US: The former head of the UN oil-for-food programme for Iraq and a brother-in-law of a former UN secretary general have been charged with bribery and conspiracy to commit fraud tied to the programme.
Benon Sevan, the only UN official to be charged in relation to the programme, and Ephraim Nadler, brother-in-law of former secretary general Boutros Boutros-Ghali, were named in an indictment unsealed in a Manhattan federal court yesterday.
Michael Garcia, US attorney for the southern district of New York, said Mr Sevan allegedly received about $160,000 from Mr Nadler on behalf of the Iraqi government and illustrated "how pervasive the corruption was and how that corruption undermined the operation of the programme".
Mr Garcia said the United States had lodged warrants for the arrest of Mr Nadler and Mr Sevan and would seek their extradition to New York. Mr Sevan is in his native Cyprus, which has a law against extraditing its citizens.
Mr Nadler, a US citizen, lives in Manhattan and in Europe. He is the brother of Leia Boutros-Ghali, the wife of the former secretary general, an Egyptian, who led the world body from 1992 to 1996 and set up the programme.
Mr Sevan's lawyer, Eric Lewis, said the US was using his client as a scapegoat and a distraction from its own "massive failures and mismanagement in Iraq".
"These allegations are not only trivial; they are without basis," Mr Lewis said in a 1½ page statement. "Mr Sevan accounted for every penny of the $64 billion under his control." He said his client had disclosed all his bank records.
Allegations against both men first surfaced in 2005 in a UN- established independent inquiry headed by former Federal Reserve chairman Paul Volcker that looked into the now defunct oil-for-food humanitarian programme.
Mr Sevan was chosen as executive director of the $64 billion programme in late 1997 by former secretary general Kofi Annan after a distinguished 40-year career with the world body.
The oil-for-food programme was designed to soften the blow to civilians of UN sanctions against Iraq by allowing Baghdad to sell oil to finance purchases of humanitarian goods. The sanctions were imposed after Iraq invaded Kuwait in 1990. The programme began in late 1996 and ended in 2003.
Most of the abuse came from oil that Saddam Hussein smuggled out of the country outside of the UN programme. More than 2,300 companies have been investigated.
Mr Volcker's report said that an Egyptian oil dealer paid Mr Sevan to steer lucrative Iraqi oil contracts his way. The cash was supposedly routed through a trading company owned by Fakhry Abdelnour, a cousin of Mr Boutros-Ghali, who was not named in the indictment.
Mr Volcker said the African Middle East Petroleum Company transferred $580,000 to the account of Mr Nadler, who then deposited funds in New York bank accounts controlled by Mr Sevan and his wife. - (Reuters)