msnbc.com news services
updated 8/8/2005 9:39:09 PM ET 2005-08-09T01:39:09

A former U.N. procurement officer pleaded guilty Monday to accepting hundreds of thousands of dollars in bribes from U.N. contractors, federal prosecutors said.

Alexander Yakovlev also admitted to soliciting a bribe under the U.N. oil-for-food program, making him the first U.N. official to face criminal charges in connection with the scandal-tainted program for Iraq.

He pleaded guilty to all three counts in the indictment — wire fraud, conspiracy to commit wire fraud and money laundering — and could face up to 20 years in prison for each of the charges, the U.S. Attorney’s Office said in a statement.

Yakovlev, who lives in the New York City suburb of Yonkers, was taken into custody and released later Monday on a $400,000 bond, with no new court date immediately set, said Megan Gaffney, a spokeswoman for David Kelley, the U.S. attorney for the southern district of New York.

“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 terms of sentencing we expect a much better deal if we enter a guilty plea.”

Just hours earlier, U.N. Secretary-General Kofi Annan had waived Yakovlev’s immunity upon request from David Kelley, the U.S. attorney for the southern district of New York.

Oil-for-food chief accused of corruption
Meanwhile, investigators probing claims of wrongdoing in the Iraq oil-for-food program accused its former chief, Benon Sevan, of corruption for taking illegal kickbacks and recommended his immunity be lifted for prosecution.

Yakovlev had been arrested after investigators found evidence he took nearly $1 million in illegal payments from the winners of $79 million in U.N. contracts, a senior U.N. official said Monday.

Yakovlev was taken into custody after the United Nations lifted his diplomatic immunity, said Mark Malloch Brown, chief of staff to Annan.

The third report by the Independent Inquiry Committee, led by former Federal Reserve Chairman Paul Volcker, was a new blow to the scandal-tainted $64 billion program. For the first time, it gave a motive for Sevan's actions, saying his finances were “precarious” shortly before his alleged misdeeds.

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.

Annan, son also blamed in report
The report touched briefly on Annan and his son, Kojo. It said new e-mails suggesting Kofi Annan knew more than he said about his son's involvement in the program raised questions that would be answered in the committee's final report, expected in September.

Yakovlev resigned earlier this year, and Sevan announced his resignation on Sunday. He criticized investigators, Annan, the U.N. Security Council and the U.N. critics who have cited the oil-for-food scandal as emblematic of perceived bungling and outright corruption.

“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. “The charges are false, and you, who have known me for all these years, should know that they are false.”

Though both men have quit, diplomatic immunity would cover their actions when they were employed. Volcker's recommendation that Annan waive that immunity was a strong indication of his conviction about the claims against them.

Sevan, a Cypriot citizen believed to be in Nicosia, was being investigated by the Manhattan district attorney's office.

Major humanitarian program
The oil-for-food program, launched in December 1996 to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait, was one of the largest humanitarian programs in history. By most accounts, it achieved what it set out to do, becoming a lifeline for 90 percent of the country's population of 26 million.

Under the program, Saddam's regime could sell oil, provided the proceeds went to buy humanitarian goods or pay war reparations. Saddam allegedly sought to curry favor by giving former government officials, activists, journalists and others vouchers for Iraqi oil that could then be resold at a profit.

The program has become the subject of several congressional investigations, as well as probes by a federal grand jury and the Securities and Exchange Commission.

According to the inquiry, Sevan worked with a cousin of Boutros Boutros-Ghali, Annan’s predecessor at the United Nations, and Fakhry Abdelnour, an Egyptian who owned a small trading firm, African Middle East Petroleum Co. (AMEP). This company transferred $580,000 to the account of Fred Nadler, the brother of Boutros-Ghali’s wife, Leia.

‘Personal pecuniary benefit’
Of this amount, Nadler then deposited in cash $147,184 to the New York bank accounts of Sevan and his wife.

“Mr. Sevan corruptly and in concert with Nadler and Abdelnour derived personal pecuniary benefit through the program through cash receipts from the sale of oil allocated by Iraq to Mr. Sevan and bought by African Middle East Petroleum Co.,” the report said.

“The participants had knowledge that some of the oil was purchased by paying an illegal surcharge to Iraq in violation of United Nations sanctions and rules of the program,” the report said.

Volcker's team recommended that the United Nations assist in the possible prosecution of Nadler and Abdelnour as well.

Yakovlev accused of sharing secret information
As for Yakovlev, investigators also found that he secretly tried to bribe a company called Societe Generale de Surveillance S.A., which was seeking an oil inspection contract under oil-for-food.

They said Yakovlev passed secret bidding information along to a friend in France, Yves Pintore, who then approached SGS to check if it would “work with” him and “influential people in the U.N. in New York.”

Volcker's team found no evidence that the company agreed to the bribe. However, it noted that Pintore essentially agreed to its characterization of his involvement.

The committee found “persuasive evidence” that Yakovlev took some $950,000 from other U.N. contractors outside oil-for-food.

Reuters and The Associated Press contributed to this report.

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