In the scandal over the U.N. Oil-for-Food program in Iraq, Kofi Annan's main line of defense has been that he didn't know. Perhaps he should take a closer look at internal U.N. Oil-for-Food audit reports, more than 50 in all, produced by his own Office of Internal Oversight Services--the same reports he's declined to share with the Security Council, or release to Congress.

One of these reports has now leaked. It concerns the U.N. Secretariat's mishandling of the hiring of inspectors to authenticate the contents of relief shipments into sanctions-bound Iraq. (Obtained by a journalist specializing in the mining industry, Timothy Wood, a copy of this report can be found at www.mineweb.com.)

Reflecting the findings of a U.N. internal audit conducted during the sixth year of the seven-year Oil-for-Food program, the report focuses on one contractor hired directly by the U.N. Secretariat: Swiss-based Cotecna Inspection SA. This is the same company that, while bidding against several rivals for its initial Oil-for-Food contract in 1998, had Mr. Annan's son, Kojo, on its payroll as a consultant. Both Mr. Annan and Cotecna's CEO, Robert Massey, have insisted that the contract was strictly in accordance with U.N. rules.

Although this report doesn't mention Kojo, it does go on for 20 pages about inadequacies and violations in the U.N.'s handling of the Cotecna contract. The report explains that "the Contract had been amended prior to its commencement, which was inappropriate" and recounts that within four days of Cotecna signing its initial lowball contract for $4.87 million, both Oil-for-Food and the U.N. Procurement Division had authorized "additional costs" totaling $356,000 worth of equipment.

The U.N. auditors say this "contravened the provisions of the Contract," and that Cotecna (not the U.N., which was using the Iraqi people's money) should have paid the extra costs. Within a year of the start of Cotecna's services, its contract was further amended to add charges above those initially agreed to, including a hike in the "per man day fee" to $600 from an initial $499. This higher fee "was exactly equal to the offer of the second lowest bidder," say the auditors, adding that the Procurement Division and Oil-for-Food "should have gone for a fresh bid."...