Maurice Strong steps aside from UN post

Maurice Strong steps aside from UN post
Globe and Mail  | April 21, 2005 | ALAN FREEMAN AND PAUL WALDIE 

April 21, 2005  by Shermy

WASHINGTON and TORONTO — Canadian Maurice Strong agreed to step aside Wednesday as a special envoy for the United Nations, but vowed to clear his name after being linked to Tongsun Park, a Korean lobbyist charged in connection with the Iraq oil-for-food scandal.

At the same time, new details emerged about a Calgary oil company in which Mr. Strong and his son, Fred, were major investors during the 1990s together with Mr. Park -- whom the younger Mr. Strong described as "a spooky guy."

Shareholders in Cordex Petroleums Inc. also included CSL Group Inc., the holding company owned by Prime Minister Paul Martin and his family. A spokesman for the Prime Minister, Melanie Gruer, said the shares were placed in a blind management agreement in 1993.

That was the year Mr. Martin became finance minister, and Ms. Gruer said he had "ceased to have anything to do with the operations of the company" five years earlier.

In his first interview since his name surfaced in the widening oil-for-food affair, Mr. Strong said he has nothing to hide in his financial relationship with Mr. Park, who is accused of acting illegally as an unregistered agent by trying to curry favour with senior UN officials on behalf of former Iraqi president Saddam Hussein.

"Whatever I did was perfectly proper, had nothing to do with oil-for-food," Mr. Strong said in a telephone interview from a resort hotel in the Dominican Republic, where he is vacationing. "I had nothing to do with that whatsoever."

Mr. Strong, who is 75 and recovering from pneumonia, confirmed that Mr. Park invested in Cordex in 1997. The company went bankrupt two years later and Mr. Park is believed to have lost the money he sank into it.

Mr. Martin's family links with Mr. Strong go back to the 1960s. Mr. Strong was picked to head Canada's foreign-aid program when Mr. Martin's father, Paul Martin Sr., was Canada's external affairs minister.

There are no allegations linking Mr. Martin with either Mr. Park or the oil-for-food program.

Earlier this week, the independent inquiry into the program headed by former U.S. Federal Reserve chairman Paul Volcker said it was seeking information about Mr. Strong's connections.

Mr. Park, who formerly worked for the South Korean intelligence service, was a major figure in a 1970s influence-peddling scandal in Washington.

New York prosecutors say he travelled to Iraq in 1997 and 1998 and later sought to promote the UN-supervised oil-for-food program, which allowed Iraq to export oil in exchange for food and humanitarian supplies.

In documents filed in a U.S. federal court, they say he invested $1-million (U.S.) received from Iraqi sources in an unidentified Canadian energy company set up by the son of a senior UN official. Mr. Strong identified the company as Cordex.

He did not dispute the $1-million figure but said in the interview that it was "a perfectly normal investment." He said Mr. Park bought the Cordex shares from another investor, rather than giving the firm a fresh injection of cash.

At UN headquarters in New York yesterday, spokesman Stephane Dujarric said Mr. Strong had agreed to step aside as Korean envoy until his association with Mr. Park "is clarified and resolved."

Mr. Strong said his relationship with Mr. Park, who was born in North Korea, was related solely to the Korea mission. Yet the relationship between the two men pre-dates that assignment, which began in 2003.

Fred Strong said yesterday that he spoke to Mr. Park by telephone during the 1990s, and that he appeared anxious to maintain close ties to the Strong family.

"He would call all the time and I didn't return his calls as best I could," said the younger Mr. Strong, a Toronto entrepreneur who is involved in a handful of small environmental companies.

"He was very keen to demonstrate his situation, that he's an important guy and all the rest of it. He would be after anyone to do whatever," Fred Strong added.

He said he had only one face-to-face meeting with Mr. Park, who "gave me the willies" and behaved like a spy. "That's their stock in trade, getting in and doing things that could be sensitive and who knows what," he said.

Cordex's main investments were in oil properties in Chile and Argentina. Initially a director of the company, Fred Strong later served as president and was in that position when it filed for bankruptcy protection in 1999.

"I was involved off and on with Cordex, more off than on," he said. As for Cordex itself, it "really didn't have much to do with anything, and certainly nothing to do with Iraq, that's for sure."

He said he is convinced his father has been "blindsided" by recent publicity about his links to Mr. Park. "It's an occupational hazard, when you are moving in those circles," he added.

Charles Cavness, who was Cordex's president and chief executive until he was asked to leave the company in January, 1997, recalls meeting Mr. Park in Washington in the mid-1990s at Mr. Strong's suggestion. "He was certainly a friend" of Mr. Strong, Mr. Cavness recalled in a telephone interview from Denver.

"It was with a view to his investing in the company, but it was more oriented to him trying to find some Korean investors" to put money into Cordex as it explored for oil, Mr. Cavness said. He added that this initial approach did not lead immediately to an investment.

Mr. Strong was appointed as a special adviser to UN Secretary-General Kofi Annan in 1996 with responsibility for UN reform, later taking over the Korea file. He was initially paid $1 a year for his services but since 2002 has received an unspecified daily rate for UN work.