9 September 2005

Deputy U.S. Permanent Representative during the Oil-for-Food formative era made a recent statement confirming the version given by U.N. longtime Security Council staffer Joseph Stephanides. Ambassador Edward N. Gnehm, a popular diplomatic figure known for his courage and integrity, had served in New York from May 1994 to August 1997. During that time, he worked closely with Council staffers handling the Middle East issues, including the Sanctions Committee, known as the 661 (Resolution) Committee. It was during that period that the Oil-for-Food was initiated. With so many political considerations, the U.S. declared position was that an effective monitoring system was critical for the Program's success.

Ambassador Gnehm stated on 13 July 2005 that he became acquainted with Mr. Stephanides in his role as head of the U.N. Sanctions Branch. He added:

"In my opinion Mr. Stephanides was an outstanding international civil servant who recognized the need to create an effective and accountable framework for OFF management and oversight. He also appreciated the need to respect the concerns of the Security Council members.

"The U.S. delegation made it clear to the United Nations Secretariat, through its contacts directly with the Chair and Members of Steering Committee, as well as through Mr. Stephanides, who acted as a liaison between the Steering Committee and the Security Council that the selection of contractors for the various inspection functions was critical to the success of the program. In addition to seeking the best qualified contractors, it was the consensus of the Sanctions Committee members that it was also essential that there be as wide a representation as possible of nationalities in the selection of contractors.

"Once the Banque Nationale de Paris was selected to manage the OFF escrow account, my government supported by several other members of the Security Council, believed that a French company should not also be selected for the inspection contracts. This view was clearly conveyed to the Steering committee and made known to Mr. Stephanides. When we became aware that there were only two candidates under consideration, Bureau Veritas and Lloyd's Register, for the Inspection of Goods contract, it was obvious that Lloyd's was the only viable choice and the Steering Committee was made aware of the views of the Security Council in this regard.

"Any suggestion that Mr. Stephanides favored any of the contractors and attempted to influence the outcome is based on a misunderstanding of the political process leading to the selection. As far as I am aware, his contacts with the British delegates served only to secure a substantial price reduction from Lloyd's after it had been determined that the contract would be awarded to them. We were all aware of the complexities that the U.N. faced in trying to satisfy the sometimes conflicting demands of various governments and the pressures to put the program into operation as quickly as possible. To my knowledge, Mr. Stephanides always acted in the best interests of the OFF program and should be commended for the success he achieved in light of these difficult considerations."