Benon Sevan, the United Nations official in charge of the oil-for- food programme in Iraq, intervened in person to steer lucrative contracts to an oil trader, Iraqi officials have told the UN´s independent inquiry. Their testimony, consistent with documents that have emerged since the fall of Saddam Hussein, adds to questions facing Mr Sevan as investigations into alleged corruption progress. The interim findings of the UN inquiry, led by Paul Volcker, are due to be published this week.

The programme began in late-1996 to allow Iraq to buy food and medicines in short supply because of international sanctions. But critics say it became a source of illicit funds for the regime.

Documents from Iraq´s state oil marketing organisation (Somo), now in the possession of the Financial Times and Il Sole 24 Ore, the Italian business daily, appear to link Mr Sevan to the assigning of contracts to Africa Middle East Petroleum, a Swiss-based oil trading company. Oil contracts which could be sold to international traders at a mark- up of up to 35 cents a barrel were awarded by the regimefor every six- month phase.

The Somo documents show that, unusually, AMEP was added to recipients in the middle of Phase Four (May-November 1998) after a visit to Baghdad by Mr Sevan. One letter, dated August 10 1998, was from Saddam Zayn Hassan, Somo´s executive manager, to Iraq´s oil minister. Translated from Arabic, it mentions AMEP as “the company that Mr Sevan cited to you during his last trip to Baghdad”.

No evidence of any financial relationship between AMEP and Mr Sevan has been established but investigators want to know what this letter means. Mr Sevan would not talk to the media while the investigations continue, his spokesman said.

AMEP signed its first contract on September 24 1998. In every subsequent phase except one, Mr Sevan´s name appears in Somo documents, several times next to that of AMEP. AMEP´s head is Fakhri Abdelnour, an Egyptian relative of former UN secretary-general Boutros Boutros-Ghali and one of the oil traders who helped South Africa bust anti-apartheid sanctions in the 1980s.

Investigators have been told that Mr Abdelnour often mentioned Mr Sevan when visiting Baghdad´s oil ministry. Mr Abdelnour says he never received allocations from Mr Sevan and met him only once “on a casual basis” in the lobby of a hotel in Vienna during an meeting of the Organisation of the Petroleum Exporting Countries.

Parallel inquiries by investigators working for the US Congress are scrutinising statements by Mr Sevan that he received tens of thousands of dollars in cash annually from an aunt in Cyprus.

Inquiries by the FT and Il Sole suggest Mr Sevan´s only close relative in Cyprus was Berjouhi Zeytountsian, an aunt who raised him after his parents´ death.

Ms Zeytountsian died in June. On March 23, she fell into an elevator shaft. Police, who declared her death an accident, never had a chance to interview her. (© Copyright The Financial Times Ltd 2005. 01/31/05)