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Investigators quit oil-for-food probe

Volcker panel spokeswoman: 'Personal decision' of workers

From Richard Roth


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Houston (Texas)

UNITED NATIONS (CNN) -- Two investigators looking into allegations of corruption in the United Nations' $60 billion oil-for-food program in Iraq have resigned in what a panel spokeswoman described as a "personal decision."

The investigators, Robert Parton and Miranda Duncan, worked for a panel headed by former U.S. Federal Reserve Chairman Paul Volcker.

Another member of the Volcker panel, Richard Goldstone, discounted a media report that Parton and Duncan resigned to protest conclusions the panel reached about U.N. Secretary-General Kofi Annan.

Goldstone told CNN that was not his understanding, and that Parton and Duncan had already been set to leave after having completed their work. He said their departure would not affect the investigation.

A spokeswoman for the Volcker panel also said the pair had completed their work. She declined to comment on reports the two had quit in protest and called their resignations a "personal decision."

The Volcker panel concluded that Annan's management was inadequate to avoid charges of conflict of interest, but he was not accused of any corruption.

Parton and Duncan worked on the investigation into Annan's son, Kojo. He was denounced in the latest Volcker report for misleading investigators and his own father about his ties to the program. (Full story)

Michael Holtzman, a spokesman for the Volcker committee, issued a statement saying its "collective judgments" are contained in its reports, as well as the evidence on which those judgments are based.

"The committee has no additional comment," he said.

Surcharges and kickbacks

Volcker has said his committee will release its third report this summer.

The oil-for-food program was launched in late 1996 to help Iraqi people hurt by sanctions put in place after the Persian Gulf War. The program appeared to achieve its goals of delivering more than $40 billion of humanitarian goods, as well as paying for weapons inspections and reparations to Kuwait.

But the program has long been a suspected source of billions in illicit revenue for Saddam Hussein, who extorted illegal surcharges on the oil sold and an estimated 10 percent kickback on the food, medicine and supplies purchased.

By design, Baghdad controlled which vendors participated in the program, but not its revenues. Those were deposited into an account controlled by the U.N., which approved the contracts. The surcharges and kickbacks were deposited in Iraqi-controlled bank accounts in other countries.

Saddam's deposed regime also pocketed billions bypassing the U.N. program by selling oil to neighboring Jordan, Turkey, and Syria, all with U.S approval in an effort to bolster its Mideast allies.

On Monday, Texas oilman David Chalmers Jr. and a business associate pleaded not guilty in federal court to charges they bribed Iraqi government officials during Saddam's reign. (Full story)

Chalmers, 51, and a business associate, Ludmil Dionissiev, 58, a Bulgarian national, were arrested at their homes in Houston last week.

Prosecutors accuse the pair and others of making millions by cutting secret deals with Saddam's government through the oil-for-food program.

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