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Panel questions Annan, delays report

U.N. secretary-general interviewed in oil-for-food investigation

From Richard Roth

U.N. Secretary-General Kofi Annan has pledged to cooperate fully with the inquiry.
• Interactive: Who's who in Iraq
• Interactive: Sectarian divide
Paul Volcker
Kofi Annan
United Nations

UNITED NATIONS (CNN) -- U.N. Secretary-General Kofi Annan was formally questioned Tuesday for the third time by a panel he appointed to probe the United Nations' controversial oil-for-food program in Iraq.

The interviews were conducted by members of the Independent Inquiry Committee, led by former U.S. Federal Reserve Chairman Paul Volcker.

Volcker took part in Tuesday's session, which lasted one hour and 35 minutes in Annan's office at U.N. headquarters, and in at least one other session.

A U.N. spokesman said the committee previously interviewed Annan on December 3 for 25 minutes and on November 9 for one hour and 45 minutes.

Volcker's interim report on the oil-for-food program had been expected next Monday, but the committee has decided to delay its release by at least one week.

Sources close to the investigation said the report -- expected to focus on the program's procurement process and potential corruption involving participants outside the United Nations -- is being held up to give those involved time to respond.

From the start, Volcker said no one was untouchable in his probe, and Annan pledged to cooperate fully. In all, he has been interviewed for nearly four hours.

"I couldn't say what I accomplished today. We met with him from time to time," Volcker said exiting the United Nations. "All I can tell you is wait for the report to come out."

Annan has come under scrutiny for alleged U.N. mismanagement of the program and for an apparent conflict of interest because a firm employing his son, Kojo Annan, won the U.N. contract to inspect goods shipped to Iraq.

The oil-for-food program began in late 1996 as a way to permit Iraq, while still under economic sanctions, to export some of its oil.

Revenues from the sales were deposited in a U.N.-controlled bank account, with proceeds earmarked for purchasing food, medicine and approved supplies.

Kojo Annan worked for Cotecna Inspection in the late 1990s. The Switzerland-based firm replaced Lloyd's Register in 1998 as the contractor tapped to authenticate goods arriving in Iraq. The contract became worth $66 million over five years, according to a U.N. official.

Both Cotecna and the younger Annan have said his work was unrelated to any of the firm's business in the Middle East or with the United Nations and was limited to West Africa, where Kojo Annan lives.

The oil-for-food program grossed $64 billion, according to Volcker's committee, with two-thirds of the funds paying for Iraqi imports. The rest paid for U.N. weapons inspectors, Iraqi reparations to Kuwait for its 1990 invasion and costs of administering the program.

Earlier this month, Volcker's committee said U.N. audits of the program revealed "under-pricing of oil and the overpricing of humanitarian goods" as well as "inadequate procedures, policy, planning, controls and coordination process across numerous areas of activity."

Volcker's committee also found U.N. management overseeing the program was "not quick to react to criticism and was either unwilling or unable to address issues raised." (Full story)

The program ended in 2003 after the U.S.-led invasion toppled Iraqi dictator Saddam Hussein.

Previously, Saddam handpicked the buyers of Iraqi oil and the vendors of humanitarian goods, allowing him to extort surcharges on the oil and kickbacks on the goods worth an estimated $1.7 billion to $4.4 billion, according to studies by the CIA-backed Iraq Survey Group and the U.S. Government Accountability Office.

Besides Volcker, the FBI, the Securities and Exchange Commission and a handful of U.S. congressional committees are investigating the oil-for-food program.

Last week, federal prosecutors obtained a guilty plea from an Iraqi-American, Samir Vincent, who bought oil from Iraq and was paid by the deposed regime to lobby U.N. and U.S. officials for the removal of sanctions. (Full story)

Vincent pleaded guilty to failing to register as a lobbyist, engaging in banned financial activity with Iraq and failing to report income on his tax returns.

CNN's Phil Hirschkorn contributed to this report.

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