ARABS-UN - Jun 1 - First UN Sacking after Iraq Aid Scandal.

The UN says it has dismissed a senior official Joseph Stephanides, for "serious misconduct" after investigators find he helped steer a contract to Lloyd's Register Inspection to monitor Iraq's oil-for-food programme. It was the first dismissal of a staff member since allegations of mismanagement in the multi-billion dollar humanitarian programme for Iraq emerged. The UN said Stephanides, who headed the secretariat's department for relations with the Security Council, had been informed of the decision on May 31, "and separated from service with immediate effect". An independent investigating committee headed by Paul Volcker reported earlier this year that advice from a Cypriot lawyer and former diplomat Stephanides, helped Britain's UN mission assist Lloyd's in winning a contract to monitor humanitarian goods. At one stage, the inquiry said in its report, he warned a British diplomat about a lower tender from Bureau Veritas, a competitor. Veritas had bid $4.3m for the contract, as opposed to Lloyd's bid of $5.4m, but proposed to use local inspectors. Stephanides told the UK mission that "he was concerned that these in-region inspectors would be less trustworthy than inspectors from other countries", and alerted a diplomat to the price difference. "Stephanides and the diplomat spoke about having Lloyd's submit a lower bid and told the diplomat how much lower the bid needed to be", the report said. Lloyd's was informed, and on Aug 9 1996, the UK mission wrote a letter to the UN that Lloyd's would drop its price to $4.5m. "I hope this will enable the steering committee to come to the right decision", John Weston, the UK representative wrote. A UN steering committee also decided that awarding the contract to Veritas, a French company, would be "politically problematic", as France already had an oil overseer post and the programme's banking contract. The UN subsequently halted the bidding process and Lloyd's won the contract. Stephanides argued the decision to give the contract to Lloyd's was a political one, taken by a UN steering committee. "I feel like this is a decision that has not appeared proportionate to what I have been accused of and I have not been given an opportunity to present my arguments", he said, adding that he would appeal. "We, like other governments, have been providing co-operation with the Volcker Commission. We are not the ones taking decisions on this material", a spokesman for the UK mission said. "It is not for the UK government or any other government, to take decisions". The UN said that separate disciplinary proceedings against head of the programme Benon Sevan, had been suspended pending further investigations by the Volcker Commission.