UNITED NATIONS, Feb. 2 -- A report due out Thursday on the United Nations' administration of the Iraq oil-for-food program is highly critical of the official who managed the program, officials familiar with the report said.
The report, by a U.N.-appointed inquiry headed by former Federal Reserve chairman Paul A. Volcker, alleges that Benon Sevan's management of the $64 billion program made it vulnerable to corruption, the officials said, speaking on the condition of anonymity because they were not authorized to speak publicly on the issue.
While the report, more than 100 pages long, contains no proof that Sevan engaged in criminal acts, it cites evidence suggesting that Sevan received illicit payoffs from Saddam Hussein's government, the officials said.
Sevan did not respond Wednesday evening to a request for comment. He has previously denied wrongdoing, saying he is the target of a "smear campaign."
One of the U.N. officials said Volcker's staff met with Sevan recently to tell him what the report would say about him. "I'm told he's very angry," the official said.
U.N. Secretary General Kofi Annan said he is bracing for some "harsh judgments" in the report and will implement any recommendations Volcker makes to improve the United Nations' "accountability." He also said he will soon announce a series of measures to "strengthen some of our management practices."
Annan, who has been questioned three times by Volcker's investigators, has said that he will lift U.N. officials' diplomatic immunity if Volcker finds sufficient evidence that they engaged in criminal activity. He said Wednesday that he is prepared to make personnel changes to improve U.N. management, but that it "will be done in a civilized way."
"There's not going to be any blood on the floor," he added.
The United Nations established the oil-for-food program in December 1996 to allow Iraq, which had been under economic sanctions since its 1990 invasion of Kuwait, to sell oil to purchase food, medicine and other humanitarian goods.
Hussein's government skimmed as much as $2 billion in illegal kickbacks and oil surcharges from the U.N.-administered program, according to an October report by CIA adviser Charles Duelfer.
Duelfer accused Sevan of receiving allocations to purchase millions of barrels of Iraqi oil on highly favorable terms. Sevan transferred the rights to buy the oil to a Panamanian-based company, Duelfer reported.
Volcker's report is also expected to examine the role of several companies that monitored Iraq's trade and managed its oil revenue.
Volcker is looking into reports that Annan's son, Kojo, improperly profited from the program, Annan said.
Kofi Annan voiced disappointment in November that his son had created a "perception of conflict of interests and wrongdoing" by failing to disclose that he was paid as much as $150,000 by a Swiss company while it profited from the oil-for-food program.
"I don't think we should go ahead of ourselves and prejudge" the report, Annan said. "Let me wait and see and study the report when I get it."
