The chairman, former US Federal Reserve chairman Paul Volcker, said on Friday two Congressional committees jeopardised the work of his investigation in their pursuit of the investigator, Robert Parton.

Volcker asked Republican Representative Henry Hyde's House International Relations Committee to return secret documents Parton has given it, warning that witnesses could be threatened if anything leaks out.
 
"We're not playing games here, we are dealing - and let me just emphasise this - in some cases with lives," Volcker said.
 
But in a serious blow to Volcker, Hyde rejected the demand late Friday and refused to give up the documents.
 
"I am aware of and appreciate the gravity of the concerns expressed today by Mr Volcker," Hyde said in a statement. "However, my committee has an obligation to continue its inquiry."
 
Rising controversy

Volcker made the demand at a hastily called news conference that was meant to dampen rising controversy over recent claims made by Parton.

The former FBI agent had quit Volcker's Independent Inquiry Committee because he believed that it had intentionally played down evidence that incriminated UN Secretary-General Kofi Annan.
 

UN chief Annan said Volcker's
report had 'exonerated' him

Volcker reiterated that there simply was never enough evidence to prove that Annan influenced the awarding of an oil-for-food contract to the Swiss company that employed his son, Kojo Annan.

But he again insisted that his committee finding was not the exoneration that Kofi Annan claimed it was.

Parton's resignation drew the attention of three US congressional committees investigating massive bribery in oil-for-food, the $64 billion programme that was set up to help Iraqis cope with international sanctions the UN imposed on Saddam Hussein's regime after his 1990 invasion of Kuwait.
 
On Thursday, Parton turned over boxes of documents from his investigative work to Republican Representative Henry Hyde, chairman of the House International Relations Committee.

Undue secrecy

A subcommittee led by Republican Representative Christopher Shays has also subpoenaed him and said it expected to receive documents from Parton on Monday.
 
They have also accused Volcker of undue secrecy, leading Volcker to respond with angry denials.
 

The UN oil-for-food programme's
wrongdoings are coming to light

The back and forth got so heated earlier this week that UN officials had begun to fear that Volcker's probe would lose its credibility and its findings would eventually be seen as irrelevant.
 
In the press conference, Volcker said his main concern was to keep his probe credible so it could keep doing its work. His committee is expected to finish this summer with a report that will examine just how much countries on the UN Security Council knew about the oil-for-food wrongdoing as it went on.
 
Volcker suggested that concern over the next report's findings might be behind the latest turmoil.
 
"I do think that as our investigation proceeds, there are people, and I'm not talking about committee chairmen, who would just assume we go away," he said.

Deal proposed

On the issue of Parton's disagreement, Volcker acknowledged that there had been "active debate" within his committee over how to interpret its findings on Annan.

"On the basis of the facts reported, others may - and have - drawn other inferences or judgments," he said.
 

Saddam's officials are believed
to have cashed in on the scheme

To settle the discrepancy, Volcker proposed a deal: He offered to lift Parton's confidentiality agreement and allow him to make a statement "when he chooses" addressing his disagreements with the committee over Annan's role.

In exchange, the congressional committees would withdraw their subpoenas and return all committee files to it. "This is critical to the committee's continued work with witnesses, governments and organisations who have placed their trust in our confidentiality," Volcker said.
 
Parton's lawyer, Lanny Davis, did not immediately return a phone call seeking comment.

While Hyde dismissed Volcker's offer, the other committees backed off somewhat.
 
Positive step

Senator Norm Coleman, a Minnesota Republican leading one investigation that is considering a subpoena of Parton, said he appreciated Volcker's efforts to "clear the air" over Parton's resignation.
 
Shays issued a statement also calling Volcker's move a positive step and suspending the demand that Parton testify.
 
"While the details of such a public statement are yet to be worked out, I believe a voluntary presentation by Mr Parton could meet Congress' legitimate need for information while maintaining the integrity of the Volcker Committee's investigation," Shays said.
 
Still, Shays pokeswoman Sarah Moore said the committee still wanted Parton's documents.