The UNDP as ATM for Tyrants

What would you say if I told you that a UN agency was undermining U.S.-led diplomatic and economic sanctions by funnelling untraceable cash to a dangerous rogue regime?

Shocking, I know. But this time it's not the Iraq Oil-for-Food program, nor for that matter is it UNRWA providing cover for Palestinian terror attacks on Israel. This time, it's North Korea:

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The United Nations Development Programme office in Pyongyang, North Korea, sits in a Soviet-style compound. Like clockwork, a North Korean official wearing a standard-issue dark windbreaker and slacks would come to the door each business day.

He would take a manila envelope stuffed with cash -- a healthy portion of the UN's disbursements for aid projects in the country -- and leave without ever providing receipts.

According to sources at the UN, this went on for years, resulting in the transfer of up to $150 million in hard foreign currency to the Kim Jong Il government at a time when the United States was trying to keep North Korea from receiving hard currency as part of its sanctions against the Kim regime.

"At the end, we were being used completely as an ATM machine for the regime," said one UN official with extensive knowledge of the program. "We were completely a cash cow, the only cash cow in town. The money was going to the regime whenever they wanted it."

Is the UN interested in getting to the bottom of this?

Earlier this month, the development program, known as UNDP, quietly suspended operations in North Korea, saying it could not operate under guidelines imposed by its executive board in January that prohibited payments in hard currency and forbade the employment of local workers handpicked by the North Korean government.

But some diplomats suspect the timing of the suspension was heavily influenced by a looming audit that could have proved embarrassing to the UN.

Documents obtained by the Tribune indicate that as early as last May, top UNDP officials at headquarters in New York were informed in writing of significant problems relating to the agency's use of hard foreign currency in North Korea, and that such use violated UN regulations that local expenses be paid in local currency. No action was taken for months.

Then, under pressure from the United States, UN Secretary General Ban Ki Moon on Jan. 19 ordered an audit of all UN operations in North Korea to be completed within 90 days, or by mid-April.

The Board of Auditors, the UN body tasked with the audit, made no movement on the audit for 40 days after Ban's order. It sent out its notification letter for the beginning of the audit on the same day the development program announced the closure of its office--March 1.

That timing, combined with past concerns about the UNDP's transparency, has raised suspicions that suspending operations would be a way to hamstring the audit, the results of which may prove damning to the organization.

"The office was closed precisely for that reason," said another UN official with extensive knowledge of the program. "With no operations in place, first of all, you have no claim to get auditors into the country. Second, it will take months and months to get documentation out of the office there, to transfer to somewhere else like New York."

Again: shocking, I know. Maybe this was rogue UN officials acting outside of their organization's policy?

UNDP spokesman David Morrison said the use of hard currency and the hiring of staff through local governments was standard practice in authoritarian countries like North Korea.

So is there anyone in this picture who is willing to stand up for accountability and integrity?

"I don't think this is an audit you can whip through in 30 days; this may take some time," John Bolton, the U.S. ambassador to the UN until the end of last year and a staunch critic of the world body, said when contacted by the Tribune for a reaction to the newspaper's reporting of the cash payments. "But I think for the reputation and integrity of the UN system, it's critical that it proceed without delay."

There will be more talk, of course, in the coming months, of UN economic sanctions against Iran. Just remember where the Iranians will go whenever they want to get around those sanctions.

The simple fact is, stories like this one are not about UN programs being subverted by rogue employees, but rather about the inherent structure of the UN. The UN is a trade association of heads of state and de facto states like the Palestinian Authority, staffed by people who have dedicated their careers to an organization separate and apart from loyalty to their own home countries. Nobody at the UN draws their authority, or depends for their salary, on the consent of the governed. Thus, inevitably, when push comes to shove, the UN staff will - even more than is usually true of bureaucracies - serve the interests of heads of state, of the status quo, of the international "community," and of the UN as an institution - the common people and the goals of particular policies don't merit a place on that list. And this will always be true of organizations structured in this way - so long as they draw their power, money and legitimacy without ultimately having to answer to the people.