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Volcker Report May Blame Annan

Paul Volcker (search) next week will release a report detailing just who is to blame in the Oil-for-Food scandal and some familiar with the documents say that report will directly fault U.N. Secretary General Kofi Annan (search) for some management lapses.

Volcker's Independent Inquiry Committee (IIC) will, for the first time, directly fault Annan for management lapses involving his son, Kojo, and the contractor, Cotecna Inspection S.A., which won the bid to oversee humanitarian contracts in Iraq, sources who have seen the documents told The Wall Street Journal. The report could, therefore, fuel the fire regarding whether Annan can effectively lead the international organization in the wake of the scandal.

The newspaper reports that the panel will fault Annan for failing to identify or take action to correct "systemic failures" in the U.N.'s internal bureaucracy that allowed problems to continue in the program until 2003. The panel concluded, however, that there is no evidence Annan rigged the world body's procurement stem in Oil-for-Food (search), exerted undue influence over contractors or ever sought or received improper payments in the controversy.

Just two days ago, Annan's chief of staff, Mark Malloch Brown, confidently predicted that the secretary general would be "exonerated" in the Volcker report.

Between 1992 and early 1999, Annan met four times with executives from Swiss-based Cotecna (search), who employed Kojo Annan from 1996 to December 1998, and continued paying him $2,500 a month up until last year, which Cotecna officials said was a fee to prevent him from working for competitors.

The United Nations has previously brushed off the meetings between the secretary general and Cotecna as routine, or simply chance encounters, and Annan himself has claimed he wasn't aware of the continuing payments to his son.

Volcker is expected to report Tuesday that Kojo Annan (search), 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.

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

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