Editorial: The UN’s credibility

Aug. 15, 2005
The Independent Inquiry Committee into the United Nations Oil-for-Food Program (IIC) issued its third interim report Aug.

The Independent Inquiry Committee into the United Nations Oil-for-Food Program (IIC) issued its third interim report Aug. 8. Within hours, Mark Malloch Brown, head of the UN Department of Public Information, held a press conference to report that Sec.-Gen. Kofi Annan had made part of the response he ultimately must make to his organization’s mishandling of the defunct program in Iraq. Annan, said Malloch Brown, would waive diplomatic immunity against criminal prosecution for two UN officials suspected of involvement in Oil-for-Food corruption.

Most of the IIC’s third interim report deals with activities of those officials: Benon Sevan, former executive director of the UN Office of the Iraq Program, and Alexander Yakovlev, a UN procurement officer. It adds details to the allegation, introduced in the first interim report, that Sevan arranged an Iraqi oil deal from which he benefited personally (OGJ, Feb. 14, 2005, p. 17). And it offers evidence that Yakovlev solicited a bribe during 1996 bidding for an Iraqi oil inspection contract.

Oil allocations

According to the IIC’s first interim report, Sevan sought and received valuable Iraqi oil allocations for a firm called African Middle East Petroleum Co. Ltd. (AMEP) in concert with Efraim Nadler, a friend and AMEP officer. The new report highlights Nadler’s role as an intermediary in communications between Sevan and Fakhry Abdelnour, AMEP president. It details money trails and says that, in one of several transactions from which Sevan and Nadler profited, Abdelnour paid an illegal surcharge to the Iraqi government. IIC says, “The report concludes that Mr. Sevan corruptly benefited from his request and receipt of Iraqi oil allocations and that Mr. Nadler and Mr. Abdelnour financially benefited from and assisted in Mr. Sevan’s corrupt activity.”

Yakovlev, the new report says, secretly participated in a scheme to solicit a bribe from Société Générale de Surveillance SA (SGS), which bid for an oil-inspection contract. According to IIC, Yakovlev gave confidential bidding information to a friend, Yves Pintore, who approached SGS. IIC’s inquiry found no evidence that SGS paid a bribe. The report says Yakovlev received payments totaling more than $950,000 from other UN contractors.

Yakovlev took part in another subject of IIC inquiry, the 1998 selection of Cotecna Inspection SA to inspect humanitarian goods entering Iraq. According to the IIC’s second interim report, Annan’s son Kojo had worked for Cotecna and was receiving fees from it when the firm won the UN contract (OGJ, Apr. 4, 2005, p. 19). That report said Kofi Annan knew his son had worked for Cotecna but might not have known of the firm’s pursuit of a UN contract. Since then, an e-mail has come to light indicating that Kofi Annan discussed Cotecna’s UN dealings with a friend and company vice-president, Michael Wilson. The new report says Cotecna officials deny the discussions mentioned in the e-mail, which Wilson says he didn’t write. IIC says its investigation of the matter continues, to be covered in a “more comprehensive report” due in early September.

In his press conference, Malloch Brown said Annan “very much looks forward to that report, not least in the strong expectation that it will clear up any remaining questions concerning his own conduct.” Malloch Brown also asserted that findings of the IIC, headed by former US Federal Reserve Chairman Paul Volcker, highlighted the need for “serious, deep-rooted management reform of our organization.”

UN credibility

That’s an understatement. The IIC inquiry now parallels criminal investigations with which the UN has little choice but to cooperate. The targets of these investigations are people who, whether or not they ultimately are convicted of profiting from the Oil-for-Food Program, let a humanitarian mechanism turn into a bag operation for former Iraqi dictator Saddam Hussein. And the secretary-general has a son entangled in a shady contract and might yet be shown have been closer than IIC previously thought to the mischief.

The IIC thus has documented widely suspected, high-level corruption of an organization that’s supposed to set standards for the world. Management reform “serious” and “deep-rooted” enough to repair the UN’s shattered credibility will have to do more than tweak systems. As Annan should have concluded on his own by now, whatever his culpability, reform effective by that standard will involve a change of managers.