Video: 'Oil-for-food' scandal grows

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updated 2/4/2005 7:28:46 PM ET 2005-02-05T00:28:46

Now in the sights of U.N. investigators: the U.N.'s highest official — former Secretary General Boutros Boutros-Ghali.

NBC News has learned that investigators are now focused on whether Boutros-Ghali benefited from Iraqi oil deals, which another U.N. official, Benan Sevan, allegedly directed to a company registered in Panama.

The interim report reveals that the oil company — African Middle East Petroleum — which pulled down $1.5 million in profits from the deals, was run by one of Boutros-Ghali's relatives.

Friday, in a phone interview from Paris, Boutros-Ghali said the oil trader was a distant relative.

"I have no control over the member of the family," he told NBC News. "Ask the Iraqis. They will tell you that I never received a penny."

Investigators, who complain Boutros-Ghali is not fully cooperating, are now pursuing his bank records.

Friday, a defensive Kofi Annan said he was shocked by findings that his close associate Sevan allegedly was personally profiting from the very beginning of the program.  

"We do not want this shadow to hang over the U.N.," said the current U.N. secretary general. "So we want to get to the bottom of it."

Sevan complains he's being made a scapegoat and did nothing wrong. But investigators say he received large cash payments of $160,000 over four years, and they don't buy his claim that the money came from an elderly aunt.

"The corruption by the No. 1 person assigned to oversee the program is simply unconscionable," says Sen. Norm Coleman, R-Minn.

Also hanging over the United Nations are claims by an Iraqi-born American who pleaded guilty to illegal deals with Saddam Hussein. He now says after the program was first approved, Saddam made hundreds of thousands of dollars in payoffs, including money to a senior U.N. official.

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