Tuesday, August 09, 2005

Former U.N. Official Pleads Guilty

FOXNews - One of the targets of the Oil-for-Food investigation, Alexander Yakovlev, on Monday pleaded guilty to conspiracy, wire fraud and money laundering charges for taking bribes during his work at the United Nations.

Yakovlev also admitted to soliciting a bribe under Oil-for-Food, making him the first U.N. official to face criminal charges in connection with the scandal-tainted program aimed at helping ordinary Iraqi citizens.

Yakovlev, who lives in the New York City suburb of Yonkers, was stripped of his diplomatic immunity earlier Monday by U.N. Secretary General Kofi Annan and taken into custody by federal authorities.

David N. Kelley, the U.S. attorney for the southern district of New York, said that a judge accepted Yakovlev's guilty plea for his part in taking at least several hundred thousand dollars from foreign companies in connection with his job as a procurement officer at the United Nations from 1993 to 2005. The former U.N. official handled tens of millions of dollars worth of U.N. supply contracts annually when he worked there.

He was released later Monday on a $400,000 bond, with no new court date immediately set, said Megan Gaffney, a spokeswoman for Kelley.

"We decided that it's in the best interest of the client to enter such a plea," Yakovlev's lawyer Arkady Bukh told The Associated Press. "In term of sentencing we expect much better deal if we enter a guilty plea."

The news came just hours after Paul Volcker, the man in charge of the independent investigation into Oil-for-Food, fingered the Russian native as one of two main U.N. officials involved in the program's corruption.

Volcker's U.N.-approved panel, the Independent Inquiry Committee (IIC), released its latest report highlighting mismanagement of Oil-for-Food on Monday. It accused Yakovlev of of collecting nearly $1 million in kickbacks outside the Oil-for-Food program.

Yakovlev resigned from his job earlier this summer after a FOX News investigation.

The Volcker report also accuses Benon Sevan, the one-time head of the Oil-for-Food program who severed his ties with the United Nations on Sunday, of taking kickbacks under the multi-billion dollar humanitarian operation aimed at easing the effects of sanctions on Iraqi civilians.

Volcker, a former Federal Reserve chairman, also said in releasing the report that Sevan should also lose his diplomatic immunity so he can be prosecuted for alleged crimes.

"All I can fairly say is that given the kind of evidence that we have presented, I would think there may well be interest in doing so," Volcker said, referring to Sevan and Yakovlev losing their immunity.

The report, which Volcker said was intended to tie up some "loose ends" in his panel's investigation, touched on topics other than Sevan. It dealt briefly with Annan and his son, Kojo, and said more would be discussed in the committee's final report, expected in September.

For the first time, the report gave a motive for Sevan's actions, saying his finances were "precarious" shortly before his alleged misdeeds.

"Our conclusions are obviously significant and troubling," Volcker said at a news conference.

Some critics have accused the United Nations of squandering millions — and even billions — of dollars in its mismanagement of the program. Yet Volcker's team found that Sevan appeared to have received kickbacks of just $147,184 from December 1998 to January 2002.

Volcker said Sevan had not responded to the IIC's efforts to contact him to get possible alternative explanations for that money.

Sevan, a 40-year veteran of the world body, announced his resignation Sunday in a scathing letter that lambasted Annan, the U.N. Security Council, the United Nations' critics, and the IIC.

"As I predicted, a high-profile investigative body invested with absolute power would feel compelled to target someone and that someone turned out to be me," Sevan wrote in the letter. "The charges are false, and you, who have known me for all these years, should know that they are false."

The resignation is largely symbolic because the U.N. was paying Sevan just $1 a year to keep him on payroll so he would cooperate with the committee. But it removes his diplomatic immunity and could leave him open to prosecution; Sevan, a Cypriot citizen believed to be in Nicosia, is also being investigated by the Manhattan District Attorney's office.

But also by resigning, Sevan may have retained U.N. benefits such as a relocation grant that permits the organization to pay for his move back home to Cyprus.

On Thursday, Sevan's lawyer Eric Lewis said the committee would find in its upcoming report that Sevan got kickbacks for steering contracts under Oil-for-Food to a small trading company called African Middle East Petroleum Co. Ltd. Inc. Lewis said it would also accuse Sevan of failing to cooperate with the investigation.

The report largely confirmed that, but went further. It described how Sevan and his wife repeatedly had overdrawn their bank accounts before Sevan first sought to steer oil allocations to AMEP.

It also found that two men helped Sevan: Fred Nadler, an AMEP director and brother-in-law of former U.N. Secretary-General Boutros Boutros-Ghali; and Fakhry Abdelnour, the president of AMEP.

Volcker's team recommended that the United Nations assist in their possible prosecution as well.

Lewis also said the United Nations was looking for a scapegoat and Sevan was it.

"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," Sevan wrote in his resignation letter to Annan. "The only thing that will is to speak the truth and stand up to the political pressures from the adversaries of the United Nations."