U.N. Decides Not To Pay Legal Bills Of Ex-Oil Official

By Colum Lynch
Washington Post Staff Writer
Tuesday, March 29, 2005; Page A11

UNITED NATIONS, March 28 -- The United Nations reversed a commitment to pay hundreds of thousands of dollars in legal fees for a senior U.N. official who was accused of ethical lapses while administering the $64 billion oil-for-food program in Iraq.

The U.N. decision Monday came after U.S., British and Iraqi officials expressed concern about U.N. plans to use surplus Iraq oil revenue to defend Benon Sevan against accusations that he improperly steered lucrative Iraqi oil contracts to an Egyptian businessman.

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The oil-for-food program was established in December 1996 to allow Iraq, which had been subject to Security Council sanctions since its 1990 invasion of Kuwait, to sell oil to purchase food, medicines and other humanitarian goods.

Former Iraqi president Saddam Hussein's government siphoned more than $2 billion in illicit bribes and kickbacks from companies that traded with Iraq through the U.N.-administered program, according to a report by CIA adviser Charles A. Duelfer.

Annan appointed Volcker head of the Independent Inquiry Committee last April to probe allegations that Sevan and other foreign officials and dignitaries received rights to buy large amounts of Iraqi crude at steeply discounted prices. Volcker concluded in a Feb. 3 report that Sevan engaged in "a grave conflict of interest" that "seriously undermined the integrity of the United Nations," a ruling that triggered a U.N. disciplinary proceeding against the veteran U.N. official.

Mark Malloch Brown, the United Nations' chief of staff, last week defended the body's decision to cover Sevan's legal fees through Feb. 3, saying that the cost of financing a defense was too high for an official working on a U.N. salary. But he subsequently informed Sevan that the United Nations would not pay for legal services provided after Feb. 3.

Samir S.M. Sumaidaie, Iraq's U.N. ambassador, said in a statement that he "was shocked and dismayed" that the United Nations had agreed to pay any of Sevan's legal fees "from assets belonging to the people of Iraq." Citing Volcker's report, he said, Sevan "appears unable credibly to account for the source of $150,000 he received over a five-year period."