Annan Given Mixed Review

Times Staff Writer

Investigators examining the “oil for food” program in Iraq said Tuesday that there was insufficient evidence to conclude that U.N. Secretary-General Kofi Annan helped steer a lucrative contract to the company that employed his son. But they criticized Annan for only briefly looking into whether the deal constituted a conflict of interest.

The investigation, led by former Federal Reserve Chairman Paul A. Volcker, also faulted Annan’s former chief of staff for shredding documents that may have assisted the inquiry, and said Annan’s son had “intentionally deceived” the secretary-general and investigators.

Annan called the report’s conclusion an “exoneration” and said he planned to finish the two years left in his term. Asked if he planned to resign, he said bluntly, “Hell, no.”


The investigators’ report does not resolve questions about whether Annan recognized that his son Kojo and the Swiss company that employed him sought to capitalize on Kojo Annan’s connection to the secretary- general. It also left open the question of whether Annan was aware of his son’s plans to do business in Iraq under the oil-for-food program.

Volcker said his panel would continue to look into Kojo Annan’s dealings and expressed hope that the younger Annan, 31, who stopped cooperating with investigators after one interview last October, would agree to answer more questions.

Although the investigation did not find evidence of wrongdoing by Kofi Annan, the report notes that Annan’s now-retired chief of staff, Iqbal Riza, had allowed a secretary to destroy relevant documents to create room in overstuffed filing cabinets, despite an order from Annan to preserve information that could help the investigation.

It was unclear whether Tuesday’s report would dispel doubts about Annan’s ability to lead the world body. A series of scandals and attacks, plus eroding support within U.N. headquarters, have made this a vulnerable time for the secretary-general.

Annan’s most vocal critic, Sen. Norm Coleman (R-Minn.), again called for him to step down. “His lack of leadership, combined with conflicts of interest and a lack of responsibility and accountability, point to one and only one outcome: his resignation.”

White House spokesman Scott McClellan said the Bush administration supported “the work of the secretary-general, and we’ll continue to work with him and the United Nations on the many challenges that we face.”

Annan said he had “lots of work to do,” and cited U.N.-organized elections in Iraq, tsunami relief efforts and a broad menu of reforms he unveiled last week as examples of the world body’s successes.

“It is not unusual that institutions this size, whether it’s government in this country or elsewhere, or companies, that problems do arise,” Annan told reporters. “You deal with the problem -- and draw the lessons and move on.”

The report was the second by Volcker’s commission, which is investigating allegations of malfeasance in the $64-billion oil-for-food program, which allowed Saddam Hussein’s sanctions-strapped regime to sell oil to purchase food, medicine and humanitarian goods.

The first report, released in February, concluded that the chief of the U.N.-run program, Benon V. Sevan, had a “serious” conflict of interest in steering oil contracts to friends and could not adequately account for money that appeared to be a kickback. Next on the agenda is an examination of the Security Council’s responsibility for how Hussein was able to reap billions of dollars through oil smuggling and kickbacks.

Tuesday’s report is the only one expected to address Annan’s role in the oil-for-food program and allegations that his relationship with his son helped Kojo Annan’s employer, Cotecna Inspection, win a contract to inspect imports in Iraq.

The report describes how Kojo Annan leveraged his father’s connections to gain his first job at Cotecna in 1997. A family friend from Annan’s native Ghana who worked at Cotecna introduced Kojo Annan to the firm and later became his boss.

Kojo Annan was employed by Cotecna in Africa, and stopped actively working for the company in 1998. But he continued to receive payments from the firm for five years.

Volcker’s report says Cotecna routed payments to Kojo Annan through front companies to disguise their origin and avoid the appearance of a conflict of interest. It also said that Kojo Annan had lied to his father about the nature and extent of his dealings with Cotecna and Iraq, where he later aspired to do business.

Cotecna’s chairman, Elie-Georges Massey, told investigators that Kojo Annan’s personal connections were the main reason he was hired, and in an internal memo discussing Kojo’s new job, Senior Vice President Andre Pruniaux attached a magazine article about Kofi Annan.

Executives from the company tried to cultivate a relationship with Kofi Annan, meeting with him four times before and after Cotecna bid successfully for the $60-million inspection contract in December 1998.

The secretary-general has maintained that he did not know his son’s company had won a U.N. contract until he read about it in a British newspaper in early 1999. He asked his chief of management, Joseph Connor, to determine whether there was a conflict of interest but did not refer the issue to the U.N.'s investigative body, a move Volcker termed “derelict.” Connor spent one day looking into the matter.

Volcker noted that at the time Cotecna bid for the U.N. contract, the company’s chief executive was under indictment in Switzerland in connection with alleged illicit payments to Pakistan’s former prime minister, Benazir Bhutto. He also said the company was in financial straits and did not submit required financial documentation in the bidding process.

Volcker said those factors made it unlikely that the U.N. would have renewed its contract with Cotecna if a proper inquiry had been carried out. Cotecna won a second contract in 1999.

The report dismisses testimony from Kojo Annan’s business partner, Pierre Mouselli, that the secretary-general knew about their plans to do business in Iraq under the oil-for-food program. Mouselli described how he and Kojo Annan met with Iraqi diplomats in Nigeria and set up three companies to export oil, import food and carry out inspections in Iraq.

In the end, none of the companies engaged in business, the report says. Mouselli twice told the panel that Kojo Annan had informed his father about his contacts with the Iraqis, but later said he couldn’t remember if Kojo had mentioned it.

“In light of this conflict in statements, the committee does not credit Mr. Mouselli’s statements,” the report says.

But the panel said it still had “significant questions” about Kojo Annan’s role in the Cotecna bidding process in 1998, “as well as about the integrity of [his] business and financial dealings with respect to the [oil-for-food] program.” It said it would continue investigating.

In a statement released through his lawyers Tuesday, Kojo Annan said that the report’s criticism of him was unfair and that he was concerned about the effect on his father.

“I deeply regret any embarrassment that the whole Cotecna issue may have caused my father. I am an independent businessman and I do not represent the U.N. or the U.N. secretary-general,” he said. “My father has an excellent reputation, and his conduct and integrity has always been impeccable.”

The secretary-general indicated that the allegations had caused him strain.

“For reasons that parents everywhere will understand, the most difficult and painful moments for me personally throughout this past year have been those when it appeared that my son Kojo might have acted inappropriately or might not have told me the full truth about his actions,” Annan said, reading from a statement.

“I love my son and have always expected the highest standards of integrity from him. I am deeply saddened by the evidence to the contrary that has emerged, and particularly by the fact that my son had failed to cooperate fully with the inquiry. I had urged him to cooperate, and I urge him to reconsider his position and cooperate.”