UNITED NATIONS - A yearlong investigation of the U.N. oil-for-food program issued a strong indictment of the United Nations and its top leadership Wednesday, concluding that they tolerated corruption and allowed Saddam Hussein's government to pocket $10.2 billion.

Secretary-General Kofi Annan called the findings "deeply embarrassing to all of us" and said he accepted the criticism leveled at him personally. But he said he had no intention of resigning.

The committee's five-volume, 1,036-page report concludes that those responsible for managing the $64 billion oil-for-food program — both U.N. member states and the world body's staff — failed the ideals of the United Nations and ignored clear evidence of corruption and waste.

Presenting the report at a meeting of the U.N. Security Council, former U.S. Federal Reserve chairman Paul Volcker, who chaired the committee, said: "Our assignment has been to look for mis- or mal-administration in the oil-for-food program and for evidence of corruption within the U.N. organization and by contractors. Unhappily we found both."

"In essence, the responsibility for the failures must be broadly shared, starting, we believe, with member states and the Security Council itself," he said.

The powerful 15-member council came in for stinging criticism because its main oil-for-food committee often ignored evidence of corruption, while some council members condoned oil smuggling to Iraq's neighbors.

The report does not say why the corruption was overlooked but notes that Russia was one of the nations that long blocked efforts to probe the claims. Russian companies were involved in oil-for-food and the country was a leading proponent of lifting the U.N. sanctions.

The report criticized the almost total lack of oversight of the program by the secretary-general and Deputy Secretary-General Louise Frechette, who was the direct boss of Benon Sevan, the program's executive director now being investigated for allegedly accepting kickbacks. It issued "adverse findings" against all three.

The report said it found no evidence to support charges that Annan influenced a contract awarded to Cotecna Inspection Services, the Swiss company for which his son, Kojo, had worked.

The committee said it also found no evidence that Kofi Annan knew about the contract, but did find instances where Kojo Annan tried to influence it with calls to the United Nations procurement office. It also said that Kojo Annan exploited his father's name without his father knowing it.

The oil-for-food program was established to help Iraqis cope with U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait.

The report criticized the way the program was created in 1996 by then-U.N. Secretary-General Boutros Boutros-Ghali. Saddam was allowed to choose the buyers of Iraqi oil and the sellers of humanitarian goods., which he used to curry favor by awarding oil contracts to officials who opposed the sanctions.

Lax oversight allowed Saddam's regime to pocket $1.8 billion in kickbacks in the awarding of contracts during the program's operation from 1997 to 2003, the committee said.

The smuggling of Iraqi oil outside the oil-for-food program in violation of U.N. sanctions poured much more money — $8.4 billion — into Saddam's coffers during the same period.
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