UNITED NATIONS, March 23 -- A U.N.-appointed panel investigating influence peddling in the oil-for-food program in Iraq is examining three contacts between Secretary General Kofi Annan and executives of a Swiss company that made payments to Annan's son while it conducted millions of dollars' worth of business with the world body, a senior U.N. official said.
The U.N. chief of staff, Mark Malloch Brown, made the disclosure less than a week before former Federal Reserve chairman Paul A. Volcker is due to issue a report on whether Kojo Annan improperly used his family connections to obtain a U.N. contract for his former employer, Cotecna Inspection SA, in December 1998.
Malloch Brown described Annan's meetings as "innocent encounters" that played no role in securing contracts for the Geneva-based firm and said the secretary general told investigators about them. He said that Annan is confident he "will be exonerated of any wrongdoing" but that Volcker will determine whether the actions of his son were "appropriate or not."
The $64 billion U.N. oil-for-food program was created in December 1996 to provide Iraq with an exemption from sanctions, which had been imposed after its 1990 invasion of Kuwait, to sell oil to buy food, medicine and other humanitarian goods. The former Iraqi government collected more than $2 billion in bribes and kickbacks from companies trading with Iraq under the program.
Annan appointed Volcker in April to investigate allegations of misconduct by U.N. personnel. Last month, Volcker accused Benon Sevan, the former director of the oil-for-food program, of asking the Iraqi government to steer valuable oil contracts to an Egyptian businessman. Sevan insists he has done nothing wrong.
Malloch Brown acknowledged Wednesday that the United Nations erred in suggesting Tuesday that Volcker's committee had backed a decision by Annan to pay Sevan an undisclosed but "big number" in legal fees.
Volcker is expected to report Tuesday that Kojo Annan, whom Cotecna employed from 1995 to 1998 to pursue business opportunities in Nigeria and Ghana, received more than $300,000 in payments from the company after he resigned. That figure is about double previous estimates of Kojo Annan's earnings.
The payments, which were first reported in a joint investigation by the Financial Times and the Italian newspaper Il Sole, were part of a "non-compete" arrangement between Cotecna and the younger Annan. He served as a consultant for the company between January 1999 and February 2004, after the company secured a contract in December 1998 to monitor the import of humanitarian goods into Iraq.
U.N. officials and a Cotecna spokesman declined to comment on the amount of the payments. Kojo Annan's attorney, Simon Smith, also declined to comment.
But Malloch Brown confirmed the newspapers' report that Kofi Annan and his wife, Nane, met in January 1997 with Elie Georges Massey, Cotecna's founder and chairman, and son Robert Massey, Cotecna's chief executive officer, over tea at the World Economic Forum in Davos, Switzerland. Malloch Brown said he did not know whether Kojo Annan played any role in setting up what he called a "social encounter."
Annan met with the elder Massey again at U.N. headquarters in September 1998, three months before the United Nations awarded Cotecna the Iraq contract, Malloch Brown said. Massey discussed his plan to establish an international lottery, which he hoped the world body would sponsor, Malloch Brown said. "It had nothing to do with Cotecna's later bidding for and winning of a contract for oil-for-food," he said.
Malloch Brown said that the final contact was initiated by the elder Massey, who sought out Annan in Geneva in early 1999 to apologize for any embarrassment caused by a January 1999 article in the Sunday Telegraph about Kojo Annan's relationship with Cotecna.