Tuesday, June 3, 2008

U.N. agency cleared of wrongdoing Dealings with Pyongyang

Tuesday, June 3, 2008

NEW YORK | Three public-finance authorities hired by the U.N. Development Program cleared the agency of sloppy accounting and giving cash to North Korean officials - charges that outraged some members of the U.S. Congress and forced the agency to withdraw from the Stalinist state in March 2007.

The 353-page report, released Monday, examined allegations raised by a former UNDP staff member who claimed the organization fired him after he blew the whistle on irregularities in the North Korea program.

The authors dismissed the whistleblower's claims as "without merit," even as it praised his work.

The panel did find, however, that the organization violated its own rules by allowing Pyongyang to assign its local staff members rather than recruiting them directly.

And it found that the UNDP could not have known that some of the hard currency it was compelled to spend in North Korea on salaries, rent and other expenses was funneled to companies that Washington suspects of helping the North buy arms and launder cash.

Few officials appeared to have digested the report by Monday afternoon, but none seemed eager to have the anti-poverty program restarted.

UNDP Administrator Kemal Dervis declined to say Monday whether he would recommend the UNDP board renew the North Korean program when it meets in Geneva on June 23.

"I will think about this and consult also with others in the U.N. system, because it's not just UNDP," he said, noting that specific agencies, such as UNICEF, are still operating in the country.

U.S. Ambassador Zalmay Khalilzad indicated Monday that it may be too soon for UNDP to resume its advisory and coordinating activities in North Korea.

"We don't see any reason, at this moment, to call for a renewal or a restart of the program," he told reporters.

Just last week, the United States announced it will resume relief contributions to North Korea, pledging 500,000 metric tons of food aid over the next year after the reclusive government agreed to "substantial improvement" in monitoring.

Monday's report, available at www.undp.org/dprk, was commissioned more than a year ago by the UNDP after the U.S. Mission at the United Nations questioned whether the international agency was inadvertently helping the North Korean regime divert food assistance and convertible currency to military purposes.

Under pressure from the U.S., the UNDP board suspended the program in March 2007.

Mr. Dervis on Monday welcomed what he described as a "very professional, high-quality" report, but said repeatedly that it was addressing "fantastical and irresponsible" allegations and reporting.

The three authors of the report were former Hungarian Prime Minister Miklos Nemeth, former U.S. and U.N. official Mary Anne Wyrsch and former World Bank executive Chander Vasudev.

They were hired by Mr. Dervis' office in September, with the approval of the board of directors and Mr. Khalilzad, said UNDP communications director David Morrison.

Former U.S. Ambassador John R. Bolton was critical of engagement with Pyongyang, and it was his management expert, Mark Wallace, who aired many of the complaints.

Monday's report, which cost $2 million, studied UNDP activities in North Korea from 1999 to 2007.

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