Politics & Policy

UNder the Law

A chance at a bit of justice in the Oil-for-Food scandal.

In what surely qualifies as the single-most-promising United Nations reform effort to date, federal prosecutors in New York, jointly with the New York District Attorney, have just announced the indictment of the man who ran the U.N.’s former Oil-for-Food program: Benon Sevan. Charged with conspiring to commit fraud and taking close to $160,000 in bribes related to Oil-for-Food deals, Sevan, if convicted, could face a prison sentence of up to 50 years. The indictment is, in its way, a neat retort to attempts by Sevan’s old boss, former Secretary-General Kofi Annan, to downplay the landmark Oil-for-Food scam in terms of “If there was a scandal.”

#ad#Sevan, who denies any wrongdoing, was of course nowhere near the federal courtroom when the indictment was unsealed. It’s been almost two years since he slipped out of New York and returned to his native Cyprus, while Annan’s spokesman was busy telling the press that this prime Oil-for-Food suspect was under control. In Cyprus, Sevan would be safe from U.S. extradition, and it appears that’s where he is now. After the indictment was announced, on Tuesday, I called his Cyprus cell phone. Sevan answered, saying he couldn’t talk, because “I am in traffic, driving.” When I called back later, he said, “Talk to my lawyer, please” — and hung up the phone.

So begins the next chapter in this saga spawned by the U.N.’s lucrative and corrupt collaboration with one of the world’s worst tyrants, the late Saddam Hussein. Advertised as a U.N.-run relief program for Saddam’s U.N.-sanctioned Iraq, the 1996-2003 Oil-for-Food program devolved into a worldwide extravaganza of kickbacks, smuggling, and bribes, fortifying Saddam with more than $17 billion in illicit funds, according to Senate investigators.

The irony of most Oil-for-Food investigations to date has been that some of the worst offenders have never encountered any penalties at all. While authorities in democratic nations such as the U.S., Australia, India, and even France have been digging into alleged offenses by their own citizens, repressive governments in countries such as Russia, China, and Syria — all of which played big roles in Saddam’s graft-ridden Oil-for-Food business — have simply not bothered.

At the U.N. itself, which ran Oil-for-Food, and where Annan’s Secretariat collected $1.4 billion from Iraq to cover the cost of administering the program, not a single official ended up even fired. Sevan retired and has been collecting his full U.N. pension, despite allegations of bribery leveled against him in 2005 by Paul Volcker’s U.N.-authorized inquiry into Oil-for-Food. When I asked Annan’s spokesman last year if the U.N. had paid Sevan’s airfare and moving expenses back to Cyprus, the answer was not “no.” It was: “We do not usually disclose personal information on individual staff entitlements to the public.”  

Sevan’s indictment challenges what some of the U.N.’s own auditors have described as Turtle Bay’s “culture of impunity.” Over the past two years, federal investigations have led to a guilty plea and a number of indictments of U.N. officials dealing with procurement; as well as a drug bust in the U.N. mailroom. But none of these have involved figures as close to the top as Sevan. The message underscored by his indictment is that even high U.N. officials, handpicked by the secretary-general to run multibillion-dollar programs, might want to think twice before deeming themselves safely above the law.

Should Sevan end up cutting a deal with federal prosecutors, he might be able to shed more light on Oil-for-Food-related doings in the U.N. executive suite — where the performances of Annan and his top aides left much to be desired, and a lot to be explained. Among the mysteries is how it happened that Annan, who spent much of his long career at the U.N. toiling in the nitty-gritty of financial management and personnel, managed by his own account to muddle the chain of command and overlook the gross mismanagement of Oil-for-Food — which he was responsible for administering.

Sevan’s post as head of Oil-for-Food from 1997-2003, which covered all but the first 10 months of the program, put him in a good position to squirrel away information that perhaps never made it into the reports of the U.N.-authorized inquiry led by Paul Volcker. Sevan stopped cooperating with Volcker’s team well before they finished their work. And Volcker, for his part, left a lot of loose ends, as well as a seven-year gag order on one of his former lead investigators, Robert Parton — who defected during the investigation, alleging before he was silenced by the court that the Volcker committee was going soft on Annan.

Sevan might also be able to provide more insights into the activities of a man indicted along with him, Ephraim “Fred” Nadler. An Egyptian-born businessman with an apartment in midtown Manhattan, Nadler is the brother-in-law of former U.N. Secretary-General Boutros Boutros-Ghali. The indictment alleges that Nadler was part of a conspiracy to skim money out of a number of Oil-for-Food contracts, using some of the funds to pay kickbacks to U.N.-sanctioned Baghdad, and funneling $160,000 to Sevan on behalf of Saddam’s regime. Nadler’s whereabouts are unclear; by some accounts he is in Switzerland; or maybe Egypt.

No one has accused Boutros-Ghali of any wrongdoing. But the tangle around him goes beyond Nadler. Boutros-Ghali’s name also surfaced in testimony last summer in the Oil-for-Food trial of South Korean businessman Tongsun Park. Found guilty of conspiring to try to bribe U.N. officials during Boutros-Ghali’s era to rig Oil-for-Food in favor of Saddam from the start, Park was a frequent visitor to Boutros-Ghali’s official residence. According to a Volcker-inquiry report, Park “often sent flowers to Mrs. Boutros-Ghali” — Fred Nadler’s sister. Tongsun Park, currently behind bars, is due for sentencing in New York federal court in late February.

What happens next in this drama probably depends on just how stir-crazy Sevan might be getting on Cyprus. When I paid a surprise visit to him last year in the Cypriot capital of Nicosia, he seemed mainly to be biding time. He had moved into the penthouse apartment of his late aunt, a retired state employee who died as the result of a fall into the building’s elevator shaft just as the Oil-for-Food investigations were taking shape (Sevan credits her as the source of the funds he is alleged in the indictment to have received as bribes from Baghdad).

The apartment was comfortable, but his arrangements seemed somewhat ad hoc. When I knocked on the door, on a rainy Sunday afternoon, he was drying his socks on a laundry rack in the living room. He had with him an array of documents and souvenirs accumulated during his globe-trotting U.N. career. He talked about his plans to move into another Cyprus penthouse apartment he said he was having renovated, “with a wrap-around balcony.”

I later discovered that the U.N., in various ways, has been keeping in touch with the self-exiled Sevan. On some U.N. documents I have seen, his e-mail address was on a circulation list last year that also included such high-ranking staff as Annan’s head of the U.N. Department of Public Information, Under-Secretary-General Shashi Tharoor. And some months after Sevan left New York, Annan posted a mutual friend, longtime U.N. staffer Michael Moller, as the U.N.’s special representative for Cyprus. Sevan and Moller during the past year have been seen dining out together in Nicosia. Until this past Tuesday, it seemed all Sevan had to do to put Oil-for-Food behind him was sit back in Nicosia for another year or two, and wait for the U.S. statute of limitations to expire.

Sevan’s indictment has just changed that equation. With charges now brought against him, the clock has stopped ticking on the statute of limitations. The U.S. has placed a lien on his Hamptons home, and lodged a warrant with Interpol for his arrest — which means he could be nabbed if he tries to travel across national borders. Unless he wants to risk a trial in New York, Sevan, now 69, faces a choice between spending quite possibly the rest of his life holed up on Cyprus, under the cloud of this indictment, or attempting a deal with the prosecutors. For Sevan, who spent his career as a globe-trotting U.N. official whose wife and daughter have spent years in the U.S., and who once ran the biggest relief program ever launched by the U.N., this ought to be a thought-provoking turn of events.

Sevan’s Washington-based lawyer, Eric Lewis, responded Tuesday to news of the indictment with a public statement on behalf of Benon Sevan, calling the allegations “without basis,” and saying the U.S. Attorney’s Office was using Sevan as a “scapegoat” and a “distraction” to divert attention from the U.S. in Iraq to the U.N.

But the issue here is not the ups and downs of the U.S. in Iraq, which receive enough coverage on any given day to dwarf even the most eye-popping stories on Oil-for-Food year round. The issue in this case is the U.N., and the question now is what happens when a high-ranking U.N. official is alleged by both a U.N.-authorized investigation and U.S. federal prosecutors to have taken bribes from a U.N.-sanctioned tyrant. Annan’s response when Sevan hunkered down on Cyprus was to keep quiet about it and do nothing. But the U.N. now has a new secretary-general, South Korea’s Ban Ki-moon, who has been talking up his mission to “Restore Trust” in the U.N. If Ban is serious, the way to start would be to call loudly and often for Sevan to return to New York and face justice.

– Claudia Rosett is a journalist-in-residence at the Foundation for Defense of Democracies who blogs at The Rosett Report.

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