Monday, November 7, 2011

Canada Press: Wikileaks cables shows misleading actions by Kemal Dervis and Darshak Shah prevented US Government from the truth in North Korea

E.O. 12958: DECL: 12/20/2016  TAGS:                 SUBJECT: DEMARCHE DELIVERED:UNDP ACTIVITIES IN NORTH  KOREA/MISLEADING ACTIONS BY UNDP DURING DEMARCHE.    REF: A. STATE 183533    Classified By: Acting Permanent Representative Alejandro D. Wolff   per reasons 1.4 (b) and (d)     1. (S) Summary. Ambassador Wallace met with Kemal Dervis,  Administrator of UNDP, on Tuesday, December 19, to deliver a  demarche regarding UNDP activities in North Korea (DPRK).  Ambassador Wolff was scheduled to deliver the demarche with  Ambassador Wallace, but was unable to attend due to a last  minute meeting of the P-5 on Iran. Mr. Dervis was accompanied  by his Deputy Chief of Staff, Douglas Keh and Mr. Bruce  Jenks, Assistant Administrator and Director of UNDP's Bureau  for Resources and Strategic Partnerships (BRSP). Per reftel,  Ambassador Wallace delivered verbatim the demarche talking  points regarding UNDP's lack of programme oversight, which  has resulted in the counterfeiting of U.S. currency and  unauthorized hard currency transfers of millions of dollars.  Per reftel, Ambassador Wallace requested an immediate audit  and investigation of UNDP activities in the DPRK as well as  copies of previously conducted audits. Mr. Dervis stated his  intention to respond to Mission requests for information by  Thursday, December 21st. End Summary. Comment. USUN has  reason to believe that during the demarche, Mr. Dervis' staff  deliberately obstructed an opportunity for the UNDP  Controller, Mr. Darshak Shah, to participate in the  discussion with Mr. Dervis in order to avoid discussing  issues previously discussed with the Controller and  Treasurer, Ms. Julie-Anne Mejia. Mr. Dervis indicated during  the discussion that Mr. Shah was in Dervis' suite and left  his office to ask Mr. Shah to join the meeting. From first  hand observation, it appears that Mr. Dervis deliberately  misled USUN by asserting that Mr. Shah was no longer in the  building. See paras. 5 and 6. End Comment.     2. (S) Dervis expressed his regret that Ambassador Wallace  and UNDP had encountered difficulties in meeting. Mr. Dervis  explained that he wanted Ambassador Wolff and Ambassador  Wallace to meet with his deputy, Associate Administrator Ad  Melkert, not because he was avoiding a meeting with U.S.  officials, but because Melkert deals exclusively with the  operational activities of UNDP, while Mr. Dervis heads the  larger United Nations Development Group (UNDG) and focuses on  the issues raised in that context. Ambassador Wallace stated  that he insisted on meeting with Mr. Dervis because he was  instructed to demarche Mr. Dervis personally, via the highest  levels of the U.S. Government. Ambassador Wallace further  underscored the importance of this matter to the U.S.  Government by stating the he would read verbatim from the  demarche given the fact that the demarche had been carefully  crafted.     3. (S) In response to the demarche, Mr. Dervis noted that as  head of UNDP he has less authority over the program and  activities of UNDP than people thought and very little  authority over other entities in the DPRK and other  countries. He added that the best way to effect change in  UNDP policies was through the Executive Board, stating that  if enough Member States expressed concern over UNDP  activities in the DPRK, then UNDP would be forced to curtail  its activities. Dervis also noted that the problem with any  type of humanitarian aid, is that since money is fungible it  can always be diverted to a military program regardless of  precautions. Ambassador Wallace assured Mr. Dervis that the  currency problem with UN agencies in the DPRK went well  beyond money being fungible; it was a systematic diversion of  very large amounts.     4. (S) Ambassador Wallace asked Mr. Dervis to explain why  UNDP programme audits seemed to either be non-existent or  unavailable to member states. Mr. Dervis stated that it is  against UNDP policy to make internal audits available.  Internal audits are "management tools of the organization"  and are conducted on a variety of issues ranging from  harassment to financial impropriety and that they may contain  personal information which could be inappropriate to share  with other entities. Ambassador Wallace questioned how member  states were to be assured that UNDP was conducting oversight  of their programmes if audits were not made available.  Ambassador Wallace continued by noting that UNDP's current  policy of not sharing internal audit information was  absolutely untenable and non-sustainable, especially with  respect to the DPRK, as interest in regard to this matter was  very high and would only grow over time. Ambassador Wallace  stated that the U.S. Government and USUN had taken  extraordinary and meticulous steps in preparing the demarche,  as the assertions related to the UNDP program are  significant. Ambassador Wallace added that the U.S.  Government is very focused on this issue and therefore needs  UNDP to take action to address the matter. Ambassador Wallace  requested that UNDP deliver copies of the most recent audits  and evaluations of the UNDP programme in the DPRK as soon as  possible.         5. (S) After learning that USUN had engaged in previous  demarches of the Controller, Mr. Darshak Shah, Mr. Dervis  requested his presence to answer additional questions about  UNDP policy and practice. Mr. Dervis and the other  participants claimed that they were not aware that USUN had  met with Mr. Shah on four separate occasions since August to  discuss this issue. USUN has dealt extensively with Mr. Shah,  as he was the primary point of contact for Mission demarches  concerning hard currency transactions in the DPRK, but he has  proven unable and unwilling to provide comprehensive and  consistent information on expenditures and audits of the UNDP  programme in the DPRK.     6. (S) Mr. Dervis and his Deputy Chief of Staff, Douglas Keh,  left the office to bring Mr. Shah into Administrator Dervis'  Office to participate in the discussions. Notably, a USUN  officer saw Mr. Shah, Mr. Keh and Mr. Dervis talking outside  of the office door. When Mr. Dervis and Mr. Keh re-entered  Mr. Dervis' office, Mr. Dervis informed Ambassador Wallace  that while Mr. Shah had been present earlier, he had left the  building to return to his own office down the street and was  unavailable. Unbeknownst to them, participating USUN officers  had met Mr. Shah on previous occasions and had introduced  Ambassador Wallace to Mr. Shah before the meeting, when USUN  officers and Mr. Shah happened to enter Mr. Dervis' office  suite at the same time. In addition, USUN saw Mr. Shah in  Dervis' suite upon leaving the meeting. When Ambassador  Wallace exited Dervis' office, Mr. Shah darted into an  adjacent office. Comment. USUN can only assume that Dervis  deliberately sought to prevent Mr. Shah's participation in  the meeting in order to avoid having him respond to  outstanding questions and explain his obfuscation during  previous meetings with USUN. End Comment.     7. (S) Because of the Controllers absence, USUN was unable to  garner firm information on UNDP's expenditures and audit  policies. Mr. Dervis did however, note that there was an  increase in the allocation to UNDP's audit office (OAPR) of  25.8 percent in the last year and that UNDP is trying to give  the office of OAPR as much resources as possible. As for the  availability of audit reports, Administrator Dervis' office  will provide what preliminary information they have by  December 21st.  WOLFF

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