Secretary and Son

“He is a grown man, and I don't get involved with his activities and he doesn't get involved with mine.”

Thus did the U.N. secretary-general, Kofi Annan distance himself at speed Monday from news that his own son, Kojo Annan, had received money right up until early this year from one of the U.N.'s prime contractors under the Oil for Food program. The elder Mr. Annan pronounced himself “disappointed,” “surprised” and–lest he look completely clueless–able to understand “the perception problem for the U.N.”

But at no point did the secretary-general suggest that he himself bore any responsibility for this glaring conflict of interest. That evasion deserves a closer look. It is a terrific cameo for the U.N. mindset that brought us the Oil for Food swindle in the first place–a culture in which secrecy is the norm, the buck stops nowhere, and some of the resulting surprises have most recently have included at least $17 billion grafted out of a U.N. relief program for Iraq, charges of rape and pedophilia among U.N. peacekeepers in Africa–and now this tale of the secretary-general's family ties.

If we go by U.N. chain of command, Kofi Annan is, however, correct that he cannot be held responsible for the activities of his grown son. One might hope, of course, that a U.N. secretary-general out of deference to the dignity of his own office would make a more diligent attempt to keep an eye on the business activities of his close kin. Instead, the discovery of Kojo Annan's ties to U.N. contractor Cotecna Inspection Services SA has required four separate bouts in which the press uncovered further financial links between Cotecna and the younger Mr. Annan.

The first round came in early 1999, just after Swiss-based Cotecna won a crucial U.N. contract to inspect Oil for Food relief goods filtering past sanctions into Saddam Hussein's Iraq. Back then, Secretary-General Annan was apparently surprised to learn he had any family ties to a major U.N. contractor–but gave us to understand that the pecuniary cord had been cut. This past year brought yet more surprises for the secretary-general, via disclosures eked out by the press in March, September and November. The current picture is that Kojo Annan's consultancy for Cotecna lapsed on the same day the company won the U.N. contract, Dec. 31, 1998 (not three weeks earlier, as the secretary-general's office previously conceded). For the following five-plus years, which comes to about twice the time Kojo Annan spent actually working for Cotecna, the company paid him $2,500 a month not to compete with its business. That would have summed to at least $150,000, plus incidentals for which the U.N. has as yet supplied no total.

It is a disturbing pattern that this information had to be dredged up after-the-fact, in fragments, by the press, rather than being publicly disclosed at the time by a secretary-general who has better access both to U.N. records and to his own son. What Secretary-General Annan neglected to mention, moreover, is that he himself does bear responsibility for how his Secretariat handles its procurement procedures, and what level of disclosure the U.N. requires of its contractors, and provides to the public. Instead, Mr. Annan miscast the case–and not for the first time–saying “I have no involvement with granting of contracts, either on this Cotecna one, or others.”
That's not true. Under Oil for Food, there were two basic kinds of contracts. There were tens of thousands of deals signed by Saddam's regime with oil buyers and relief sellers. That was one kind of contract, which the U.N. was supposed to monitor. And then there were a handful of contracts signed by the U.N. Secretariat itself, with companies hired to help the U.N. monitor Saddam's Oil for Food deals. The contract that Mr. Annan referred to as “this Cotecna one,” as if he weren't quite sure what whichamahoosy everyone was talking about, belonged to the handful signed by the Secretariat. That “Cotecna one” (rolled over into the Cotecna two) was handled by the U.N. Procurement Division. And the U.N. Procurement Division reports to the secretary-general.

Not that one would expect the secretary-general to spend long nights poring over details of every contractor hired by his own Procurement Division. But it is reasonable to expect that somewhere in the multibillion-dollar procurement operations of the United Nations there would be a functional mechanism to require disclosure by all U.N. contractors of such details as, say, a stream of payments to the immediate family of a top U.N. official.

That is not merely a matter, as Secretary-General Annan suggested, of “perception of conflict of interests.” Even if nothing wrong gets done, it is a conflict of interest. Both Cotecna and Kojo Annan, through his lawyers, have denied any wrongdoing. Fine. But given that the U.N. is supposed to be a public institution, not a privately held secret society, what's needed here is systematic full disclosure. Had this been the prevailing climate at the U.N. during Oil for Food, there would have been far fewer opportunities for Saddam to scam billions out of the program, and maybe even a lot fewer surprises for the secretary-general.

– Ms. Rosett is a fellow at the Foundation for the Defense of Democracies and the Hudson Institute. Her column appears here and in The Wall Street Journal Europe on alternate Wednesdays.