WASHINGTON – Distressed that the U.N. agency that oversees the Palestinian Arab relief organizations employs members of the terror group Hamas, leading senators are asking the State Department to cut funds for the agency.

Next week, eight Republicans and at least one Democrat plan to send Secretary of State Powell a letter calling on him to punish the U.N. Relief and Works Agency and withhold the American subsidy for 2005.The New York Sun obtained a copy of the letter, which is being circulated among senators. A similar letter is circulating in the House of Representatives. Last year, American U.N. dues to the relief agency totaled $127 million. On average, Congress provides the agency with between 22% and 25% of its annual budget.

The complaints over the relief agency highlight the growing scandals swarming around the United Nations this season. ABC News reported last night that the payments by a Swiss based consulting company, Cotecna, to Secretary-General Annan’s son, Kojo, disclosed by the Sun, are being looked at by a federal grand jury.

That grand jury is also investigating the role in the scandal of several American oil companies, including Chevron Texaco and Exxon Mobil, as well as the international businessman Marc Rich, a former sanction-buster who may have been a middleman for suspect oil deals with Iraq.

The letter concerning the U.N. relief agency is also a window into one of the many tactics Congress is expected to adopt next year to pressure the United Nations to reform. Turtle Bay has yet to cooperate fully with the House’s and Senate’s oil-for-food investigations. A group of six senators is planning to push legislation next session to cut America’s U.N. contribution until the world body does cooperate in full.

Yesterday, the chairman of the Senate subcommittee that has already issued subpoenas regarding the oil-for-food scandal, Senator Coleman of Minnesota, wrote an op-ed article for the Wall Street Journal calling on Kofi Annan to resign because the graft occurred on his watch.

On MSNBC last night, Senator Shelby of Alabama joined his fellow Republican in calling for the secretary-general’s resignation. So far, Mr. Annan has refused to hand over more than 50 internal audits of the oil-for-food program or to waive potential criminal immunity for senior officials associated with the U.N. sanctions arrangements that allowed Saddam Hussein to steal an estimated $21 billion.

The letter on the relief agency, expected to be sent to Foggy Bottom on December 8, says: “We urge you to suspend all funding for UNRWA until all members of terrorist organizations are removed from its staff. We further urge you to use the United States’ leverage in the United Nations and UNRWA to seek new leadership for UNRWA that will take immediate concrete action to ensure that personnel and entities working under and with UNRWA are not, in any way, involved in terrorist activities or incitement to violence.”

Senator Wyden, a Democrat of Oregon, has been circulating the letter among colleagues from his party. On the Republican side of the aisle, Senators Brownback of Kansas, Chambliss of Georgia, Cornyn of Texas, Ensign of Nevada, Kyl of Arizona, Roberts of Kansas, Santorum of Pennsylvania, Smith of Oregon, and Talent of Missouri have all lent their names to the letter so far. The latest interest in the relief agency on Capitol Hill surged after its commissioner general, Peter Hansen, told Canadian television October 3, “I am sure that there are Hamas members on the UNRWA payroll and I don’t see that as a crime.”

In addition to being one of the most prolific recruiters of suicide bombers, Hamas is a service agency, operating hospitals and schools in Gaza. As the primary U.N. agency responsible for the daily conditions of Palestinian refugees, UNRWA, its defenders have said, has no choice but to cooperate with Hamas, one of the few effective groups delivering basic services to the Palestinians in Gaza.

The letter points out, however, that the Foreign Assistance Act of 1961 compels the U.N. agency to make sure that America’s contribution to it does not go to any refugee who is receiving military training or has engaged in acts of terrorism. “The intent is clear,” the senators write. “The United States does not want money going to members of terrorist organizations under any circumstances.”

It goes on to say, “For many years, Congress has sought to ensure that UNRWA funds are used for the programs it supports and not for anything inappropriate, such as terrorist activities. UNRWA has long been accused of accepting no responsibility when charges arise that Palestinian terrorists operate in its refugee camps and UNRWA schools use textbooks and educational materials which promote anti-Semitism and exacerbate tensions between Israelis and Palestinians.”

While the State Department has yet to comment on a request from a letter it has not received, it is unlikely that Mr. Powell, who has already announced his intention to resign, will agree to end American support for the refugees. Next week, American diplomats are to attend two meetings in Oslo with international donors, including representatives from the relief agency, to discuss how to build transparent institutions in Gaza and the West Bank in anticipation of the Palestinian elections scheduled for next month.

Perhaps because of that, the American Israel Public Affairs Committee, a potent lobbying group here, is said not to support the letter, anticipating potential humanitarian problems if the U.N. relief agency were to leave Gaza as Israeli troops withdrew from the territory.