Sevan Resigns Before Explosive Report

The former chief of the Iraqi Oil-for-Food program, Benon Sevan (search ), resigned from the United Nations Sunday — just hours before the results of a probe are expected to accuse him of getting kickbacks from the $67 billion operation.

The Independent Inquiry Committee (search ), appointed by the U.N. to probe allegations of corruption in the program, plans to release on Monday its third interim report on the humanitarian program.

Sevan resigned in a letter to Kofi Annan (search), blasting the U.N. secretary-general and accusing him "sacrificing" him for his own political gain.

"I fully understand the pressure that you are under, and that there are those who are trying to destroy your reputation as well as my own, but sacrificing me for political expediency will never appease our critics or help you or the Organization," Sevan wrote.

Sevan's lawyer said on Thursday that investigators have concluded that Sevan took kickbacks while he was overseeing the humanitarian operation and refused to cooperate with their probe.

While the amount of money Sevan allegedly took wasn't immediately known — and may be as little as $160,000 — the findings would be a major blow because of his stature in the organization and the control he had over it. Sevan is also being investigated by the Manhattan District Attorney's office and could face criminal charges.

The committee plans to release its findings about Sevan on Monday, and had sent advance notice to Sevan's lawyer, Eric Lewis. Lewis revealed the findings early and vehemently denied both claims against Sevan, whom the U.N. had been paying a symbolic one dollar a year to keep him on payroll so he would cooperate — until he resigned from the post Sunday.

"The fact is, the committee's allegations are baseless," Lewis said in a statement. "Mr. Sevan never took a penny, as he has said from the beginning."

Click here to read Lewis' statement (pdf file).

Click here to read Lewis' account of the "false allegations" against his client (pdf file).

The committee, led by former U.S. Federal Reserve Chairman Paul Volcker (search), refused to comment on Lewis' claims. Committee spokesman Mike Holtzman had said earlier Sevan would be one subject of the Monday report.

"Our final judgment on him will be rendered [Monday]," Holtzman said.

The Oil-for-Food (search ) program, launched in December 1996 to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait, quickly became a lifeline for 90 percent of the country's population of 26 million.

Under the program, Saddam's regime could sell oil, provided the proceeds went to buy humanitarian goods or pay war reparations. Saddam's government decided on the goods it wanted, who should provide them and who could buy Iraqi oil. But the Security Council committee overseeing sanctions monitored the contracts.

In a bid to curry favor and end sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for Iraqi oil that could then be resold at a profit.

According to Lewis, the committee will find that a small trading company called African Middle East Petroleum Co. Ltd. Inc. paid Sevan in exchange for his helping it win oil contracts from Saddam's regime. It will say that he acted "in concert" with a friend named Fred Nadler, who is the brother-in-law of former U.N. Secretary-General Boutros Boutros-Ghali.

Lewis said the letter of findings that Volcker's team sent to him does not spell how much he got in kickbacks.

Volcker's team has been investigating Oil-for-Food for more than a year. In an interim report released in February, the committee concluded that Sevan solicited oil allocations from Saddam's regime on behalf of the company, known as AMEP, between 1998 and 2001. It said Nadler was essentially his middleman and accused Sevan of a "grave conflict of interest."

In its report, Volcker's team mentioned $160,000 in "unexplained funds" belonging to Sevan. Sevan had disclosed the money earlier, saying it was from an aunt in Cyprus.

Lewis said Volcker's committee will also say that Sevan refused to cooperate with its investigators, apparently because he would not meet face-to-face with them in recent months. Lewis acknowledged that Sevan had refused to do so since January because investigators accused him of lying or changing his testimony when he didn't remember meetings or phone calls he'd had years before.

He said instead Sevan had agreed to respond to written questions.

Lewis accused Volcker's team of treating Sevan unfairly by concealing evidence from him, relying on secret interviews with jailed members of Saddam's former regime and questioning his integrity when he couldn't remember phone calls that took place years before.

He said it was trying to look tough and appease critics in the United States who have accused it of bungling the investigation.

"The IIC wants cartoon villains, not the truth," Lewis said in the statement. "Mr. Sevan has now reached a point in his dealings with the IIC where he questions the Committee's commitment to objective and evenhanded fact-finding and doubts he can receive a fair hearing in this forum."

After the February report, Annan announced disciplinary proceedings against Sevan but said he would wait until the report came out before making a decision.

The Associated Press contributed to this report.