UN dismisses first official over oil-for-food scandal

June 3, 2005 UN Secretary General Kofi Annan fired the first UN official in connection with the Iraqi oil-for-food scandal. "After a thorough review of all aspects of the case, the Secretary General has decided that Mr. Joseph Stephanides be summarily dismissed for serious misconduct in accordance with UN staff regulations," relayed spokesman Stephane Dujarric. "Mr Stephanides was advised accordingly yesterday and separated from service with immediate effect. There is no allegation of any criminal act. This is a disciplinary action for a breach of staff rules regarding procurement."

The investigation concluded that Stephanides infringed on regulations by helping the British company, Lloyds Register Inspection Ltd., win a contract under the UN programme for Iraq. Mr. Stephanides acted as the head of the Security Council Affairs Division when he allegedly told the company how much to lower its price to be awarded a contract. He denies any wrong-doing and hired a lawyer to defend himself. Aged 59, Stephanides worked for the UN for 25 years, and was due to retire in September this year.

After a first food-for-oil interim report was released in February, Mr. Stephanides along with Benon Sevan were suspended. Sevan, the former head of the oil-for-food programme for 6 years, was also accused of breach of procurement rules in the report co-written by Paul Volcker. However, disciplinary measures against Sevan will not be carried out because of his status of diplomatic immunity.

A final report is scheduled for publication in three months which should further clarify whether Mr. Sevan received Iraqi oil allocations for a friend's company. In the meantime, he remains suspended from all UN duties, and is being given only a symbolic salary of one dollar a year.

A central and unanswered question, is whether either Stephanides or Sevan profited directly by their actions in executing and implementing the complex programme.