The Magazine

"Hell, No"--He's Not Exonerated

From the April 11, 2005 issue: Kofi Annan and the Oil-for-Food investigation.

Apr 11, 2005, Vol. 10, No. 28 • By CLAUDIA ROSETT
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IN THE EPIC UNITED NATIONS Oil-for-Food scandal, we now have a moment of high farce, with what will surely be remembered as Kofi Annan's "Hell, no" press conference--named for the secretary general's belligerent answer on March 29 to a reporter who, quite appropriately, wondered if Annan shouldn't think about resigning sometime soon. The U.N.-authorized inquiry into Oil-for-Food wrongdoing, led by former Federal Reserve chairman Paul Volcker, clocked in last Tuesday with its second interim report on a program now infamous as the biggest fraud in the history of humanitarian aid. That same afternoon, Annan summoned the media to the blue-curtained U.N. briefing room to announce his great relief at "this exoneration."

What exoneration? Despite its scores of investigators, $30 million budget, and more than 10 months on the job, the Volcker inquiry has addressed only a few narrow issues. The focus of this second interim report was Annan's role in the U.N.'s hiring in 1998 of an Oil-for-Food contractor, Swiss-based Cotecna Inspection, S.A., which employed Kofi Annan's son, Kojo, as a consultant, while bidding on the lucrative U.N. contract to inspect Oil-for-Food imports in Saddam Hussein's Iraq. Cotecna, coincident with its U.N. labors, kept paying Kojo Annan from 1999 through early 2004, five years after he had quit. These are intriguing matters. But Volcker has yet to address the bulk of the Oil-for-Food program, and his final report is not expected till mid-summer. It was Annan himself who just last year was urging all and sundry to wait for Volcker's final word before reaching any conclusions.

Now, in his rush to exonerate himself, the secretary general seems to have forgotten that Oil-for-Food was a vast endeavor, running from 1996 to 2003, in which the United Nations, in the name of providing for the sanctions-squeezed people of Iraq, oversaw more than $110 billion worth of Saddam Hussein's oil sales and relief purchases, much of that riddled with billions in graft. All but the first month of this exercise was administered and--in the words of one of Annan's spokesman--"audited to death" by Annan's Secretariat. It was Annan who personally signed off on Saddam's shopping lists, and repeatedly urged the Security Council not only to continue the program, but to expand it in size and scope, which allowed Saddam to rake in yet more illicit billions from oil smuggling.

If Annan has indeed lost sight of his own oversight role, it would hardly be the only such lapse turned up in this inquiry. What emerges from the jumbled narrative of the Volcker interim report is a U.N. universe of forgetful officials, botched record-keeping, cronyism, and conflicts of interest so abundant they start to sound simply routine--which they apparently were. Most noteworthy is the volume of damning information whitewashed by bland wording, culminating in Volcker's judgment that in some respects Annan's performance was "inadequate." By such standards, the Titanic was "non-buoyant."

As with the earlier interim report, issued in February, Volcker informs us that his team has found no smoking gun. But there's enough smoke here to leave you wondering if Volcker's team should have been looking not for a gun but, instead, for a roomful of U.N. shredders, flaming out from overuse.

As it happens, the Oil-for-Food scandal does indeed feature a shredder. Among the findings of this Volcker installment is that in April 2004, just as the inquiry was pulling itself together and after Annan had promised that all documentation would be preserved, Annan's former chief of staff, Iqbal Riza, approved a request from his secretary to shred some files covering precisely the period under investigation in this interim report, from 1997 to 1999. The reason given was to clear space. As described in the report, the shredding went on for more than seven months, ending in December--a process we are told Riza somehow failed to notice.

Then there's Volcker's finding, after poking through the available shreds and cinders, that there is "no evidence" Kofi Annan interfered improperly in the U.N.'s awarding of the Iraq contract to Cotecna. But there is plenty of evidence that Kofi Annan--contrary to his public pose of bewildered ignorance--had plenty of reasons to ponder possible connections among Cotecna, his son, and U.N. business.

Kofi Annan first dealt with Cotecna during U.N. talks in the early 1990s over setting up an Oil-for-Food type program--before the program finally began in 1996. It was Kofi Annan who, via a Cotecna employee named Michael Wilson, son of an old Annan family friend, helped young Kojo land his original job with Cotecna back in 1995. Annan Senior met twice with Cotecna CEO Elie Massey, first for cocktails in Switzerland in 1997, and, more suggestively, in September 1998 at U.N. headquarters in New York, a time when Kojo Annan was pressing Cotecna business at U.N. gatherings. For this appointment, the preliminary entry on Kofi Annan's calendar read: "Kojo--Mr. Massey (private)."

When a report surfaced in the London Sunday Telegraph in early 1999 that Kojo had remained on the Cotecna payroll while the company was submitting its winning bid in late 1998 for the U.N. contract, it was the old Annan family chum, Wilson, at Cotecna--not an impartial oversight body--to whom Kofi Annan turned first for information. The secretary general then asked his staff to look into the matter. They turned around a report that same day, clearing Kojo of any questionable or continuing dealings with Cotecna. The press--as late as last year--was told by Annan's office to lay off, that the 1999 U.N. internal report was the final word.

As it turns out, Kojo, by Volcker's account, then received from Cotecna some $484,492 over the next five years, coincident with the company's work for the U.N. Cotecna claims the payments came to no more than $160,800. Whatever. We are treated in this report to Annan's vague speculation that he himself might have somehow been the source for the U.N. internal report clearing his own son. Asked about this possibility by the Volcker team last December, Annan gave an answer that belongs right up there in the pantheon with President Clinton's definition of "is." "It's possible that I did--I don't recall," said Annan, adding, "I sort of may have mentioned that this is what I have been told."

The oddities detailed in this report hardly end there. It turns out, for example, that--never mind Kojo--the head of Cotecna, Elie Massey, sent Kofi Annan a letter in 2002, asking that the secretary general intervene to stop Ghana from dropping a Cotecna contract. Annan's response was not to ignore or return the letter--but to forward it to the ambassador of Ghana. This was an action that by any ordinary lights implied an endorsement from the U.N. secretary general. The exonerating circumstances in this case seem to be that Ghana in any event went ahead and scrapped its Cotecna contract. We are left with a scene in which the secretary general engaged in a clear conflict of interest, but is implicitly excused on grounds that it did not pay off.

Then there was Kojo Annan's habit, recorded in this report, of dropping by the U.N. Procurement Division, where he liked to tinker with the computers and visit another old family friend, Diana Mills-Aryee, who worked there. While Volcker found no evidence Kojo did anything wrong during these visits, he did turn up an intriguing email from Kojo to Mills-Aryee (whom he liked to address as "Dear Aunty"), dated June 1999, informing her that one of his companies, Sutton Investments, "currently consult for or are associated with" Cotecna, and concluding, "Don't worry Aunty your son will structure your early retirement."

Such is a sampling of the contents of this report, with which Kofi Annan now deems himself cleared in relation to Oil-for-Food. At the "Hell, no" press conference, Annan took precisely three questions before announcing he had "lots of work to do," and departing the room at speed. How much more of this man's work can the U.N. survive?

Claudia Rosett is journalist-in-residence with the Foundation for the Defense of Democracies.