When U.S. Secretary of State Colin Powell met Secretary-General Kofi Annan last month at an Egyptian summit on Iraq, the two old friends shook hands. Then Powell handed the U...

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WASHINGTON — When U.S. Secretary of State Colin Powell met Secretary-General Kofi Annan last month at an Egyptian summit on Iraq, the two old friends shook hands. Then Powell handed the U.N. chief a letter.

Iraqi elections are in two months and the United Nations has to send more electoral experts to Iraq right away, the letter said, according to U.S. and U.N. officials. The Americans will arrange the protection they need, so it was time for the world body to act.

The same day, news broke that Annan’s son, Kojo, had lied about how long he had been involved with a Swiss inspection business that won a lucrative U.N. contract in Iraq.

The events, though apparently coincidental, were a 1-2 punch. Annan cut his Africa trip short and took the next flight home, just in time to hear calls from Sen. Norm Coleman, R-Minn., and a few media outlets for the secretary-general’s resignation.

“Payback time” for U.N.?

It was a very bad week for Annan, and supporters worry that the attacks will get worse if investigations into the alleged corruption in the U.N.-run “oil-for-food” program in Iraq result in more allegations.

Oil-for-food program

Origins: The program was started in December 1996 and allowed Iraq to sell oil in order to buy civilian goods and ease the impact on ordinary Iraqis of the sanctions imposed after Saddam Hussein invaded Kuwait in mid-1990.

The U.N. secretariat administered the program while a council committee supervised it. The program ended in November 2003, six months after the U.S.-led invasion of Iraq.

Controversy: Iraqi authorities released intelligence indicating Saddam earned billions of dollars through kickbacks and surcharges on which vendors would buy Iraqi oil and sell goods. Saddam also used secret oil allocations to reward 1,300 individuals, officials and political parties from more than 40 countries, according to lists drawn up in Iraq.

Investigations: The United Nations appointed former U.S. Federal Reserve chairman Paul Volcker to investigate. Another probe is being conducted by the U.S. Attorney’s Office in the Southern District of New York. At least seven U.S. congressional committees are conducting their own investigations.

Fraud: Charles Duelfer, head of the Iraq Survey Group for the CIA, estimated that Saddam earned $3 billion from schemes to subvert the $64 billion U.N. program and another $7.5 billion in direct deals made with governments to subvert sanctions even before the U.N. program began.

The Allegations: The most serious allegation against the United Nations is that Benon Sevan, head of the U.N. program, received oil allocations from Iraq. Sevan denies taking money. There were also revelations about the work of Annan’s son, Kojo, in West Africa with the Swiss firm Cotecna. The firm inspected goods under the U.N. program in Iraq and is being investigated. U.N. spokesman Fred Eckhard said the Cotecna contract was awarded without the secretary-general’s knowledge.


“It’s payback time for the U.N.,” said a Bush administration official who did not want his name used because he was not authorized to speak on the record. “The bills are coming due for the U.N.’s noncooperation on Iraq, and the oil-for-food scandal is red meat for the U.N.’s critics.”

Annan is caught in a struggle for his future. The secretary-general who wanted his legacy to be the reform of the United Nations may see it become instead presiding over one of the world body’s worst scandals, even though Saddam Hussein was behind the corruption.

The United Nations began the oil-for-food program, through which Iraq sold about $65 billion worth of oil, in 1996 to soften the impact of international sanctions on Iraq that were meant to keep Saddam’s regime from rearming after the 1991 Persian Gulf War.

The program improved the welfare of Iraqis, but it also enabled the Iraqi leader to amass more than $10 billion from kickbacks and smuggling. He also allegedly offered bribes to prominent figures around the world, including the U.N. official in charge of the program, to undermine the international sanctions.

There are eight investigations of the program, including an independent U.N. inquiry led by former Federal Reserve Chairman Paul Volcker. After Volcker makes his first report in January, he will share the 55 internal U.N. audits he possesses with other investigators. His final verdict is due at the end of 2005.

And so in New York and Washington, questions hover: Can Annan position himself as the leader of reform, or will he be perceived as part of the mess that needs to be swept away in a massive housecleaning? And has he hurt himself and the United Nations irrevocably by not opening the world body to greater scrutiny?

Annan and his aides acknowledged they were slow to confront the allegations, feeding a perception they were hiding something.

“It’s a godsend the way Annan’s been handling this,” said one U.S. congressional investigator. “It’s simply a gift to his enemies.”

Coleman, the Republican senator, does not accuse Annan of wrongdoing but says the U.N. chief should resign to take responsibility for the oil-for-food program’s failings.

“It is so clear to me that any organization in which the CEO presided over such a massive fraud should step down to allow it to restore its credibility,” said Coleman, who heads the Senate’s Permanent Subcommittee on Investigations, which is examining the corruption charges.

Sen. John Ensign, R-Nev., and Rep. Jeff Flake, R-Ariz., are preparing twin bills to tie American funding for the U.N. to the organization’s cooperation with the investigations, withholding increasing amounts of America’s 22 percent share of the body’s budget until Congress is satisfied.

Irony of accountability

In an irony of timing, the demands that Annan resign to increase U.N. accountability came as a panel of 16 prominent global figures presented a report that he commissioned a year ago about how to improve U.N. accountability and efficiency. The report calls for improved internal oversight, offers proposals to fight terrorism and weapons proliferation, and suggests a buyout to rid the organization of “deadwood” — all reforms that congressional leaders have been demanding.

When he presented the report to the United Nations’ 191-member General Assembly last Wednesday, Annan received a standing ovation in an expression of support.

But if he is perceived as an obstacle to the very reforms he commissioned — and their funding — that could increase pressure from within the United Nations for him to step down, said a Security Council diplomat.

“Can he continue to serve the United Nations when the most powerful member of the U.N. is not willing to work with him?” said the diplomat, who requested anonymity because of the issue’s sensitivity.

American conservatives also were infuriated by what they perceive as U.N. officials’ attempts to tip last month’s U.S. elections against President Bush.

In interviews, U.S. officials and members of Congress recited a list of apparent transgressions: in September, Annan called the invasion of Iraq “illegal”; the next month, the U.N. nuclear watchdog agency said powerful explosives had disappeared in Iraq under the watch of U.S.-led forces; and two days before the U.S. elections, Annan sent Bush a letter arguing against the eventual attack on the Iraqi city of Fallujah.

To U.N. foes, the oil-for-food allegations are the perfect vehicle in which to pack their accumulated complaints against the world body.

None of the investigations have suggested that Annan took bribes or acted illegally. The most serious complaint against him is that he has blocked congressional investigators’ access to U.N. documents and employees, though he recently agreed to hand over internal documents through Volcker in January and to allow staffers to do informal interviews.

That doesn’t stop politicians such as Rep. Scott Garrett, R-N.J., from demanding that Annan pay a heavy price for the scandal. “The larger question is whether he should be in jail,” Garrett said last week.

As Powell’s letter made clear, the White House needs U.N. help holding the Iraqi elections scheduled for Jan. 30. Having the criticism come from other quarters provides leverage over the U.N. and the man the U.S. helped bring to office eight years ago.

Even among those scrutinizing U.N. failings most closely are voices that say Annan should not resign. Rep. Christopher Shays, R-Conn., who is leading one of the investigations, said problems exposed by the oil-for-food scandal are institutional, not personal, and if anyone has the incentive to change things, it would be Annan.

“This is the secretary-general’s last, best chance to redeem his stewardship of the U.N. and bring badly needed transparency to the organization,” Shays told reporters this week. “His remaining time in office should be driven by a proactive effort to get to the bottom of the oil-for-food scandal and reform the U.N. structures and processes that let it happen.”