Will a Korean Connection Bring Down Kofi Annan?

Tongsun Park, a Korean national charged yesterday in New York for brokering corrupt oil-for-food contracts, has told the Joongang Ilbo that he is considering a deal with U.S. prosecutors to testify against corrupt U.N. officials, and that Kofi Annan is among those targeted for possible prosecution:

In a telephone interview from Japan, Mr. Park, 70, told the Joongang Ilbo that he had been offered a plea-bargain from the U.S. federal prosecution in return for testifying before a U.S. court. “I am seriously considering the offer,” Mr. Park said. “The prosecutors only accused me of acting as an unregistered agent, and have not pressed official charges against me yet.”

If convicted, he could face up to five years imprisonment and a fine of up to $250,000. Mr. Park claimed that the U.S. federal investigators’ target is corrupt, high-ranking UN officials involved in the UN-led oil-for-food program for Iraq. He alleged that UN Secretary General Kofi Annan is among the targets.

The federal complaint (HT: counterterrorism blog) alleges that Park conspired to violate 18 U.S.C. sec. 951, which requires agents of foreign governments to register their agency relationships with the Attorney General. According to the Joongang Ilbo story, Park admitted to having been paid by Saddam’s governmnt for lobbying. It was not clear whether the lobbying to which Mr. Park referred consisted of the same activities described in the complaint. The complaint charges that Park received at least $4 million from the Iraqis for brokering oil-for-food deals, and for lobbying and bribing U.N. officials who shaped the program’s terms at its inception. Park’s partner–whom the New York Times names as Iraqi-American businessman Samir Vincent–later became a confidential government informant and implicated Park.

According to Paragraph 9 of the Complaint, Park was instrumental in Iraq’s efforts to shape the oil-for-food program into a one that would be amenable to Iraqi skimming, manipulation, and misuse from its inception. One of Park’s functions in this regard was conveying multimillion-dollar cash payments to high U.N. officials who could influence oil-for-food’s terms. Iraqi agreement was a prerequisite to its cooperation with the program. The complaint alleges that between 1993 and 1995, Park and his partner lobbied senior U.N. officials to agree to terms favored by the Iraqi officials who employed Park, and that they also arranged meeting between Iraqi and U.N. officials to discuss the program’s terms. The New York Times also reports:

The complaint also charges that Mr. Park met with a second, unnamed senior United Nations official and made a substantial investment in a company belonging to the official’s son.

Park also allegedly worked with a former U.S. official to lobby for terms favored by Iraq.

The Iraqi government’s failure to pay Park and his partner the full agreed amount resulted in a series of letters and trips to Iraq, which in turn created a paper trail that helped the authorities to trace the scheme. It also led to a disagreement between Park and his partner that proved fruitful to federal prosecutors. U.S., British, and Bulgarian companies are also implicated.

In the oil-for-food scandal, the Iraqi government chose middlemen, such as Mr. Park, to sell Iraqi oil at discounted prices. The middlemen were expected to pay the Iraqi government “surcharges” for the right to conduct this trade, giving Saddam Hussein’s regime access to extra funds he could use for arms, personal luxuries, foreign influence, and maintaining his machinery of state control. The middlemen then sold their Iraqi oil vouchers at a profit, using a portion of the proceeds to purchase food and humanitarian supplies. Agencies that were responsible for inspecting and delivering the food and supplies often failed to catch the delivery of spoiled food and medicine in practice. Some contractors completely failed to deliver goods after being paid for them. One of the inspection firms, the Swiss-based Cotecna, hired Kofi Annan’s son Kojo, for which it paid him $300,000. The United Nations also received a substantial commission for administering the program.

A recent U.N. investigation found that a senior deputy to Kofi Annan ordered the shredding of several boxes of key oil-for-food audit reports. Annan claims to have been exonerated by the report, but several key U.N. officials, including Annan, have already been tarnished by the scandal, as the New York Times reports:

In its first interim report, on Feb. 4, the commission found that the former head of the program, Benon V. Sevan, had a “grave and continuing conflict of interest” in helping a friend obtain valuable Iraqi oil contracts and said a second United Nations official, Joseph Stephanides, had violated procurement rules. Both men have been suspended and are in the process of answering United Nations charges against them.

Questions have also been raised about the participation of Kojo Annan, son of the United Nations secretary general, Kofi Annan. The elder Mr. Annan was criticized in the most recent interim report on the grounds that he failed to perceive the appearance of a conflict of interest when Kojo Annan was employed by a contractor employed by the program.

This is not Mr. Park’s first encounter (must-reading for Korea watchers) with U.S. authorities over allegations of corrupt lobbying (HT: Instapundit). Park figured prominently in the 1976 “Koreagate” scandal, which led to ethics charges against a congressman and findings that 186 others took bribes(!), and ultimately, to Park’s indictment on “36 federal charges including bribery, failure to register as a lobbyist and making illegal political contributions.” The Joongang Ilbo reports that Park “was acquitted in return for his testimony,” which sounds like a slightly-off way to say that the charges were dismissed.