Second UN official 'linked to Saddam pay-off'

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American prosecutors are investigating claims that a second senior United Nations official involved in the oil-for-food scheme may have been paid off by Saddam Hussein after an Iraqi-born American businessman struck a plea-bargain deal last week.

The testimony of Samir Vincent, who pleaded guilty to acting as a covert agent for Baghdad, indicates that Saddam's manipulation of the scheme began at its inception in 1996.

Attention has previously focused on how, from 1998, Iraq skimmed off proceeds from the programme and issued vouchers for oil sales to its foreign supporters. In his testimony, however, Vincent, 64, detailed links with the Iraqi regime dating back to 1992.

He made the claim that a UN official, who has not yet been named publicly, received cash payments from iraq in 1996 in his statement submitted as a "co-operating witness" to the United States federal court in Manhattan. A copy of the papers has been obtained by The Telegraph.

According to the indictment, Vincent was among a group of Iraqi officials and agents who agreed on the scheme to reward those who co-operated with Saddam with the oil vouchers. For his part, Vincent was allegedly rewarded with five oil contracts which he sold for between $3 million and $5 million.

Federal prosecutors in New York and congressional investigators in Washington believe that the evidence of the former Iraqi Olympic athlete, who became a wealthy US oil trader with connections at the top of the Republican and Democrat parties, represents a crucial breakthrough that will lead to further indictments.

Benon Sevan, the former head of the oil-for-food programme from which Saddam skimmed at least $1.7 billion, is already under investigation by federal prosecutors.

A CIA report published earlier this month claimed that Mr Sevan was allocated vouchers by Saddam to sell 7.3 million barrels of Iraqi oil through a Panamanian-registered company.

According to the UN, Mr Sevan's name may have been used by a corrupt Iraqi official in a scheme to line his own pockets. Mr Sevan has denied any wrongdoing.

Mr Sevan took over the oil-for-food programme in October 1997. The secret Iraqi payment to a UN official, of which Vincent was told, occurred in the previous year as the programme was introduced that allowed Baghdad to import food and medicine despite strict sanctions.

In February 1996, he said, he travelled to Baghdad for talks with Saddam over the programme. The negotiations were crucial for the Iraqi dictator, who refused to sign the deal until the UN allowed him to select trading partners under the scheme. That concession gave him enormous power over how the programme operated and allowed him to reward allies with lucrative contracts.

"Several million dollars in cash were sent by the Iraqi government to Iraqi government officials in New York pursuant to those agreements," Vincent said. "Several hundred thousand dollars of this money was given to me, in Manhattan, and the rest was given to others, one of whom I understood was a United Nations official."

The oil-for-food scandal has prompted fierce criticism of Kofi Annan, the UN secretary-general, who oversaw the initial negotiations with Iraq over the programme and later appointed Mr Sevan. It has also emerged that Mr Annan's son, Kojo, worked for the Swiss company, Cotecna, that was awarded the contract in 1998 to inspect shipments to Iraq under the programme.

There has never been any suggestion of personal wrongdoing by Mr Annan, but his supervision of the UN has been attacked.

Vincent is due to be sentenced to up to 28 years in jail on March 31. Judge Denny Chin told prosecutors that he would delay the sentencing if they needed more time to use Vincent to prepare cases against the UN official and others implicated in his story.

His revelations are likely to overshadow the findings of the UN's inquiry into the scandal conducted by Paul Volcker, the former chairman of the Federal Reserve.

He said recently that his commission was unlikely to have found a "smoking gun" by the time it issues its preliminary report due by the end of the month.

Mr Sevan has talked to the commission but refused to give testimony on the advice of his lawyer, The Telegraph has learnt.

Vincent's testimony dovetails with the case outlined against him by David Kelley, the chief prosecutor. He said that "in or about 1995 and 1996, Samir A Vincent conveyed messages from a United Nations official to representatives of the Iraqi government in Manhattan and elsewhere".

The indictment referred to Vincent's trip to Baghdad in February 1998, where he ``participated in the drafting of agreements with an Iraqi official relating to Vincent's and others' compensation regarding their efforts on behalf of the Iraqi government with respect to Resolution 986 [oil-for-food]".

It continued: "In or about May 1996, Vincent received a cash payment in Manhattan from the government of Iraq in partial satisfaction of the agreements. In or about May 1996, Vincent distributed to another individual a cash payment from the government of Iraq in partial satisfaction of the agreements referenced above."

His testimony also outlined a relationship with a "former official of the United States government". Jack Kemp, a former American football star, Republican congressman and federal housing secretary, has since confirmed that he was questioned by the FBI about his dealings with Vincent.

Mr Kemp personally approached the vice-president, Dick Cheney, and Colin Powell, the then secretary of state, in 2001 about a deal to allow UN weapons inspectors back into Iraq in return for the phasing out of sanctions. He met Vincent regularly but said that he never received any payments.

Mr Kemp, who maintains close links with Bush administration figures, said that Frank Carlucci, a defence secretary under Ronald Reagan, vouched to him that Vincent was a "good guy".

Telegraph