Weapons of Mass Destruction (WMD)

DATE=5/2/04

TYPE=CORRESPONDENT REPORT

TITLE=ANNAN/OIL FOR FOOD (L-O)

NUMBER=2-315543

BYLINE=STEPHANIE HO

DATELINE=WASHINGTON

INTERNET=

VOICED AT:

INTRO: U-N Secretary General Kofi Annan is urging the world to wait for the results of an independent investigation into Iraq's Oil-for-Food program before rushing to judgment. Critics accuse U-N staffers and contractors working for the international organization of helping the Saddam Hussein government illegally siphon off billions of dollars from the program. V-O-A's Stephanie Ho reports from Washington.

TEXT: Speaking on the N-B-C television program "Meet the Press", Mr. Annan stressed that U-N employees could lose their jobs if they refuse to help investigators looking into the Oil-for-Food program.

/// FIRST ANNNAN ACT ///

They will be dismissed because they have to cooperate with the investigation.

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The three-member investigation group is being headed by former U-S Federal Reserve Bank chairman, Paul Volcker. It has no subpoena power and will rely on voluntary cooperation.

Mr. Annan said the Volcker team will have access to all U-N documentation regarding the program. He added that investigators have the authority to interview any U-N employee, regardless of rank.

/// SECOND ANNAN ACT ///

And if their findings were to conclude that any U-N staff member had been engaged in this corruption, he or she will be dealt with severely. Their (diplomatic) privileges and immunity will be lifted, so if necessary, they will be brought before the court of law and dealt with, in addition to being dismissed.

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"Oil-for-Food" was launched in 1996 as a humanitarian program, aimed at helping ordinary Iraqis cope with international sanctions imposed after the 1991 Gulf War. It allowed Saddam Hussein's government to sell some of Iraq's oil and use the money to purchase food and other goods.

In a Congressional hearing last week, the U-S General Accounting Office reported that under the program, the Hussein government pocketed more than 10-billion dollars earned from smuggling oil and extracting illegal kickbacks. This illicit activity involved hundreds of companies from more than 40 countries.

At the United Nations, one of the top people under scrutiny is the Oil-for-Food program head, U-N Assistant Secretary General Benon Sevan. He has denied the allegations against him.

N-B-C asked Mr. Annan about a recent letter from Mr. Sevan's office to a company also under investigation, asking it to first clear information with his office before cooperating with investigators.

Mr. Annan said he could not confirm whether Mr. Sevan knew about the letter. But he added that such actions are being made at the request of the investigating panel.

/// OPT THIRD ANNAN ACT ///

What we have done is we are protecting all the material for the investigation and it has been turned over to the Volcker group. And Mr. Volcker is very keen to safeguard all the documentation - not only from the United Nations and the staff, but also from some of the agents and contractors, for them to cooperate.

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Mr. Annan also repeated denials that his son was involved in illegal activities related to the program.

The U-N Secretary General pledged to fully support the independent panel's findings. He also urged the world public not to rush to - in his words - "smear" the United Nations.

Mr. Volcker said the panel expects to have its first report in about three months, but that the entire investigation could take longer. (SIGNED)

NEB/SHO/RAE