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U.N.: Kofi Annan Will Be Exonerated

Kofi Annan (search) will be exonerated in the Oil-for-Food scandal, according to the U.N. secretary-general's chief of staff.

The statement comes just days before the anticipated release of a critical report into claims of nepotism involving Annan, his son, Kojo, and a company that won a lucrative Oil-for-Food (search) contract.

Annan has consistently denied any wrongdoing, but many questions remain about how the company Cotecna won a multi-billion dollar job to oversee humanitarian contracts in Iraq, while Kojo Annan was working for them. The Financial Times reported Wednesday that the secretary general personally met three times with executives from Cotecna (search) in Geneva, in New York and over tea at the World Economic Forum in Davos, Switzerland.

At a sometimes combative press conference Wednesday, the United Nations chief of staff, Mark Malloch Brown (search), defended those meetings, saying anyone could have tea with the U.N. secretary-general in Davos. He described the meetings as "innocent encounters" that played no role in securing contracts for the Geneva-based firm and said Kofi Annan told investigators about them.

He said that Annan is confident he "will be exonerated of any wrongdoing" but that Volcker will determine whether the actions of Kojo Annan (search) were "appropriate or not."

Paul Volcker (search) — the man tapped by U.N. to lead an independent investigation into the Oil-for-Food program — will release a report next week detailing exactly who his panel says is responsible for what wrongdoings in the multi-billion-dollar program.

Volcker is expected to report Tuesday that Kojo Annan, who worked for Cotecna from 1995 to 1998 to pursue business opportunities in Nigeria and Ghana, received more than $300,000 in payments from the company after he resigned. Those figures were first reported in a joint investigation by the Financial Times and the Italian newspaper Il Sole.

Kojo Annan served as a consultant for the Swiss-based company between January 1999 and February 2004, after it secured the humanitarian goods contract in December 1998.

Meanwhile, FOX News has learned Annan has been forced to re-open an investigation into claims of favoritism and sexual harassment by Dileep Nair (search), the head of the U.N.'s internal oversight office. Relatedly, Volcker in January released more than 50 audits of the Oil-for-Food program carried out by the Nair's office.

When the allegations of favoritism and harassment were first made, Annan dismissed them, but it then came out that the United Nations hadn't even addressed the complainants.

Nair was told on Monday that the United Nations was re-opening the investigation and he immediately demanded an audience with the secretary general. That meeting is scheduled for 11:30 a.m. Thursday.

On the Oil-for-Food issue, former U.N. Secretary General Boutros Boutros-Ghali (search) told Italy's La Repubblica newspaper Thursday that right-wing American politicians are using the scandal as a weapon against the United Nations.

Boutros-Ghali, head of the United Nations from 1991 to 1996, shrugged off criticism of the world body over the program, which allowed Iraq to sell oil to buy goods to ease the impact of 1990 U.N. sanctions on Iraqi civilians.

"The American right has seized this scandal as a weapon against the United Nations. It's a scandal created ad hoc. It's not me asserting this, it's clear to everyone," he told the newspaper.

The former director of the program, Benon Sevan (search), was accused of giving an Iraq oil allocation to a cousin of Boutros-Ghali who owned a small trading company.

Boutros-Ghali also told the newspaper that he would testify before Volcker's commission if called. "Yes. I've prepared a defense document. I also want to dispel any doubt: It has nothing to do with me," he said.

Click on the video box above for a complete report by FOX News' Jonathan Hunt.