New blow for Annan in oil-for-food scandal aftermath

The Bush Administration said on Thursday UN Secretary-General Kofi Annan had been too hasty to claim he had been exonerated in the Iraqi oil-for-food scandal and would not rule out he might eventually resign.

"That report did not exonerate him," said US deputy assistant secretary of state Mark Lagon, referring to the findings of an inquiry into the UN oil-for-food programme led by Paul Volcker, the former US Federal Reserve chairman.

On the possibility Annan might one day resign, Lagon said, "His future is not certain."

But he added: "It's his decision. He'll be deciding. We're not calling for his resignation."

The Bush Administration has been careful not to call for the resignation of Annan since the oil-for-food probe began last year.

The US official, the deputy head of the State Department office for international organisations, which includes the United Nations, made the remarks in a briefing with a small group of reporters during a visit to UN headquarters.

Annan has been dealt yet another damaging blow by the revelation that two investigators looking into possible corruption allegations resigned in protest after he was cleared of wrong-doing.

The two lawyers, Robert Parton and Miranda Duncan, resigned in the belief that the report which cleared Annan was a whitewash, according to sources familiar with the investigation.

The resignations exposed serious divisions among the panel's three committee members.

One, Swiss law professor Mark Pieth, appeared to side with the two departing investigators. He said that: "You follow a trail and you want to see people pick it up."

The committee "told the story" that the investigators presented, "but we made different conclusions than they would have".

But another committee member, Judge Richard Goldstone, said it was not his understanding that the pair had left in protest against the interim report's conclusions. He said that they had been due to leave the investigation after completing their work.

The spokeswoman for the Volcker panel declined to comment on the departures, but said that they were for "personal reasons".

The report on the Annans was released last month. It found that Annan had failed to ensure a rigorous inquiry after it emerged his son Kojo was continuing to be paid by a firm called Cotecna, which had a multimillion pound UN contract to monitor oil-for-food shipments.

It catalogued the longstanding relationship between a senior Cotecna employee, Michael Wilson, and the Annans and said that Annan had asked Wilson to get his son a job.

The report also said that Kojo Annan had "intentionally deceived" his father, found that he was "not forthcoming" to the inquiry on secret payments from Cotecna, that he had "failed to co-operate fully" with the inquiry and that he has "refused to answer questions" about records he "belatedly" made available.

Every revelation "is incredibly troubling, and worries him ... more than it does anybody", said Annan's chief of staff, Mark Malloch Brown. "It's a very unfortunate fact of life."

The two investigators were described as having been convinced that "they had destroyed" Annan. The source said that Parton, a former FBI agent and Duncan, a newly qualified lawyer who worked for him, were distressed when the senior committee members did not take the same view as they had. Reuters and

- INDEPENDENT