Mixed report

Kofi Annan, cleared in a contract scandal involving his son but still under fire, says he won't resign as head of the U.N.

By Ewen MacAskill
Published March 30, 2005 3:40PM (EST)

The position of the U.N. secretary-general, Kofi Annan, was undermined Tuesday after an independent inquiry into the oil-for-food scandal heavily criticized his son Kojo and a Swiss company. Although Annan was personally cleared of improper influence in the awarding of a contract to the company, Cotecna, the committee of inquiry's findings about his son left question marks about his stewardship of the U.N., which has come under increasing pressure.

At a press conference Tuesday, the chairman of the inquiry committee, Paul Volcker, said an investigation the secretary-general had initiated was "inadequate" and should have been referred to the U.N.'s independent watchdog agency.

Annan was defiant. "As I had always hoped and firmly believed, the inquiry has cleared me of any wrongdoing," he said. Asked if he would resign, he replied: "Hell, no." But Annan, who is due to retire next year at the end of two terms, could now find it difficult to push through his reform program, and to pacify his critics.

Republican Sen. Norm Coleman said Tuesday: "His lack of leadership, combined with conflicts of interest and a lack of responsibility and accountability, point to one, and only one, outcome: his resignation."

In Washington, the White House voiced cautious support for Annan. Spokesman Scott McClellan said: "This is a very serious matter. We have stated that repeatedly. Congress has been looking into it as well. We continue to support the United Nations; we continue to support Secretary-General Annan in his work at the United Nations. We will carefully study the report that Volcker has put forward today. We're also looking forward to seeing the final results of his investigation."

The inquiry is continuing and is due to issue its final report in the summer. It will give its verdict on the wider issue of the conduct of the oil-for-food-program, which was set up to minimize the impact of sanctions on Iraq by allowing Saddam Hussein to sell oil in return for food, a system open to abuse. An interim report of the inquiry released last month was critical of the U.N.'s handling of the program.

Tuesday's report dealt with the specific issue of whether the award of a contract by the U.N. to Cotecna, which employed Kojo Annan, was free of improper or illicit influence. Cotecna was selected by the U.N. in December 1998 to conduct inspections of humanitarian goods entering Iraq.

The report concluded: "There is no evidence that the selection of Cotecna in 1998 was subject to affirmative or improper influence of the secretary general in the bidding or selection process." But the report notes that U.N. rules were not followed: Cotecna was not asked to submit a financial statement, one that might have helped reveal the company's financial strains at the time.

Volcker said: "Our investigation has disclosed several instances in which [Annan] might, or could, have become aware of Cotecna's participation in the bidding process. However, there is neither convincing testimony to that effect nor any documentary evidence."

Volcker added: "Taking all of this into account, the committee has not found the evidence is reasonably sufficient to show that the secretary general knew that Cotecna had participated in the bidding process in 1998."

But the report is critical of Kojo Annan. He left Cotecna in 1998, but, apparently unknown to the U.N. or his father, continued to be paid by the company until 2004. The report said that after the media disclosed his relationship with the company in January 1999, Kojo Annan "actively participated in efforts by Cotecna to conceal the true nature of its continuing relationship with him. Kojo Annan also intentionally deceived the secretary general about this continuing financial relationship." Nor had he been totally forthcoming to the inquiry about the payments.

The report adds: "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 program." The inquiry is still looking into this.

The report concluded that Cotecna had cooperated in making documents and staff available, but that it had "made false statements to the public, the United Nations and the committee."

Annan's former chief of staff, Iqbal Riza, is also criticized for allegedly giving the go-ahead for the shredding of documents relevant to the inquiry. The report says an assistant to Riza, who retired in December, had shredded many documents in 2004. The shredding continued even after Annan issued an order that all oil-for-food documents be preserved, Volcker said. Riza "acted imprudently" and in violation of the document preservation order, the committee concluded.

Ewen MacAskill

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