Ex-U.N. Oil-For-Food Chief Charged

The former United Nations oil-for-food chief was charged Tuesday with bribery and conspiracy to commit wire fraud for allegedly accepting $160,000 to influence the program illegally.

The charges against Benon Sevan, 69, of Nicosia, Cyprus, were contained in a rewrite of an indictment stemming from the scandal over the program set up from 1996 to 2003 to permit the Iraqi government to sell oil primarily to buy food and medicine for suffering Iraqis.

The program was designed to help Iraqis cope with U.N. sanctions, but authorities said it was corrupted by bureaucrats, oil tycoons and Saddam Hussein after the former Iraqi leader was allowed to choose the buyers of Iraqi oil and the sellers of humanitarian goods.

Federal and state prosecutors also announced the indictment of Ephraim Nadler, 79, of Manhattan, on the same charges.

Nadler, a brother-in-law of former U.N. Secretary-General Boutros Boutros-Ghali, allegedly helped a coconspirator obtain the right to buy Iraqi oil under the program in exchange for commissions from the oil sales and then funneled approximately $160,000 of these oil commissions to Sevan, the indictment said.

If convicted, Sevan could face up to 50 years in prison.

"The oil-for-food scandal was a classic example of the 'fox guarding the chicken coop,' in which Saddam Hussein's regime required kickbacks for the purchase of oil, according to the U.S. Attorney's indictment," said CBS News foreign affairs analyst Pamela Falk.

Nadler, who was also charged with conspiracy to commit wire fraud by engaging in prohibited financial transactions with Iraq and violating the International Emergency Economic Powers Act, could face up to 112 years in prison.

U.S. Attorney Michael Garcia said the United States has lodged warrants for the arrest of both men with Interpol and will seek their arrest and extradition to the United States.

Garcia said the charges against Sevan demonstrated "how pervasive the corruption was."

Whether or not Sevan will be brought to New York to be tried depends on complex political and extradition agreements with Cyprus, which is where Sevan has lived since he resigned from the U.N. last year, according to Falk.

A statement by Sevan's attorney defended Sevan, accusing the United States Attorney's office of using "Sevan as a scapegoat and a distraction from the United States' own massive failures and mismanagement in Iraq." The statement calls allegations that Sevan took some $144,000 in cash are "not only trivial; they are without basis."

FBI Assistant Director Mark J. Mershon said the indictment brings to 14 the number of individuals charged in the case and "strikes at the heart of the corruption that pervaded the oil-for-food program."

Since 2004, Sevan has been the subject of a U.N.-backed probe of fraud and waste in the $64 billion operation.

Eric Lewis, a lawyer for Sevan, did not immediately return a telephone message for comment. It was not immediately clear whether Nadler has retained a lawyer, though authorities said he is believed to be out of the country.

In August 2005, a U.N.-appointed investigating committee pursuing claims of fraud and waste in the program accused Sevan of a conflict of interest in his handling of oil-for-food contracts. Sevan resigned from the U.N. that same month and returned to his native Cyprus.

The U.N. investigating committee also accused him of accepting $147,184 in kickbacks for steering the contracts to a company of his choice.

Sevan, who had worked for the U.N. for 40 years, has repeatedly denied wrongdoing.

On Feb. 22, South Korean businessman Tongsun Park is scheduled to be sentenced for his conviction on charges he accepted at least $2 million to serve Iraq's interests in the scandal. He could face up to five years in prison.

Assistant U.S. Attorney Stephen Miller told the jury in Park's trial last July that Park was part of a decade-long conspiracy to bring about the lifting of sanctions imposed on Iraq after it invaded Kuwait and brought about the first Gulf War.

Miller said Park used his relationship with Boutros-Ghali to join an effort by Samir A. Vincent, an Iraqi-American, to earn the favor of Iraq and share as much as $45 million in windfall gains if the sanctions were lifted.

Vincent, who testified against Park, has pleaded guilty to federal charges and is cooperating with the government. He testified that Park arranged meetings during 1993 with himself, Boutros-Ghali and Vincent, including three meetings at Boutros-Ghali's Manhattan residence.

Miller told the jury that Park and Vincent arranged a 1993 meeting in Geneva, Switzerland, with Boutros-Ghali and Tariq Aziz, then Iraq's deputy foreign minister, and Barzan al-Tikriti, the half brother of Saddam who then was the Iraqi ambassador to the United Nations in Geneva.

Several others accused in the conspiracy are awaiting trial, including Texas oilman Oscar S. Wyatt Jr., who has pleaded not guilty.