UNITED NATIONS – Secretary-General Annan’s son, Kojo, relied on members of his father’s inner circle to secure a U.N. contract for his former employer and avoid paying taxes on a Mercedes, according to a new report released yesterday by the U.N.-appointed committee investigating the oil-for-food program.

The most comprehensive report yet from the Independent Inquiry Committee headed by a former chairman of the Federal Reserve, Paul Volcker, strongly criticized the highest levels of U.N. management in light of the oil-for-food scandal – up to and including Secretary-General Annan.

Despite the Volcker committee’s findings, Mr. Annan has refused to resign.

The new report found that Mr. Annan’s supervision of oil for food “fell short of the standards that the United Nations organization strives to maintain,” and that his deputy, Louise Frechette, failed to supervise the program’s chief, Benon Sevan, who was accused of participating in a bribery scheme.

The document stated that Kojo Annan relied on aides to the secretary-general to avoid paying taxes on a Mercedes he was importing to Ghana and to secure a U.N. contract for a Swiss company, Cotecna, which had employed him. While the elder Mr. Annan acknowledged the need for reform, he dismissed suggestions that the buck should stop with him, casting such a characterization of accountability as “simplistic.”

Kojo Annan used U.N. officials as personal and professional resources – including his father’s personal assistant and his legal adviser – referring to them as “my people in New York,” according to the Volcker document. Yesterday’s report asserted for the first time that the younger Mr. Annan “took active part in Cotecna’s effort to secure a U.N. contract,” which was finally signed in October 1998 – charges he has denied in the past. One recently uncovered memo, written in 1998 by Cotecna’s Michael Wilson, suggested that the secretary-general knew about his son’s efforts on behalf of Cotecna. But Mr. Volcker’s investigators maintained that there was no evidence that Kofi Annan was aware of, or tried to influence, the awarding to Cotecna of the U.N. contract.

The secretary-general’s ignorance of the contract, which was highlighted yesterday by Mr. Annan as he addressed the U.N. Security Council, may soon be challenged by other oil-for-food investigators.

“We will focus both on the scandal and on the ability of the U.N. to investigate itself,” a spokesman for the chairman of the House of Representatives’ International Relations Committee, Henry Hyde, a Republican of Illinois, Samuel Stratman, told The New York Sun. Mr. Stratman referred to a report by the House committee’s oil-for-food investigation, which is expected “in a matter of weeks.” Mr. Hyde said yesterday in a statement, “The Volcker report details a pattern and practice of deceit and corruption that has infected senior levels of the U.N.’s administration.”

The House committee secured internal memos after one of Mr. Volcker’s key investigators on the Cotecna issue, Robert Parton, resigned from the Volcker team. Mr. Parton is currently under a court-issued gag order. “We cannot comment on this matter except to say that we are committed to responding to subpoenas issued by Congress so long as they are outstanding,” Mr. Parton’s lawyer, Lanny Davis, told the Sun.

“Now is the time to clean house at the U.N.,” Senator Coleman, a Republican of Minnesota, said. “Kofi Annan should resign and allow a new team to implement a new commitment to accountability and transparency.”

Turtle Bay was abuzz yesterday with rumors of pending resignations of top officials, but Mr. Annan told reporters, “I don’t anticipate anyone to resign.” Asked by the Sun if the word “accountability,” which he had used in a Security Council speech, means that the buck should stop with him, the secretary-general said that was a “simplistic” characterization. “We need to take steps against those who have been found [responsible for] any wrongdoing.” he said.

A secretary in the U.N. procurement department, Nora Dias, whom Kojo Annan telephoned in his efforts to secure the Cotecna contract, was named in the new report. Ms. Dias’s former boss is Alexander Yakovlev, who pleaded guilty recently to federal bribery charges and is said to be cooperating with the prosecutor for the U.S. Southern District of New York. Mr. Volcker yesterday complained that the federal investigators, in grilling Mr. Yakovlev and others, have failed to cooperate with his U.N-authorized probe.

One month after Cotecna was hired by the United Nations, on November 13, 1998, Mr. Annan’s personal assistant, WagayeAssebe, wrote a memo, cited by yesterday’s Volcker report, to the secretary-general: “Sir, Kojo asked me to attach the letter re: the car he is trying to purchase under your name. The company is requesting a letter be sent from the U.N. Kojo said it could be signed by anyone from your office. May I ask Lamin to sign it? Please advise.”

The reference is to a $39,056 Mercedes-Benz the younger Mr. Annan bought after helping Cotecna to secure the U.N. deal. According to the report, Kojo was able to receive a 14.3% diplomatic discount off the sticker price by presenting the purchase as his father’s. Using his father’s name, Kojo Annan also managed to save a $14,103 import duty once he shipped his car to Ghana, where it was to be used.

The report does not say if the letter referred to by Ms. Assebe was actually written. Instead, it cites Ms. Assebe as saying that she “does not recall” speaking to Mr. Annan on the subject or passing him the note; Mr. Annan as not recalling the note; the car dealer as saying he never spoke to Mr. Annan, and Mr. Annan’s legal adviser, Lamin Sise, who also does not recall being contacted about the car purchase. Ten days after the memo was written, Mr. Sise spoke on the phone with Kojo for eight minutes.

Beyond the U.N. secretariat, the report also criticizes the Security Council, and specifically Russia and China for non-cooperation with the committee. It also criticizes America for allowing the illicit smuggling of Iraqi oil via Jordan and Turkey.