Updated

The secretive Volcker inquiry into the more than $110 billion United Nations Oil-for-Food (search) scandal plans to issue a third interim report later this month — to tie up “loose ends” from the previous two reports, as a committee spokesman recently put it.

Having spent more than $30 million over the past year, the U.N.-authorized Independent Inquiry Committee has so far confirmed reports previously documented in the press that the man appointed by U.N. Secretary General Kofi Annan (search) to run Oil-for-Food, his longtime colleague Benon Sevan, engaged in a conflict of interest in soliciting lucrative oil allocations from Saddam Hussein’s regime.

Beyond that, however, the investigation headed by former Federal Reserve Chairman Paul Volcker (search) has offered up little more than the censure of a few third-tier U.N. officials, while allowing Annan to claim, without apparent basis in fact, “exoneration” from a conflict of interest involving his son Kojo, who received money from a major Oil-for-Food contractor, Cotecna Inspection S.A. (search).

Now, even the Volcker committee’s wrap-up of loose ends may need more work. The latest question mark looms over the committee’s “adverse findings” released five months ago against a retired U.N. official, Allan Robertson (search). Formerly the head of the U.N. procurement department, Robertson was censured by the Volcker inquiry this past February based on testimony that appears to have come from a tainted U.N. source.

Robertson protested at the time that he was innocent. His claims were sharply dismissed by the Volcker inquiry, which declared it had “compelling evidence” that while running the U.N. procurement department, Robertson had willfully violated U.N. procedures in 1996 to award an inspection contract to Saybolt Eastern Hemisphere B.V. (search), a Dutch firm that monitored Saddam's oil exports from Iraq under the Oil-for-Food program.

The problem here is that the Volcker committee’s “compelling evidence” came from Alexander Yakovlev (search), another longtime U.N. procurement official who handled tens of millions of dollars worth of U.N. supply contracts annually, and was portrayed as an advocate of integrity in the two Volcker interim reports that examined the awards of the Oil-for-Food inspection contracts.

Yakovlev was the U.N. officer in charge of awarding both the Saybolt and Cotecna contracts, and the Volcker committee relied on his claims that in both cases, but particularly that of Saybolt, he had fought against the violation of U.N. rules.

But Yakovlev, a Russian native, abruptly resigned from the United Nations late last month, after a FOX News investigation revealed that he was involved in an apparent conflict of interest with a regular U.N. supplier, IHC Services Inc., which had hired Yakovlev’s son Dmitry between 2000 and 2003, according to Dmitry’s own resume.

Yakovlev left the United Nations the day after the world body announced its own inquiry into his activities, and the Volcker committee then took charge, sealing his office to all but its own investigators. A day later, the executive director of the Volcker investigation, Reid Morden, told the New York Times that the committee, on unrelated grounds, had been harboring its own suspicions about Yakovlev’s “veracity.”

None of those suspicions, however, are evident in the two Volcker reports released to date. In the first of those documents, issued Feb. 3, Yakovlev’s testimony served in part to condemn another U.N. official, Joseph Stephanides (search) – who was fired four months later by Kofi Annan on the basis of Volcker’s findings. Stephanides says he is innocent, a claim backed by a wide array of Western diplomats and by the U.N. staff union, and he is appealing his firing.

In the same report, the committee briskly dismissed Robertson’s claim that some of the evidence against him had likely been trumped up by Yakovlev. Robertson was not even sent a copy of the report.

None of this was corrected, or even addressed, in the second Volcker report, released March 29. Robertson’s claims of innocence simply slipped from view. He had retired from the United Nations in 1998. There was nothing for Robertson to appeal, except the loss of his good name.

But a closer look at Robertson’s case reveals a great deal about the Volcker committee’s peremptory methods in fingering some lower-level U.N. staffers, while providing far gentler handling to top officials -- including Annan and Iqbal Riza, Annan’s then chief of staff.

Riza abruptly left the post in January, after investigators discovered that he had shredded three years’ worth of Oil-for-Food documents, which he claimed were only duplicate records. But he was retained by Annan as a special advisor and has since been appointed to a new, high-level U.N. position dealing with “world peace."

By contrast, both Robertson and Stephanides describe a kangaroo-court process, in which they say they were allowed no reasonable chance to defend themselves.

Told abruptly just a few days before the release of the damning report that they were about to be charged with “adverse findings,” they were allowed to view evidence only under close supervision in the Volcker committee’s offices, and given less than a week to prepare written rebuttals before the report was released. Both the accused officials say the Volcker committee then published its report only a day after they had submitted their defenses. “It was obvious to me that they had made up their minds,” Robertson told FOX News.

In Robertson’s case, the committee relied heavily on documents written by Yakovlev and found by investigators in U.N. procurement office files. These documents, referred to in U.N. jargon as “notes to file,” were memoranda of the sort that U.N. staffers can place in official records to note their objections to actions taken over their protest. U.N. procedures require that such memoranda be copied to any U.N. officials involved in the decision at the same time that they are placed in the permanent files.

In Robertson’s case, the Volcker committee cited two such memoranda from Yakovlev, dated July 22 and July 25, 1996, which claimed, in effect, that Robertson — then head of Yakovlev’s department — was bending the rules and overlooking a lower-priced bid from another firm in order to give the Iraq oil inspection contract to Saybolt. The first of the memos, Yakovlev also testified to the committee, summarized a meeting between Yakovlev and Robertson where Yakovlev made the same objections face-to-face.

Robertson says the face-to-face meeting Yakovlev summarized in the “note to file” never took place. Nor, says Robertson, had he ever seen the damning “notes to file” themselves until the Volcker committee confronted him with them this past February – as Robertson says he also told Volcker investigator, Susan Ringler. Robertson protested at the time that Yakovlev’s notes appeared “self-serving,” and pointed out that if they were generated back in 1996, when the contracts were awarded, then both he and at least one other U.N. official in the chain of command should have received copies. FOX News has since learned that this other U.N. official also does not recollect having received copies of Yakovlev’s “notes to file.”

The Volcker committee, in its report, judged that “Mr. Robertson’s efforts to attack the credibility of Mr. Yakovlev are as unsupported as they are unconvincing.” The committee had no further comment about Robertson and Yakovlev when reached by FOX News.

In a series of in-depth interviews about his treatment during the Volcker investigation, Robertson said, “I feel I was probably a soft target,” because he had been retired from the U.N. for years by the time Volcker started his investigation.

“I have been treated unfairly," Robertson declared, “and if this is how they approach people like me, what kind of reporting or investigation is really involved on their part?”

George Russell is Executive Editor of FOX News. Claudia Rosett is a journalist-in-residence with the Foundation for the Defense of Democracies.