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UNITED NATIONS (AP) - Former U.S. Federal Reserve chairman Paul Volcker is the leading candidate to head an independent panel to investigate allegations of corruption in the U.N. oil-for-food program, U.N. diplomats said Wednesday. Secretary-General Kofi Annan said Tuesday he hoped to make an announcement "in the course of the week" on the panel members.
"We are going to investigate these allegations very seriously and with a very thorough independent investigation," he said.
Diplomats, speaking on condition of anonymity, said the United States pressed to have an American lead the panel and backed Volcker.
Many U.S. lawmakers, who are conducting their own investigation, have expressed skepticism about the U.N.'s ability to create an independent panel to implicate some of its own high-ranking officials. A call to Volcker's New York office seeking comment went unanswered.
The allegations of corruption first surfaced last January in the Iraqi newspaper Al-Mada. The newspaper had a list of about 270 former government officials, activists and journalists from more than 46 countries suspected of profiting from Iraqi oil sales that were part of the U.N. program.
The U.S. General Accounting Office, Congress' investigative arm, estimated the Iraqi government pocketed $5.7 billion by smuggling oil to its neighbors and $4.4 billion by extracting illicit surcharges and kickbacks on otherwise legitimate contracts.
The corruption claims have become a major embarrassment for the United Nations.
Annan launched an internal inquiry into the oil-for-food program in February but canceled it in March to allow a broader, independent examination that will also cover dealings with governments as well as companies and other entities that signed contracts with the United Nations or with Iraq.
Under the oil-for-food program, which began in December 1996 and ended in November, the former Iraqi regime could sell unlimited quantities of oil provided the money went primarily to buy humanitarian goods and pay reparations to victims of the 1991 Gulf War. Saddam Hussein's government decided on the goods it wanted, who should provide them, and who could buy Iraqi oil - but a U.N. committee monitored the contracts.