Oil-for-food boss `broke UN rules on interests'

PAUL VOLCKER, the former US Federal Reserve chairman heading the investigation into the United Nation's oil-for-food programme in Iraq, said yesterday that its procedures had been "tainted".

In a damning account, he said the official in charge, Benon Sevan, had placed himself in "an irreconcilable conflict of interest". An interim report was to be published by Mr Volcker later last night. It was expected to lay bare a multitude of problems with the scheme, devised to allow Iraq to sell limited amounts of oil between 1996 and 2003 to purchase humanitarian supplies.

Arguing in yesterday's Wall Street Journal that the report did not make for "pretty reading", Mr Volcker nonetheless conceded that his investigators had not found evidence of "systematic or widespread abuse" of the $64bn programme by UN staff.

A final report is expected in June. Only then, Mr Volcker indicated, would he tackle questions about the son of the UN secretary general, Kofi Annan. Kojo Annan was employed by a contractor that benefited directly from the scheme.

The interim report will focus on Mr Sevan. Mr Volcker wrote that his team had determined that he had violated both "specific UN rules" and the "broad responsibility of an international civil servant to adhere to the highest standards of trust and integrity".

Mr Sevan had "an irreconcilable conflict of interest" by becoming personally involved in selecting which oil companies would get the contracts. Evidence suggests Mr Sevan worked to direct contracts to African Middle East Petroleum, a Panama-registered company that is owned by a Swiss-based oil trader.