A report on Tuesday from an inquiry conducted by Paul Volcker, a former US Federal Reserve chairman, found no evidence that Annan had influenced bidding for a lucrative contract under the $67 billion programme to a Swiss firm that employed Annan's son, Kojo. It also said that the firm as well as Kojo Annan, aged 31, a businessman in Nigeria, had misled his father on his continued relationship with the firm. However, the report also said that Annan and UN officials failed to thoroughly investigate the potential conflict-of-interest and that Annan's former chief of staff and long-time ally shredded possibly relevant documents.
US senator Norm Coleman, a Minnesota Republican and major critic of the United Nations, called for Annan's departure. "His lack of leadership, combined with conflicts of interest and a lack of responsibility and accountability point to one, and only one, outcome: his resignation."
However, the White House voiced cautious support for Annan, and Europeans were expected to rally around him. Security Council member China said it was time for the issue to be brought to a close.
"I strongly hope that it is high time that we put an end to this episode surrounding the secretary-general," said China's UN ambassador, Wang Guangya. He said he was relieved Annan had been cleared of wrongdoing. At issue is the scandal-tainted oil-for-food programme which allowed the Iraqi government under Saddam Hussein to sell oil to finance purchases of civilian goods for its people living under UN sanctions.
The programme began in December 1996 and ended after the US-led invasion. Iraq then released documents showing bribes, kickbacks and oil smuggling.
The report issued by Volcker's committee, appointed by Annan to analyse the actions of UN officials, was the panel's second. The new report concentrated on Annan and his son.
The Swiss firm Kojo Annan worked for, Cotecna, had received a $10 million a year UN contract in Iraq. Volcker's report showed Kofi Annan had met Cotecna officials three times, once before the contract was awarded in December 1998. However, the report said there was no proof Annan had lobbied for the firm, which initiated the meeting.
"Some of the best investigative minds in America and from around the world have been at this for 12 months," Mark Malloch Brown, Annan's chief of staff told a news conference. "No other leader of an organisation has put himself through this kind of cross-examination," he said. "But it's done. It's past. The verdict is delivered."
The Bush administration said it would support Annan's efforts to reform the United Nations.
"This is a very serious matter," said White House spokesman Scott McClellan. "Congress has been looking into it as well. We continue to support the United Nations. We continue to support Secretary-General Annan in his work at the United Nations."
Among European countries, Portugal has voiced support for Annan and others are expected to do so. Volcker will issue a final report in June and this time will include actions by the 15-member Security Council. According to a CIA report, the former Iraqi government siphoned nearly $2 billion from the oil-for-food programme, but it earned another $8bn through oil exports not part of the programme, which the Security Council, including the United States, knew about.
Volcker's first report in January accused Benon Sevan, the head of the UN programme of steering some $1.5 million worth of oil contracts to an Egyptian acquaintance.