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'Hell No,' Kofi Won't Go

Investigators said Tuesday there wasn't enough evidence to show that U.N. Secretary-General Kofi Annan knew of a contract bid by his son's employer for the oil-for-food program in Iraq. However, they criticized the U.N. chief for not properly investigating possible conflicts of interest in the matter.

Asked if he was planning to step down in a response to the program, Annan replied, "Hell, no."

The report released Tuesday accused the company, Cotecna Inspection S.A., and Annan's son, Kojo, of trying to conceal their relationship after the contract was awarded. It criticized Kofi Annan for conducting only a one-day investigation into the issue, and faulted his management of the world body.

The investigation led by former U.S. Federal Reserve Chairman Paul Volcker did not accuse the U.N. chief of corruption or any other wrongdoing. But its conclusion fell well short of the clear vindication that the secretary-general had wanted.

Even so, Annan said he was happy with the report's findings he committed no wrongdoing.

"After so many distressing and untrue allegations have been made against me, this exoneration by the independent inquiry obviously comes as a great relief," Annan told reporters.

CBS News Foreign Affairs Analyst Pamela Falk said that while the report "stops short of accusing the secretary-general of financial gains in the scandal, it makes damaging accusations about Kofi Annan's failure to prevent his own son from being involved in corruption and conflicts of interest.

"Stacked up with the recent admission by Kofi Annan that he met on several occasions with officials from Cotecna – the Swiss company involved in the scandal – and that incriminating documents were destroyed by Annan's staff, the report is yet another blow to U.N. credibility," Falk said.

At a press conference after the report was released, Volcker said there wasn't enough evidence to suggest that Kofi Annan knew about the process by which Cotecna was selected for an inspection contract under the oil-for-food program, or that he tried to influence it.

"Our investigation has disclosed several instances in which he might, or could have become aware, of Cotecna's participation in the bidding process," Volcker said. "However, there is neither convincing testimony to that effect nor any documentary evidence."

Kojo Annan worked for Cotecna in West Africa from 1995 to December 1997, and then was a consultant for the firm until the end of 1998 — when it won the oil-for-food contract. He remained on the Cotecna payroll until 2004 on a contract to prevent him from working for a competitor in West Africa.

The $64 billion oil-for-food program was the largest U.N. humanitarian aid operation, running in 1996-2003. Saddam Hussein's government was allowed to sell oil in exchange for humanitarian goods as an exemption from U.N. sanctions imposed after Iraq's 1990 invasion of Kuwait.

In a bid to curry favor and end sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for Iraqi oil that could then be resold at a profit. U.S. congressional investigators say Saddam's regime may have illegally made more than $21 billion by cheating the program and other sanctions-busting schemes.

The report is the second issued by Volcker's team. It coincides with allegations of sex abuse by U.N. peacekeepers and of sexual harassment and mismanagement by senior U.N. staff and comes a week after Kofi Annan called for the biggest overhaul of the United Nations in its 60-year history.

Some critics, including several U.S. lawmakers, have been calling for Kofi Annan to resign. Even before the report was issued, Sen. Norm Coleman, a Minnesota Republican, reiterated his call for Annan to "put the interests of the U.N. ahead of his personal interest" and step down.

After the release of the report, however, U.S. State Department spokesman Adam Ereli backed Annan, though he said the U.S. government hadn't had time to read the report.

"We support the United Nations and we support the secretary-general and his work," Ereli said. "Secretary-General Annan and the United States share a common commitment to working together to reform the United Nations, and we will support him in his efforts to do that."

Annan expressed his deep disappointment with the involvement of his son. The report released Tuesday accused Kojo Annan and Cotecna of trying to conceal their relationship after the contract was awarded and not cooperating with the committee.

"I love my son and have always expected the highest standards of integrity from him," Kofi Annan said. "I am deeply saddened by the evidence to the contrary that has emerged and particularly by the fact that my son had failed to cooperate fully with the inquiry."

In a letter annexed to the report, Kojo Annan's lawyer, William R. Taylor, rejected any claim that his client had not been wholly cooperative with the committee. But Taylor admitted he had not told his father the entire truth.

The Volcker report said that while Cotecna "generally has cooperated" with the investigation, the committee "concludes that Cotecna has made false statements to the public, the United Nations, and the committee."

In the most damning findings against Kofi Annan, Volcker's investigation, however, conclude that Annan's inquiry "was inadequate" and that the issue should have been referred to the U.N. legal office or internal watchdog.

In an attached letter, Annan's lawyer defended the secretary-general's action, saying he acted on the advice of three advisers.