PRESS RELEASE

August 8, 2005

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REPORT: UN PROGRAMME OFFICIALS GAINED ILLEGALLY THROUGH BRIBES AND CORRUPTION

The IIC is today issuing its third Interim Report.  The Report records the Committee’s analysis and conclusions with respect to:

A)                          the illicit activities of Benon Sevan, Executive Director of the United Nations Office of Iraq Programme, in concert with past or present principals of African Middle East Petroleum Co., Ltd, Efraim (Fred) Nadler and Fakhry Abdelnour, and

B)                           the evidence that a United Nations procurement officer, Alexander Yakovlev, in concert with French businessman Mr. Yves Pintore, actively solicited a bribe in connection with the Oil for Food Programme (the Programme) and otherwise presumptively accepted illicit payments from other UN contractors outside the Programme.

The Committee’s first two Interim Reports, issued on February 3 and March 29, 2005, considered the procurement practices of the United Nations in awarding contracts to major contractors which were part of the operational backbone of the Programme. Matters reported in this third report are the result of investigations relating to those same activities, but not complete at the time of issuance of the first two Interim Reports.

Some principal findings based on the evidence presented in the Report are:

1.      With respect to Mr. Sevan, Mr. Nadler, and Mr. Abdelnour:

·        Mr. Sevan corruptly and in concert with Messrs. Nadler and Abdelnour derived personal pecuniary benefit from the Programme through cash receipts from the sale of oil allocated by Iraq to Mr. Sevan and bought by African Middle East Petroleum Co. Ltd. The participants had knowledge that some of the oil was purchased by paying an illegal surcharge to Iraq in violation of United Nations sanctions and rules of the Programme.

2.      With respect to Mr. Yakovlev and Mr. Pintore:

·        Mr. Yakovlev, while responsible for the procurement of an independent oil inspection company for the Programme in 1996, purposefully, and in concert with Mr. Pintore, participated in a corrupt scheme to solicit a bribe from SGS, a bidder for that contract. In pursuing this scheme, Mr. Yakovlev, again in concert with Mr. Pintore, provided confidential bid information, internal assessments, and selection considerations to SGS in violation of the Charter of the United Nations, and UN Regulations and Rules. (N.B. The Committee has no evidence that SGS agreed to pay a bribe or paid a bribe.)

Concerning both Mr. Sevan and Mr. Yakovlev, the Committee recommends to the Secretary-General that he grant a properly supported request or requests by law enforcement authorities which are pursuing active investigations within their jurisdictions, to waive their immunity for purposes of criminal investigation and prosecution, giving due consideration to the requesting authority’s commitment to reciprocal cooperation with the Committee’s investigation.

Concerning Messrs. Nadler, Abdelnour, and Pintore, the Committee recommends that the Secretary-General, upon receipt of an appropriate, properly supported, request, make available the necessary information to assist law enforcement authorities in the possible investigation and prosecution of the three men, again with due consideration to the requesting authority’s commitment to cooperation with the Committee’s investigation. The Committee makes the same recommendation with respect to any others who may be shown by continuing investigations to have acted in concert with Mr. Yakovlev in criminal wrongdoing.

The Report also responds to representations made by Messrs. Riza, Robertson and Stephanides to the Committee asking that adverse findings made against them in earlier Reports be modified or reversed. In the cases of Messrs. Riza and Robertson, after careful review, the Committee has concluded that their findings and conclusions remain accurate and fair from the evidence available. They have reached the same conclusion concerning Mr. Stephanides as his representations relate to Mr. Yakovlev. The Committee has yet to review additional material submitted by Mr. Stephanides’ counsel on matters other than those which touch on Mr. Yakovlev.

According to Paul Volcker, the Committee’s Chairman,”These findings close several avenues of inquiry developed in earlier Interim Reports. A much broader report on the administration of the Oil-for-Food Programme is in preparation, with the expectation of release in early September. Before concluding its work, the Committee also intends a more comprehensive listing of firms participating in the Programme, either in the purchase of oil or the sale of humanitarian goods, as well as a more detailed analysis of the manner in which Iraq and its vendors and oil purchasers manipulated the Programme.”