Oil-for-Food Funds Traced

Oil-for-Food Funds Traced
Kofi Annan's son got more money than U.N. said
Sat, Nov. 27, 2004
The Associated Press

UNITED NATIONS — Secretary-General Kofi Annan's son received payments from a firm with an oil-for-food contract more than four years longer than the United Nations previously said, a U.N. spokesman said Friday.

Fred Eckhard said the panel investigating alleged corruption in the oil-for-food program has been told by Kojo Annan's attorney about the payments.

“There is nothing illegal in this,” Eckhard said of the payments from the Swiss firm Cotecna.

It was an embarrassing moment, however, for the United Nations to have to admit that its earlier information was wrong.

Eckhard said that Kojo Annan's attorney told him that the younger Annan “continued to receive monthly payments beyond the end of 1999, when we previously thought they had ceased, through February 2004.”

Eckhard acknowledged that the United Nations previously said that Kojo had stopped receiving monthly payments at the end of 1999.

Eckhard explained that Kojo worked under an open-ended no-compete contract, meaning that when an employee leaves a company, he can receive payments to assure that he won't set up a competing company doing the same work as the employer.

The oil-for-food program, instituted to help Iraqis cope with sanctions, began in December 1996 and ended in November. In the program's seven years, Iraq exported $65 billion worth of oil, and $46 billion of that revenue went to the oil-for-food program.

Saddam Hussein's government determined which goods it would buy, who would provide them and who could buy Iraqi oil.

Cotecna, the firm that employed Kojo Annan, was hired to verify that the goods that were purchased actually reached Iraq.

Allegations of corruption surfaced last January in the Iraqi newspaper Al-Mada and have intensified in recent months, calling into question the United Nations' credibility and causing what Annan called “a very serious” crisis.

The paper listed about 270 former government officials, activists, journalists and U.N. officials from more than 46 countries suspected of profiting from oil sales.

The program is now the subject of an investigation by a three-member panel led by former U.S. Federal Reserve Chairman Paul Volcker.