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Annan Blasts Oil-for-Food Critics

Secretary-General Kofi Annan (search) accused critics of the U.N. oil-for-food program (search) Thursday of treating allegations of corruption as fact and ignoring the program's role of providing aid to nearly every Iraqi family.

The U.N. chief declared that he was "very keen" for the three-member panel led by former U.S. Federal Reserve chairman Paul Volcker (search) to report "as soon as possible." And he promised that any U.N. official found guilty of accepting bribes or kickbacks would be dealt with "very severely."

Annan said he met Wednesday with Benon Sevan, who headed the oil-for-food program and has been accused of receiving kickbacks from Saddam's government, to discuss the allegations and cooperation with the investigation.

Officials said Sevan is retiring on May 31 but would remain available for the investigation.

"Benon has stated quite clearly that he is innocent," Annan said. "He has indicated he will cooperate as I expect all other staff members to cooperate."

The panel doesn't have subpoena authority and will rely on voluntary cooperation from governments, U.N. staff, members of Saddam's former government and current Iraqi leaders. They claim they have evidence that dozens of people, including top U.N. officials, took kickbacks from the $67 billion oil-for-food program.

Volcker refused to accept the chairman's post until the Security Council adopted a resolution calling on all countries to cooperate with the investigation. The council unanimously approved the measure on Wednesday.

Volcker received support Thursday from European Union foreign policy chief Javier Solana.

"Be sure that all the European countries are going to participate and to cooperate on the investigation and clarify everything," Solana told reporters after meeting Annan.

The allegations of possible U.N. corruption first surfaced last January in the Iraqi newspaper Al-Mada. The newspaper had a list of about 270 former government officials, activists and journalists from more than 46 countries suspected of profiting from Iraqi oil sales that were part of the U.N. program.

The General Accounting Office, Congress' investigative arm, estimated in March that Iraqi pocketed $5.7 billion by smuggling oil to its neighbors and $4.4 billion by extracting kickbacks on otherwise legitimate contracts.

Annan launched an internal inquiry in February but canceled it in March to allow a broader, independent examination as allegations of massive corruption in the U.N. program grew, calling the world body's credibility into question.

He told reporters Thursday it is "unfortunate" that some allegations are "being handled as if they were facts," and that in the process the oil-for-food program's importance to Iraqis had been lost.

"The fact that [there] may have been wrongdoing by a few should not destroy the work that many hardworking U.N. staff did," he said.

Under the oil-for-food program, which began in December 1996 and ended in November, the former Iraqi regime could sell unlimited quantities of oil provided the money went primarily to buy humanitarian goods and reparations to 1991 Gulf War (search) victims.

The program was launched to help Iraqis cope with U.N. sanctions imposed after Iraq's 1990 invasion of Kuwait. Saddam's government decided on the goods it wanted, who should provide them and who could buy Iraqi oil -- but a U.N. committee monitored the contracts.

"If the Iraqi government has smuggled oil and done all sorts of things, I don't think it is fair to lump it all together and blame the U.N. and the Secretariat because there are things that were definitely beyond our control -- not only the Secretariat but even the member states," Annan said.

In Washington, U.S. diplomats told the House Government Reform subcommittee Wednesday that there was a widespread system of kickbacks in the U.N. program that benefited officials within Iraq, including Saddam. But U.S. State Department official Patrick Kennedy said reports that some U.N. career officials -- including Sevan -- directly benefited from the program "are unsubstantiated allegations without any evidence to support them."

Annan said it is important to separate the oil-for-food investigation from the effort led by his special adviser, Lakhdar Brahimi, to help Iraqis decide on a transitional government that will take power from the U.S.-led coalition on June 30.