UNITED NATIONS, March 22 -- The United Nations agreed last year to use the proceeds of Iraqi oil revenue to pay the legal fees of a former U.N. official who was accused of improperly steering lucrative oil contracts to an Egyptian businessman, according to a U.N. statement released Tuesday.
The United Nations' chief spokesman, Fred Eckhard, said in a statement that the organization agreed in October to a request by Benon Sevan, the former head of the U.N. oil-for-food program in Iraq, to cover all "reasonable" legal expenses associated with his testimony before a U.N.-appointed panel investigating allegations of misconduct in the largest U.N. humanitarian program. The decision, which was made on the advice of the U.N. legal affairs office, was taken to ensure Sevan's "full cooperation," Eckhard said.
Eckhard declined to divulge the amount of Sevan's legal claims, but he said the United Nations is questioning some expenses and that Sevan has not been reimbursed.
Mark Malloch Brown, the world body's new chief of staff, ended the arrangement after a U.N.-appointed panel, headed by former Federal Reserve chairman Paul A. Volcker, alleged in a Feb. 3 report that Sevan had a conflict of interest and had violated U.N. rules.
Sevan has denied he engaged in any wrongdoing. Sevan's lawyer, Eric L. Lewis, did not respond Tuesday evening to telephone and e-mail messages seeking comment.
The United Nations' oil-for-food program was established in December 1996 to allow Iraq, which was sanctioned after its 1990 invasion of Kuwait, to sell oil to buy food, medicine and other humanitarian goods. Former Iraqi president Saddam Hussein's government siphoned more than $2 billion in kickbacks from companies conducting business under the program, U.S. and U.N. officials said.
The legal payments for Sevan were to be drawn from a $66 million U.N. account that was used to administer the oil-for-food program. The account is also being used to pay compensation to relatives of U.N. officials who died in the Aug. 19, 2003, attack on U.N. headquarters in Baghdad and to finance Volcker's $30 million-a-year investigation.
The disclosure of the U.N. agreement, which was first reported by the New York Sun, comes one week before Volcker is scheduled to report on an investigation into whether U.N. Secretary General Kofi Annan's son, Kojo, received payments for helping a Swiss company obtain a lucrative contract to monitor the oil-for-food program.
The Geneva-based company, Cotecna, has denied that Kojo Annan, a former employee who worked for the firm in West Africa, played any role in the company's Iraq operations. The United Nations maintains that Kofi Annan played no direct role in securing the bid for Cotecna.
The Financial Times, however, reported Tuesday night on its Web site that Kofi Annan had held previously undisclosed meetings with two executives from the company before it signed the U.N. contract. The British newspaper reported that a U.N. official confirmed that Kofi Annan met three times with Cotecna executives but that the meetings had nothing to do with Cotecna's Iraq contracts.