imposed on Iraq after the 1991 Gulf war. Terms of the arrangement allowed Iraq to sell oil to buy food and medicine for ordinary citizens hard hit by the sanctions.

U.N. administrators oversaw the program, but former Iraqi leader Saddam Hussein was allowed to decide what goods he wanted to buy, who should provide them, and who could buy the oil.

The U.S. General Accounting Office estimates Saddam siphoned off more than $10 billion in illegal proceeds on the sale of more than $67 billion worth of oil.

The program was shut down last November, and the records turned over to the U.S. and British-led coalition.

Several investigations are already under way into allegations of corruption. Secretary-General Annan says he is coming to the conclusion that the wrongdoing may have been widespread.

"It is highly possible that there have been quite a lot of wrong-doing, but we need to investigate and get to see who was responsible. And given the nature of the operation that involves so many companies, so many countries, we will need quite a lot," he said.

Mr. Annan said members of the Iraqi Governing Council are conducting their own investigation into the fraud allegations.

That probe was started in January, after an Iraqi newspaper published a list of more than 250 firms and individuals it said were suspected of profiting from the oil-for-food program. Among those listed was senior U.N. official Benon Sevan, who headed the program.

Mr. Sevan is retiring soon, and has been unavailable to comment. But through a U.N. spokesman, he has strongly denied the charges.