The Independent Inquiry Committee (IIC) investigating the Oil-for-Food Program in Iraq has cleared United Nations Sec.-Gen. Kofi Annan from wrongdoing in relation to money his son Kojo received from a program contractor. But it levels serious charges against the son, the contractor, and the UN’s response to disclosure of the payments.
The IIC’s second interim report focuses on dealings of the Swiss company Cotecna Inspection SA, which inspected Iraqi Oil-for-Food imports from December 1998 until the program ended in November 2003. Kojo Annan worked for Cotecna as an employee from late 1995 until early 1998-before Cotecna won the UN contract. After his employment ended, Kojo Annan received at least $2,500/month from Cotecna for consulting services through 1998 and under a no-compete agreement from January 1999 through February 2004, according to the report.
Conflict of interest
The conflict of interest here is obvious: The son of the UN secretary-general received a tidy stipend from a former employer that won a multimillion-dollar contract and subsequent renewals from the UN for work in Iraq. As both employee and consultant, Kojo Annan worked for Cotecna mostly on business in Nigeria, his mother’s birthplace. The interim report, however, cites instances in which he may have made inquiries about Cotecna work for the UN and in which Cotecna seems to have tried to capitalize on his relation to the UN chief. Kojo Annan and Cotecna officials say he didn’t try to develop UN business for the firm. The interim report further alleges that after a Jan. 24, 1999, article in the Sunday Telegraph of London disclosed Kojo Annan’s link with Cotecna, the firm took steps to hide its payments to the young man.
The IIC found no evidence that Kofi Annan influenced the 1998 selection of Cotecna to replace Lloyd’s Register Inspection Ltd. in the Oil-for-Food contract. But the UN, says the report, deviated from its normal procurement procedures in two ways: It didn’t require Cotecna to complete a questionnaire and submit a financial statement. And it failed to consider a Swiss criminal investigation into allegations of payments by Cotecna to secure an inspection contract in Pakistan.
The IIC reports no evidence that the UN chief even knew that his son’s former employer had submitted a bid for the Iraqi work. According to the report, he learned of the connection just before the Sunday Telegraph article appeared. He then ordered an inquiry, which a day later reported that UN procurement officials didn’t know of Kojo Annan’s connection with Cotecna and that Kojo’s employment there had ended. The report calls the investigation, especially following disclosure of the investigation into Cotecna’s Pakistani dealings, inadequate. A full investigation probably would have precluded renewal of Cotecna’s Iraqi contract, it says.
The IIC further alleges that Kojo Annan helped Cotecna conceal the payments he received from the firm after his formal employment ended and that he “intentionally deceived the secretary-general about this continuing financial relationship.” Kojo Annan, the report says, didn’t fully cooperate with the inquiry. “Significant questions remain about the actions of Kojo Annan during the fall of 1998 as well as about the integrity of Kojo Annan’s business and financial dealings with respect to the [Oil-for-Food] Program.” Investigation of those questions continues.
In other findings, the IIC faults a former aide to Kofi Annan for allowing documents relevant to the investigation to be destroyed. And it says another UN official improperly used Oil-for-Food funds to pay for a position unrelated to the program.
Allegations mount
It is, of course, the money Kojo Annan received from Cotecna while it was a UN contractor that looks worst in this report. But it and the lesser improprieties fit a pattern. The findings follow the IIC’s February allegations that the Oil-for-Food Program’s executive director, Benon Sevan, received payments from a company for which he arranged a profitable Iraqi oil deal (OGJ, Feb. 14, 2005, p. 17). The earlier report included other allegations of irregularities in the selection of contractors.
So detailed allegations continue to mount about the widely suspected corruption of the Oil-for-Food Program. In its new interim report, the IIC says its final report to the UN will “make recommendations for reforming the organization’s regulations and rules governing conflicts of interest.” Better late than never.✦