Inner City Press: Investigative Reporting from the United Nations

At UN, As Ban Speaks of US $100M “Contribution,” How Spent & Reported?

By Matthew Russell Lee

UNITED NATIONS, February 17 -- As the UN belatedly provided the Press Thursday with a written answer to questions about the $100 million in US Tax Equalization Funds being “re-purposed” for security renovations by Inner City Press and others, the lack of paperwork and transparency remained striking.

The UN's February 17 statement says it's for “perimeter security.” But on February 16, a well placed source in the UN's Fifth Committee budgeting process told Inner City Press that the $100 million would not be part of the UN Capital Master Plan or even its “Associated Costs.” The source claimed that the $100 million would be spent outside the UN's perimeter.

Then on February 17, head UN security official Gregory Starr disagreed, telling Inner City Press cryptically that even if money is spent inside the UN, it is to protect against attacks from outside.

The UN has still not answered Inner City Press' questions including to whom and when will the $100 million be paid? Will a procurement exercise by held, and a low bidder selected? If the pre-selected CMP contractor Skanska -- recently charged with violating minority contracting rules in New York -- is given the money, how can it not be part of the CMP?

The UN has today merely said that “contributions may be accepted by the Secretary-General... updated information has been provided to the Advisory Committee on Administrative and Budgetary Questions, and any further update will be provided as may be required during the Assembly's consideration.”

The Fifth Committee will get paperwork about the CMP in March -- will this $100 million, and who is getting it and for what, be included?

With Spokesman, with so few questions answered, Ban Ki-moon doggle?

Beyond written questions posed the past weeks, all unanswered, on which we will be writing in the future, on February 10 Inner City Press posed a series of questions to Ban Ki-moon's spokesman in his noon briefing:

Inner City Press: you’d said regarding this $100 million, you’d said, repeatedly yesterday and the day before, to ask the State Department. So I want to say this is what the State Department has said. Patrick Kennedy, Under-Secretary-General [sic] for Management, he says, “in this case, the United Nations notified the State Department that it intended to use the TEF [Tax Equalization Fund] funds for security enhancements”. So I want to know, who he is saying the UN said that they were going to use it that way. Who in the UN made that communication? Is there any paperwork? Is there any, for the use of $100 million, is there any paperwork both requesting it, noting the approval, and has the money begun to be spent? What’s the… can we find out more about the use of $100 million, other than an oral statement to ask the State Department, how the UN is spending this money?

Spokesperson Nesirky: Well, as you well know, this is something that is in the works. That project is in the works. I think you will have seen plenty of comments on this from the US Administration that make it very clear the purpose, and the reason, and the full consultation that is taking place, and the full agreement on what needs to be done and how it is to be done.

Inner City Press: But isn’t the UN, I guess, if we are talking about $100 million, isn’t there some process either through the GA [General Assembly], some budget document? Why wasn’t, for example — I guess that’s really my question — is the Secretary-General, is he aware in any way of this? Does this take place at the level of [Michael] Adlerstein? Who is… it says that the UN notified the State Department it was going to use the money this way. So my question to you is you said, ask the State Department; this is what they say. Who in the UN made that notification?

Spokesperson: Well, I can certainly find out for you. The broader point is quite straightforward: it is US money. It belongs to the US and it is for the US to decide how that money will be spent. And it is done in consultation with the United Nations. And that is very straightforward. It is…

Inner City Press: Who gets the money? Skanska? Is the UN procure… you see what I am saying? I am saying the UN is spending the money. You can say it came from the US. But if the UN spends $100 million, does it go through the Department of Procurement? Is it being paid to Skanska? Do you see what I mean? It is a UN spending question. It is not a State Department question.

Spokesperson: I think it is, again, quite straightforward that there is the Capital Master Plan, which is the refurbishment and renovation, or more importantly, of the entire Headquarters building. And that includes a security component already. But since that project and the funding for it was approved by the General Assembly in 2006, there have been obviously concerns about heightened security risks since that time; since the project, the plan, was approved. And it is in that light that there needed to be the security upgrade that costs $100 million, and as I mentioned to you yesterday and to your colleagues sitting here, this is a host country obligation and that’s why the US is funding it.

Inner City Press: My only question is, if there is a security component in the overall Capital Master Plan of which the US is paying only 22 per cent, it can’t be said that that all security of the Capital Master Plan is the US responsibility. I am just, I guess, I am noting that why some people, but the main question I have is, if there is $100 million… My main question is just this: for the spending of $100 million is there any UN paperwork? Has there been any amendment to the Capital Master Plan budget?

Spokesperson: Well, what do you think, Matthew? What do you think, Matthew?

Inner City Press: Then can we see it?

Spokesperson: Do you think it’s just done on the back of an envelope? Of course there is, Matthew.

Inner City Press: I don’t know; that’s why I have been asking for three days to say: when was it decided? It’s just that simple. Maybe you have somebody coming in this briefing; I don’t mean to keep asking, but…

Spokesperson: Matthew, let’s go back to it offline. As I say, it is an important topic and it does deserve attention. And we addressed it very clearly yesterday and answered many questions here, and stated it quite clearly and I think we’ll leave it here.

Inner City Press: : Just put out a single readout, it would be fine; it would be fine. Just a written piece of paper.

Then, a full week later, the UN responded with this:

From: UN Spokesperson - Do Not Reply [at] un.org
Date: Thu, Feb 17, 2011 at 2:56 PM
Subject: Response to questions about the extra security costs
To: Matthew Russell Lee [at] innercitypress.com

In response to recent questions on the $100 million in extra security costs, we have the following information to provide:

Under UN regulations, contributions may be accepted by the Secretary-General, provided that the purposes for which the contributions are made are consistent with the policies, aims and activities of the Organization. The last Capital Master Plan progress report (A/65/511, issued in October 2010) informed the General Assembly that discussions were ongoing with the Host Country and the Department of Safety and Security in reference to the Capital Master Plan construction scope regarding perimeter security. The report is still under consideration, but updated information has been provided to the Advisory Committee on Administrative and Budgetary Questions, and any further update will be provided as may be required during the Assembly's consideration.

New York, 17 February 2011

As may be required? Watch this site.

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As UN Refuses to Account for $100 M, Ban Ki-Moon Doggle Alleged

By Matthew Russell Lee

UNITED NATIONS, February 10, 1pm -- On the $100 million of US Tax Equalization Funds that are being “re-purposed” for use at the UN, Secretary General Ban Ki-moon's spokesman Martin Nesirky repeatedly told Inner City Press this week to “ask the US State Department.”

While Inner City Press did ask US Ambassador Susan Rice, it seemed strange for the UN to refuse to provide information about its own plans and use of $100 million.

On February 10, Inner City Press asked Nesirky about a statement by US Under Secretary of State for Management Patrick Kennedy, that “In this case the United Nations notified the State Department that it intended to use [TEF funds] for security enhancement.”

Inner City Press asked Nesirky who in the UN told the State Department that the UN intended to repurpose the $100 million in US funds: was it Capital Master Plan director Michael Adlerstein? Department of Management chief Angela Kane? Or Secretary General Ban Ki-moon himself? Nesirky would not answer.

Inner City Press asked if the $100 million will be paid to the UN selected contractor Skanska, recently charged in New York City with defrauding minority sub-contractor rules and involved in South America in what is called the Skanska Scandal. Nesirky would not answer.

Given that the Capital Master Plan is ostensibly subject to UN General Assembly oversight, with reports that purport to disclose cost overruns, Inner City Press asked if this $100 million is anywhere in the UN budget documents. Nesirky would not say.

Cutting off the questions, he said that this should be dealt with “off line” - that is, not in the press briefings. But Inner City Press has submitted a number of written questions to Nesirky's office that have not been answered.

Beyond the above, there is unclarity about the TEF. Inner City Press on February 9 asked in writing, with no acknowledgment much less answer:

What are the sources of funds which are deposited into the TEF? Isn't the TEF funded only through the Staff Assessment? You seem to be saying that the TEF is funded through the Staff Assessment AS WELL AS through "reimbursements" from the United States. Please provide a balance sheet of the TEF which shows the deposits made into it as well as the disbursements made from it for 2009 and 2010.

You answered that the "net balance of $179 million" was "due to the United States" from the TEF as of 31 December 2009. What was the net balance due to the United States from the TEF as of 31 December 2010, and what is the net balance due to the United States as of today, 9 February 2011?

You stated that "The US levies taxes on its nationals in respect of their UN earnings, and reimburses the UN for the same." Are you saying that the US makes payments to the UN which are deposited into the TEF, and that these payments are equal to the amount it receives in taxes from its nationals who work for the UN?

Regulation 4.12 of the UN Financial Regulations states that --

“In accordance with regulation 3.2, any balance on a Member State’s tax equalization account after the obligations referred to in regulation 4.11 have been satisfied shall be credited against the assessed contributions due from that Member State the following year.”

Were the balances from 2009 credited toward the US' assessment for 2010, as required by UN Financial Regulation 4.12? If not, then why? Was the UN not following its own financial regulations when it allowed the "balances due" to the US to reach $179 million as of the end of 2009? Please explain.

None of these questions have been answered. One problem here is that by refusing to state which UN officials notified the US State Department about the re-purposing of $100 million, responsibility must go to the top. And when Ban said that 99% of his officials make public financial disclosure and Inner City Press showed this is untrue, Nesirky said it was all a metaphor. Watch this site.

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At UN, Re-Purposing of US $100 M Defended by Susan Rice, Noone Else Paid

By Matthew Russell Lee

UNITED NATIONS, February 9 -- When US Ambassador Susan Rice came to the UN Security Council stakeout late Wednesday morning, she was prepared to answer questions about the Tax Equalization Fund, some of which Inner City Press submitted to the US Mission Tuesday morning.

In the House of Representatives a proposal is being considered to get the $179 million owed to the US applied to future UN dues. At some date still undisclosed, some US State Department official told the UN it could keep $100 million for security upgrades in the Capital Master Plan renovation, beyond the CMP security elements already approved by the General Assembly, for which the US pays 22%.

Inner City Press asked Ambassador Rice who had approved this, and if any other country would be contributing toward the $100 million in additional security.

Ambassador Rice said that the Obama Administration opposes the House legislation. She cited Republican Congressman Peter King of Long Island as supporting this position. Her answer implied that no other country is contributing to the $100 million -- she spoke only about $79 million of the $179 million being put toward UN dues. She did not say who had approved the $100 million.

Inner City Press began asked what Ambassador Rice would say to those who now consider the $179 million, or at least $78 million of it, to be a slush fund -- Ambassador Rice asked, “Slush fund? There is no slush fund,” and her spokesman moved on to another questioner. Transcript below.

Susan Rice at UN stakeout, Tax Equalization Fund not shown

Minutes later at the UN noon briefing, Inner City Press asked UN spokesman Martin Nesirky who the UN had spoken to within the US government to conclude that these $100 million could be spent, and if it had ever been approved or presented to the UN General Assembly.

Nesirky again said, ask the State Department -- we have -- and said he would look into whether there are other Capital Master Plan related funds that have not been disclosed or voted on by the General Assembly.

When asked to explain why the $100 million was so urgent it could not go through regular budgeting (and disclosure) procedures, Nesirky said to ask the State Department.

Earlier, Inner City Press had asked Nesirky's office

Ultimately, who within the Secretariat is responsible for spending this money? DM? DSS?

Has the General Assembly given its approval to this project? Is there a mandate from the GA for this activity?

How was the referenced money “repurposed”? Did the US Mission or State Department indicate how it could be repurposed? How? What other countries have allowed extra budgetary money to be similarly repurposed and how much?

Answers will be reported when they are received. Watch this site.

From the US Mission to the UN's transcript:

Inner City Press: On Sudan, what do you make of this fighting in Malakal? The army, there are several dozens of people who have been killed of late, what does the US think of that? And I wanted to ask, on the Tax Equalization Fund—there’s a dispute in the House about this $100 million that the State Department has told the UN it can use for security improvements. Who approved that at the State Department and are other countries going to be contributing to that, or is the US paying the whole $100 million with no offset on the CMP payments?

Ambassador Rice: Well, let me start with Malakal. Obviously we’re very concerned about the violence in Malakal and along that border area. This is a function, as you know, of the need for these units that have been joint to now separate, and it is of concern that lives have been lost and violence has occurred, and it underscores the need for this process of disintegrating the joint units to be done carefully and with some supervision.

Let me turn now to the Tax Equalization Fund, and the application of these credits. The legislation that is pending in the House today is a piece of legislation the administration strongly opposes. And we do so because it was the City of New York that underscored the vital importance to US national security to enhance security—physical security—in this structure, above and beyond what was originally contemplated during the Capital Master Plan. We have thousands of New Yorkers who pass through this building and under this building every day. We have school children, we have members of the public, we have the President of the United States, come in this building on a regular basis. And the City of New York and the State Department and the administration feel that it’s in our national interests and in the interests of the people of New York that steps be taken swiftly to upgrade the physical security of this building. And that is what we have done, in coordination with the United Nations. That is also why Representative Peter King—a New Yorker—who is chairman of the Homeland Security Committee in the House, said very plainly yesterday that this is a crucial commitment that we’ve made, one that should be honored, and he opposes this legislation because it unwisely would make that impossible.

Let me just say also, Matt, we share, however, the spirit in which the legislation is offered, which is to reduce the deficit and to address the need for spending reductions. But the other portion of those credits—the $79 million—will do just that, because we intend to apply those to assessments that we would otherwise have to request resources from Congress to pay. So this is a way of ensuring that we are utilizing taxpayer dollars wisely.

Inner City Press: So it’s kind of a slush fund, there’s no approval?

Ambassador Rice: Slush fund? No, there’s no slush fund.

These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund. Video Analysis here

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

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