BNP's role in UN Iraq oil scheme queried

4th February 2005, Comments 0 comments

UNITED NATIONS, Feb 3 (AFP) - An independent inquiry into the UN oil-for-food programme in Iraq questioned Thursday former secretary general Boutros Boutros-Ghali's choice of a French bank to handle the immense sums of money involved in the scheme.

UNITED NATIONS, Feb 3 (AFP) - An independent inquiry into the UN oil-for-food programme in Iraq questioned Thursday former secretary general Boutros Boutros-Ghali's choice of a French bank to handle the immense sums of money involved in the scheme.

Boutros-Ghali selected the Banque National de Paris (BNP) in 1996 even though it was not the lowest bidder for the contract to manage the programme's escrow account, the inquiry committee said in an interim report.

Moreover, neither Boutros-Ghali nor any other appropriate official justified in writing the rejection of the lowest acceptable bidder as being in the interests of the United Nations - as would have been required by the UN's own financial regulations.

Only four banks - BNP, Chase Manhattan, Credit Suisse and Union Bank of Switzerland - submitted proposals for the escrow account contract.

A subsequent analysis of the proposals ranked Credit Suisse number one, with BNP in third place.

"For the selection of BNP, a competitive bid process was initiated but then not completed," said the inquiry, which is headed by former US federal reserve banking chief Paul Volcker.

It said Boutros-Ghali had chosen BNP "for reasons that were not appropriately disclosed at the time."

The committee implicated neither BNP nor the French government in any wrongdoing, although Volcker stressed the investigation was far from over.

Interviewed in December last year by the investigating committee, Boutros-Ghali said he had left it up to the Iraqis to choose from the short list of four banks.

"When I have this short list, I get in contact with the Iraqis. And said what is your choice?" the former UN chief said in the interview. "And they said we want this bank. It's okay. And this is how the choice was done."

However, in a later interview in January, Boutros-Ghali told the committee that he had in fact chosen BNP because of US opposition to the choice of a Swiss bank.

The US stance had been communicated by the then US ambassador to the United Nations, Madeleine Albright, four days before the awarding of the contract to BNP.

According to a UN memo cited in the report, Albright offered three reasons against selecting a Swiss bank: Swiss banking laws were not sufficiently transparent, Switzerland was not a UN member at the time, and Saddam Hussein and his family had personal bank accounts in the country.

Choosing a bank was a "third-class problem" compared to the other issues occupying his time, Boutros-Ghali told the committee, acknowledging that BNP had been selected to satisfy the major interested parties.

Responding to the interim report's findings, Mark Malloch Brown, chief of staff for UN Secretary General Kofi Annan, acknowledged that the entire contract bidding process had clearly been "overridden by political considerations."

© AFP

Subject: French News

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