Former UN oil-for-food head charged with bribery

NEW YORK, Jan 16 (Reuters) The former head of the UN oil-for-food program for Iraq and a brother-in-law of an ex-UN Secretary General have been charged with bribery and conspiracy to commit wire fraud tied to the program.

Benon Sevan, the only UN official to be charged in relation to the program, and Ephraim Nadler, brother-in-law of former Secretary-General Boutros Boutros-Ghali, were named in an indictment unsealed in Manhattan federal court today.

Michael Garcia, US attorney for the Southern District of New York, said in a statement that Sevan allegedly received about 160,000 dollars from Nadler on behalf of the Iraqi government.

Garcia said the United States had lodged warrants for the arrest of Nadler and Sevan and will seek their arrest and extradition to New York. Sevan is in his native Cyprus, which does not extradite its citizens. Nadler, a native of Egypt and a US citizen, lives in Manhattan and in Europe.

''The allegations in this current indictment that the executive director of the very program that was created to provide humanitarian aid to the Iraqi people was involved in such a scheme demonstrates how pervasive the corruption was and how that corruption undermined the operation of the program,'' Garcia said.

Allegations against both men first surfaced in 2005 in a UN-established independent inquiry headed by former Federal Reserve Chairman Paul Volcker that looked into the oil-for-food program.

At the United Nations, spokesman Farhan Haq said the world body had been cooperating with US authorities in following up on the findings of Volcker's investigation and would continue to do so.

Secretary-General Ban Ki-moon ''reiterates the commitment to have the United Nations uphold the highest ethical standards,'' Haq told reporters.

Sevan's lawyer Eric Lewis did not immediately return a call for comment but Sevan has vigorously denied the charges in the past and said he was made a scapegoat.

Nadler is the brother of Leia Boutros-Ghali, the wife of the former secretary-general who led the world body from 1992 to 1996 and set up the program.

OIL SMUGGLED The 64 billion dollars oil-for-food program was designed to soften the blow to civilians of international sanctions against Iraq by allowing Iraq to sell oil to finance purchases of humanitarian goods. The sanctions were imposed after Baghdad's troops invaded Kuwait in 1990.

The program, of which Sevan was executive director, began in late 1996 and ended in 2003.

Much of the abuse came from oil that Saddam smuggled out of the country outside of the UN program. More than 2,300 companies have been investigated and some governments accused of having abused the humanitarian program.

Saddam embezzled over 1 billion dollars from the UN program and probably as much as 10 billion dollars outside the program, according to the Volcker inquiry.

US federal prosecutors have indicted 12 other people in relation to the program and two other UN officials accused of siphoning off money from the world body but not connected with program.

The Volcker inquiry accused Sevan of steering an oil contract to a small Panama-registered trading firm, which netted the firm some 1.5 million dollars.

Sevan was chosen to direct the billion program in late 1997 after a distinguished 40-year career with the world body in which he was involved in some of the most intractable, and often dangerous, world crises.

In his long UN career he served in Afghanistan, Angola, Burundi, Kosovo, Rwanda, Somalia and Lebanon and in myriad jobs at UN headquarters in New York, including security coordinator and Security Council administrator.

REUTERS AB BST00:09