UN ordered to pay legal fees of oil-for-food chief

The U.N.'s highest internal judicial body has ordered the United Nations to pay legal fees to the former chief of its oil-for-food program, who has been accused of accepting money to illegally influence the $64 billion humanitarian program in Iraq.

The program was the biggest humanitarian program in U.N. history, but a U.N.-sanctioned investigation found widespread corruption, involving thousands of parties, that bilked the humanitarian program of $1.8 billion.

The program chief, Benon Sevan, has been charged with bribery and conspiracy to commit wire fraud for allegedly accepting $160,000 to illegally influence the program.

The Administrative Tribunal's judgment, obtained Wednesday by The Associated Press, said the United Nations must pay "all reasonable legal fees" incurred by Sevan until February 2005, subject to an independent audit of the lawyers' invoices.

The judgment said Sevan and his lawyers were seeking $880,300, plus interest.

Under the oil-for-food program, which ran from 1996 to 2003, Iraq was allowed to sell oil provided most of the money went to buy humanitarian goods. It was aimed at easing Iraqi suffering under U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait and was a lifeline for 90 percent of the country's population.

But a 18-month U.N.-sanctioned investigation led by former Federal Reserve Chairman Paul Volcker found massive corruption in the program. Its final report in October 2005 accused more than 2,200 companies from some 40 countries of colluding with Saddam Hussein's regime to bilk the humanitarian program of $1.8 billion.

In 2004, it accused Sevan of accepting $147,184 in kickbacks for steering oil-for-food contracts to a company of his choice.

At the time, the U.N. agreed to pay Sevan's legal fees.

But when the investigation accused then-Secretary-General Kofi Annan of a role in the scandal, Annan reversed the payment decision.

Annan then rejected the ruling when the U.N. Joint Appeals Board upheld Sevan's appeal in February 2006.

Sevan took his case to the Administrative Tribunal, which ordered the U.N. to pay reasonable legal fees in its judgment dated Nov. 26, 2008.

Both the appeals court and the tribunal said it had no evidence that Annan's chief-of-staff ever imposed conditions on the payment agreement.

"We abide by all the decisions of the Administrative Tribunal, which is the highest appeals body within the U.N. system," said U.N. associate spokesman Farhan Haq.

Sevan resigned from the U.N. in 2005 and returned to his native Cyprus. He has not been extradited to the United Nations.

In January 2007, federal and state prosecutors charged Sevan with taking a $160,000 bribe to influence who could buy Iraqi oil under the oil-for-food program. The indictment charged Sevan with bribery and conspiracy to commit fraud.

At the time, his lawyer, Eric Lewis, said Sevan was being made a political scapegoat and that he had accounted for every penny, helping to save "tens of thousands of innocent people from death by disease and starvation."