Thursday, October 1, 2009

UNDP Accused of Cover-Up in North Korea Cash Funneling Scandal

By George Russell


What’s happened to the trove of documents that the United Nations Development Programme (UNDP) promised to hand over to prove—or disprove— its innocence in funneling millions of dollars in hard currency to the North Korean dictatorship of Kim Jong Il?

Are they under UNDP safekeeping in North Korea? Or are they being picked over in a UNDP safe house in Beijing, before a sanitized version is offered up for inspection? And is that just part of a wider destruction of evidence?

[Editor's note: See correction at the bottom of this article.]

Those questions became the subject of a storm of Internet accusations over the past week, as an anonymous blog associated with UNDP dissidents charged coverup, and then offered up photos of UNDP documents that it claimed were proof.

To see the accusations, go to

For its part, UNDP has flatly denied the accusations.

The documents lie at the heart of a controversy that has reached boiling point several times since last January, when a U.S. Ambassador to the U.N., Mark Wallace, used the conclusions of a series of UNDP audits to charge that the U.N.’s flagship development agency had funneled the hard currency to Kim regime officials in March in violation of its own rules, along with a variety of other major infractions. UNDP subsequently announced it had closed its office in March. A preliminary audit by the U.N. panel, without benefit of the documents, validated many of the U.S. charges last June.

The U.N. auditors were ordered at the end of June to make another attempt to investigate—and are still stymied. On Sept. 28, the chairman of the auditing board formally advised the U.N. that the Kim government had refused visas for his inspectors to examine the papers. He declared that the panel of auditors had been disbanded and returned to other duties.

To see the Board of Auditor’s letter, click here.

In response to Fox News questions a month later, UNDP spokesman David Morrison declared that his organization was "initiating steps" to bring the documents out of Pyongyang—something UNDP had long promised.

After that came silence—until the anonymous bloggers began posting their accusations. The first charge came on Nov. 21, when they claimed that Beijing staffers of UNDP said boxes of Pyongyang papers were "now located in the private residence of the UNDP Resident Representative in Beijing." (The Resident Representative is the highest-ranking U.N. official in a nation’s capital.)

The blog also claimed that a team of UNDP officials, as well as officials from the South Korean government, were on their way to vet the trove before any auditors saw it.

All of those charges were forcefully denied by UNDP spokesman Morrison in response to Fox News queries.

"No documents have arrived in Beijing or anywhere else," he declared. "We expect to be in a position to be in a position shortly to make all documentation available outside [North Korea]."

Over the weekend, however, the bloggers struck again, this time offering up cell-phone photos that claimed to show the contents of a small fraction of 59 boxes of UNDP papers in Beijing.

Only two photos were displayed. In one is a fragment labeled "Files Packing List Control Sheet," which carries a summary of monthly accounts from April 1999 to October, 2000. The control sheet carries the acronym for UNDP’s Regional Bureau for Asia and the Pacific, and is dated April 13, 2007.

The other snapshot shows the edges of a variety of files, and pieces of paper showing various stamps, signatures and an address label for the Resident Representative in North Korea, along with letterhead of what appears to be a Korean trading company.

Nothing in the photographs, however, directly linked them to a location in China.

But in the meantime, hints at an even broader UNDP coverup appeared on Sunday in the blog of respected independent journalist (and Fox News consultant) Claudia Rosett. She offered up internal UNDP documents dating from Sept. 24 that recommended the disposal of 11 email and other servers, for reasons of obsolescence or wear and tear. Purchase of two of the "obsolete" servers dated from 1998 and 1999, but all of the others were undated.

To see the documents, go to

"We don’t know what’s on these 11 servers," Rosett declared. "But surely it’s worth finding out?"

UNDP spokesman Morrison issued yet another rebuttal. The equipment, he said in a written response to Fox News followup questions, had been used to host "UNDP’s virtual directory (phone book). They contained no sensitive information and nothing to do with UNDP’s operations in DPRK [the acronym for Democratic People’s Republic of Korea]."

In any case, he added, "All data is backed up before the hardware is destroyed."

A spokesman for the U.S. mission to the U.N. said officials there would look into the issue.

George Russell is executive editor of FOX News.


Correction: UNDP gave incorrect information to Fox News regarding the contents of 11 computer servers that critics have said are being disposed of as part of the alleged coverup. UNDP spokesman David Morrison told FOX News that the servers, which UNDP has declared obsolete, had been used to host the organizations’s “virtual directory" (phone book) and “contained no sensitive information.”

After follow-up questions from FOX News, Morrison said that only one of the 11 servers hosted the directory. The others “were a combination of file/print servers and UNDP’s old intranet.” All information contained in the servers, he declared, “was migrated to other equipment to ensure that no information was lost.” The incorrect information, he told FOX News, had been provided inadvertently.

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