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Department of Public Information . News and Media Division . New York

27 October 2005

Following is a near-verbatim transcript of today’s noon briefing by Stéphane Dujarric, Spokesman for the Secretary-General.

Please note: the Thursday Noon Briefing was shifted to 2:00 p.m. due to the issuance of the report of the Independent Inquiry Committee into the UN oil-for-food Programme.

Briefing by Spokesman for Secretary-General

We’ve posted the highlights of the previous briefing already online so you have those. I will read two statements -- one on the oil-for-food inquiry and I will also read a statement to the record regarding remarks by the Iranian President.

**Secretary-General - Independent Inquiry Committee

Concerning oil-for-food, the Secretary-General takes note of the findings contained in the fifth and final report of the Independent Inquiry Committee into the oil-for-food programme.

He notes that a vast network of kickbacks and surcharges has been exposed, involving companies registered in a wide range of Member States, and certified by them as competent to conduct business under the programme. He hopes that national authorities will take steps to prevent the recurrence of such practices in the future, and that they will take action, where appropriate, against companies falling within their jurisdiction.

He recalls that, in his speech to the Security Council responding to the Committee’s previous report, he already accepted responsibility for management failures in the Secretariat. He also notes that the latest report confirms the Committee’s earlier finding that the respective roles and responsibilities of the Secretariat, the Security Council and the 661 Committee -- which approved all of the contracts, including the prices -- were never clearly enough defined.

Most important, the Secretary-General believes that thorough reform of the management structures and practices of the United Nations, especially those that relate to oversight, transparency and accountability, is vital. He has already instituted extensive reforms -- including broader and more vigorous financial disclosure requirements, a stronger policy to protect whistle-blowers, and a review of all oversight and audit arrangements. He intends to pursue these and other reforms with even greater vigour in the weeks and months ahead, and looks to Member States for their support.

Finally, he wishes to thank the members of the Committee -- Mr. Volcker, Justice Richard Goldstone and Professor Mark Pieth -- and their whole team for the extremely thorough investigation they have conducted. Such an investigation is exactly what the Secretary-General hoped for when he set up the inquiry 18 months ago. He notes, as Mr. Volcker himself has done, that few other organizations would voluntarily expose themselves and their activities to such detailed scrutiny.

**Secretary-General - Iranian President’s Remarks about Israel

Concerning the remarks made by the President of Iran, the Secretary-General has read with dismay the remarks about Israel attributed to Mahmoud Ahmadinejad, the President of the Islamic Republic of Iran.

He reminds all Member States that Israel is a long-standing member of the United Nations with the same rights and obligations as every other member. He recalls in particular that, under the United Nations Charter, all members have undertaken to refrain from the threat or use of force against the territorial integrity or political independence of any State.

The Secretary-General had already decided to visit Iran during the next few weeks, to discuss other issues. He now intends to place the Middle East peace process, and the right of all States in the area to live in peace within secure and recognized boundaries free from threats or acts of force at the top of his agenda during that visit.

That is it for me.

**Questions and Answers

Question: In the Volcker report, there is some new information about Kojo Annan: payment of 20,000 Swiss francs for the benefit of Kojo Annan, apparently came from money originally paid from Cotecna to Michael Wilson. I wonder if the Secretary-General can cast any light on this payment to his son and whether he’s alarmed at all by the reference in the report to information about this transaction among other transactions being referred to the appropriate investigative authorities.

Spokesman: I think you would have to ask Mr. Annan and Mr. Wilson about these payments. And, as we’ve said, the UN, when appropriate, will cooperate with any judicial authorities investigating anything found in the report.

Question: We keep talking about the misuse of Iraqi oil-for-food funds. Mr. Volcker’s commission has already used up $35 million or more and it seems he has the intention to continue for another two months or more. How much more money is going to be used?

Spokesman: If I heard Mr. Volcker correctly, he said they would wind up through the end of November. One of the issues that obviously has to be worked out is the issue of the archives and the documents that have been gathered by the Commission. We are currently in discussion with the IIC regarding what happens with those documents and we hope to be able to issue guidelines on how the different categories of documents would be treated in the most transparent way possible.

Question: How much extra more money is going to be used?

Spokesman: I’m not aware of any extra beyond what we’ve, I’m not aware of any fresh requests for funds. I think they are budgeted through the end of November.

Question: I have a question relating to the issue of funds and how those funds were used to finance the Volcker investigation. In this new era of transparency at the UN, will you be releasing and can you release information about how the money spent on this investigation, $35 million, was actually used? Mr. Volcker said of this money, half of it went to private companies who were involved in the data processing and half of it went to salaries and the like. What I’d like to know is, what compensations were paid specifically for commissioners and investigators and how the selection process of these companies that were involved in the data processing was actually made.

Spokesman: I was told today that the Volcker Committee is being audited by a private firm whose name we’re trying to get for you, and that those audits will be made public.

Question: A couple of things. You mentioned, at the beginning of the briefing, how Kofi has started the new ideas to reform the Organization, all that to avoid a future problem like oil-for-food has created. But, you’ve made no mention of his intentions in terms of some of the people who were cited by Volcker as having behaved badly, among them, partly himself in that he wasn’t forthcoming with information to the investigators, but certainly Iqbal Riza, Benon Sevan, Louise Fréchette, and others. What about these people? Will they continue to be working with the Organization, and also, Volcker’s latest report looks at the companies and individuals who’ve behaved badly and what does this mean in terms of the UN’s relationship with these companies and these individuals in the future? What sort of guidelines would be put in place or some way of avoiding this type of problem in the future?

Spokesman: In the mention of the companies, our accounts department and financial officials are reviewing the report very carefully. They’re going to take action as warranted. Where contracts with companies that provide humanitarian services in Iraq which have been approved by the 661 committee, it may be necessary to consult with the Council first regarding these contracts, because there are obviously some contracts outstanding which the Iraqis have asked us to continue with. In any case, we will determine whether any company against which an adverse finding is made appears in our own vendor database and, if so, we will urgently follow established procedure which can include suspension from the database. As for your other question, there were no adverse findings against Mme. Fréchette and Iqbal Riza. I think that was covered in the previous reports. Mr. Riza serves as a Special Adviser to the Secretary-General on the Alliance of Civilizations, and continues to have the full support of the Secretary-General, as does the Deputy Secretary-General. I would remind you that Mr. Sevan no longer works for this Organization.

Question: Where is the accountability for Mr. Sevan if he’s run off with money? Where do you hold a man like that accountable?

Spokesman: Mr. Sevan is open to any criminal proceedings that may be taken against him by a national authority and, as we said, with him and anyone else who faces criminal charges, we would immediately waive immunity.

Question: Fréchette was Sevan’s boss. She is cited in the report as having handled her position in a fairly dismal fashion. Iqbal Riza shredded documents and has been reprimanded for this. Are these the type of people that an Organization that’s now planning to reform itself should keep on board?

Spokesman: When the Secretary-General spoke to the Council, he accepted the failures, he accepted the responsibility for the management failures of the Secretariat as a whole.

Question: Stéphane, does the Secretary-General continue to have a personal assistant who the Volcker report found had provided insider information to his son?

Spokesman: I think Ms. Assebe did absolutely nothing wrong. If you look at the index and the Secretary-General of course continues to have full support.

Question: According to the report, she provided insider information to the Secretary-General’s son. Is that?

Spokesman: That’s your interpretation. That’s your read of the report. My answer to you is simple, is that there were no adverse findings against Ms. Assebe and she, of course, continues to enjoy the full support of the Secretary-General.

Question: One of the recommendations that the committee makes is the creation of the position of Chief Operating Officer. When the Secretary-General created the Deputy Secretary-General’s post, Ms. Fréchette in this case, was supposed to do that. Why is this suggestion being made? Isn’t Ms. Fréchette the chief operating officer? Or do you think…

Spokesman: I think her job was not specifically -- the office of the Deputy Secretary-General was not specifically as chief operating officer. These suggestions by Mr. Volcker are obviously being studied by us and by the Member States.

Question: It says in the current report that Tun Myat wasasked every year to fill in a disclosure form, a financial disclosure form and nothing happened. Could you tell me a) who asked for this? and b) why nothing happened? I mean, if you don’t fill in the form, why should he continue working for the UN?

Spokesman: It was clear from the report that there were failings in oversight and in management. That is why we’re pursuing a strong overhaul of the financial disclosure form and enforcement of those rules and moving those rules further down the line to the director’s level.

Question: What you announced recently, that there will be a disclosure form is apparently, according to this report, is not new.

Spokesman: What is new is that the forms will be much longer and will request much more information and we do hope that the enforcement of that requirement will be stronger and it is already being and that is already the case. This will be part of the jobs of the new ethics office and I do expect to have a senior management official here in the early part of next week to sort of unveil the bigger package of these rules.

Question: Just to finish this, who was it that requested that he would fill?

Spokesman: It was standard procedure. It was staff regulations that these forms be filled out.

Questions: It says that notes were made to him to fill in those forms but it doesn’t say by whom.

Spokesman: We just got this report like you. We’ll look into it.

Question: Now that the whole Volcker exercise is over, maybe you can address some of the outstanding questions, such as how it was that a Mercedes was purchased in the Secretary-General’s name with a diplomatic tax discount in Switzerland and subsequently shipped to Ghana with the diplomatic exemption on import taxes in the name of the Secretary-General? Can you explain to us how that happened?

Spokesman: It’s in the report. I’m not going to address that.

Question: Follow-up question. How can the Secretary-General be committed to overhaul of the UN management where he continues to employ as his personal assistant someone who provided insider information to his son and continues to ignore the fact that a car was bought with a diplomatic discount in his name, in Switzerland, and then imported to Ghana?

Spokesman: As far as we’re concerned, there were no adverse findings against Ms. Assebe. She continues to have the full support of the Secretary-General. We’ve come close to spending $38 million on an investigation under which no other organization has ever submitted itself to. This was an exercise in trying to get to the bottom of all sorts of issues related to the oil-for-food programme and, as far as we’re concerned, it’s definitive.

Question: Does the Secretary-General feel that the Volcker Committee got to the bottom of it, and in particular does the Secretary-General feel that the Volcker Committee got to the bottom of how a car was purchased in his name in Switzerland and imported to Ghana with a diplomatic discount?

Spokesman: You’d have to ask the Volcker Committee if they thought they had gotten to the bottom of it. That’s my answer to you.

Question: You just said $38 million was to be spent? Correct?

Spokesman: Yes. By the end of November it will be close to $38 million.

Question: Out of your own pocket?

Spokesman: Out of the oil-for-food accounts.

Question: In this report, it strongly suggests that some of the recommendations or findings should eventually be considered for reform of the Organization. After having studied, what process does the Secretary-General foresee?

Spokesman: Some of the things we’ve already started from the earlier reports, which is what I’d mentioned: the more rigorous financial disclosure form, the review of oversight and audit, the OIOS and the Department of Management have taken a look at the last Volcker report and, as you know, there’s been an overhaul of the procurement department. So, these are things that have been ongoing as the reports have been released.

Question: The report questions a lot of things that are associated with Boutros Boutros-Ghali. In terms of Oil-for-Food and there certainly is inference that he could have been on the take. What is the UN doing about the case of Boutros Boutros-Ghali? Are you in touch with him? What has he told you, what sort of follow-up?

Spokesman: I’m not aware that we’re in touch with him. The findings of the investigation into Mr. Boutros-Ghali are in the report and speak for themselves.

Question: Is something continuing? Is OIOS looking into this further? He is after all a former Secretary-General.

Spokesman: The report into the activities of Mr. Boutros-Ghali is the exhaustive investigation.

Question: Is the Secretary-General aware that on May 23, 2001, his son received payment of 20,000 Swiss Francs from Michael Wilson’s company, Kynaston to his own company VeveySport?

Spokesman: I’m not aware that he was aware.

Question: Regarding the Secretary-General’s appointment of Martti Ahtisaari to be special representative to Kosovo, could you tell me when that is going to be taking place?

Spokesman: The discussions regarding his terms of references are still ongoing so we hope to have an announcement in the next few days.

Question: Does the Secretary-General have any comment on the fact that his special representative for Europe, Jean-Bernard Merimee, has admitted in this document that he received, I think it was about $160,000 in commissions on Iraqi oil sales while he was working as a special representative for the Secretary-General?

Spokesman: The Secretary-General was very shocked at this finding and disappointed that Mr. Merimee took this money and admitted to taking this money. But, I would stress that Mr. Merimee’s temporary employ here as a UN special advisor had nothing to do with the Iraq file.

Question: Can I ask a question on Lebanon? When is the Larsen report expected to be going to the Council?

Spokesman: On Monday, I believe, it’s expected to be discussed.

Question: And will it be on the ministerial level?

Spokesman: I still don’t know. I think they’re still working on that.

Question: What about a resolution?

Spokesman: I think you’ll have to ask the Council members that.

Question: About your contention that no other organization has undertaken such an investigation. Isn’t it the fact that what the investigation found was that this organization was very poorly supervised to begin with, and it still is need of a huge transformation and isn’t that the problem rather than keep saying that we investigated it and that’s it?

Spokesman: I don’t disagree with the premise of your question. This organization needs serious overhaul of the rules by which it does business.

Question: Can you sum up the entire totality of all the disciplinary actions that have been taken against all the UN officials implicated by all these Volcker reports into the Oil-for-Food scandal?

Spokesman: Off the top of my head, Mr. Stephanides separated from the organization and, as you know, he’s filed an appeal that has gone on. Mr. Sevan has also been fired, resigned, excuse me, resigned before he would have been fired. But, I also think you have to take a look at what the Volcker committee did find and where it did find the major amount of bribery, of corruption of the system by Saddam Hussein, where the money was made and it was not through criminal actions save for one person in the Secretariat.

Question: Concerning all the money and kickbacks going to various entities and organizations. In one of the sections it talks about a Father Benjamin based in Geneva that he got about 150,000, something like that, and that 90,000 was transferred to the Vatican, to the account of the Vatican and the United Nations knows about it. Will any effort be made with all this entities that have been known to get kickbacks, to get the money back to the UN or to Oil-for-Food?

Spokesman: If criminal activity took place, we would work closely with any judicial authorities to make sure the cases are followed through.

Question: You said that you’re trying to deal with the documents right now. If there is any other investigation outside of the UN who has requested those documents, would an independent inquiry be lending or giving those documents to these other investigations?

Spokesman: We would obviously try to cooperate as much as we can with any other requests for documents.

Question: Mr. Volcker said in his press conference today that it would be up to the UN what happened to the archive. Will the UN release the archive publicly, and particularly, will the UN release the text of the interviews between investigators and Kofi Annan?

Spokesman: As I said, we’re right now discussing with the IIC how to handle those documents, and we hope to be able to announce some guidelines on how these documents, how all these different categories of documents are treated, whether it’s interviews, confidential statements the commission received and how they can be treated in the most transparent way possible.

Question: You mentioned the need to focus on Saddam Hussein and how much he was able to manipulate the programme, but Mr. Volcker in his briefing today said, I quote, “The corruption of the programme would not have been so substantial if there had been better discipline at the UN.” So, what is the Secretary-General’s overall response to these allegations?

Spokesman: It’s what the Secretary-General had said earlier, which is that he accepts the responsibilities for the failings of management part of the Secretariat, as well as the oversight responsibilities of the Secretariat.

Question: It’s one thing to take responsibility…

Spokesman: One of the things is to push as hard as possible on the reform process so there are clear lines of management and decision-making, and that if we are given responsibility that we are also submitted to greater and more independent oversight.

Question: Do you feel that there continues to be a culture of impunity at the UN?

Spokesman: No, I wouldn’t.

Question: I’m just following up on her question. Louise Fréchette and others who were intimately involved in the program were aware that the majority of contracts were tainted by kickbacks and other things. So, how can you not hold these people accountable for not running the program properly?

Spokesman: For some of these contracts, which were examined for pricing by the Oil-for-Food office and submitted to the Security Council, I think none, and in a number of cases we flagged the pricing problem, none of them were blocked because of the issue of pricing and my quick perusal of the report this morning, a lot of that activity took place outside of any structure having to do with the UN, of the kickbacks and those contacts.

Question: But they were aware. Louise Fréchette and others even acknowledged that it was obvious that a majority of these contracts had kickbacks in them. Wasn’t that the flashing light, the warning signal that something had to be done?

Spokesman: We had on a number of occasions flagged that to the 661 committee, and as I’ve said, one of the issues, the problems that we’ve accepted is the failing of the management and the oversight.

Question: But, again, it goes back to the question asked earlier, is that the type of person who should be, I’m talking about Louise Fréchette in this case, who should be?

Spokesman: For some of these people we’ve discussed, it’s not a question of the person, it’s a question of the clear lines of responsibility between us and between the Council and Secretary and the Member States that were never clearly defined in this programme, and that is one of the underlying problems with the programme as a whole.

Question: But why does Stephanides take the fall?

Spokesman: If you look at, there was a clear, and he even admitted to violating a procurement rule, and there was an adverse finding against him in the report.

Question: Will Volcker be allowed to speak with members of the press?

Spokesman: Yes. And he’ll probably stop at the stakeout and shortly to take a few of your questions.

Question: Will we be allowed to?

Spokesman: No, not participate. Yes, it’ll be live on the in-house TV, and there’ll be some press seats which, I don’t know if you have to access them through the visitors’ lobby or through Conference Room 4.

Question: You said that Mr. Stephanides was disciplined because there was a violation of procurement. We heard the other day in a briefing by OIOS that in an the audit of procurement of engineering services for peacekeeping, there were violations of procurement rules. Why is nobody being punished for those violations?

Spokesman: I don’t remember exactly the case you’re talking about, but I know the procurement department is being gone over by a fine-tooth comb whether it be by OIOS, the Department of Management, an external review by Deloitte & Touche so I’m sure that as OIOS proceeds with its investigation, if other people are to be disciplined, they will be.

Thank you.

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For information media • not an official record

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