Watching the U.N.'s Watchdog

The United Nation's anti-corruption department has been rocked by accusations that the office itself is corrupt.

The head of the U.N. Office of Internal Oversight Services, Undersecretary-General Dileep Nair (search), has been accused of promoting and recruiting people in ways that are not consistent with U.N. rules and regulations. Also, a senior investigator has been suspended and there have been accusations of financial and sexual misconduct.

The scrutiny of Nair and his division comes at a delicate time, as the United Nations is under intense scrutiny for alleged abuse of the Iraqi oil-for-food program. In fact, the Office of Internal Oversight Services (search) is the U.N. agency charged with looking into any abuses within the United Nations and that includes oil-for-food.

Nair has been accused of covering up abuses of the oil-for-food program. So far, his office has carried out 55 internal audits of the process that before the U.S.-led war against Saddam Hussein's regime allowed Iraqi oil to be sold so food could be purchased for Iraqis.

Other allegations of impropriety include charges that some inside the OIOS received financial kickbacks in return for promoting people and that some people were promoted in exchange for sexual favors.

One group within the United Nations that has raised concerns about Nair and his office is the United Nations Staff Union. In April, the group called on U.N. Secretary-General Kofi Annan (search) to establish an independent investigation of the Office of Internal Oversight Services.

To read the resolution from the U.N. Staff Union, click here.

Annan recently wrote to Nair asking him to answer the allegations. Annan's office said the letter went out "a couple of weeks ago" but declined to say what was in the letter except to confirm that recruitment allegations were addressed.

A spokesman for Annan told Fox News it would be irresponsible to ignore such serious accusations. But the secretary-general's office has yet to receive a response from Nair.

Nair, who is currently on sick leave from his position, denied all the accusations to Fox News.

Asked if he would resign if any of the charges are proven true, Nair said, "of course."

"I mean that goes without question because that would mean my integrity is impugned and the only thing I work upon in this office is integrity and the credibility that people have in this office and if that is gone, you might as well pack up and go," Nair told Fox News.

Nair, a former banker and civil servant from Singapore, was picked by Annan in 2000 to run the U.N.'s anti-corruption office. He serves a five-year, non-renewable term.