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Former U.N. chief linked to oil scandal

By Suzanne Goldenberg and Charlotte Moore

WASHINGTON/LONDON, FEB. 6. The U.N. Secretary-General, Kofi Annan, has promised to move swiftly to deal with corruption after an inquiry into the oil-for-food programme drew links to the relatives of the former U.N. chief, Boutros Boutros-Ghali.

``Obviously, there were some hard knocks in the report and we are concerned about it,'' the U.N. Secretary-General told reporters. ``We want to get to the bottom of it, to get to the truth, and to take appropriate measures to deal with the gaps.''

Mr. Annan, who succeeded Mr. Boutros-Ghali in 1997, could also fall under scrutiny for possible familial connections to the scandal. A forthcoming report from the independent inquiry will examine charges that his son, Kojo Annan, helped a Geneva-based company obtain a U.N. contract.

New concerns

So far, the head of the inquiry, Paul Volcker, has reserved his greatest criticism for the programme's administrator, Benon Sevan. But there were new concerns at the U.N. yesterday about the role of Mr. Boutrous-Ghali, who was in charge of the organisation from 1991 to 1996, and oversaw the inception of the oil-for-food programme.

Two of Mr. Boutros-Ghali's relatives — a brother-in-law and a cousin — have been connected to the scandal in which Mr. Sevan is accused of trading influence for barrels of oil.

Mr. Boutros-Ghali told the New York Times from Paris that the inquiry's allegations about his conduct were ``silly.'' His cousin, Fakhry Abdelnour, headed African Middle East Petroleum, which made at least $1.5 million profit between 1998 and 2001, buying oil at a favourable price and selling it on to larger firms including Royal Dutch/Shell.

The firm sold 6.4 million barrels of Iraqi crude to Shell, which said in a statement on Friday that it had been unaware of Mr. Sevan's involvement in the deal.

A middleman

Mr. Sevan's contacts with Mr. Abdelnour were infrequent. He was in regular communication with Fred Nadler, brother of Mr. Boutros-Ghali's wife, who served as a link with the oil company. Mr. Nadler was a middleman between Mr. Abdelnour and Mr. Sevan. Mr. Nadler and Mr. Sevan were in phone contact on an almost weekly basis from 1998 to 2004.

Phone records obtained by the investigation also show calls made from the homes of Mr. Boutros-Ghali's mother-in-law and another brother-in-law, Emmanuel Nadler.

The report notes that Mr. Boutros-Ghali bypassed U.N. financial regulations on competitive bidding to award a banking contract to the Banque Nationale de Paris, making his choice after getting approval from the Saddam Hussein regime.

Two other companies were alleged to have benefited from the non-competitive tenders. The British company named, Lloyd's Register Inspection Limited, said its bidding for U.N. contracts was ``fair and above board.''

- Guardian Newspapers Limited 2004

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