An investigation of the UN oil-for-food programme accused programme chief Mr Benon Sevan of a "grave conflict of interest," according to a report released today.
The report said his conduct in soliciting oil deals was "ethically improper and seriously undermined the integrity of the United Nations".
Despite Mr Sevan's claims that he never recommended any oil companies, the investigation led by former US Federal Reserve Chairman Mr Paul Volcker concluded that he repeatedly solicited allocations of oil from Iraq under the programme and "created a grave and continuing conflict of interest."
Mr Volcker also said there is "convincing and uncontested evidence" that selection of the three UN contractors for the oil-for-food programme - Banque Nationale de Paris, Saybolt Eastern Hemisphere BV, and Lloyd's Register Inspection Limited - did not conform to established financial and competitive bidding rules.
Pointing to flaws in the auditing of the programme, the report said there was insufficient funding and staff, poor planning, and stressed that important areas of the oil-for-food programme were never reviewed.
It called for greater transparency and accountability. The report said Mr Sevan denied any wrongdoing but said evidence from Iraqi officials contradicted that.
Still, a summary of the report's findings did not accuse Mr Sevan of any criminal action. The committee said that it investigated allegations that Mr Sevan, while executive director of the oil-for-food programme, requested oil allocations from the Iraqi government on behalf of the African Middle East Petroleum Company, a Swiss-based oil trading company known as AMEP.
"The committee concludes that Mr Sevan ... solicited and received on behalf of AMEP several million barrels of allocations of oil from 1998 to 2001.
As a result of Mr Sevan's conduct, AMEP's revenue - net bank fees and surcharge payment - totalled $1.5 million." "The committee finds also that Mr Sevan's solicitations on behalf of AMEP and AMEP's resulting purchases of oil presented a grave and continuing conflict of interest, were ethically improper, and seriously undermined the integrity of the United Nations," the report said.