NEW YORK – The Swiss company at the heart of a new report on the oil-for-food scandal (search) repeatedly lied about its links to Secretary-General Kofi Annan's (search) son, one investigator said, going much further in his criticism than the document itself.
The investigator, Mark Pieth, also rejected Annan's declaration that the report, released Tuesday, exonerated him on the matter of Cotecna Inspections S.A. (search) winning a $10 million-a-year U.N. contract while he was secretary-general and while it employed his son Kojo.
"We did not exonerate Kofi Annan," Pieth told The Associated Press. "We should not brush this off. A certain mea culpa would have been appropriate."
The report was the second to be released by the U.N.-appointed committee led by former Federal Reserve Chairman Paul Volcker. It coincides with allegations of sex abuse by U.N. peacekeepers and of sexual harassment and mismanagement by senior U.N. staff. It comes a week after Annan called for the biggest overhaul of the United Nations in its 60-year history.
Volcker said at a news conference he hoped the findings, and a final report in midsummer, will help bring about "a reformed U.N., a U.N. capable of commanding and maintaining the support of its member states and the public at large."
A key conclusion was that Kofi Annan never interfered in the awarding of the contract to the Swiss company but should have better investigated possible conflicts of interest after a British newspaper, The Sunday Telegraph, reported the link between Kojo Annan and Cotecna in January 1999.
Annan's advisers had told him after a cursory one-day audit in 1999 found no conflict and that no further probe was necessary. Cotecna's contract was subsequently renewed repeatedly.
In uncharacteristically strong language, Annan replied "Hell, no" when asked if he planned to step down, and noted the report's findings that he committed no personal wrongdoing.
"After so many distressing and untrue allegations have been made against me, this exoneration by the independent inquiry obviously comes as a great relief," he said.
But the report clearly faulted the secretary-general's management of the world body and his oversight of the scandal-ridden oil-for-food program in Saddam Hussein's Iraq.
The report's harshest criticism, however, was reserved for Cotecna, which won a U.N. contract in 1998 to certify goods imported to Iraq under the program, and Kojo Annan. The report accused them of trying to conceal their relationship after the firm was awarded the contract.
Kojo Annan worked for Cotecna in West Africa from 1995 to December 1997, then was a consultant for the firm until the end of 1998 — when it won the oil-for-food contract. In November it was disclosed that he remained on the Cotecna payroll until 2004 on a contract to prevent him from working for a competitor in west Africa.
Volcker's Independent Inquiry Committee found that Kojo Annan was not forthcoming with either his father or the committee and accused him of consistently trying to hide the nature of his relationship with Cotecna.
In an interview with The Associated Press following the report's release, Pieth said Cotecna officials continually deceived investigators about the relationship — specifically, how much Cotecna paid Kojo Annan.
"It's a continuous history of us confronting them, them owning up to something and then backtracking," said Pieth, a professor of criminal Law and criminology at the University of Basel, in Switzerland.
A spokesman for Cotecna denied the allegations.
"We are very shocked to be accused of not being forthcoming," Seth Goldschlager said.
Pieth cited a letter dated April 16, 2004, that was not included in the report released Tuesday, which he showed to The Associated Press. In the letter, a senior vice president of Cotecna wrote that after Kojo Annan left the company in 1998, it paid him no more money.
But the report issued Tuesday concluded that Kojo Annan was paid as much as $484,492 after he left the company.
Cotecna disputes the figure and argues that Tuesday's report does not make clear that the company has ordered an audit into all payments made to Kojo Annan, to be delivered at the end of April.
Goldschlager said a preliminary report to the committee concluded that Kojo Annan had not received more than $400,000 from the company.
The $64 billion oil-for-food program ran from 1996 to 2003. Saddam's government was allowed to sell oil in exchange for humanitarian goods as an exemption from U.N. sanctions imposed after Iraq's 1990 invasion of Kuwait.
Seeking 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. U.S. congressional investigators say Saddam's regime may have illegally made more than $21 billion by cheating the program and other sanctions-busting schemes.
In a statement issued through his lawyer, Kojo Annan welcomed the committee's finding clearing him and his father of exerting "any undue influence" in the awarding of the Cotecna contract.
"I deeply regret any embarrassment that the whole Cotecna issue may have caused my father," he said. "My father has an excellent reputation and his conduct and integrity has always been impeccable and this report does not alter that."
Kofi Annan on Tuesday addressed the report's finding that Kojo Annan had not been entirely forthcoming.
"For reasons that parents everywhere will understand, the most difficult and painful moments for me personally, throughout this past year, have been those when it appeared that my son, Kojo, might have acted inappropriately or might not have told me the full truth about his actions," Annan said.
The report also criticized Annan's former chief of staff, Iqbal Riza, who retired in January, of giving approval to shred three years of files on April 22, 2004 — the day after the U.N. Security Council authorized the Volcker investigation.
The files — which Riza said were duplicates — contained documents related to the oil-for-food program that were unavailable in the U.N. records file, the report said.
Volcker also criticized Dileep Nair, the head of the U.N.'s internal watchdog, for hiring a man using oil-for-food money whose work was not directly related to the program.
Annan's current chief of staff Mark Malloch Brown said Nair would be disciplined.
In letters of response attached to the report, both men denied any wrongdoing.