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UN Report Charges Oil-for-Food Official with Corruption

The former head of the U.N. Oil-for-Food program for Iraq has been accused of taking bribes while administering the multi-billion dollar program. The charges were contained in a new U.N. report from the investigative panel probing the scandal.

The report accuses Benon Sevan, a veteran U.N. official, of accepting nearly $150,000 in bribes from African Middle East Petroleum, or AMEP, a firm run by a relative of former U.N. Secretary-General Boutros Boutros Ghali.

The head of the investigative panel, the former chairman of the U.S. central bank, Paul Volcker, sums up the findings.

"Basically, what happened was we found movements of funds from AMEP, that was the firm that lifted the oil and promptly sold it to an account controlled by Fred Nadler which was then subject to a series of cash withdrawals in amounts of less that $10,000," he said. "And within days or weeks thereafter there would be deposits into Sevan's accounts in cash in New York, all accompanied by what could safely be called a flurry of telephone calls around the relevant times of the payments. That is the essence of it."

Mr. Sevan, a Cypriot, vehemently denies the charges. He resigned from the United Nations Sunday, but his whereabouts are unknown.

Secretary General Kofi Annan appointed the independent Inquiry Committee in April 2004 to investigate allegations of fraud and corruption in the management of the oil-for-food program in Iraq.

The program was designed to ease the impact on ordinary Iraqis of sanctions imposed after Saddam Hussein invaded Kuwait. In addition to Mr. Volcker, the panel members are South African Justice Richard Goldstone, who served as chief prosecutor of the International Criminal Tribunals for Rwanda and the former Yugoslavia, and Swiss professor of criminology Mark Pieth, who is an expert on money laundering.

The investigative committee will issue a broader report in early September and its final report in October. Those reports will deal with the issue of whether the secretary general interfered in the awarding of contracts to a firm that employed his son.