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Strong took tainted cheque, inquiry finds

No 'direct evidence' prominent Canadian businessman knew money came from Iraq

By SHAWN MCCARTHY

Thursday, September 8, 2005 Updated at 5:12 AM EDT

From Thursday's Globe and Mail

NEW YORK – Prominent Canadian businessman Maurice Strong accepted a personal cheque for nearly $1-million (U.S.) that was drawn on a Jordanian bank and came from a controversial international businessman who was working closely with the Iraqi regime, an inquiry into the UN's scandal-ridden oil-for-food program has found.

The committee concluded there was no "direct evidence" that Mr. Strong knew that the money, provided for a business investment in July, 1997, had come from Iraq or that the man, Korean-born Tongsun Park, was attempting to buy his influence. Mr. Park has since been indicted by U.S. authorities for allegedly working as an illegal Iraqi agent.

The inquiry said the relationship between the two men raised troubling questions regarding conflict of interest among UN officials.

According to the report, in July of 1997 in Baghdad, Mr. Park met with then-Iraqi deputy prime minister Tariq Aziz, who gave him $1-million cash in a cardboard box to be used in the embattled regime's campaign to win favourable treatment from the UN.

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A few days later, Mr. Park deposited the money in the Housing Bank-Jordan in Amman. He then wrote a cheque on the same account to "Mr. M. Strong" in the amount of $988,885, which was used to buy shares in a financially troubled, family-controlled oil company -- shares that Mr. Strong himself had an obligation to buy.

At the time, Mr. Strong was working as a special adviser to the Secretary-General on UN reform but had no direct role in the oil-for-food program.

Mr. Strong was travelling in China and not available for comment yesterday. He has denied any conflict of interest and said the payment by Mr. Park was a normal business investment in a company controlled by the Strong family, Cordex Petroleum Inc.

His Toronto lawyer, John Campion, said he was pleased that the committee found no wrongdoing by the prominent businessman, who is a friend and former mentor to Prime Minister Paul Martin.

"Importantly, Mr. Strong had no connection or advocacy or influence over the oil-for-food program or any aspect of it," Mr. Campion said. He added that Mr. Strong, who has worked at the UN in various capacities for three decades, made it a policy not to involve himself in other people's files.

"I am very comforted to say that the committee, having heard everything, said, 'No adverse finding.' "

In its report yesterday, the committee headed by former Federal Reserve chairman Paul Volcker criticized the UN Security Council and the Secretary-General's office for allowing the regime of Saddam Hussein to bilk some $10.2-billion by smuggling, kickbacks and other illegal charges during the $64-billion oil-for-food program.

More than $8-billion of that pilfering was the result of smuggling, which was outside the purview of the program itself, and which the Security Council members were aware of and failed to stop.

In addition to its account of Mr. Strong's dealings, the report also placed an uncomfortable spotlight on two other Canadians who have played important roles at the UN.

The panel slammed deputy secretary-general Louise Frechette, who had nominal oversight over the oil-for-food program but failed to respond adequately to allegations of corruption.

Ms. Frechette, a former senior bureaucrat in Ottawa, "did not carry out the responsibilities of her office," Mr. Volcker said. He offered the same criticism of her boss, UN Secretary-General Kofi Annan.

Mr. Annan later said he expected "no resignations" as a result of the inquiry's findings.

At the same time, former Canadian spymaster Reid Morden, who is executive director of the Volcker inquiry, was forced to recuse himself from the investigation into Mr. Strong's relationship with Mr. Park because of his previous relationship with both men.

According to the inquiry, when Mr. Morden was president of Atomic Energy of Canada Ltd. in 1996, he asked Mr. Strong and Mr. Park to help the Crown corporation sell nuclear reactors to Korea. In fact, AECL entered into a consulting arrangement with Mr. Park at the time, according to the inquiry.

AECL had no immediate comment on Mr. Park's arrangement with the company.

Mr. Park was a prominent lobbyist at the centre of the Koreagate scandal in the 1970s, in which he was alleged to have handed out envelopes stuffed with cash to willing congressmen as part of a lobbying effort on behalf of the South Korean government. He was charged with 36 counts of mail fraud, bribery, conspiracy and failure to register as a foreign agent. The charges were eventually dropped.

With a report from Alan Freeman in Washington

Canada Free Press, CFP Editor Judi McLeod