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Despite critical oil-for-food report, Annan plans to stay on at UN

UNITED NATIONS -- Secretary General Kofi Annan said yesterday he takes personal responsibility for lapses in the UN oil-for-food program in Iraq, but he stressed he has no plans to resign.

In a devastating assessment of the program yesterday, investigators issued a report that strongly criticized Annan, his deputy, and the Security Council for allowing Saddam Hussein to bilk $10.2 billion from the giant humanitarian operation and for oil smuggling operations.

''The report is critical of me personally, and I accept the criticism," Annan said.

The Independent Inquiry Committee's report on the oil-for-food program said those managing the program -- including UN member states and the world body's staff -- failed the ideals of the United Nations, ignoring clear evidence of corruption and waste that flourished after it was created in 1996 to help ordinary Iraqis.

''The inescapable conclusion from the committee's work is that the United Nations organization needs thorough reform -- and it needs it urgently," the report said.

The report's conclusions and its strong urging for change were made a week before world leaders gather for a summit in New York to consider a host of Annan's own reform initiatives. Many of his proposals have stalled -- including some similar to the committee's -- because of deep divisions among member states. The United States and other supporters of UN reform hope the report will provide much-needed impetus.

''This report unambiguously rejects the notion that business as usual at the United Nations is acceptable," US Ambassador John Bolton said. ''We need to reform the UN in a manner that will prevent another oil-for-food scandal. The credibility of the United Nations depends on it."

Former Federal Reserve chairman Paul Volcker, who headed the investigation, presented the report at a Security Council meeting attended by Annan.

The committee said the corruption that reached the top of the $64 billion program reflected the absence of a strong institutional ethic in an organization that should exemplify the highest global standards because of its ''unique and crucial role."

Yet it also acknowledged that the program was partly successful, providing minimal standards of nutrition and healthcare for millions of Iraqis coping with tough UN sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait. It also helped keep Hussein from obtaining weapons of mass destruction, the report said.

One of the largest humanitarian programs in history, oil-for-food was a lifeline for 90 percent of the country's population of 26 million. But Hussein was allowed to choose the buyers of Iraqi oil and the sellers of humanitarian goods, and used that power to curry favor by awarding oil contracts to former government officials, activists, journalists, and UN officials who opposed the sanctions.

''The findings in today's report must be deeply embarrassing to us all," Annan said in a briefing to the 15-nation council. ''The Inquiry Committee has ripped away the curtain, and shone a harsh light into the most unsightly corners of the organization. None of us -- member states, Secretariat, agencies, funds and programs -- can be proud of what it has found."

The five-volume report, more than 1,000 pages long, was highly critical of the almost total lack of oversight of the program by the secretary general and Deputy Secretary General Louise Frechette, who was the direct boss of Benon Sevan, the program's executive director who is being investigated for allegedly accepting kickbacks.

Despite the criticism, Annan said: ''I don't anticipate anyone to resign. We are carrying on with our work."

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