U.N. Finds Fraud, Mismanagement in Peacekeeping

U.N. Finds Fraud, Mismanagement in Peacekeeping

Task Force Says 'Multiple Instances' of Corruption Have a Cost of $610 Million

By Colum Lynch
Washington Post Staff Writer

Tuesday, December 18, 2007; A06

UNITED NATIONS -- A U.N. task force has uncovered a pervasive pattern of corruption and mismanagement involving hundreds of millions of dollars in contracts for fuel, food, construction and other materials and services used by U.N. peacekeeping operations, which are in the midst of their largest expansion in 15 years.

In recent weeks, 10 procurement officials have been charged with misconduct for allegedly soliciting bribes and rigging bids in Congo and Haiti. It has been the largest single crackdown on U.N. staff malfeasance in the field in more than a decade

The task force has issued a series of public and confidential reports charging that corruption has spread from U.N. headquarters -- where three officials have been convicted in bribery schemes -- to the far reaches of its growing peacekeeping efforts. The task force has also cast a spotlight on the United Nations' repeated failure to take action against officials long suspected of wrongdoing, allowing them to carry out criminal schemes in one U.N. mission after another.
"The task force identified multiple instances of fraud, corruption, waste and mismanagement at U.N. headquarters and peacekeeping missions, including ten significant instances of fraud and corruption with aggregate value in excess of $610 million," said one report by the task force, headed by a former federal prosecutor in Connecticut, Robert Appleton.

The new corruption cases highlight the limits of reforms imposed since the early 1990s, when a previous buildup of peacekeeping missions led to reports of rampant corruption in Cambodia, Somalia and the Balkans. In response, in 1994 the United Nations created the Office of Internal Oversight Services (OIOS), but it has a poor record of holding corrupt officials to account.
The recent investigation in Congo revealed "widespread and inherent corruption" throughout the mission's purchasing department. One official targeted in the probe, Abdul Karim Masri, had emerged unscathed from repeated OIOS inquiries into his activities over more than a decade.
The task force charged that Masri, 54, engaged in an "extensive pattern of bribery" during his seven years in Congo, according to a confidential account of the probe.

The unit alleged that Masri accepted a $10,000 bribe from a boating company, steered a lucrative catering contract to a friend, and persuaded one U.N. contractor to paint his apartment and swimming pool at no cost and another to give him a steep discount on a Mercedes-Benz. It also described an effort by Masri to solicit a kickback from a construction executive on a $5.5 million contract to refurbish an airfield in eastern Congo.

"We are the ones deciding the case," Masri told him, according to the account of a meeting at Masri's Kinshasa home. "It's in our hands."

Masri declined repeated requests by e-mail to comment on the findings, saying that U.N. rules do not permit him to "deal with the press." He referred questions to U.N. staff counsel Edwin Nhliziyo, a retired U.N. auditor who served with Masri in Congo.

"He has denied all these allegations," Nhliziyo said. "If the U.N. has the evidence to back all of this stuff up, that is fine. At this point it's just allegations, and he is innocent until proven guilty."
In Haiti, the United Nations charged five employees with misconduct after the task force established that they had steered a $10 million-a-year fuel contract to a Haitian company, Distributeurs Nationaux S.A., according to U.N. officials and confidential documents. The task force has been unable to prove that the five profited from the scheme, citing its lack of authority to subpoena bank records, but it recommended that the case be referred for criminal prosecution by authorities in Haiti or the United States.

U.N. officials privately acknowledge that some malfeasance is inevitable in an organization that processes 12,000 purchase orders in the field each year and buys enough energy to power a city larger than Washington, D.C. They also noted that some previous U.N. corruption crackdowns unraveled under closer examination.

"I don't believe there is, or that [the investigators] have found, a culture out there of fraudulent behaviors," said Philip Cooper, an Australian who administers U.N. peacekeeping missions. "We have our share of malpractice, but we do not have many cases of straight-out fraud like has been found in the Congo."

The latest investigations grew out of the probe into the U.N. Iraqi oil-for-food program by Paul A. Volcker, former Federal Reserve Board chairman. It comes as spending on peacekeeping operations is rising -- from $2.2 billion in 2004 to $7 billion -- supporting a force of more than 100,000 peacekeepers.

Volcker's team helped uncover a bribery scheme by a U.N. procurement officer, Alexander Yakovlev of Russia. Yakovlev pleaded guilty in August 2005 to federal charges that he received nearly $1 million in kickbacks for steering contracts to favored companies.

In response, the United Nations placed eight other officials on administrative leave and created the procurement task force. The Internal Oversight office, meanwhile, brought in new leadership for its investigations division and doubled the number of staff members to about 60, stationing half of them in the field.

In June, the task force, which recruited many of Volcker's investigators, helped federal prosecutors convict one of the eight suspects -- Sanjaya Bahel -- for steering about $100 million in contracts to an Indian state company. Bahel had been cleared by OIOS.

But the task force's mandate will expire on Dec. 31 and its future is uncertain, prompting some of its investigators to leave. U.N. Secretary General Ban Ki-moon has urged the General Assembly to fund the task force for another year to pursue a backlog of cases, but a bloc of developing countries has refused to approve the request, calling for more debate. A U.N. budget committee, responding to pressure from the developing countries, will probably finance the task force for six months -- a move that officials warn could undermine efforts to retain the investigators.

Singapore has also criticized the task force for allegedly trampling the rights of one of its nationals, Andrew Toh, a senior U.N. official who said he was denied access to legal counsel.
"What bothers us is the task force itself seems to think it can be exempted from the same standard that it wants to apply to other people," said Singapore's U.N. ambassador, Vanu Gopala Menon.

Appleton maintains that there is no recognized right to counsel for internal investigations and that Toh never requested it. "There was absolutely no transgression of due process rights," he said.

Toh is the target of a lengthy investigation into whether he improperly helped two Peruvian generals and a Canadian company, Skylink Aviation, secure a multimillion-dollar contract to lease two MI-26 Peruvian government helicopters for the U.N. mission in East Timor. The task force has been unable to prove that Toh accepted bribes, but it says it cannot close the case until it gets access to Skylink's Swiss bank account used in the helicopter deal.

Toh was recently demoted, fined two months' pay, and charged with misconduct for not fully cooperating with investigators and not complying with an obligation to disclose all of his financial holdings. "They have taken 22 months to look into allegations of corruption, they've scoured the world, wasted thousands of man-hours, spent millions of dollars, and they are unable to find anything," Toh said.

But even some of the task force's detractors say its probes have been far more rigorous and sophisticated than previous investigations.

In Congo, the task force reached far back into U.N. archives to put together its case against Masri, who began working for the organization in the mid-1980s in Damascus, Syria. Masri's colleagues accused him at the time of falsifying receipts for several vendors, including a cement company, which allowed them to get full payment even though they delivered only a portion of contracted shipments.

A decade later, in Rwanda, investigators probed allegations that Masri steered business to a Dubai-based firm in exchange for kickbacks. Masri also came under suspicion for charging more than $10,000 for water pumps costing $300. OIOS dropped the probe a year later, citing insufficient evidence.

In August 2000, five months after Masri arrived in Congo, rumors of his involvement in corrupt activities there appeared in a local newspaper, l'Avenir. A subsequent OIOS investigation found that a contractor had leased Masri a Mercedes for $250 a month, well below market value. But OIOS did not make a case against Masri, recommending instead that staff members should be transferred "if their behavior does not change to avoid bad press for the organization and its staff."

It was seven more years before Masri was placed on leave and barred from doing U.N. business.