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Former oil-for-food chief quits U.N.

Sevan calls payoff allegations false, says Annan 'sacrificed' him

In his resignation letter, Benon Sevan said his managemet of the oil-for-food program was "transparent."


United Nations
Kofi Annan

UNITED NATIONS (CNN) -- The former director of the U.N. oil-for-food program resigned Sunday, denying wrongdoing and blasting the organization and its leadership a day before he is to be accused of profiting from illegal deals.

Benon Sevan resigned from the United Nations in a letter to Kofi Annan, accusing the secretary-general of "sacrificing" him for political expediency.

A spokesman for the U.N.-appointed Independent Inquiry Committee investigating the program told CNN last week that the committee's latest report on the topic, to be issued Monday, would address allegations against Sevan.

Sevan was suspended after an initial report was issued in February. (Full story)

Sevan became a U.N. "adviser" after the oil-for-food program ended in 2003, and his attorney, Eric Lewis, said Sevan retired with the title of undersecretary-general.

Lewis said Thursday that he had been given the findings in advance, and in a written statement vehemently denied any wrongdoing by his client. (Full story)

Lewis told CNN on Sunday night that Sevan is in Cyprus, his home country, and he didn't know when he might return. Asked about the timing of the resignation, the attorney said, "Sevan lost confidence that the (secretary-general) or the (committee) would treat him fairly."

In the career diplomat's three-page letter to Annan, released by Lewis' office, Sevan called his management of the program "transparent."

He said he was proud of what he and his staff accomplished and dismayed at the lack of support from the United Nations. Sevan, 67, noted that he has worked with Annan for nearly 40 years on various projects.

"I am disappointed by the tepid manner in which the United Nations has spoken out in defending the program against the scandalous accusations," Sevan said.

"As I predicted, a high-profile legislative body invested with absolute power would feel compelled to target someone, and that someone has turned out to be me," he said. "The charges are false, and you, who have known me all these years, should know that they are false.

"I fully understand the pressure that you are under, and that there are those who are trying to destroy your reputation as well as my own, but sacrificing me for political expediency will never appease our critics or help you or the organization."

U.N. spokeswoman Marie Okabe said Sunday night that the world body would have no comment on the resignation or the report until it is released.

Lewis said the inquiry committee -- led by former U.S. Federal Reserve Chairman Paul Volcker -- will contend that Sevan took $160,000 from the trading company American Middle Eastern Petroleum, known as AMEP, to help it secure lucrative oil contracts from the regime of former Iraqi President Saddam Hussein.

The committee accuses Sevan of acting "in concert" with Eric Nadler, a friend related to AMEP's owner, Fakhry Abdelnour.

Volcker's panel will cite as evidence telephone contacts with Nadler that occurred during "significant periods," such as "just before and after" oil allocations and contract negotiations, Lewis said.

AMEP has admitted to the panel's investigators that it paid an illegal surcharge of $160,000 in October 2001 to guarantee oil contracts from Iraq.

According to U.N. financial disclosure forms, Sevan received $160,000 in four cash payments from 1999 to 2003. He described them on financial disclosure forms as cash gifts from an aunt, a retired government photographer who lives in Cyprus.

"According to a long-time family friend, she never had shown signs of having access to large amounts of cash," the panel's February report stated.

That report said Iraq provided the oil to Sevan in an effort to gain his support on several issues, including the repair and rebuilding of Iraq's infrastructure.

Volcker accused Sevan of placing himself in a "continuing conflict-of-interest situation that violated explicit U.N. rules and violated the standards of integrity essential to a high-level, international civil servant."

However, Sevan wrote Sunday: "I managed a $64 billion program, and the (committee) thinks I would compromise my career for $160,000 and then report it publicly. This is what happens when you appoint an unaccountable 'special prosecutor' with an unlimited budget and mission to find someone, anyone to blame."

According to Sevan, the United Nations transferred nearly $10 billion to the Development Fund for Iraq after the oil-for-food program ended, in November 2003.

Under the program, Iraq was permitted to export a limited amount of its crude oil to buy food, medicine and supplies.

The program, the largest humanitarian operation in U.N. history, was designed to help Iraq deal with the international economic sanctions imposed after its 1990 invasion of Kuwait.

It generated $64 billion in revenue from its launch in late 1996 until the U.S.-led invasion toppled Iraqi dictator Saddam Hussein in 2003.

Over seven years, 248 companies incorporated in 61 countries bought 3.4 billion barrels of Iraqi crude oil, with the proceeds deposited in a U.N.-controlled bank account that paid vendors who sold U.N.-approved goods back to Iraq. The oil revenue also paid for weapons inspectors.

Multiple investigations were prompted by reports that Saddam extorted billions of dollars in surcharges from chosen oil buyers, received kickbacks from suppliers of goods and may have awarded rights to buy oil as political favors to countries that supported rolling back sanctions.

Sevan also is the focus of an investigation into the oil-for-food program by the U.S. attorney's office for the Southern District of New York.

Lewis said he couldn't address the status of Sevan's diplomatic immunity.

CNN's Lauren Rivera contributed to this report.

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