The U.N. Aims to Tighten Contract Oversight

The U.N. announced new measures Monday to strengthen oversight of contracting after a senior U.N. official pleaded guilty last week to soliciting nearly $1 million in bribes for confidential bidding information.

An outside consulting firm will soon join the U.N.’s internal investigators and the U.S. attorney’s office in examining how many contracts may have gone to the highest bribe, not the lowest bid, and to ensure it doesn’t happen again.

The firm, which is expected to be chosen by the end of September, will carry out “a full financial and internal control review of the U.N.’s procurement system,” chief U.N. spokesman Stephane Dujarric said. It will also implement reforms a consultant recommended in June after a comparison of U.N. purchasing practices with those at top U.S. companies.

Secretary-General Kofi Annan ordered the independent assessment after the arrest last week of Alexander Yakovlev, a Russian official with a long career in the U.N.’s procurement office. The U.N. investigators tipped off the U.S. attorney’s office of New York’s Southern District to Yakovlev’s suspected corruption, and he pleaded guilty to conspiracy, wire fraud and money laundering.

U.S. and U.N. investigators said they had discovered $1.3 million in a secret bank account of Yakovlev’s in Antigua and had traced about $950,000 to companies that had won U.N. contracts outside the oil-for-food program for Iraq.

A separate inquiry, led by former U.S. Federal Reserve Chairman Paul Volcker, into corruption in the oil-for-food program accused Yakovlev of requesting a bribe from a Swiss firm bidding for a U.N. contract to inspect oil deliveries in Iraq.

Yakovlev was the U.N. officer in charge of awarding oil-for-food contracts to two other inspection companies, Rotterdam-based Saybolt Eastern Hemisphere and the Swiss firm Cotecna Inspection.

One of Volcker’s mandates was to clear up charges that Cotecna had won the contract because it employed the secretary-general’s son, Kojo Annan. The Volcker committee concluded in an earlier report that the senior Annan did not influence Cotecna’s receipt of the multimillion-dollar contract. But in an ominous aside at a news conference last week, Volcker said recently discovered e-mails suggested that Kofi Annan knew more about the company’s bid than he revealed to Volcker’s investigators, and that the issue was still being looked at.

London’s Sunday Times reported this weekend that investigators were looking into dealings by Kobina Annan, the secretary-general’s brother, with Michael Wilson, an Annan family friend who helped get Kojo Annan the job at Cotecna. Dujarric had no comment other than to confirm that Kofi Annan had a brother named Kobina who was the Ghanaian ambassador to Morocco.

The Volcker panel also concluded that the former executive director of the oil-for-food program, Benon V. Sevan, had “corruptly benefited” from his position and had allegedly received about $140,000 in kickbacks from Iraqi oil contracts. Sevan has denied wrongdoing.

Annan waived diplomatic immunity for Yakovlev and said he would do so for Sevan if authorities made credible charges against the former official, who is now in his native Cyprus.

Dujarric said the Yakovlev case had prompted concern that corruption at the United Nations was more widespread than previously thought. The case “shows that whatever measures and safeguards that have been in place need to be looked at again and procedures need to be tightened,” Dujarric said.