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29.11.2004 General News

Annan `Disappointed' by Son's Ties to UN Contractor

By Bloomberg

Nov. 29 -- United Nations Secretary-General Kofi Annan said he was upset to learn his son was getting paid this year by a company under scrutiny for its role in the UN program through which U.S. investigators say deposed Iraqi dictator Saddam Hussein stole as much as $21.3 billion.

A UN spokesman said last week that Kojo Annan, 29, received $2,500 a month over four years from Geneva-based Cotecna Inspection SA, which checked humanitarian goods paid for by oil sold under a UN-administered program from 1999 to November 2003. Kojo Annan worked full-time for Cotecna from 1995 to 1997, and as a consultant until the end of 1998. His work was in Africa, according to the company.

Kofi Annan, 66, told reporters today that he thought until last week that his son's relationship with Cotecna ended in 1998. UN spokesman Fred Eckhard said on Nov. 26 that Kojo Annan received a total of $125,000 until February this year as part of a ``no-compete'' contract under which he agreed not to start a business in competition with Cotecna.

``Naturally, I was very disappointed and surprised,'' Kofi Annan said at the UN today. ``I had been working under the understanding that this ceased in 1998. I had no expectation that the relationship continued.''

`Perception Problem'

In a statement, Cotecna said Kojo Annan was involved ``exclusively'' with the company's activities in Nigeria and Ghana. The Annan family is from Ghana.

Annan said he recognized that that there was a ``perception problem for the UN of conflict of interest'' with the payments that continued until this year, and that criticism of the UN's management of the oil-for-food program was making the world body's work ``much more difficult.''

The U.S. Congress and an independent panel appointed by Annan and led by former Federal Reserve Chairman Paul Volcker are investigating the oil-for-food program, which was designed to isolate Hussein in the decade leading up to the U.S.-led invasion of Iraq.

Congress plans to review payments Kojo Annan received after 1999, the Wall Street Journal reported today, citing an unidentified member of the House Committee on Government Reform. Cotecna never disclosed that it continued to make payments to him after 1999 even though the committee subpoenaed the company for information about the transactions, the Journal said.

Resignation Not Sought

John Danforth, U.S. ambassador to the UN, said all the oil- for-food issues were ``very serious and deserving of very careful attention.'' Danforth told reporters he delivered that message to Kofi Annan at a meeting today in New York.

``Allegations of fraud and bribery and the like are very serious and they go to the integrity of the organization,'' Danforth said. ``We have to get to the bottom of this and let the chips fall where they may.''

The U.S. isn't seeking Annan's resignation, Danforth said. ``I do not think the U.S. government rushes to judgment until all the facts are in,'' Danforth said. The ambassador also said he didn't see any reason for Congress to question U.S. funding of the UN.

Cotecna Connection

A Cotecna spokesman said all information on the matter had been turned over the UN and U.S. investigators, the Wall Street Journal reported. Kojo Annan worked for Cotecna as a trainee and consultant, the Journal reported.

There's no evidence that Kojo Annan's relationship with Cotecna affected the contracts the UN awarded, Eckhard said.

The UN program allowed Iraq to sell oil in order to feed its population during the final six years of sanctions, which ended with the Iraq war in March 2003. The U.S. says former regime elements may be using Hussein's billions to fund insurgents in Fallujah and other Iraqi cities.

Iraq cooperated with countries to manipulate its sale of food and medicine, Volcker said in a Nov. 24 interview with television talk show host Charlie Rose. Cotecna employed 85 inspectors to authenticate that lists of goods purchased through the program matched items arriving at four Iraqi border posts.

``The imports were overpriced or of poor quality, so the importer was making a margin much larger than an ordinary commercial margin,'' Volcker said, noting that Russia was one of the countries involved in the program. ``There would be some mechanism that at least part of that money would be paid back to either the Iraqi government or Iraqi officials.

Evelyn Suarez, an attorney for the Washington law firm Williams Mullen, which represents Cotecna, didn't return a telephone call seeking comment.

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