UNITED NATIONS, Feb. 7 -- Secretary General Kofi Annan has suspended the former director of the oil-for-food program and another official following a critical report on the now-defunct plan for Iraq, the United Nations said Monday.
Benon Sevan, the former head of the program, and Joseph Stephanides, who helped set it up in 1996, were suspended with pay pending a probe into their actions, the world body said.
The decision was made on Friday, a day after Paul A. Volcker, the former U.S. Federal Reserve chairman appointed by the United Nations to investigate the program, issued an interim report.
"They were suspended with pay, which is the most common procedure," U.N. spokesman Fred Eckhard said. "It is the beginning of the process. We will by Wednesday be giving them a letter, listing the charges against them. They have two weeks to respond."
The sharpest criticism in the report was against Sevan, who ran the $64 billion program from October 1997 until its end, in 2003.
He was accused of steering an Iraqi oil allocation to a cousin of Boutros Boutros-Ghali, who was U.N. secretary general from 1991 to 1996. The cousin, who owned a small trading company, earned $1.5 million from the transaction.
Stephanides, who like Sevan is from Cyprus, was said to have colluded with Britain's U.N. ambassador to improperly steer a major contract to a British company.
Neither official is accused of accepting money, and both have denied wrongdoing. But the Volcker report expressed concern about $160,000 in cash Sevan said he received from his aunt in Cyprus, who has since died.
Sevan has retired but is back on a $1-a-year salary because of the investigation. His current status also gives him diplomatic immunity, which Annan said he would lift if there were a criminal indictment.
"We would see whether there was an indictment from any national authority, and the lifting of immunity would allow him to defend himself within that judicial system, but we are not there yet," Eckhard said.
Sevan's and Stephanides's salaries continued so as not to prejudge the outcome of the investigation, but under U.N. rules, their pensions cannot be touched, he said.
Volcker is continuing his probe until June. Under the program, Iraq was allowed to sell oil to buyers of its choosing and contract for food and other necessities to ease hardships caused by U.N. sanctions.
