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US: US charges oil-for-food chief

by Brooke Masters and Mark TurnerFinancial Times
January 16th, 2007

Benon Sevan, the administrator who was in charge of overseeing the United Nation’s oil-for-food programme for Iraq, was indicted on Tuesday on federal charges of bribery and conspiracy to commit wire fraud, as part of a growing attempt by prosecutors to hold UN employees accountable to US laws.

The charges against Mr Sevan, a Cypriot, and Fred Nadler, a US businessman who allegedly funnelled $160,000 in illegal commissions to Mr Sevan, bring to 14 the number of people and companies charged in connection with the oil-for-food scandal, FBI officials said.

Mr Sevan is the first UN official to be charged for wrongdoing under the programme. Mr Nadler is a brother-in-law of Boutros Boutros-Ghali, former UN secretary-general.

The case highlights a multi-pronged effort led by US attorney Michael Garcia of the southern district of New York to tackle law-breaking at the UN. “If you look at the UN as an entity, they’re sitting in the middle of New York,” Mr Garcia told the Financial Times. “We’re the office that has the responsibility for looking at the corruption at the UN. It’s here, just like Wall Street is here.”

Since Mr Garcia’s arrival in New York from Washington in 2005, his office has brought about 10 cases against current and former UN employees. The charges range from visa fraud and selling illegal drugs to procurement fraud and bribery charges.

Saddam Hussein’s regime raised $1.8bn in contravention of sanctions, through kickbacks and surcharges on the sale of oil and the purchase of goods in the programme. “What you’ve got is risk. You’ve got opportunities. You’ve got lots of money changing hands,” Mr Garcia said.

Mr Sevan has been a target for UN critics, who accused the organisation of presiding over the largest corruption scandal in history. Revelations of his alleged wrongdoing in 2005 by an independent inquiry committee, headed by Paul Volcker, the former Federal Reserve chairman, led to a big anti-corruption push.

Mr Sevan’s attorney described the charges as trivial and baseless and accused the US attorney’s office of using his client “as a scapegoat and a distraction from the United States’ own massive failures and mismanagement in Iraq”.

The drug and the visa cases have been low-level. This summer, authorities broke up a drug ring that was using UN diplomatic pouches ’among other methods’ to smuggle the stimulant khat into the US.

Mr Garcia said his efforts had not been hampered by diplomatic immunity issues. “There’s never been a case where we wanted to go forward and we couldn’t,” he said.

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