UNITED NATIONS – Secretary-General Kofi Annan (search) said he was unaware his son received $30,000 a year for over five years from a Swiss-based company under investigation in connection with suspected corruption in the U.N. oil-for-food program in Iraq.
The disclosure of the payments was the latest embarrassment for Annan and the United Nations related to the program to help Iraqis cope with U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait.
Annan told reporters Monday that he had been working on the understanding that payments to his son, Kojo Annan (search), from Cotecna Inspection S.A. (search) stopped in 1998 "and I had not expected that the relationship continued."
But on Friday, U.N. spokesman Fred Eckhard said Kojo Annan's lawyer had informed the independent panel appointed by the secretary-general to investigate allegations of corruption in the oil-for-food program that the younger Annan continued to receive monthly payments through February 2004.
The program allowed Iraq to sell unlimited quantities of oil provided the proceeds went primarily for humanitarian goods and reparations for victims of the 1991 Gulf War.
Annan's son worked for Cotecna in West Africa from 1995 to December 1997 and then as a consultant until the end of 1998.
"Kojo Annan's sole responsibilities were in Africa," said Cotecna spokeswoman Ginny Wolfe. "He had nothing to do with any U.N. discussions and work."
Cotecna was hired by the United Nations on Dec. 31, 1998 to certify that food, medicine and other goods entering Iraq corresponded to a list of goods approved for import.
The United Nations previously said Kojo Annan stopped receiving monthly payments from Cotecna at the end of 1999. But Eckhard said Friday he continued to be paid because he had an open-ended no-compete contract.
Under that contract, Kojo Annan was paid $2,500 a month — $30,000 a year — in return for which he agreed not to work for a competitor, Wolfe said.
The secretary-general reiterated that in his U.N. job he has "no involvement with granting of contracts, either on this Cotecna one or others." But he said he understood "the perception problem for the U.N., or the perception of conflict of interests and wrongdoing."
Five U.S. congressional panels have been pressing the independent inquiry headed by former U.S. Federal Reserve chairman Paul Volcker (search) to hand over internal U.N. documents for their own oil-for-food probes. But Volcker told the Senate that his panel won't hand over documents until its investigative reports are issued starting in January.
Earlier this month, congressional investigators estimated that Saddam's government raised more than $21.3 billion in illegal revenue under the oil-for-food program and by subverting U.N. sanctions for over a decade.
Eckhard said it was up to Volcker to decide whether the Kojo Annan contract involved wrongdoing. "We feel there is not. We have looked into it and we can find no evidence," he said.
Wolfe noted that the oil-for-food program awarded Cotecna an inspection contract in 1992 — before Kojo Annan joined the company — but it was withdrawn because Saddam didn't want full inspections. In 1996, when Kojo Annan was working for the company, Cotecna lost an oil-for-food contract to Lloyd's Register (search), she said.
With these two contracts in mind, Wolfe said, "it defies logic to think there was anything going on in the process" of awarding the contract to Cotecna in December 1998.
Annan has said his son joined Cotecna at the age of 22 as a trainee in Geneva, before he became secretary-general.
"He is an independent business man. He is a grown man, and I don't get involved with his activities and he doesn't get involved in mine," the U.N. chief said.
Asked whether he was disappointed and angry with his son for taking the money and not disclosing it, Annan replied: "Naturally I was very disappointed and surprised, yes."
U.S. Ambassador John Danforth discussed the oil-for-food investigations with Annan Monday and was asked afterward whether the United States still has confidence in the secretary-general.
"I don't think the U.S. government rushes to judgment until all the facts are in," he said.