Former U.N. Oil-for-Food Chief Indicted

The former executive director of the United Nations oil-for-food program in Iraq was indicted yesterday by a Manhattan federal prosecutor for taking about $160,000 in bribes.

Benon V. Sevan of Cyprus is the third U.N. official to be charged with or convicted of crimes in a federal probe of corruption at the world body. Sevan had overseen a $64 billion program created in December 1996 to permit Iraq to sell oil to buy food and medicine and repay billions in war reparations over its 1990 invasion of Kuwait.

Michael J. Garcia, the U.S. attorney from the Southern District of New York, issued a warrant through Interpol for the arrest of Sevan at his home in Cyprus, as well as a warrant for Efraim "Fred" Nadler, a New York businessman who was indicted on charges of channeling the illegal payments to Sevan. Nadler's whereabouts are unknown.

If convicted, Sevan, 69, could face up to 50 years in prison and Nadler, 79, could be sentenced to a maximum of 112 years. Garcia said he would seek their extradition to face charges. Sevan's indictment marks the culmination of a 2 1/2 -year criminal investigation by two New York prosecutors into corruption at the United Nations that has led to the indictment or conviction of 14 people.

"The oil-for-food program was established to provide humanitarian relief to the Iraqi people, not to line the pockets of corrupt officials," said Robert M. Morgenthau, the Manhattan district attorney who participated in the investigation. Garcia said in a statement that the indictment "demonstrates how pervasive the corruption was, and how that corruption undermined the operation of the program."

Sevan's lawyer, Eric L. Lewis, dismissed the charges as "baseless" and said his client is a "scapegoat and a distraction from the United States' own massive failures and mismanagement in Iraq." Lewis said that Sevan -- who served in some of the world's most dangerous capitals during his 40 years at the United Nations -- had previously disclosed the money as a "family gift."

The U.N. oil-for-food program was marked by scandal. Former Iraqi president Saddam Hussein siphoned at least $2 billion in illegal kickbacks from companies trading in the program, before it was placed under the control of the U.S.-led military coalition that invaded Iraq in March 2003.

Kofi Annan, then the U.N. secretary general, appointed former U.S. Federal Reserve chairman Paul A. Volcker to lead an inquiry into allegations that Iraq granted U.N. officials, including Sevan, lucrative rights to buy discounted Iraqi oil in exchange for favorable treatment.

Volcker accused Sevan of engaging in "a grave conflict of interest" by using his contacts with the Iraqi leadership to steer millions of dollars in contracts to an Egyptian businessman. He accused Nadler -- the brother-in-law of ex-U.N. secretary general Boutros Boutros Ghali -- of channeling nearly $160,000 in proceeds from Iraqi oil sales to Sevan.

The indictment unsealed yesterday affirms some of Volcker's findings, noting that Nadler is alleged to have helped an unnamed co-conspirator "obtain the right to buy Iraqi oil under the oil-for-food program in exchange for commissions from the oil sales, and then allegedly funnelled approximately $160,000 of these oil commissions to Sevan."

Sevan is charged with bribery, wire fraud and conspiracy to commit wire fraud and theft or bribery. Nadler is charged with seven counts of bribery, wire fraud, conspiracy to commit wire fraud and the violation of a 1990 U.N. arms embargo and a 1979 law banning trade with terrorist states. It remains unclear whether Cyprus, which does not have an extradition treaty governing financial crimes with the United States, will surrender Sevan.

Federal authorities announced the indictment as the new U.N. secretary general, Ban Ki Moon, traveled to Washington yesterday to shore up U.N. relations with the United States. Ban told a gathering of Washington Post executives, editors and reporters that he has "a strong and firm commitment" to raise the United Nations to the "highest level of ethical standards." He said he intends to "lead by example," citing a recent pledge to publicly disclose his financial statement each year.

Also yesterday, Ban held his first meeting as secretary general with President Bush, discussing a range of political crises, including Darfur, the Middle East and North Korea. He also pressed Bush to ensure continued U.S. funding for the world body, to support international efforts to halt global warming and to back U.N. efforts to increase assistance to the world's poorest.

Bush welcomed Ban with a slap on the back and urged him to "pick up the phone" and call whenever he wanted to discuss political affairs, according to U.N. sources. He also pressed Ban to have the United Nations play a larger, unspecified political role in Iraq. The U.N. chief responded that while the United Nations is doing everything it can to support Iraq's transition, it is constrained by the lack of security on the ground, the sources said.

"I appreciate so very much how you opened up the discussion with a strong commitment to democracy and freedom," Bush said after the hour-long meeting. "And the United States . . . wants to work with the United Nations to achieve a peace through the spread of freedom."