U.N. Officials Bribed by Saddam?

At least three senior United Nations officials are suspected of taking multimillion-dollar bribes from the Saddam Hussein regime, U.S. and European intelligence sources tell ABCNEWS.

One year after his fall, U.S. officials say they have evidence, some in cash, that Saddam diverted to his personal bank accounts approximately $5 billion from the United Nations Oil-for-Food program.

In what has been described as the largest humanitarian aid effort ever undertaken, the U.N. Oil-for-Food program began in 1996 to help Iraqis who were suffering under sanctions imposed following the first Gulf War.

The program allowed Iraq to sell limited amounts of oil, under supposedly tight U.N. supervision, to finance the purchase of much-needed humanitarian goods.

Most prominent among those accused in the scandal is Benon Sevan, the Cyprus-born U.N. undersecretary general who ran the program for six years.

In an interview with ABCNEWS last year, Sevan denied any wrongdoing.

"Well, I can tell you there have been no allegations about me," he said. "Maybe you can try to dig it out."

And in a Feb. 10 statement, Sevan challenged those making the allegations to "come forward and provide the necessary documentary evidence" and present it to U.N. investigators.

But documents have surfaced in Baghdad, in the files of the former Iraqi Oil Ministry, allegedly linking Sevan to a pay-off scheme in which some 270 prominent foreign officials received the right to trade in Iraqi oil at cut-rate prices.

"It's almost like having coupons of bonds or shares. You can sell those coupons to other people who are normal oil traders," said Claude Hankes-Drielsma, a British adviser to the Iraq Governing Council.

Investigators say the smoking gun is a letter to former Iraqi oil minister Amer Mohammed Rasheed, obtained by ABCNEWS and not yet in the hands of the United Nations.

In the letter, dated Aug. 10, 1998, an Iraqi oil executive mentions a request by a Panama-based company, African Middle East Petroleum Co., to buy Iraqi oil — along with a suggestion that Sevan had a role in the deal. "Mr. Muwafaq Ayoub of the Iraqi mission in New York informed us by telephone that the abovementioned company is the company that Mr. Sevan cited to you during his last trip to Baghdad," the executive wrote in Arabic.

A handwritten note indicated that permission for the oil purchase was granted by "the Vice President of the Republic" on Aug. 15, 1998.

The second page of the letter contains a table titled "Quantity of Oil Allocated and Given to Mr. Benon Sevan." The table lists a total of 7.3 million barrels of oil as the "quantity executed" — an amount that, if true, would have generated an illegal profit of as much as $3.5 million.

"Somebody who is running the Oil-for-Food program for the United Nations should not be receiving any benefit of any kind from a rogue dictator who was perpetuating terror in his country," said Hankes-Drielsma.

Full Investigation Announced

The United Nations, at first, dismissed the allegations about Sevan, but this week, Secretary General Kofi Annan said there would be a full investigation led by the former chairman of the Federal Reserve Bank, Paul Volcker.

"We are going to investigate these allegations very seriously," Annan said during a press conference.

In addition, Congress is scheduled to begin hearings into the bribery scandal this week.

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