Monday, January 25, 2010

Corruption at the UN: Who is watching the watchdog?


By RASNA WARAHPosted Sunday, January 24 2010 at 18:06

WE, THE PEOPLE OF THE world, would like to believe that the money we contribute to the United Nations is used to promote peace and development in poor or strife-torn regions, and to provide humanitarian relief to countries in crisis.

But a recent review of corruption and fraud at the UN by the Associated Press (AP) has found that theft of UN funds is rampant in the neediest countries, and that the organisation is unwilling or unable to bring the culprits to book.

The review, whose findings were published two weeks ago, shows that investigations into cases involving massive fraud, theft and corruption in the UN’s various offices around the world have either been stalled, halted or closed by the UN’s Office of Internal Oversight Services, which is tasked with the job of looking into such cases and recommending disciplinary action.

At least five major cases in Afghanistan, Iraq and Africa are among the inquiries that have either been shelved or not investigated further.

For instance, the review found that no action had been taken following a taskforce report completed in December 2008 that found $1 million a day being siphoned off from a UN safe in Kabul – funds that were part of an $850 million rebuilding project in Afghanistan.

In Iraq, no action has been taken on a finding that about half of the $350,000 UN funds intended for the launch of a radio station for women in Baghdad was used to pay off personal loans, a mortgage and credit cards.

Another investigation into bid-rigging involving a transport company in Africa found that contracts were being deliberately steered to just one company.

According to the AP review, over the past year, “not a single significant fraud or corruption case has been completed”, and dozens of cases are still languishing un-investigated. The review comes at a time when the UN is losing credibility as an effective watchdog against corruption worldwide.

The UN Convention Against Corruption, which came into force in December 2005, has neither reduced corruption nor resulted in significant asset-recovery in UN member states.

The convention not only introduces a comprehensive set of standards, measures and rules that all countries can apply in order to strengthen their anti-corruption legal and regulatory regimes, but also requires member states to return assets obtained through corruption to the country from which they were stolen.

AT THE TIME OF ITS ADOPTION, then UN Secretary-General Kofi Annan described corruption as “an insidious plague that has a wide range of corrosive effects on societies” noting that the convention “will warn the corrupt that betrayal of public trust will no longer be tolerated”.

It is ironic that a world body that categorically endorses core values such as honesty, integrity, accountability and transparency, has been unable to root out corruption within its own corridors.

This is partly due to the fact that its oversight bodies, including OIOS, the Ethics Office and the Ombudsman’s Office, are manned by people who are themselves employees of the UN. This creates a conflict of interest.

A senior lawyer at a Washington-based watchdog organisation told me that by virtue of being UN employees, OIOS investigators are often under pressure to keep a lid on cases involving fraud or corruption, especially if these cases have the potential to severely mar the reputation of the UN.

Quite often, she added, and especially now when the UN is cutting back on funds for its oversight activities, the OIOS operates like a public relations firm whose job is to put a positive spin on a negative story or to cover up cases of fraud or malpractice.

The revelations highlighted in the AP review may suffer a similar fate. However, it is becoming clear that the halo surrounding the UN has suffered a serious dent in recent years.

In October 2008, One World Trust, a UK-based think tank, published a paper that showed that despite a 2005 whistleblower protection policy, the UN routinely fails to protect them against retaliation, and that the organisation’s self-policing mechanisms remain ineffective.

Watchdog organisations believe that the oversight capabilities of the UN are severely compromised by the fact that investigators lack security of tenure, and are appointed through UN administrative bodies, which may not be too keen to have themselves investigated.

The sad reality is that the world’s taxpayers, who contribute funds to the UN through their governments, remain largely unaware of the fact that millions of dollars are being lost to corruption and fraud by UN officials, instead of being used to promote human rights and development in the world’s poorest nations.

Saturday, January 16, 2010

Help Haiti - Donate Now !

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Help us Help in Time: Central Emergency Response Fund (CERF)
Your donation is helping the UN to provide rapid response and relief to victims of the Haiti earthquake

Haiti earthquake hotline for UN staff

UNDP Administrator Helen Clark and the whole of UNDP is mobilized to bring support and assistance to UNDP staff on the ground.

Staff members trying to get information about family members who were working in Haiti can call the UN hotline at +1 212 963 4139.

16 U.N. workers killed; 150 missing

1/14/2010 3:31 AMAssociated Press

UNITED NATIONS - The U.N. chief said 16 U.N. personnel were confirmed dead late Wednesday in the earthquake that decimated Haiti's capital, with 100 to 150 U.N. workers still unaccounted for, including the mission chief and his deputy.

Secretary-General Ban Ki-moon announced that 11 Brazilian peacekeepers and five international police officers - three from Jordan and one each from Chad and Argentina - were killed in the "horrendous" quake.
U.N. officials said 56 others were injured. Seven who were seriously hurt were evacuated from the country, they said.

"Many continue to be trapped inside U.N. headquarters and other buildings," said Ban, noting that includes the U.N.'s mission chief, Hedi Annabi, and his chief deputy, Luis Carlos da Costa. "Other peacekeepers and civilian staff from many member states remain unaccounted for."

U.N. peacekeeping chief Alain Le Roy said at least 10 people were pulled alive on Wednesday from the lower floors of the five-story headquarters building for the U.N. peacekeeping mission, which collapsed in Tuesday's magnitude 7.0 earthquake quake.

Annabi, a Tunisian diplomat who has worked for the U.N. for 28 years, and da Costa, a Brazilian whose U.N. career spans four decades, were missing. Also unaccounted for was an eight-member police delegation from China that Annabi was meeting in an office on the headquarters' top floor when it collapsed, U.N. officials said.
"It is our estimate that around hundreds of people were still working inside the building," Ban said. "Therefore it will be in the range of 100 to 150 that I'm quite concerned about."

Ban said he was immediately dispatching Assistant Secretary-General for Peacekeeping Edmond Mullet, who was Annabi's predecessor in Haiti, to Port-au-Prince to take over as acting chief of the U.N. mission and direct the world body's emergency response starting Thursday morning.

"Most urgently is the emergency search and rescue: People buried under the rubble are still alive. We must save them, as many as possible, and we must move immediately," Ban said. "To the people of Haiti, I say this: We are with you. We are working quickly, as fast as humanly possible."

Ban said one Chinese and at least two U.S. search and rescue teams should have arrived in Haiti by Wednesday night, with two more U.S. teams expected to arrive today. He said Mullet would try to meet with Haitian President Rene Preval and other government leaders immediately after his arrival. Ban said his office was unable to directly contact Preval.

Ban's former spokeswoman, Michele Montas, a well-known Haitian journalist, was visiting family when the quake struck. In an e-mail received by U.N. staff late Wednesday afternoon, Montas said she was OK but Port-au-Prince "is 80 percent destroyed," said Montas' successor, U.N. spokesman Martin Nesirky.

"Saw hundreds of bodies in the street this morning and people trying to reach survivors under buildings and carrying the wounded on doors and makeshift stretchers. Most everything above one-story has been leveled," and there have been "more than 30 aftershocks," Montas wrote in an e-mail as read aloud to reporters by Nesirky.

Le Roy said the Villa Prive and the Hotel Montana, where a large number of U.N. staff lived, also were damaged. He said it was not known how many U.N. personnel were in the buildings at the time.
Helen Clark, head of the U.N. Development Program, said 38 UNDP staff are unaccounted for, including 10 believed to have been in the building adjacent to the agency's main office, which collapsed.

The U.N.'s Haitian mission - spread across the country - includes 7,000 peacekeeping troops, 2,000 international police, 490 international civilian staffers, 1,200 local civilian staffers and 200 U.N. volunteers, he said. The force was brought in after a bloody 2004 rebellion following decades of violence and poverty in the nation.

Le Roy said the 3,000 troops and police in Port-au-Prince are securing the airport and port, patrolling, and helping to clear roads in addition to digging in the rubble of the collapsed headquarters building.

The U.N. is operating out of its logistics base near the airport, which was not seriously damaged, he said.
Susanna Malcorra, the undersecretary-general for the department that staffs and equips U.N. field-based peace operations, said the Brazilian peacekeeping contingent includes an engineering unit which is moving "with a lot of caution" at the toppled headquarters building because they don't have the expertise in dealing with people trapped under rubble nor the specific tools to handle it, including sensors to listen for signs of life.
The engineers are trying "to ensure that they don't produce more damage to the building than has already happened," she said.

"We need guidance from the rescue teams to make sure that we maximize the use of our engineers properly," Malcorra said.

Ban urged the international community "to come to Haiti's aid in this hour of need" and announced that the U.N. would provide $10 million for immediate relief from its emergency fund "to kickstart" the global response.

Late Wednesday, Ban met with former U.S. president Bill Clinton, his special envoy to Haiti, and they then attended a meeting of the General Assembly where many countries announced pledges of aid to the devastated country.

Clinton, who has been focusing on raising money to rebuild Haiti after devastating cyclones in 2008, said "maybe a third of the country" has been affected by the quake. He urged people to send cash - not supplies - to buy food, water, shelter materials and first aid supplies.

He urged member nations to provide Haiti the aid they previously pledged. "We need those commitments," Clinton said.

Tuesday, January 12, 2010

The Possible End of Wikileaks

As it appeared on All Things Whistleblower, a website on which whistleblowers may anonymously break stories of government and corporate transgressions,
has gone offline and will remain so while it looks for funding. The home page featured a message saying that Wikileaks had received "hundreds of thousands of pages from corrupt banks and other information pertaining to the Iraq war, China, the United Nations” and that it does not currently have the resources to release the documents. Wikileaks has featured thousands of sensitive documents regarding the September 11 attacks, Guantánamo Bay and the Church of Scientology, among others. Neil Gordon of the Project on Government Oversight commented on Wikileaks, saying: "We think there's nothing but good that can come from sites like Wikileaks. It provides places for whistleblowers to provide documents anonymously, which is often the only way you can uncover corruption."

Monday, January 11, 2010

U.S. Ignored U.N. Aid Agency's Fraud and Mismanagement

Monday , January 11, 2010

By George Russell


Between 2004 and 2008, the U.S. Agency for International Development (USAID) showered more than $330 million on an obscure United Nations agency known as UNOPS — United Nations Office for Project Services — to carry out development aid projects in Afghanistan. What happened next wasn’t pretty.

Among other things, USAID apparently overlooked a growing stack of U.N. audits and investigations that pointed to fraud, mismanagement and lack of internal financial controls by UNOPS in Afghanistan, even as the U.S. agency continued to shovel money in UNOPS’s direction. So did other branches of the U.S. government, to the tune of an additional $100 million.

In a stunning number of cases, however, USAID also ignored its own oversight procedures and did not even insist that contracts with UNOPS enshrine the agency’s uncontested right to access financial records that would tell how the U.S. government money was spent. Consequently those records were never examined.

In other cases, it looked like legal loopholes were created to make sure UNOPS got to keep its financial records out of USAID’s reach.

Worse, the oversight disaster may still not be fixed—even as UNOPS, claiming that it has changed its ways, may get a bigger role in Afghanistan, financed with dollops of U.S. money, in the months and years ahead. .

U.S. government inspectors who did a 17-month study of the fiasco, however, have reported that they can’t fully assess whether the problems with UNOPS have been solved — partially due to a continuing lack of full cooperation on the part of UNOPS officials, who refused to let the inspectors question UNOPS managers thoroughly about the operations of the U.N. agency’s financial management system.

Along with refusing to allow the inspectors access to significant information about its financial management system, the study reveals that UNOPS had not even begun investigating some aspects of alleged fraud by its employees that has already been uncovered in Afghanistan, and, more importantly for future operations, still does not systematically review the accuracy of the data on its electronic books.

All of those distressing conclusions, and more, are contained in a dense, 68-page report by the Government Accountability Office (GAO), an investigative arm of Congress that examines how U.S. federal public funds are spent, and suggests a few remedies for the administrative lapses it uncovers.

Click here to read the entire report

In the case of UNOPS, GAO has been remarkably discreet. Its report was presented on Nov. 19 to the U.S. Senate Subcommittee on Investigations that originally commissioned it, then kept out of the public eye for another month.

The GAO findings only became public on Dec. 17, just in time to languish without much notice over the Christmas break. They were, however, hailed by UNOPS four days later, as the organization pledged “to continue to implement reforms that strengthen the organization’s management and financial controls.”

Both U.N. Secretary-General Ban Ki-moon and the Obama administration have their own reasons to applaud UNOPS’s attitude, however much it may or may not be grounded in fact. Both have big plans for upping U.S. spending in Afghanistan via the U.N., as part of an expanded military and civilian effort that President Obama inaugurated on Dec. 1, with the announcement that 30,000 additional U.S. troops would go to Afghanistan.

Alongside the military buildup, Secretary-General Ban on Dec. 4 began to tout a “civilian surge” in Afghanistan that would include mammoth infusions of additional development aid, under U.N. supervision, which would likely point to an increased role for UNOPS.

As part of that increase the U.N.’s requested spending this year for its peacekeeping mission in Afghanistan, known as UNAMA, is nearly $242 million, making it one of the fastest-growing — and contentious — big-ticket items in the U.N.’s 2010 budget. The U.S. share of that total would be about $63 million. (The U.S. pays about 22 percent of regular U.N budgets, and about 26 percent of peacekeeping tallies.)

But far more money than that will likely be involved. On Jan. 28, for example, Ban and British Prime Minister Gordon Brown will host a major international conference on Afghanistan that will include a significant pitch for more development aid — much of which will likely also be filtered through U.N. agencies, including UNOPS.

All of which could result in hundreds of millions of dollars worth of contracts churning through UNOPS, a little-known U.N. agency based in Copenhagen, which is the world organization’s chief on-the-ground manager for development projects, as well as a provider of procurement, human resources management, and financial management, services both for the U.N. and for other governments and private organizations.

It is also another U.N. organization swathed in diplomatic immunity and secrecy that has been stained in a series of scandals and administrative lapses in past years. The fallout from those lapses is continuing.

Last April, for example, the Inspector General of USAID issued a separate report on $25 million worth of projects sub-contracted to UNOPS between 2003 and 2006 to build small-scale infrastructure projects throughout Afghanistan. It revealed, among other things, that $10 million of the money was spent on UNOPS work in Haiti, Sudan, Sri Lanka and Dubai; that some of the projects actually completed in Afghanistan were built shoddily or to the wrong specifications and were on the verge of falling apart; that UNOPS officials saw at least one of the projects as a “cash cow,” and that UNOPS officials stonewalled when U.S. inspectors tried to find out what happened.

According to the report, UNOPS also drew down $6.7 million worth of U.S. funds from a line of credit months after the project ended, with no apparent justification. One whistleblowing U.N. employee cited in the Inspector General’s report reported that the local director of UNOPS spent about $200,000 of U.S. money on renovating his guesthouse.

At the same time, the agency’s oversight was further hampered by the fact that its 36-nation supervisory Executive Board did not have direct access to the internal audit reports documenting UNOPS’s failings — just as the same Executive Board, which also supervises the United Nations Development Program (UNDP), did not have access to internal audit reports from the same period that pointed to UNDP violations of its own rules in North Korea.

(In September 2008, the GAO report notes, UNOPS rules were altered to give Executive Board members “limited access” to the audits, if formally requested. The same change went into effect for UNDP.)

U.S. prosecutors subsequently were unable to bring civil or criminal charges against anyone involved with misappropriation of funds at UNOPS, because those officials operate under U.N. diplomatic immunity. The USAID Inspector General, however, vowed to set collection agencies on UNOPS to retrieve some of the money. UNOPS has since reported on its own website that it “has reimbursed money owed to its clients as a result of errors or misuse, and will address any new issues if they come to light.”

Click here for the Inspector General's report

The U.S. funds involved in the $25 million scandal are not even part of the bigger ocean of cash examined in the just-released GAO report.

Instead, the document observes in a footnote that UNOPS pulled down $97.8 million in U.S. subcontracting work between 2004 and 2008, over and above the money it received to undertake projects directly.

The litany of management sins uncovered in the U.N.’s own internal audits of UNOPS are the major focus of GAO concern—along with the fact that most of the documentation of those lapses was unavailable to the U.S., even as it funneled huge sums to the U.N. agency.

Since the inception of U.N. peacekeeping in Afghanistan in 2002, the GAO report says, regularly scheduled U.N. internal audits and investigations discovered that UNOPS was spending money it did not have (2002); lacked “valid information” on some of its costs and did not have an “independently validated internal control network” (2004); had “recurring expenditures” beyond its budget, along with inadequate or non-existent supervision by managers (2006), and along with continuing cost overruns, had “deficiencies in managing project budgets and expenditures in the field” (2007)

Some of the undocumented information on costs and spending increased the cost of projects dramatically. The GAO report says that the price-tag on the biggest USAID project in Afghanistan, building secondary roads, increased by a factor of ten through a series of modifications and add-ons—without supporting documentation.

In addition, an external U.N. Board of Auditors report on UNOPS, published in June, 2008, noted “significant weaknesses in the accounting and internal control system,” “inadequate cost control of projects” and other failings. At the same time the auditors declared that UNOPS “has made good progress” in “addressing various weaknesses in its internal control accounting and imprest functions.”

Click here to see a timeline of audit reports against USAID projects carried out by UNOPS

Indeed, during much of that period, UNOPS was in such bad shape that the U.N. comptroller declared in 2005 that the agency was “in a precarious situation,” and it subsequently underwent a substantial management overhaul. On its website, UNOPS claims that the new management (headed by current executive director Jan Mattson) was in the forefront of identifying the organization’s failings.

Significantly, however, the GAO study says that as far as it can determine, UNOPS financial documentation systems are still not up to the task of discovering bad management or wrongdoing. “Without a system in place that can document timely, accurate, and complete information, management’s capacity to ensure effective internal audits is limited.”

The GAO inspectors say that UNOPS’s own director of internal oversight has said that “the accuracy and completeness of data entry remain a concern.” The inspectors added their own important observation that UNOPS management “does not know the extent to which data reliability is a problem because UNOPS has not sought any systematic check on data reliability.”

Nor did UNOPS management apparently want the GAO inspectors to find out certain things on their own. As part of their investigation, the inspectors prepared a questionnaire for UNOPS managers world wide, asking them to assess how well the UNOPS financial management system, known as Atlas, captured data and strengthened internal financial controls.

The report says that UNOPS top management demanded that the inspectors cut out “almost half” of the proposed survey questions, including ones the U.S. officials felt “were important” to discovering the capabilities of Atlas.

The failings found by the inspectors on the part of USAID itself in the UNOPS case are equally grave, starting with the inexplicable lack of concern by the agency in following its own rules regarding oversight.

In dealing with organizations like UNAPS, the report says, USAID can demand a right to audit financial documentation in any contract where it is the sole donor to a project, as it was in five of 11 of the major grants made to UNOPS during the 2004-2008 period. UNAID did not demand the inclusion of that right in the contracts, the report says.

Even when the aid agency is not the sole contributor, it can negotiate for the same rights, and in four cases chose not to. In three of the four cases, the only other contributor turned out to be UNOPS itself, often in token ways, like adding in-kind landscaping services. Top UNOPS officials told the GAO inspectors that the U.N. agency’s actions were “strange,” because UNOPS is not normally a donor to anything it works on.

Says the report: “They told us these in-kind contributions might have been made to avoid USAID’s regulations.”

When it came to recommendations arising from their work, the GAO inspectors confined themselves to generalities, including the tightening up of USAID procedures to demand audits when the agency’s contributions gave it the right to do so, better training of USAID officials in those rights, and creation of some kind of system to check that the audit rights were actually asked for. All of these were apparently embraced by the State Department, of which USAID is a part.

When it came to UNOPS, the inspectors didn’t say much — presumably because the U.N. agency is immune to strong medicine administered from outside its diplomatic immunity envelope.

Instead, the GAO officials vaguely urged that Secretary of State Hillary Clinton work with other member states to “support” UNOPS’s “continued management reforms,” and to “encourage UNOPS management to assess the effectiveness of the reform effort.”

On the first GAO suggestion, UNOPS on its website has said it “takes note of these comments, and is committed to further strengthening data quality, to completing investigative processes and to implementing necessary reforms.”

But then it added, on the point of assessing the effectiveness of its reforms, that “UNOPS believes reforms have already produced tangible results.” Among other things, the agency said, its external auditors had approved its accounts without qualifications, and UNOPS has been able to sign new operating agreements with various U.N. agencies, the European Commission and the World Bank.

As a result, the agencies revenues and new business have “almost doubled,” the agency reported.

With fresh gushers of cash about to pour into Afghanistan in the near future, those revenues could be on a path to skyrocket much further — regardless how much improvement is actually registered with the way that UNOPS handles the money under its care.

George Russell is executive editor of Fox News