Annan Fires Official Over Oil for Food

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The New York Sun

UNITED NATIONS – A mid-level official, Joseph Stephanides, was summarily fired yesterday by U.N. Secretary-General Annan, making him the first casualty of the oil-for-food scandal. Meanwhile, higher-ups who had been accused of more severe violations have yet to be punished.


“I am what they call a convenient sacrificial lamb,” the Cypriot-born U.N. veteran told The New York Sun.


Mr. Stephanides was terminated after his attempts to receive an internal hearing were rebuffed. A letter he sent to the United Nations, explaining his actions, went unanswered, he told the Sun.


By contrast, three others who, like Mr. Stephanides, were accused of wrongdoing by the Volcker committee have thus far escaped similar action.


A former chief of staff, Iqbal Riza, and a former internal investigator, Dileep Nair, have both been forgiven by Mr. Annan and retired without reprimand. No action has been taken against a third official, the former head of the oil-for-food program, Benon Sevan. All three were more senior than Mr. Stephanides, and therefore in a position to know more about any unreported wrongdoing in the world body’s upper echelons.


“Each case was looked at on its own merit,” a spokesman at the United Nations, Stephane Dujarric, told the Sun yesterday. But that was not the way Mr. Stephanides, a former head of the U.N. Security Council Affairs Division, saw it.


He was informed of his dismissal through a letter. Mr. Stephanides told the Sun yesterday that he has already been informed that due to the dismissal, just shy of his 60th birthday in September, his pension funds could be reduced by at least 5%.


The Annan-appointed committee headed by a former Federal Reserve chairman, Paul Volcker, cited Mr. Stephanides for colluding in 1996 with then-British ambassador to the United Nations, John Weston, to steer an oil-for-food contract to a London-based shipping inspection company, Lloyd’s Register. A French company, Bureau Veritas, had placed a lower competing bid.


The company that replaced Lloyd’s two years later as the oil-for-food shipping inspector, Swiss-based Cotecna, was the source of much suspicion, although the Volcker committee did not find enough evidence in its March 29 report to accuse Mr. Annan of helping the company, which had employed his son Kojo.


Mr. Stephanides maintains that the 1996 decision to engage Lloyd’s was not made by him alone but with his U.N. superiors and by Security Council diplomats. Since a French bank, BNP Paribas, had already received a substantial oil-for-food contract, the organization believed that the inspection job should be awarded to a company from another country, rather than another French firm.


The British firm Lloyd’s was the next-lowest bidder. “It’s not enough what is cheapest,” Mr. Stephanides said. “It is also what could sail through in the council.


“I saved money for the U.N.,” by convincing Lloyd’s to lower its original bid by $900,000, he told the Sun.


Mr. Stephanides sent memos on August 6 and 8, 1996, to the head of the U.N. procurement at the time, Allan Robertson, and four other U.N. superiors. The U.N. documents, seen by the Sun, support his contention that the decision to procure Lloyd’s was approved by the office charged with applying the Iraq sanctions.


“That is the way the U.N. operates,” a former diplomat at the British Mission, Carne Ross, told the Sunday Telegraph back in February. “It seems a little harsh if Joseph Stephanides is carrying the can for this as a U.N. official.”


Mr. Dujarric insisted yesterday that “due process was fulfilled” in Mr. Stephanides’s case. But according to his attorney, George Irving, the United Nations has not allowed Mr. Stephanides to present his case. A hearing was never scheduled and a long letter went unanswered. Yesterday, instead, Mr. Stephanides said, “they chose to go to the most severe punishment,” by firing him. He plans to appeal the decision.


In contrast, Mr. Sevan, who was cited by the Volcker committee for putting himself at a “grave conflict of interest,” has so far declined to answer the charges against him. Far from punishment, the United Nations quietly offered to pay his legal fees, and rescinded the offer only after it was reported by the Sun. Mr. Dujarric said yesterday that Mr. Annan would not take action against Mr. Sevan, whose $1 a year salary comes with immunity from criminal prosecution as long as the case against him is under investigation by Mr. Volcker’s team. His contract was renewed on Tuesday.


Similarly, Mr. Riza had been cited by Volcker for “imprudently” shredding oil-for-food-related documents. Mr. Annan “has found there is no ground for disciplinary action against him,” Mr. Dujarric said. Mr. Riza continues to advise Mr. Annan.


The former head of the Office of Internal Oversight Services, Mr. Nair, was accused by Mr. Volcker of misusing oil-for-food money to hire a fellow Singaporean. He recently retired without reprimand.


The New York Sun

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