UN official admits fraud

A veteran UN procurement official has pleaded guilty to conspiracy, wire fraud and money laundering charges after investigators found evidence he took nearly $1 million in illegal payments from the winners of UN contracts worth $79 million.

    The UN's Annan is under pressure in a widening scandal

    UN purchasing officer Alexander Yakovlev was charged on Monday in a federal court filing with receiving "at least several hundred thousand dollars" in illicit payments from firms seeking to secure UN contracts, David Kelley, the US attorney for the southern district of New York, said in a statement.

    The quick guilty plea - which comes just hours after his arrest - often means the accused is cooperating with federal prosecutors.

    Yakovlev worked on the controversial grant of a UN contract to Swiss firm Cotecna, a company that employed Kojo Annan, the son of the UN secretary-general.

    The UN-established Independent Inquiry Committee, set up to look for corruption in the oil-for-food programme, is still investigating whether Kofi Annan influenced the award of that contract to Cotecna, said Paul Volcker, the former US Federal Reserve chairman who heads the inquiry.

    Diplomatic immunity lifted

    Volcker did not link Yakovlev to the Cotecna contract at a Monday news conference at which his panel released its third interim report on the inquiry into the now-defunct $67-billion aid plan for Iraq.

    Instead, it said the money identified so far as given to Yakovlev came from contracts outside the oil-for-food plan.

    Yakovlev was taken into custody after the United Nations lifted his diplomatic immunity at the request of federal prosecutors, said Mark Malloch Brown, chief of staff to Annan.

    His plea hints that corruption at the United Nations is not confined to the oil-for-food programme, which was shut down in 2003 after the US-led invasion of Iraq.

    Prison time

    Yakovlev faces 20 years in prison and a maximum fine of $250,000 - or twice the gross gain resulting from each offence - for each of the three counts to which he pleaded guilty. He was released on a $400,000 bond.

    Volcker's (above) panel found
    Yakovlev had solicited a bribe 

    The Volcker panel said it initially uncovered evidence that Yakovlev, working with a friend, French national Yves Pintore, used his UN post to solicit a bribe from Swiss firm Societe Generale de Surveillance SA, in return for confidential information on a pending oil inspection contract.

    There was no evidence that the Swiss firm, one of six companies bidding for the contract, paid any bribe, the committee said.

    While investigating that case, the inquiry said it discovered $950,000 in illegal payments from the winners of an undisclosed number of UN contracts worth $79 million.

    Offshore account

    The money was paid into an offshore bank account controlled by Yakovlev in Antigua, West Indies.

    Yakovlev initially denied any wrongdoing; but later refused to meet investigators to answer their questions, the panel said. Confronted with the committee's evidence, Pintore said he would not dispute the findings, the panel added.

    Yakovlev, 52, abruptly resigned from his UN post in mid-June and his office was sealed by investigators after a report he had helped his son get a job with a firm that once did business with the United Nations.

    SOURCE: Reuters


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