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Seven Men Charged in Failed London Attacks; Iran Nuclear Program; Volcker Presents Oil-for-Food Interim Report

Aired August 8, 2005 - 12:00   ET


ANNOUNCER: Live from CNN Center, this is YOUR WORLD TODAY.
JIM CLANCY, CNN INTERNATIONAL ANCHOR: Defying international warnings, Iran restarts sensitive nuclear work, stoking fears of its ambitions.

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Under a cloud of suspicion, the former head of the U.N.'s oil-for-food program resigns a day before a critical report's released.


CHARLES GIBSON, CO-HOST, "GOOD MORNING AMERICA": It is with a profound sadness and true sorrow that I report to you Peter Jennings has died tonight of lung cancer.


CLANCY: Mourning a man who delivered nightly news to Americans for decades.

It is 8:30 p.m. in Tehran, noon at the United Nations. I'm Jim Clancy.

VERJEE: And I'm Zain Verjee. A very warm welcome to our viewers throughout the world. This is CNN International and YOUR WORLD TODAY.

Seven men charged in the failed July 21 attacks in London have appeared in court. Four of the men face conspiracy to murder charges.

Robin Curnow updated us just a short while ago.


ROBYN CURNOW, CNN CORRESPONDENT: Busy day here at Belmarsh Prison, where seven men linked to the July 21 bombings in London appeared before a magistrate, facing a variety of charges ranging from attempted murder, conspiracy to murder, as well as explosive charges. Other men also here charged with lesser counts of helping the suspects to evade arrest.

Also, additionally, one man, Haroon Rashid Aswat, who was reported from Zambia on Sunday, he also reported before a magistrate here at Belmarsh Prison. He was -- appeared on a U.S. extradition warrant. The Americans wanting him in connection with conspiracy to set up a terror training camp in Oregon in the United States. All in all, an important day for the investigation, the first part of the legal process into the bombings here in London on July the 7th and July the 21st.

Robyn Curnow, CNN, London.


VERJEE: Joining us now with more on the case is legal analyst Mark Stephens. He's an expert on international media and defamation.

Thanks for joining us. With all the publicity, can these men get a fair trial?


Yes, Zain, I think they can get a fair trial. Of course, we in this country have rules about what can and can't be reported. They were very similar to the sorts of rules that you had in America back at the beginning of the 20th century, but you chose to allow free speech to have reign. And we've actually taken a much more sort of, one might say, nanny approach to looking after jurors and trying to closet them away from the news.

VERJEE: What are some of the concerns of police, though, as far as the media go?

STEPHENS: Well, the contempt of law -- court law in this country basically says that if you create a substantial risk of serious prejudice to the fair administration of justice, if you like, precluding someone from getting a fair trial, then you are in contempt of court. And you stand in jeopardy of either going to jail or perhaps even being fined. Of course, that's one of the reasons that the police have exalted the media to block out the pictures of these individuals who they accuse of these crimes.

VERJEE: Why? Why was that?

STEPHENS: Well, they are worried that -- well, they are worried that what will happen is that people will -- the defendants will make an allegation that these people can't get a fair trial by virtue of the media coverage, which they say will be sensational, the fact that they've been identified, all of those kinds of things. And of course, the defendants very often make these kinds of applications.

Defense lawyers very often make these kinds of applications in this country because it's a good tactical maneuver. It tries to chill down the coverage about their client in advance of any trial. And as a consequence, obviously, what the public get to hear about the trial is that much less than it would be in many other countries of the world, but particularly America.

VERJEE: What does the British media, then, need to do?

STEPHENS: Well, the British media needs to be careful that it reports in a fair and impartial way. One of the things that the attorney general who's the man in charge of this in this country does is he gets very upset if the media reports thing, which are, for example, presumptive of guilt.

So one of the headlines in the newspapers was, "Got the Criminals," and in those circumstances the men identified he was very concerned about that, because it assumed that they were guilty. Whereas, obviously, they are not guilty until a jury has decided so on the evidence. And so, it's that sort of coverage that I think the attorney general and the police in particular will be trying to prevent coming forward in the forthcoming weeks.

Of course that creates a problem for international media like CNN, because, of course, you report not only the news breaking in this country, but all over the world. And there's a consequence of that.

What happens is that what you could legitimately and lawfully publish in America and every other place in the world outside England and Wales, you can't publish in England and Wales, or can't broadcast in England and Wales in quite the same way. And that does create problems.

Of course what with the advent of the Internet as well, and, people can't go and look at the pictures that we've been looking at over the last few weeks. We've all seen these pictures of the people the police wanted to interview about the 21st of July attempted bombings. And, of course, they were -- it was the public's eyes and ears that were...

VERJEE: Right.

STEPHENS: ... assisted the police in having those people arrested. Now, it seems faintly ridiculous that the law now precludes us from a situation of seeing pictures of those people for the next 18 months while these guys await trial.

VERJEE: And we'll be grappling with all those issues. Thank you so much. Legal analyst Mark Stephens, an expert on international media and defamation.

Thank you.

CLANCY: Turning to one of the most important stories of the day: mistrust, national pride, and nuclear fears all raising the specter of a diplomatic confrontation between Iran and the west. President Mahmoud Ahmadinejad, in office barely a week, has ordered the resumption of uranium conversion to produce nuclear fuel.

International efforts to strike a compromise appear to have thus far failed. And the stakes could not be higher.


CLANCY (voice over): A new Iranian president swiftly navigated his country on a collision course with Europe and the U.S., insisting on Iran's right no enrich uranium and produce its own nuclear fuel for peaceful purposes. As Iranian scientists resumed uranium conversion at a plant in Isfahan, the U.N. turned on surveillance cameras inside the plant. And the west pondered seeking U.N. Security Council sanctions.

No one dispute's Iran's right to produce nuclear fuel. The question is whether Iran would use that technology in a clandestine weapons program.

LEONARD SPECTOR, MONTEREY INSTITUTE INTERNATIONAL STUDIES: Well, once they begin to enrich uranium, they will have the capability in hand to upgrade it, not just for the use in a nuclear power plant, where it would be enriched to, say, 3 percent, but all the way to weapon's grade uranium, which would be enriched to about 90 percent. So we are very concerned that they will have the capability in place and they can start stockpiling intermediate product, and then could break out of the nonproliferation treaty very rapidly and have nuclear weapons if they wanted them.

CLANCY: Iran did not declare its enrichment program. An exiled group revealed that in 2002, surprising the CIA, the Mossad and just about everyone else.

The U.S. accused Tehran of pursuing weapons of mass destruction. At the very least, the International Atomic Energy Agency said Iran had failed to comply with its obligations under the nuclear nonproliferation treaty.

More troubling, the IAEA reported finding traces of weapon's grade uranium at two sites in Iran that it inspected, while Tehran raised another site suspected of being part of the program. Britain, France and German have offered to supply Tehran with nuclear fuel and dangled economic incentives as well. But President Mahmoud Ahmadinejad is repeating what his predecessor declared: Iran will never give up its right to enrich uranium.


CLANCY: Now, some think Iran's moves are merely a strategy to test the European Union. On the other hand, the EU and others are thinking of taking the case now to the U.N. Security Council. The question is, who will blink first -- Zain.

VERJEE: Jim, a two-day shutdown for the U.S. embassy and U.S. consulates in Saudi Arabia. The U.S. State Department says the closure was prompted by what it calls specific and credible threats.

Australia and Britain are also warning their citizens against travel to Saudi Arabia. Both cite credible reports that terrorists are planning more attacks in the kingdom.

CLANCY: In just a few minutes, we are going to hear the findings of a probe into the U.N.'s oil-for-food program scandal. This comes one day after the head of that program resigned amid accusations he personally profited from illicit oil deals.

In a letter to the U.N. secretary-general, Kofi Annan, Benon Sevan had this to say: "I fully understand the pressure you are under and that there are those who are seeking to destroy your reputation, as well as my own. But sacrificing me for political expediency will never appease our critics or help you or the organization."

All right. We're going to take a short break.

Coming up, we're going to look at the events making news in the United States.

VERJEE: And one story that's, well, just out of this world.


UNIDENTIFIED FEMALE: We're going to enjoy another day on orbit, and we'll see you Earth tomorrow.


VERJEE: U.S. shuttle astronauts make the best of a delayed return home.

That and more after the break.


CLANCY: Welcome back. You are watching an hour of world news here on CNN International.

Well, the crew of the Space Shuttle Discovery now spending another day circling the Earth. They are enjoying some spectacular views, no doubt about that. Their scheduled landing was delayed after NASA said it wasn't satisfied with the weather outlook.

Sean Callebs joins us now from the Kennedy Space Center in Florida. He has an update on the mission.

Sean, when will they be coming home?

SEAN CALLEBS, CNN CORRESPONDENT: Well, if you listen to NASA, they will be coming home tomorrow morning, some time, some time within the next 17 to 21 hours. We'll break that down for you in just a second. But you're exactly right when you say the seven-member crew finally has a chance to look out the window and just take it all in for a bit.

They have basically been busy around the clock while they have been awake orbiting the earth. But now, because the landing has been delayed, they have some time to peek out the window.

And actually, even though it's a little bit after noon here on the East Coast of the United States high above the Earth, the crew is actually getting ready for some sack time, going to bed. They will sleep about eight hours, then they will get up and begin doing all their pre-entry tests once again, then begin the task of strapping in to come through the atmosphere and land once again.

Now, what happened today? NASA has very rigid guidelines on exactly how the weather has to be in Florida for the shuttle to land. They simply can't risk the possibility of the pilot not being able to see the runway.

There were some low cloud cover here this morning in the area, and that caused some concerns. The flight director explains exactly why today's landing was waved off.


LEROY CAIN, FLIGHT DIRECTOR: We're going to give a real hard look at KSC. And if it looks promising, we'll continue on down the timeline for the first opportunity of KSC. If it begins to not look promising, we may slow-roll the (INAUDIBLE) door closure, or having the crew start fluid loading, for example, on that first opportunity.

It makes it a little bit easier to make the third opportunity of the day, which is my first, Edwards, if I do that. But by all means, we are going to come in and make a real earnest attempt at the first two opportunities to KSC. And if we can't make it there, we will be looking at Edwards.


CALLEBS: OK. Now we'll break it down for you.

NASA hopes to bring the Shuttle Discovery into the atmosphere just around 4:00 Eastern time and land at 5:07 here at the Kennedy Space Center. That is about 17 hours from now.

Now, they could also land out west at the White Sands Missile Range. It's 6:30 Eastern Time. That's about 18 hours from now. Then again, another window opens up here at the Kennedy Space Center at 6:42 Eastern Time.

Now, they will also be looking far out west in California at Edwards Air Force Base. They could theoretically land there about 8:11 in the morning Eastern Time. White Sands, again, becomes an option. Although, we should point out this is very, very slim, because of all the shuttle landings, about 60 have been here in Florida, 30 in California, only one at White Sands.

And finally, the last window for opportunity tomorrow would be at 9:47 Eastern Time. Jim, that's in 21 hours.

So the crew, no doubt, getting some rest. And they will touch down tomorrow. Scientists and engineers will have a chance to begin poring over the orbiter to see exactly what damage it suffered during launch and during its 13 days in space. And we'll also hear from those seven astronauts exactly what it was like to orbit the Earth for all those days -- Jim.

CLANCY: All right. Sean Callebs. None of us taking it for granted anymore.

We're going to be watching this very carefully. And CNN will bring you live coverage of the Shuttle Discovery's return to Earth, now scheduled for 9:07 hours Greenwich Mean Time Tuesday, or the regional times that are shown here on your screen.

VERJEE: Let's check some other stories now making news in the United States.

President Bush is getting ready to sign a national energy plan into law. He's taking a break from his Texas vacation to fly to New Mexico to sign the bill. Mr. Bush says the measure will make the U.S. less reliant on foreign oil. But critics say its effects will be minimal.

CLANCY: Tributes are pouring in this day. They're from journalists and others for Peter Jennings.

He was the long-time news anchor, "World News Tonight," on the ABC network. Jennings died Sunday night after a public and a valiant struggle with lung cancer.

Jason Carroll looks back on his long, eventful career.


PETER JENNINGS, ABC NEWS ANCHOR: And "living" is the key word. The National Cancer Institute Center says that we are survivors from the moment of diagnosis.

CARROLL (voice over): Four months after telling the world he had been diagnosed with lung cancer, Peter Jennings, the longtime ABC News anchor, died Sunday at the age of 67. His ABC News colleague Charles Gibson made the announcement.

CHARLES GIBSON, ABC NEWS ANCHOR: It is with a profound sadness and true sorrow that I report to you Peter Jennings has died tonight of lung cancer.

CARROLL: Within minutes of his passing, friends and former longtime colleagues of Jennings shared their memories of the man who endlessly trotted the globe, doing the job he loved and doing it with such panache right up to the very end.

JEFF GREENFIELD, WORKED WITH JENNINGS: I think Peter's going to be seen as kind of maybe the last of these kinds of giants, and maybe a figure that we are increasingly going to miss.

UNIDENTIFIED MALE: I used to joke when I worked at ABC -- I was there from 1900 to 2000, for 10 years, on "World News" the whole time, and I used to say the only thing worse than Peter not being interested in your career was having him interested in your career.

GEORGE STEPHANOPOULOS, ABC NEWS: He was a reporter, first and foremost. And that was just in his blood, that curiosity, that obsession with making and keeping contacts. And he taught us all an awful lot about it.

BARBARA WALTERS, ABC NEWS: I don't know anyone who could command an audience with the kind of authority that Peter had.

TED KOPPEL, ABC NEWS: He was a warm and loving and surprisingly sentimental man.

DIANE SAWYER, ABC NEWS: It's customary to say that he'll not come again. Peter Jennings will not come again.


VERJEE: We are turning now to one of our top stories, the findings of the U.N. oil-for-food scandal investigation. The results of a multimillion-dollar probe into the humanitarian program are now being made public.

CNN Senior U.N. Producer Liz Neisloss joins us now.

Liz, you just got a copy of this just a few minutes ago. Any obvious headlines? What does it say?

LIZ NEISLOSS, CNN SR. U.N. PRODUCER: Well, Zain, that's right, we are waiting for Paul Volcker, the head of the U.N.'s investigation into oil-for-food to come forward and tell the press the details of his report. But as you say, we did just receive it. And as we expected, the report details illegal funds that Benon Sevan, the head of the program, received through Iraqi oil contracts.

Now, this report, from what we've seen so far, shows that a company called African Middle East Petroleum took approximately $150,000 in cash. It put it into a Swiss bank account. That money was taken from the -- withdrawn from the bank account by a friend of Benon Sevan, a gentleman named Fred Nadler (ph), and then paid into Benon Sevan's account.

Now, what this reports does also detail is that Benon Sevan was really financially strapped for cash. He had a mortgage of over $4,300, monthly debt obligations, credit cards. The report says that Sevans' finances were frequently stretched thin from the monthly burden of funding two residences, debt obligations, credit cards, and related living expenses.

In short, the report says Mr. Sevan's personal financial condition was precarious at the time he became executive director of the office of the Iraq program. This report also says that it follows the money that went to this company, the African Middle East Petroleum Company. And once the oil stopped flowing to that company, the cash soon stopped flowing into the Sevans' accounts.

Now, as we are expecting, as I said, Paul Volcker to come out to give more details. Volcker, though, in a statement that was issued with the report also says that these findings closed several avenues of inquiry that were developed in earlier reports. And they are expected to issue a broader, much broader report in September -- Zain.

VERJEE: Liz Neisloss reporting. Thanks, Liz.

CLANCY: Well, let's check in and find out what's moving the markets in the United States.

(STOCK MARKET REPORT) VERJEE: We'll bring you an update of our top stories next.

CLANCY: And as the settlers pack up ahead of the planned Gaza withdrawal, suggestions arise that the territory will become a base for terrorism. We're going to get a live report from the largest settlement in Gaza. You're looking at the sunset now along the beaches of Gush Katif


CLANCY: We're going to take you directly to the United Nations. The oil-for-food interim report being presented now by Paul Volcker.

PAUL VOLCKER, OIL-FOR-FOOD PROBE CHIEF: Our third interim report -- I have a relatively short statement that I'd like to read to put this in perspective.

This third interim report extends certain lines of investigation opened in the two earlier interim reports. First, it analyzes in detail the illicit activities of Benon Sevan, who was the executive director of the United Nations Office of the Iraq Program. And second, it reviews evidence that a United Nations procurement officer, one Alexander Yakovlev actively solicited a bribe in connection with the program. And there are also indications that he accepted bribes from other United Nations contractors.

Now, I remind you, the committee's findings are based upon reasonably sufficient evidence. In these cases, we clearly believe that standard has been met, and our conclusions are obviously significant and troubling. We are a fact-finding body, we're not a law enforcement agency.

However, as I have indicated from the beginning of our work, the committee, where possible, cooperates with national law enforcement authorities with respect to first, potentially corrupt activities of oil-for-food program contractors, which we identify in our investigation. Also, United Nations staff members it identifies in its reports as apparently engaging in corrupt practices. And then, certain others outside the United Nations who collaborated in illicit and corrupt activities involving oil-for-food program.

And the fact is, we've had good cooperation with some law enforcement agencies in our work, including and relevant to today's report. The office of the district attorney of this city where the U.N. located. But it's been true of authorities of other countries, the French, the Italian, the Swiss, and a number of Middle Eastern countries.

As has been widely reported, Mr. Sevan is now the subject of a criminal investigation. The criminal charges are to be brought against Mr. Sevan. The committee recommends that the secretary general is seen to any properly supported request from an appropriate law enforcement authority for waiver of Mr. Sevan's U.N. immunity.

In February, when the committee issued its first interim report, it was aware that someone within the U.N.'s procurement division may have been solicited -- may have solicited a bribe from one of the bidders for the oil inspection contract during the 1996 procurement bidding process. By mid-May, committee investigators had determined that the official in question was indeed, Mr. Yakovlev.

The evidence now gathered by the committee is sufficiently strong that we are again recommending that upon the request of the appropriate law enforcement authorities, the secretary general also waived the immunity of Mr. Yakovlev. The committee's investigation of Mr. Yakovlev's program-related activities, discontinuing including with respect to his role as a procurement officer for the 1998 inspection contract for humanitarian goods entering Iraq.

Now, you will recall in the second interim report in late March, the committee reported on events leading up to Cotecna's 1998 receipt of this contract. At that time, at the time that Cotecna bid and won this contract, it employed Kojo Annan, the son of the secretary general, as a consultant. Although the secretary general knew his son worked for Cotecna, the committee, in weighing conflicting statements and in the absence of documentary evidence, found that the evidence was not reasonably sufficient to show that the secretary general knew during that bidding and contract award process that Cotecna was a candidate. Therefore, no definitive conclusion was reached.

The committee also found no conclusive evidence that the secretary general's son, Kojo Annan, assisted Cotecna in the bidding process. However, it carefully noted that its investigation of Kojo Annan's actions during the fall of 1998 was continuing, one of the loose ends we have referred to in the past.

Now further evidence has emerged on these points. As reported in the press, Cotecna recently discovered and disclosed a short e-mail that raises a further question about the secretary general's knowledge of the Cotecna's interest. Specifically, the e-mail indicates that Michael Wilson, then a Cotecna vice president of and a friend of the secretary general and Kojo Annan, had a brief discussion with the secretary general and his entourage in Paris in late November 1998 about the status of Cotecna's negotiations with the United Nations.

The e-mail concluded that, and I quote, "The collective advice, was that we" -- meaning Cotecna -- "could count on their support." End of quotation. The new evidence clearly raises further questions, questions we have not been able to answer to our satisfaction for this report.

I can say that we are confident that despite Mr. Wilson's denials, the e-mail does appear authentic. Most of the e-mail's content, addressing matters not relevant to the committee's investigation, is accurate. But I must also emphasize the investigation has elicited a series of denials from others, presumably involved unknowdgeable, concerning the fact of the discussion described in the e-mail.

The investigation is continuing, through further document search and interviews, to evaluate the significance of this new evidence and other evidence that bears on the selection of Cotecna. The committee does expect to review its conclusions on this matter in its next report. That report will be much more comprehensive. It is anticipated in early September. It will provide a broad review of the management of the program by the various United Nations bodies: the Security Council and its 661 committee; the United Nations secretariat, under the leadership of the secretary general; and the nine U.N.-related agencies operating in Iraq.

Permit me to emphasize the committee has been and is exceptionally well-served by a dedicated and highly professional and competent staff. Nonetheless, I won't claim in the time available that every aspect of the program could be reviewed and evaluated in detail. The committee is confident, however, that the breadth of its next report, the evidence it will present and its recommendations for action, will effectively discharge its responsibility for a timely and authoritative response to the broad mandate that was given.

Now, finally, the committee also plans to accomplish in early October a report on the activities of the companies that purchased Iraqi oil and that supplied humanitarian goods under the program. That report will provide a definitive list of the more than 4,500 private contractors that engaged in the purchase of oil for the sale of humanitarian and other goods to Iraq under the program.

The listing will supplement earlier information by including entities substantively supporting the nominal contracting parties, sometimes front companies, so-called. It will provide information of known or alleged beneficiaries of oil allocations or purchase contracts and it will report the apparent payment of illicit surcharges and oil contacts and kickbacks on humanitarian contracts. Contracting parties have been and are being notified of their anticipated appearance in that committee listing.

The October report will also deal with remaining issues concerning contract execution by the program's inspection and banking contractors and the activities of the United Nations Compensation Commission.

In conclusion, the findings in today's report tie up two important loose ends in our inquiry, but they are by no means the end of this investigation. Our team, almost inevitably I suppose, is still turning up new information every day. We also realize the investigation cannot and should not go on indefinitely. What's important is that we contribute effectively to the needed reform of the United Nations administration in general and to its ability to respond appropriately to further humanitarian or other challenges that it will receive in the future.

So with that much comment and introduction, I would be delighted to have your questions.

Yes, ma'am.

QUESTION: Mr. Volcker, I think there's -- Claudia Rossette (ph).

There appears to be no mention of the Nadler's family relationship to former Secretary-General Boutros Boutros-Ghali here. Maybe there wasn't time. But will you be going into that or looking at some of the leads that point to Boutros Boutros-Ghali?

VOLCKER: Well, Mr. Boutros Boutros-Ghali was, of course, the secretary-general of the U.N. when this program started. And we intend to include his connection in that respect, and perhaps others in the final report, in the next comprehensive report, so called.

UNIDENTIFIED MALE: The gentlemen next to her.

QUESTION: Eric Shawn (ph) from Fox News.

Based on the fact that Mr. Sevan has resigned, does he now have diplomatic immunity anymore. And do you think that he should be charged criminally with what you have found and discovered here, as well as Mr. Yakovlev?

VOLCKER: I don't know that he's resigned or not, but we -- I don't know of his whereabouts authoritatively, although we have read press reports that he may be Cypress these days. But the immunity continues beyond his term of office, and, yes, we think the evidence is sufficient to recommend to the secretary-general that upon proper application by appropriate criminal authorities, that his immunity be lifted. That is a process that one has to go through.

Yes, sir?

UNIDENTIFIED MALE: The gentlemen in the front row here.

QUESTION: Yassin Kosere (ph) from Al-Jazeera Station.

In the light of what we know now, how many people do you think, VIPs, would be in this dragnet?

VOLCKER: I can't possibly answer that question. I -- we will review and reach conclusions about the administration in general in our next report.

Yes, sir?


VOLCKER: Oh, I'm sorry. You're calling on these people. Not me. Excuse me.



UNIDENTIFIED MALE: OK. The gentlemen down there with the microphone.

QUESTION: Thank you very much.

The report notes that after Mr. Yakovlev's resignation from the United Nations on June 22nd, there was sufficient bank account activity, including the transfer of a substantial sum of funds from the Mexico (ph) account. Can you be more specific about the amounts involved?

VOLCKER: No, I think we did mention over a million dollars. I can't be any more specific than that.

QUESTION: Are there any indications that criminal charges...

CLANCY: Paul Volcker there, answering the questions, centering very much on Benon Sevan, him saying that he would recommend that the secretary-general lift his U.N. immunity from prosecution, and that investigators pursue that angle.

So bad news certainly for Benon Sevan. Paul Volcker couldn't have been clearer in his links to problems within the programs, also laying it out for Alexander Yakovlev, and there at the end, talking about more than a million dollars. He said there was evidence that Yakovlev had solicited bribes, and had also received bribes that had not been solicited.

Perhaps, though, most troubling in all of this is Paul Volcker saying very clearly that Secretary-General Kofi Annan is not yet out of the woods, woods, that there are what he called -- or he is, what he said was not satisfied with the evidence that he has thus far been able to gather in. Cotecna, the company that Kofi Annan's son worked for, at first it would appear there was not sufficient evidence to point a finger at the U.N. secretary-general. But after the emergence of an e-mail, apparently from someone inside the Cotecna company. As it was negotiating yet another contract with the United Nations, a man in that company saying that he was assured by Kofi Annan of his continued support in order to win that contract. Paul Volcker said that's another area where he's being to be looking into.

But clearly this report, a lot of things being deferred until the final report. Paul Volcker saying there that that could come in September, so this is going to raise more questions, troubling questions for Kofi Annan.

Now, the head of the investigation released the official findings there. We are going to have much more on this in the minutes and the hours ahead. Stay with CNN. We'll be right back after this break.


VERJEE: Israel's cabinet has given final approval to the first phase of the Gaza withdrawal, now just a week away. But as some settlers are digging in their heels, others are already packing up and moving out.

Guy Raz joins us now from the largest settlement in Gaza, Neveh Dekalim.

Guy, you've spoken to some of the settlers there. What've they told you?

GUY RAZ, CNN CORRESPONDENT: Well, Zain, as night falls in Neveh Dekalim, this largest of all the settlements, the people here realize it's moving and creeping just one day closer to the moment when it will no longer exist.

Now Neveh Dekalim, along with 20 other of the Gaza settlements, will be evacuated, beginning around the 17th of October.

Now most of the settlers here are still going on with life as normal, taking their kids to the beach, going to work. But scratch the surface, and you find that many are very much resigned to the reality of the Israeli's government's decision to begin pulling Israeli citizens out of the land it first occupied 38 years ago.

Now most of the residents of Neveh Dekalim still remain. Some are beginning to trickle out. And in other parts of the Gaza Strip, in other settlements, that trickle is very rapidly becoming a flood.


RAZ (voice-over): The sign reads "Elei Sinai," "will not fall," but most of the residents here admit, it's just an empty slogan. In a few weeks, Elei Sinai indeed fall.

DAVID YAMIN, ELEI SINAI SETTLER (through translator): I have accepted that there will be a disengagement.

RAZ: David Yamin and his wife, Esti are not defiant or combative. Inside their home, boxes are piled high, prepared for the movers. I asked David whether he settled here out of ideological reasons?

YAMIN (through translator): I'm here because I love the quality of life. I'm no ideologue and I'm not fanatic, I just like it here.

RAZ: A few streets up from the Yamin family, Anat Sa'adon gathers empty boxes. She, too, accepting the reality that her time in this community is over.

ANAT SA'ADON, ELEI SINAI SETTLER (through translator): We will not argue with the army. There are others here who will stay until the end, but we won't.

RAZ: Elei Sinai stands less than 200 meeters from Israel's border with Gaza. But its land the international community regards as occupied.

(on camera): By the end of September, Israelis will no longer live on this side of the fence. This road will mark a permanent boundary for the first time in 38 years, marking the point at which Israel ends and Gaza begins.

(voice-over): A few miles north of Elei Sinai settlement, inside the recognized boundaries of Israel, a new neighborhood is going up. It's called Nisai (ph), and in a few weeks, this temporary community will house about a third of the evacuated settlers. David and Esti Yamin aren't sure whether they'll go there.

ESTI YAMIN, ELEI SINAI SETTLER (through translator): The government wants me on the other side of the fence, but I'll go as far away as possible, maybe to the middle of the country, to make sure I won't be moved again.

RAZ: And what next for Elei Sinai settlement? Palestinian and Israeli developers are proposing to turn the site into a casino.


RAZ: Zain, the narrative of this pull-out very much differs depending on who you talk to. For Palestinians, it's seen as a tiny step forward; for many, an insignificant move. For Israelis, it's regarded as a painful concession. What is certain is that Israel's pull-out from Gaza is the biggest change in this conflict in a long, long time -- Zain.

VERJEE: What's the Palestinian Authority's plan the day after disengagement?

RAZ: Well, Zain, the Palestinian Authority very much wants to ensure that this process is done in a very smooth way. Ultimately, all of these settlements, all of this land, will fall under the authority of the Palestinian leadership. It will essentially become Palestinian national territory. They will then begin the process of clearing out the area and developing the area. The idea ultimately is to build high rise homes here. The single family homes that now exist in these Gaza settlements are simply impractical for the some 1.3 million Palestinians who live in the Gaza strip -- Zain.

VERJEE: CNN's Guy Raz reporting -- Jim.

CLANCY: It is very important to continue to follow some stories; stories that affect not just hundreds, but literally hundred of thousands of people. More large shipments of food are reaching the famine victims in southern Niger, but aid groups say thousands of tons of emergency rations are still needed within the next few weeks if tens of thousands of people are to be saved from starvation. The United Nations now estimating some 32,000 children face death without food and medical treatment. The U.N. also raised five-fold to $80 million, its estimate of the money needed to tackle what it terms a deteriorating situation in Niger.

Well, UNICEF deputy director general Rima Salah is just back from Niger, where she saw the unfolding tragedy firsthand. She joins us now from New York.

Ms. Salah, How would you describe the situation today? Because I think people are under the impression that the aid is there, or the aid at least is on its way, and this is a problem the world has solved. Your view?

RIMA SALAH, UNICEF DEP. DIRECTOR-GENERAL: Yes, my view -- I've just came back yesterday -- that still the crisis is still going on. Because 32,000 children are still facing the crisis of malnourishment. I saw -- two days ago, I saw a child dying in the hospital. We have to save those children. But we thank all the donors that food is arriving. For example, UNICEF airlifted 1,000 tons of therapeutic milk and food. But we need to airlift 3,000 tons more to save children and to reach the most vulnerable in the villages. We have 3,000 villages that are still very vulnerable.

CLANCY: When you say very vulnerable, are these villages getting food aid? Are they open to that? Or has it not yet arrived?

SALAH: Some of them, for example, around 100 villages have received from UNICEF, from World Food program, from other agencies. But we still need to airlift for more and more villages. So it's very important that the food arrives there on time to save children and to save families and communities. And most importantly, that we have to see to the underlying causes, which is poverty also. So we need to solve the crisis in Niger and the surrounding countries.

CLANCY: All right. Everyone, I think by now, understands this was first locusts, and then it was a drought that has affected Niger. And it often is hit by droughts. But right now, are the roads passable? There was some talk about the rains coming in and making the situation worse.

SALAH: Well, of course, but still, the roads are open. Because I was there. And also, we are airlifting, which is easier, also, to airlift to the most vulnerable zones. Which is -- one of the most vulnerable is Maradi, which is really is epicenter of the crisis, where I visited also the centers that are run by UNICEF and with other non-governmental organizations.

CLANCY: Just, finally, Rima Salah, if you can tell us -- people are concerned to see the problem, not just addressed temporarily, but the problem solved. What's really needed for that?

SALAH: What is really needed is to fight poverty, is to really have early warning systems, and to see how we can solve the problems of poverty, of also traditions. And also empowering of communities; empowering of women, particularly. It's very important.

CLANCY: Rima Salah, deputy director general of UNICEF. I want to thank you very much for your agency for your own work, and all of the people in UNICEF for their work there in Niger. We are going to continue to follow that story.

You've been watching YOUR WORLD TODAY on CNN International.

VERJEE: Thanks so much for watching.


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