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UN Secretary-General Annan Defends Iraq Oil-For-Food Program - 2004-04-22

U.N. Secretary-General Kofi Annan has issued a spirited defense of the world body's role in administering the Iraq oil-for-food program. The organization is bracing for a barrage of criticism as investigators look into allegations the humanitarian aid program was riddled with corruption.

Mr. Annan Thursday described the swirl of corruption allegations surrounding the humanitarian aid program as 'unfortunate' and 'unfair'. A day after appointing a high-level panel to investigate the Iraq oil-for-food panel, Mr. Annan noted that many unproven accusations are being treated as fact.

"The Oil-for-Food Program did provide relief to the Iraqi population; every household was touched," he said. "So that should not be overlooked. The fact that there may have been wrongdoing by a few should not destroy the work that many hard working U.N. staff did."

A U.S. television network reported this week that at least three senior U.N. officials may have made millions of dollars in illegal profits from the humanitarian aid program. The network said documents from Iraq's oil ministry link the program's director Benon Sevan to a payoff scheme that allowed hundreds of foreign officials to deal in Iraqi oil at below market prices.

Mr. Sevan has flatly denied the allegations, and has agreed to cooperate with investigations.

Information provided by Iraq's Governing Council detailed how Saddam Hussein's government manipulated the oil-for-food program to extract bribes from companies doing business with Iraq. Most of the illicit funds were allegedly funneled through a network of foreign bank accounts in violation of U.N. sanctions.

The U.S. General Accounting Office estimates Saddam's government generated more than $10 billion in illegal profits, most from smuggling oil and the rest from illicit surcharges and after-sale charges to suppliers.

The United Nations has already come in for harsh criticism for what critics describe as lax administration of the $67 billion program.

However, Secretary-General Annan said that the world body and its staff should not be blamed for crimes the Iraqi government may have committed.

"If the Iraqi government has smuggled oil and done all sorts of things, I don't think it is fair to lump it all together and blame the U.N. and the Secretariat," he added. "Because they are things that were definitely beyond our control."

A partial list of those allegedly benefiting from illegal oil-for-food payments was published earlier this year in an Iraqi newspaper. It included the names of more than 270 people, political organizations and religious figures from 40 countries.

Several investigations into the corruption allegations are underway, but there are questions about how any person, company or government suspected of wrongdoing might be prosecuted.

The panel named this week by Secretary-General Annan is endorsed by the Security Council, and will be headed by the highly-respected former U.S. Central Bank Chief Paul Volcker.

As Mr. Volcker noted as he accepted the job, the panel will have no prosecutorial powers.