Thursday, June 12, 2008

The U.N.'s North Korea Chutzpah

June 12, 2008

Cindy Adams, the New York Post's doyenne of dish, ends her gossip column with a signature sign-off: "Only in New York, kids, only in New York."

I thought of this tag line recently in an unlikely context - a report issued last week by the latest group of investigators charged with reviewing the United Nations Development Program's operations in North Korea. The program was so rife with scandal that the U.N. agency last year took the unprecedented step of withdrawing from the country.

Listen to the UNDP and the report is an exoneration of its work in North Korea and an indictment of the U.S., which first went public with charges of gross mismanagement a year and a half ago. Read the report, however, and a different picture emerges. The findings are consistent with the U.S. allegations: large sums of money that vanished after being transferred to Pyongyang; dual-use technology shipped off to the North without the requisite U.S. export licenses; a whistleblower without whose input the abuses would not have been uncovered. It also contradicts much of what UNDP officials said in sworn testimony last year to the U.S. Senate Permanent Subcommittee on Investigations.

The report was commissioned by the UNDP and undertaken by a panel of investigators selected by the agency. It is the third probe of the UNDP's operations in the North, following reports last year by U.N. auditors and U.S. Senate investigators. Yet even the UNDP's own investigators - who had full access to the players and documents involved - were unable to come up with a complete picture of the agency's operations in North Korea. The UNDP's record-keeping was so poor that the investigator's dictum - follow the money - was impossible to heed.

When a Journal editorial last week cited disbursements of $57.1 million to $72.3 million from 1999 to 2007 based on data in the report - far higher than the $30 million to $40 million claimed by the UNDP at a press conference - the agency first told us our arithmetic was wrong, and then said the panel had made an error that it planned to correct. Whatever. An accurate accounting is apparently beyond the UNDP's capability. The report specifies that the panel "was unable to confirm the total size" of the program because it did not have "full financial transaction information."

Even so, the report details a much larger program than the UNDP had previously represented as well as far higher transfers to the North Korean government than it previously admitted. A minimum of $9.13 million went directly into the coffers of Kim Jong Il's regime, to 11 different agencies. Data in the report suggest the transfers may have been $20 million or more.

That's a far cry from what the UNDP told the U.S. mission to the U.N. and Senate investigators. According to the Senate report, UNDP officials said the "National Coordinating Committee," or NCC, was the "entity the North Korean government designated to receive UNDP funds for use on Development Projects." How much did the NCC receive? The "UNDP informed the Subcommittee that over an eight-year period from 1999 until the program's suspension in 2007, its records showed that it has transferred no more than $380,000 of UNDP project funds to the NCC UNDP bank account."

Senators don't take kindly to being misled by sworn witnesses, and Carl Levin and Norman Coleman, chairman and ranking member respectively, may wish to inquire further. Mr. Levin may also wish to issue an apology to Mark Wallace, the then-U.S. diplomat responsible for blowing the lid off the UNDP's shenanigans. At a hearing last year, the senator hammered Mr. Wallace for saying that he suspected that the UNDP may have transferred $7 million to Pyongyang. It turns out Mr. Wallace's estimates were way too low.

But that's not all. The report also recounts how North Korea used U.N.-affiliated accounts to launder money, such as $2.72 million transferred to a company in Macau. It's unclear just whose money it was - UNDP's or North Korea's - and the report doesn't help much in clearing up that mystery. At the very least, the UNDP let itself be used by unscrupulous North Koreans.

The UNDP also appears to have played loose with the truth on transfers of dual-use technology. The panel found that the UNDP shipped 95 items that were "controlled by the U.S. for national security and anti-terrorism reasons." It did not obtain the export licenses required by U.S. law.

A year ago, the UNDP was dismissing allegations that it transferred dual-use technology: "[T]here have been some rice husk removers transferred and a plotter to help the [North Korean] authorities more accurately produce maps for environmental monitoring," a spokesman explained on April 26, 2007. A few weeks later he said, "The kind of equipment provided is by no means state of the art." In a letter dated June 7, 2007, the U.S. asked the UNDP to provide information about equipment with potential dual-use applications that it had obtained for North Korea. It received no response.

Finally, the UNDP is claiming exoneration for its treatment of the former UNDP staffer in Pyongyang who blew the whistle on the slipshod operations there. Again, the UNDP is being slippery with the truth. The report found no merit in Artjon Shkurtaj's claim that the UNDP retaliated against him for reporting the irregularities he saw in Pyongyang. But it also determined that without him the UNDP's misdeeds would never have come to light. Mr. Shkurtaj is still without a job.

The U.S. gives about $250 million a year to the UNDP in voluntary contributions, and it would be nice to think that in light of these latest revelations that it would take the occasion to rethink that. Sen. Coleman's office tells me he has drafted a letter to Secretary of State Condoleezza Rice asking for cuts. Zalmay Khalilzad, U.S. ambassador to the U.N., declined to comment on the report.

The UNDP's executive board has a responsibility to make sure the agency provides better oversight of its programs - especially in countries where UNDP money might be used to help prop up dictators. At its meeting next week in Geneva, it could start by adopting a resolution requiring the agency to adhere to U.S. export-control laws. And it could require the UNDP to hire outside auditors to track UNDP disbursements. Allowing member states to see now-secret internal audits would help too.

Meanwhile, the spinmeisters at the UNDP keep declaring victory. Talk about chutzpah. Even New Yorkers aren't in their league. Only at the U.N., kids, only at the U.N.

Ms. Kirkpatrick is a deputy editor of the Journal's editorial page.

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