Reuters and the AP report on the second US arrest resulting from probes into the UN Oil-For-Food financial scandal. Police arrested Vladimir Kuznetsov after Kofi Annan withdrew his diplomatic immunity earlier today, joining Alexander Yakovlev in the klink for money laundering and bribery:

Vladimir Kuznetsov, a Russian Foreign Ministry official and the elected chairman of the U.N. General Assembly's budget advisory committee, was taken into custody by the FBI, Russian and U.S. officials said.

Kuznetsov later appeared in federal district court in khaki shorts and a green shirt and pleaded innocent.

The court offered to release him only if he could post a $1.5 million bond co-signed by three financially worthy parties and secured by $500,000 in properties and cash.

Even if released, he would remain under house arrest with an electronic monitoring device.

The arrest was only the latest scandal plaguing the world body following allegations of corruption and mismanagement in the defunct $64 billion U.N. oil-for-food program for Iraq, and a senior procurement officer's admission he had demanded illegal payments from would-be U.N. contractors.

It appears that Yakovlev has talked with investigators, a suspicion I had when authorities arrested him and just as quickly bailed him out. Note the difference between the bond conditions as described in this article. Yakovlev got out on a standard bail arrangement, albeit for $400K. Kuznetsov has to put up a third of his $1.5 million in cash or securities, with three underwriters, and still wear the Martha Stewart signature model electronic anklet.

The continuing Russian connections to the program also bears attention. Kuznetsov wasn't just some flunky at Turtle Bay -- he headed an important General Assembly committee and worked for Vladimir Putin in the foreign office. Russia supported France in the 2003 showdown over whether to remove Saddam Hussein by force. Only after we toppled him in three weeks did we find out the extent to which Russia had performed an end-run around the sanctions regime it argued to continue instead of using force.

This arrest causes one to wonder whether Putin or his government have more to do with UNSCAM than first thought. Yakovlev only had tenuous ties to the Putin regime, while Kuznetsov has much stronger connections to the autocratic former KGB chief. His credentials may lead to the discovery of more reasons why the Russians backed the French use of its veto when it came to holding Saddam accountable for his refusal to comply with sixteen UN Security Council resolutions.

Addendum: The Washington Post includes this choice tidbit:

The latest arrest comes less than two weeks before a Sept. 14 summit that will draw more than 170 world leaders to U.N. headquarters to address, among other issues, management gaps that allowed corruption to occur. A senior U.S. official said it was too soon to determine whether the case "would help or hinder" U.S efforts to strike agreement on a proposal to impose greater independent oversight of U.N. spending.

The Bush administration is facing intense resistance from Russia, China and the "Group of 77" developing countries to proposals aimed at strengthening outside scrutiny of the United Nations' books. The Russian government, meanwhile, has vigorously opposed a U.N. reorganization plan that would undercut the power of Kuznetsov's committee.

Interestingly, the Post buries this story on page A27. I wonder why?

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Another UN official is arrested in connection with the oil-for-food scandal. This one isn't some low-level functionary either. [Read More]

Tracked on September 3, 2005 4:33 PM