IRAQ: Swiss Oil-for-Food Monitor Rejects 'Malicious' Criticism
Cotecna Inspection S.A., the Swiss company that monitored the shipment of humanitarian goods to Iraq under the oil-for-food program, has accused the committee investigating the program for the United Nations of making "false, misleading and malicious" statements.
In letters written March 30 and April 21, a Cotecna lawyer demanded that the committee correct what she called "inaccuracies and misleading statements" in its report.
The committee's second report, issued March 29, criticized the company for making "false statements" about its relationship with Kojo Annan, son of Kofi Annan, the United Nations secretary general. The report, wrote Evelyn M. Suarez, the Cotecna lawyer, portrayed a "distorted and untrue picture of the company."
The committee "stands by its report," said Mark Pieth, one of three commissioners on the panel, which is led by Paul A. Volcker, the former Federal Reserve chairman.
Speaking on grounds that they not be identified, investigators for the committee discounted Cotecna's complaints, noting the report's conclusion that the panel still lacked a full account of Cotecna's payments to Kojo Annan and its activities with respect to the oil-for-food program. The program, which ran from December 1996 to 2003, allowed Iraq to sell oil to buy food and medicine.
The company's accusations are the latest criticisms of the panel, which Kofi Annan appointed last year under pressure to investigate charges of corruption in the $64 billion program. The complaints - which accuse the panel of being either too tough on United Nations staff members and contractors, as Cotecna has alleged, or too soft, as United Nations critics say - reflect the extent to which the organization and the multiple investigations have become politically polarizing.
Last week The Associated Press reported that two staff members on Mr. Volcker's panel had resigned. One of them, Robert Parton, who led the investigation of Kojo Annan and Cotecna, argued that the panel had been too uncritical of the relationship between the two and too willing to accept the secretary general's statements that he had not interfered with the selection of Cotecna.
The second Volcker report was harshest in its judgment of Kojo Annan, 31, and Cotecna, saying that they conspired to conceal the duration of their business and professional relationship and that Kojo Annan had deceived his father about it. It also accused Cotecna of making "false statements to the public, the United Nations and the committee."
In its letter to Mr. Volcker, which ran more than 50 pages and which was provided to Congressional panels investigating the program and to The New York Times, Cotecna denied specifically that it had made "false statements" about its relationship with Kojo Annan.
Cotecna insisted it had been accurate in saying that Mr. Annan had not, in fact, done any work for the company after Dec. 31, 1998. Cotecna paid him after that to ensure that he would not work for competitors. The letter states the company provided the panel with a copy of the agreement last June.
The Volcker committee points to an April 2004 letter from a senior Cotecna executive denying that Kojo Annan was employed by Cotecna or had received money from the company after 1998. A Cotecna spokesman said the executive was simply mistaken; he said the company had informed the panel that the statement was made in error as soon as it was discovered.
Cotecna also said the panel had distorted the record by asserting that Cotecna's contract would not have been renewed had the United Nations known about an investigation of a possible bribe by the company to the husband of Benazir Bhutto, then prime minister of Pakistan, to secure a contract there. Cotecna said the panel had noted only in footnotes that no Cotecna executive was indicted as a result of the bribe inquiry.
The report maintained that Cotecna had an obligation under its procurement rules to report the existence of such an investigation and had not. But Cotecna said the changes in rules that required such reporting "were not made public in any way."
"Indeed, the procedures remain opaque to this day," Ms. Suarez wrote.
Finally, Cotecna expressed "outrage" over the report's assertions that there were "possibly" additional payments of $306,305 to Kojo Annan above and beyond what it had disclosed. A Cotecna spokesman said that in January, the company had told Mr. Volcker's investigators that one reported possible payment had, in fact, come from a competitor. This, the letter stated, suggested that the payment "did not come from Cotecna."
It chastised the panel for failing to note that an independent auditor hired with the panel's approval had issued a "preliminary result" on March 23, six days before the committee issued its report, indicating that no "additional or irregular payments from Cotecna to Kojo Annan" had been found. The committee report noted only that the "review is not complete."
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