Sevan In The Hot Seat

The one-time Federal Reserve chairman, however, said he cooperated with Manhattan District Attorney Robert Morgenthau, who, according to Mr. Volcker, is looking into criminal wrongdoings by the other principal target of yesterday's report, Mr. Sevan. Mr. Sevan, however, is currently in Cyprus, which like other E.U. members, excepting Britain and the Netherlands, does not extradite its citizens for criminal trials in America.

Mr. Sevan was allowed to leave America even though the United Nations repeatedly said it maintained Mr. Sevan on staff with a symbolic salary of $1 a year to ensure that he would not leave the country and that he would work with the Volcker committee. According to Mr. Volcker, Mr. Sevan has not cooperated with the U.N.-mandated committee for more than six months, refusing interviews and agreeing only to answer written questions.

The Volcker committee accused Mr. Sevan of "corruptly" receiving payments relating to the program he has headed. The committee found that Mr. Sevan had taken $150,000, at times depositing in his bank accounts large sums in $100 bills. Mr. Sevan resigned his U.N. post Sunday, accusing Mr. Volcker of "scapegoating" him, amid denials of accepting bribes. Mr. Volcker yesterday said that the documentation of banking transactions and phone conversations in his report speak for themselves.

According to the report, Mr. Sevan acted in concert with the two principal owners of a small Panamanian-listed trading company, Africa Middle East Petroleum, Efraim Nadler and Fakhry Abdelnour. Boutros Boutros-Ghali is not mentioned in yesterday's report, although Mr. Abdelnour is the former secretary-general's cousin and Mr. Nadler his brother-in-law.

In describing Mr. Nadler, an Egyptian-born Jewish businessman with residences in Geneva and New York, the report mentions two of his brothers, Emanuel and Henri (Enrico), as well as their mother, Pauline. None of these immediate family members is accused of wrongdoing. The one next-of-kin missing from the list is Mr. Nadler's sister, Leia Maria, who is the wife of Mr. Boutros-Ghali.

"We are not necessarily saying everything in this report," a principal member of the Volcker committee, Mark Pieth, told the Sun. "We decided to deal with two carefully circumscribed issues in this report. Anything else, any other issue will be in the next report."

Mr. Volcker said that a report expected next month will describe in greater detail the management of the oil-for-food program by the United Nations and its related organs and will answer remaining questions on the current and former secretaries-general. The timing of that report coincides with the annual General Assembly debate, which brings many heads of states to Turtle Bay, and which Mr. Annan hopes will concentrate on U.N. reform.

"The fact that the head of the oil-for-food program received illicit, under-the-table payments from Saddam Hussein and that he successfully blocked an audit of his own office highlights the need for reform and new management at the U.N." said Senator Coleman, a Republican of Minnesota, who has previously called for Mr. Annan's resignation.

It's worth noting that someone let Sevan out of the US, despite the request that he stay put pending the investigation. Now, that he's outside the US, he can evade prosecution because of a lack of extradition rights between Cyprus and the US.

If Sevan was innocent as he claims, and not a scapegoat, he would have testified before the Volcker Commission. Instead, he stonewalled them. It makes you wonder what his motivations are, but I can hazard a guess. He knows that he wasn't as clean as he said he was, and that there is sufficient information on his double dealings and the mass corruption under his watch that he would be in serious trouble. Hence, he's managed to get out of the US without having to answer for his actions.