The following is a transcript of a statement Paul Volcker made August 8, 2005, at a news conference, followed by a question and answer session with reporters.
I have a relatively short statement that I'd like to read to put this in perspective.
This third interim report extends certain lines of investigation opened in the two earlier interim reports.
First, it analyzes in detail the illicit activities of Benon Sevan, who was the executive director of the United Nations Office of the Iraq program.
And second, it reviews evidence that a United Nations procurement officer, one Alexander Yakovlev, actively solicited a bribe in connection with the program. And there are also indications that he accepted bribes from other United Nations contractors.
Now, I remind you the committee's findings are based upon reasonably sufficient evidence. In these cases, we clearly believe that standard has been met. And our conclusions are obviously significant and troubling.
We are a fact-finding body; we're not a law enforcement agency.
However, as I have indicated from the beginning of our work, the committee, where possible, cooperates with national law enforcement authorities with respect to, first, potentially corrupt activities of oil-for-food program contractors which we identify in our investigation; also, United Nations staff members it identifies in its reports as apparently engaging in corrupt practices; and, then, certain others outside the United Nations who collaborated in illicit and corrupt activities involving the oil-for-food program.
The fact is, we've had good cooperation with some law enforcement agencies in our work including, relevant to today's report, the office of the district attorney of the city where the U.N. is located.
But it's also been true of authorities in other countries: the French, the Italians, the Swiss and a number of Middle Eastern countries.
As has been widely report, Mr. Sevan is now the subject of a criminal investigation. If criminal charges are to be brought against Mr. Sevan, the committee recommends that the secretary general accede to any properly supported request from an appropriate law enforcement authority for a waiver of Mr. Sevan's U.N. immunity.
In February, when the committee issued its first interim report, it was aware that someone within the U.N.'s procurement division may have solicited a bribe from one of the bidders for the oil inspection contract during the 1996 procurement bidding process.
By mid-May, committee investigators had determined that the official in question was indeed Mr. Yakovlev. The evidence now gathered by the committee is sufficiently strong that we are again recommending that, upon the request of the appropriate law enforcement authorities, the secretary general also waive the immunity of Mr. Yakovlev.
The committee's investigation of Mr. Yakovlev's program-related activities is continuing, including with respect to his role as a procurement officer for the 1998 Cotecna inspection contract for humanitarian goods entering Iraq.
Now, you will recall in the second interim report in late March, the committee reported on events leading up to Cotecna's 1998 receipt of this contract. At that time, at the time that Cotecna bid and won this contract, it employed Kojo Annan, the son of the secretary general, as a consultant.
Although the secretary general knew his son worked for Cotecna, the committee, in weighing conflicting statements and in the absence of documentary evidence, found that the evidence was not reasonably sufficient to show that the secretary general knew during that bidding and contract award process that Cotecna was a candidate. Therefore, no definitive conclusion was reached.
The committee also found no conclusive evidence that the secretary general's son, Kojo Annan, assisted Cotecna in the bidding process.
However, it carefully noted that its investigation of Kojo Annan's actions during the fall of 1998 was continuing -- one of the loose ends we have referred to in the past.
Now, further evidence has emerged on these points. As reported in the press, Cotecna recently discovered and disclosed a short e-mail that raises a further question about the secretary general's knowledge of Cotecna's interest.
Specifically, the e-mail indicates that Michael Wilson, then a Cotecna vice president and a friend of the secretary general and Kojo Annan, had a brief discussion with the secretary general and his entourage in Paris in late November 1998 about the status of Cotecna's negotiations with the United Nations.
The e-mail concluded, and I quote, "The collective advice was that we" -- meaning Cotecna -- "could count on their support," end of quotation.
The new evidence clearly raises further questions, questions we have not been able to answer to our satisfaction for this report.
I can say that we are confident that, despite Mr. Wilson's denials, the e-mail does appear authentic. Most of the e-mail's content, addressing matters not relevant to the committee's investigation, is accurate. But I must also emphasize the investigation has elicited a series of denials from others -- presumably involved or knowledgeable -- concerning the fact of the discussion described in the e-mail.
The investigation is continuing through further document search and interviews to evaluate the significance of this new evidence and other evidence that bears on the selection of Cotecna.
The committee does expect to review its conclusions on this matter in its next report. That report will be much more comprehensive. It is anticipated in early September. It will provide a broad review of the management of the program by the various United Nations parties: the Security Council and its 661 Committee, the United Nations secretariat, under the leadership of the secretary general, and the nine U.N.-related agencies operating in Iraq.
Permit me to emphasize the committee has been and is exceptionally well-served by a dedicated and highly professional and competent staff. Nonetheless, I won't claim in the time available that every aspect of the program could be reviewed and evaluated in detail.
The committee is confident, however, that the breadth of its next report, the evidence it will present and its recommendations for action will effectively discharge its responsibility for a timely and authoritative response to the broad mandate it was given.
Finally, the committee also plans to publish in early October a report on the activities of the companies that purchased Iraqi oil and that supplied humanitarian goods under the program.
That report will provide a definitive list of the more than 4,500 private contractors that engaged in the purchase of oil from or thetracts. And it will report the apparent payment of illicit surcharges on oil contracts and kickbacks on humanitarian contracts.
Contracting parties have been and are being notified of their anticipated appearance in that committee listing. The October report will also deal with remaining issues concerning contract execution by the program's inspection and banking contractors and the activities of the United Nations Compensation Commission.
In conclusion, the findings in today's report tie up two important loose ends in our inquiry. But they are by no means the end of this investigation. Our team, almost inevitably, I suppose, is still turning up new information every day.
We also realize the investigation cannot and should not go on indefinitely. What's important is that we contribute effectively to the needed reform of the United Nations administration in general and to its ability to respond appropriately to further humanitarian or other challenges that it will receive in the future.
So with that much comment and introduction, I would be delighted to have your questions.
QUESTION: Mr. Volcker, there appears to be no mention of the Nadler's family relationship to former Secretary General Boutros Boutros-Ghali here. Maybe there wasn't time. But will you be going into that or looking at some of the leads that point to Boutros Boutros-Ghali?
VOLCKER: Mr. Boutros Boutros-Ghali was of course the secretary general of the U.N. when this program started. And we intend to include his connection in that respect and perhaps others in the final report, in the comprehensive report -- so-called.
QUESTION: Based on the fact that Mr. Sevan has resigned, does he now have diplomatic immunity anymore? And do you think that he should be charged criminally with what you have found and discovered here, as well as Mr. Yakovlev?
VOLCKER: I don't know that he's resigned or not. But I don't know of his whereabouts authoritatively, although we've read press reports that he may be in Cyprus these days.
But the immunity continues beyond his term of office. And, yes, we think the evidence is sufficient to recommend to the secretary general that, upon proper application by appropriate criminal authorities, that his immunity be lifted. There is a process that one has to go through.
QUESTION: In the light of what we know now, how many people do you think -- VIPs -- would be in this dragnet...
VOLCKER: I can't possibly answer that question. We will review and reach conclusions about the administration in general in our next report.
QUESTION: The report notes that after Mr. Yakovlev's resignation from the United Nations on June 22nd, there was sufficient bank account activity including the transfer of substantial sum of funds from the Moxico (ph) account. Can you be more specific about the amounts involved?
VOLCKER: I can't be any more specific than that.