At UN Pension Fund, Gag Orders and OIOS Mysteries,
Ms. Barcena Says Outsourcing Slow Too Under Sach
Byline: Matthew Russell Lee of Inner City Press at
the UN
UNITED NATIONS, March 27 -- As the UN
Pension Fund's proposed outsourcing of $9 billion hangs in the balance,
fiduciary Ban Ki-moon has reversed his previous shift of authority, and has
re-named UN Controller Warren Sach as his representative to the Pension Fund.
Alicia Barcena, who held the post from March 1 through March 13 and who
announced a slow-down in bid-review in a
March 5
press conference, is no longer Mr. Ban's representative to the Pension Fund.
Tuesday Inner City Press asked Ms.
Barcena to explain the change. She said that the Secretary-General was looking
again at his delegations of authority, but that nothing will change from the
policy she articulated back on March 5. She and Mr. Ban are in charge of
policy, Mr. Sach with implementing it. Any outsourcing will still await an asset
and liability review, she said.
Staff member and pensioners contacted later on Tuesday by Inner City Press asked
if Ms. Barcena has "put it in writing." No, is the answer. There is word that
the Pension Fund's Investment Committee never signed off on the rushed proposal
to outsource. Time and the documents will tell. For now the (re-) delegation
document is dated March 13, from Ban Ki-moon to Warren Sach:
"Upon the
recommendation of Ms. Alicia Barcena, Under-Secretary-General for Management,
responsibility is hereby delegated to you, effective March 2, 2007, to act on my
behalf in all matters relating to the investment of assets of the United Nations
Staff Pension Fund [sic], the United Nations Library Endowment Fund and the
United Nations University Endowment Fund... This supersedes my delegation to Ms.
Barcena of 27 February 2007."
This delegation memo, cc-ed to DSG Migiro,
Mr. Nambiar, Ms. Barcena, Mr. Cocheme and Mr. Kim Won-Soo, is the type of
document that would and should be routinely available under a Freedom of
Information regime at the UN. Tuesday Ms. Barcena told Inner City Press that she
intends to seek further advice on how to improve the FOIA proposal, previously
made by Chris Burnham, to make it better for journalists. Here's hoping.
USG Barcena
When Inner City Press asked Ms. Barcena
about the propriety of UN fund, program or agency staff being told to not speak
to the press, she shook her head and said that whistleblower protections are
"essential." What then of the following email?
Subject:
Pension Fund under attack in the media
From: Ibrahima
Faye/UNJSPF/NY/UNO
To: UNJSPF IMS
Staff Group, UNJSPF NY Staff Group, UNJSPF NY Consultants Group
Date: February
9, 2007, 10:19 AM
Dear all,
For a week
now, some of our colleagues within the Pension Fund are being subjected to
targeted attacks through one media press named Inner City Press.... I would like
to also caution each one of you for meeting with that press entity or
reporter or any other request for interview as it is strictly forbidden
by the Staff Rule for staff member to make any kind of press announcement or
speech without prior approval, beside, this press ICP is neither a UN
investigative body nor an asermented [sic] United Nations entity.
As the
situation may warrant, I would be obligated to come back to you with more
indepth advises. Remember this is our Pension Fund, our working tool, our
working environment and when the Fund's name is spoiled, we are all concerned
and inbricated [sic] as one. (Emphasis added.)
After this prohibition on
speaking to the Press, the same Mr. Faye followed-up by emailing all staff a
copy of Secretary General Bulletin 6 of 2007, about the "classification" of
information that cannot be released, thereby linking the gag order to Ban Ki-moon.
On
February 28,
Pension Fund CEO was asked on camera about the gag order, and did not rescind,
much less denounced it. Gag order appears to be the rule of the day, and not
only at the UN Pension Fund, as will be shown in coming days.
Regarding the Office of Internal Oversight
Services investigative report recommending action against Dulcie Bull and Paul
Dooley, a memo from Ms. Barcena's predecessor as Under Secretary General for
Management to Pension Fund CEO Bernard Cocheme has come to light. In May 2006,
Chris Burnham wrote to Cocheme demanding to know why Cocheme had not taken any
disciplinary action against the individuals named in the Office of Internal
Oversight Services audit of the Fund. Those named in the OIOS audit as requiring
"action" include Dulcie Bull and Paul Dooley. Cocheme never took disciplinary
action, and he now states that after some back-and-forth, OIOS allowed this
inaction. Before turning to the questions raised by this OIOS turn-about (or
backsliding), the back-and-forth referred to by
Cocheme in his February 28 press
conference is reflected in two
statements by the Office of the Spokesman for Secretary General Ban Ki-moon:
Subj: Your
question on OIOS and the Pension Fund
Date: 2/8/2007
2:48:05 PM Eastern Standard Time
From: Farhan
Haq [at] un.org
To: Inner City
Press
In March 2006,
the OIOS completed an investigation into allegations of possible conflict of
interest, favoritism and mismanagement at the United Nations Joint Staff Pension
Fund. Based upon the evidence adduced, OIOS concluded that several staff members
- including two Senior UNJSPF staff - have acted improperly in connection to
contracts for information technology services awarded to a consultant retained
by UNJSPF.
OIOS issued
several recommendations in this case, including that UNJSPF management take
appropriate action against its two staff. The Chief Executive Officer of UNJSPF
informed OIOS that he disagrees with the findings and recommendations of the
report of investigation - as regards the actions of his staff - and advised that
he "intends to take no action" with regard to them. OIOS advised him that
pursuant to its mandate, it will report his response to the General Assembly.
Pursuant to
General Assembly resolution 59/272, the report is available to Member States
upon request. It has already been released, in redacted form, to two Member
States who have requested it.
And then:
Subj: Question
for OIOS
Date: 3/12/2007
1:15:35 PM Eastern Standard Time
From: okabe
[at] un.org
To: Matthew
Russell Lee
Q: is it
possible to get a comment from OIOS on Mr. Cocheme's Feb. 28 statement in 226
that OIOS, despite the text of their March 2006 Investigative Report, now says
that no disciplinary action is needed, and the basis for this?
A: OIOS has
completed its report on its investigation into conflict of interest in the
procurement of a consultant in the UNJSPF and made recommendations for
appropriate action to be taken. While OIOS was initially advised that no action
will be taken by the UNJSPF, this was subsequently clarified and we were advised
that no disciplinary action will be taken by UNJSPF management. The decision by
UNJSPF management on the action to take was deemed appropriate and on this
basis, OIOS closed the case and the relevant recommendations. Further questions
need to be addressed to UNJSPF.
Knowledgeable sources inside the Pension
Fund question how OIOS can claim for itself so many roles, as investigator,
prosecutor and judge. How did Cocheme answer Burnham back in May 2006, since the
arranged OIOS back-down was only delivered in 2007, once Inner City Press
started asking and reporting about the previously-undisclosed OIOS report?
While previous UN spokesman Stephane Dujarric in December 2006 promised an OIOS
press briefing in early 2006, the changed position is "no briefing until OIOS
finishes with the General Assembly," which is now pushed back to May 2007. While
at that time Mr. Cocheme's (non-) actions maybe reviewed, this is not
transparency.
Meanwhile, sources in the Pension Fund
tell Inner City Press that Dulcie Bull has kept the distance from the office she
established as this coverage broke. Cocheme has traveled back and forth to
Ecuador; his trips to Geneva by way of Paris cost upwards of $3500. For example,
a trip from February 3 to 10 cost $5,767, including $2,051 in Daily Sustenance
Allowance, $3,514 airfare on Swiss Air, business class, charged to American
Express, and a $202 "terminal fee." Your money at work or play, said one
staff member wag. Peter Goddard, who abused and abuses Pension Fund employees
and even tried to intimidate the Press by filing spurious complaint with UN
Security, continues trying to silence the staff. This violates the UN's stated
whistleblower protections, including as expressed by the Under Secretary General
for Management on March 27. Developing.
Feedback: Editorial
[at] innercitypress.com
UN Office: S-453A,
UN, NY 10017 USA Tel: 212-963-1439
Reporter's mobile
(and weekends): 718-716-3540
At UN Pension Fund, More Complaints, More Impunity,
No Stop to Outsourcing Assured
Byline: Matthew Russell Lee of Inner City Press at
the UN
UNITED NATIONS, March 8 -- There is a lot
of talk from the UN against impunity. But at the UN Pension Fund, despite
detailed findings of irregular
no bid contracts and cover-up of sexual
harassment, impunity is the
order of the day. Secrecy, too: Inner City Press is informed that a half dozen
staffers from the Pension Fund's Investment Management Service have written to
Ban Ki-moon's envoy to the Fund, Alicia Barcena, expressing deep concerns. Ms.
Barcena's office has been asked about the letter, with no response by press
time. And in this chaos, with questions about past outsourcing still unresolved,
$9 billion is headed out the door, on perhaps a two month delay.
For
thirty days,
Inner City Press has reported on a 20-page investigative report by the UN Office
of Internal Oversight Services on conflict of interest, favoritism and
mismanagement at the Pension Fund. The Report includes the complaint, by Yuri G.
Kondratyev and another staff representative, which led to the investigation. The
OIOS report asked Fund CEO Bernard Cocheme to take action on three individuals
-- Dulcie Bull, Paul Dooley and Sanjaya Bahel, since incarcerated -- and, among
other things, for the UN's Office of Human Resources Management to become more
involved in the Pension Fund to ensure fairness.
On February 28, Bernard
Cocheme deigned to appear for a press conference, at which he twice resorted to
reading out pre-written statement. The
upshot
is his claim that OIOS has mysterious agreed to ignore its own findings, and
allow no action to be taken on Dulcie Bull and Paul Dooley, nor on getting OHRM
more involved, and perhaps -- as many are now calling for -- canceling the
Memorandum of Understanding signed by OHRM's Jan Beagle which has allowed the
Pension Fund to become its own fiefdom.
Mr. Cocheme began by focusing on one of
the seeming irregularities on which Inner City Press had reported, the Pension
Fund's hiring of Frank De Turris whose father Ernest De Turris has worked at the
Fund. Mr. Cocheme claimed that a decade intervened. But multiple sources say
that De Turris the Younger first got a job on a Pension Committee in Geneva,
then through Peacekeeping, before getting the inside track at the Pension Fund
in New York.
Mr. Cocheme claimed that he had no
contact with staffer Ibrahima Faye, who in the past month has twice sent mass
emails to all staff, telling them not to speak to the Press. This is not true
either.
Mr.
Ban and Chairman of GA's 5th Committee, which will soon hear of OIOS and Pension
Fund
On March 7, Inner City Press
again
interviewed Yuri G. Kondratyev, for a second time, again affirmatively on record
(Mr. Kondratyev has said, "I wasn't scared then, how much less so now that I am
retired." The book he is writing should be finished, he says, by summer.)
Since
he filed the complaint that led to the recommendations, what does he now think?
"Nothing has been done," said Mr. Kondratyev. "Dulcie
is protected."
Why does Bernard Cocheme do nothing?
"No one can understand this. He said he only came
for one term, maybe that it why he didn't want to stop what Goddard and Dulcie
did. Now it is two terms."
And how many more? Mr. Kondratyev
described and provided documentation about the Pension Fund's system for keeping
files on employees. This was used to discipline Ibrahima Faye, who was sexually
harassed and said as much in a five to seven page memo to Cocheme which,
according to Mr. Kondratyev, Cocheme acknowledged receipt of and then retaliated
by letter-to-file. When Mr. Kondratyev asked to see his own file, he found
inside complaints he'd never seen, one of which, from a Vivian Garcia, was
quietly removed by the following day.
The Pension Fund's tactics are not
limited to staff, but now extended to the Press. The story continues on the
spurious complaint the UN Pension Fund filed with UN Security regarding Inner
City Press' attempt to ask question outside the meeting of the Fund's Audit
Committee on February 15. Inner City Press signed into the building, went
without incident to the reception area outside the meeting, and waited for some
twenty minutes there, with press pass and tape recorder. A man who did not
identify himself then came out and asked, "How did you get in here?"
"Though the front door."
Subsequently Mr. Cocheme's assistant Pat
Ryder came out to say that questions would be answered later. Inner City Press
left a business card, but no questions have been answered. Rather, two weeks
later and just after Mr. Cocheme's tense press conference on February 28 where
he responded to questions about his inaction on the recommendations in an
investigative report by the Office of Internal Oversight Services, Inner City
Press got a call from Victor Buttaro of UN Security. Mr. Buttaro said a
complaint was filed but declined to say by whom. He demanded from Inner City
Press a signed written statement without explain how such a statement would be
used.
The following day at Ban Ki-moon's
spokesperson's noon briefing, at the suggestion of other UN correspondents,
Inner City Press raised the issue, asking the spokesperson's office to provide
guidance to the UN Pension Fund that it is not appropriate to waste UN
Security's time on spurious complaints that are only designed to reduce media
coverage. Video
here.
On March 6, Mr. Buttaro of UN Security
again called Inner City Press. Inner City Press forwarded his number to the
staff of the office of the spokesperson. Inner City Press was approached by UN
Media Accreditation and Liaison Unit, with questions about the Pension Fund's
complaint -- which, Inner City Press was in this conversation told, is
attributable to the Pension Fund's executive office(r) and ultimately to Mr.
Cocheme -- and even questions about the content of Inner City Press' recent
articles. When Inner City Press returned Mr. Buttaro's call, he said, are you
giving a signed written statement or not?
"If you explain what happens with such signed
statements."
"It goes in my report."
"And what happens to the report? What are the
potential consequences?"
"It goes to my supervisor." And soon it was
suggested that Inner City Press come in too the Security Office, and see the
Supervisor. Apparently -- and this is the first written use of a phrase Inner
City Press long ago orally coined -- they think the First Amendment stops
at First Avenue™.
This phrase has been proffered to press-freedom central at the UN; we'll see.
And more to follow on the Pension Fund and those trying, and those not trying,
to hold its senior management accountable.
Outsourcing of UN Pension Fund Delayed Through April,
Cocheme's Inaction on OIOS Report
Byline: Matthew Russell Lee of Inner City Press at
the UN
UNITED NATIONS, March 5 -- The proposed outsourcing
of $9 billion of the UN Pension Fund will not take place at least through the
end of April, said Alicia Barcena, Under-Secretary General of Management, on
Monday.
The outsourcing, widely questioned by UN
staff and beneficiaries, had been aggressively pushed by previous Under
Secretary General for Management Chris Burnham and UN Controller Warren Sach.
The bids of 13 investment banks were opened on February 15. In response to
questions from Inner City Press on February 28, Mr. Sach said the winner would
not be selected until the end of March. On March 1, Ms. Barcena took over for
Mr. Sach as the Secretary-General's representative to the Pension Fund.
Asked Monday about the
outsourcing on Monday, Ms. Barcena moved the date back at least another month,
to the end of April, and put in sequence before any final decision the
completing of an asset-liability management study, and decisions on an
investment strategy, which she said she'll discuss this week with the chair of
the Pension Fund's investment committee, Merrill Lynch official William
McDonough. Video
here,
from Minute 33:08.
Ms. Barcena also appeared to
distance herself -- wisely, observers say -- from Pension Fund CEO Bernard
Cocheme. Mr. Cocheme was presented with an investigative report by the UN Office
of Internal Oversight Services in late March 2006, which among other things
called for him to take action on, Dulcie Bull and Paul Dooley, two managers who
were involved in steering no-bid contracts to the previous boss of Mr. Dooley.
After first claiming that the OIOS report was never final, then being quoted as
"disagreeing" with the report, Mr. Cocheme on February 28 claimed that OIOS has
allowed him to take no disciplinary action. If so, the problems only grow
deeper, including in light of the UN General Assembly's Fifth Committee March 5
discussion of failure to follow OIOS reports on
spending following the tsunami.
Ms. Barcena, asked by Inner
City Press about the failure to impose any disciplinary action despite OIOS'
written findings and recommendations, said that the "the person to responsible
to answer is Bernard Cocheme," but that she will be meeting with him "on this
ground." Video
here,
from Minute 36:09. We expect to have more news about Mr. Cocheme and his future
on Thursday. Ms. Barcena has been asked follow-up questions about Mr. Cocheme
and the Pension Fund.
Mr.
Ban, boss of Ms. Barcena -- AND of Mr. Cocheme
For now, we note that on December 16,
2005, Cocheme wrote to the UN Staff Council to complain about their resolution
69, which criticized his management. In the letter, Cocheme along other things
claims that the OIOS reported was "requested by me" and "rejects any allegations
of wrongdoing or irregularities in its management," a claim challenged by the
OIOS' findings three months later. Even before then, Rosemarie Waters of the
Staff Council wrote back stating that "I have personally spoken with members of
the UNJSPF management concerning staff allegations of abuse of authority, yet
those concerns were never acknowledged or addressed." And now it only gets
worse. Developing.
At UN Pension Fund, No Outsourcing in March, Cocheme
Speaks As Complaint Filed to Block Press Access
Byline: Matthew Russell Lee of Inner City Press at
the UN
UNITED NATIONS, February 28 -- The proposed
outsourcing of $9 billion of the UN Pension Fund will probably not take place
for at least a month, UN Controller Warren Sach said Wednesday at a press
conference with Pension Fund CEO Bernard Cocheme.
Mr. Sach spoke first, and explained that
the evaluation of the 13 bids for the outsourcing contracts is ongoing, and will
in all likelihood require the hiring of yet another outside contractor. When
asked if these additional contractor will be chosen through a bidding or request
for proposals process, Mr. Sach said no.
Bernard Cocheme read out loud
a statement he had made on February 15 to the UN Pension Board's Audit
Committee. Video
here,
from Minute 16:35 through 25:30. Inner City Press had attempted to observe or at
least ask questions outside that meeting, held at the Pension Fund's office at 1
Dag Hammarskhold Plaza. After waiting nearly half an hour in the Pension Fund's
reception area, Inner City Press was told that its questions would be answered
later, in writing. Inner City Press then left the Pension Fund's office.
Wednesday Mr. Cocheme stated that later
in the day at that February 15 meeting, the head of the UN's Office of Internal
Oversight Services came and told the Committee that there had been no need for
Mr. Cocheme to discipline the senior managers named in a March 2006 OIOS report,
namely Dulcie Bull and Paul Dooley, who awarded no-bid contracts to his previous
boss Gerard Bodell. Mr. Cocheme's statements on Wednesday are at odds with the
statement provided and to date not retracted by Ban Ki-moon's spokesperson's
office, that Mr. Cocheme told OIOS he disagrees with the report and "will take
no action" --
Subj: Your
question on OIOS and the Pension Fund
Date: 2/8/2007
2:48:05 PM Eastern Standard Time
From: Farhan
Haq [at] un.org
To: Inner City
Press
In March 2006,
the OIOS completed an investigation into allegations of possible conflict of
interest, favoritism and mismanagement at the United Nations Joint Staff Pension
Fund. Based upon the evidence adduced, OIOS concluded that several staff members
- including two Senior UNJSPF staff - have acted improperly in connection to
contracts for information technology services awarded to a consultant retained
by UNJSPF.
OIOS issued
several recommendations in this case, including that UNJSPF management take
appropriate action against its two staff. The Chief Executive Officer of UNJSPF
informed OIOS that he disagrees with the findings and recommendations of the
report of investigation - as regards the actions of his staff - and advised that
he "intends to take no action" with regard to them. OIOS advised him that
pursuant to its mandate, it will report his response to the General Assembly.
Pursuant to
General Assembly resolution 59/272, the report is available to Member States
upon request. It has already been released, in redacted form, to two Member
States who have requested it.
Mr. Cocheme distinguished Wednesday
between "take no action" and "take no disciplinary action." He insisted he has
told both staff members to in the future avoid the "possible misperception" that
they are acting in an "non-prudent manner."
At
few places other than the UN can a person give no-bid contacts to his previous
boss and then, even when caught out, merely be admonished not to "create
misperceptions" in the future.
Mr.
Sach - Mr. Cocheme, at side, not shown in this UN photo
Mr. Cocheme stated that since the
above-quoted response by Ban Ki-moon's spokesman's office, OIOS has confirmed to
him in writing that despite its reports recommendation that "appropriate action"
be taking on Mr. Dooley and Ms. Bull, no disciplinary action is required. Inner
City Press on Wednesday asked for a copy of such an OIOS statement, but Mr.
Cocheme declined. It is imperative that OIOS ask questions, given the seeming
non-action on its report and recommendations.
Mr. Cocheme acknowledged that
two emails have circulated this month to all staff in the Pension Fund, to not
talk to the media, specially naming Inner City Press. Mr. Cocheme stated that
the staff representative sent these without Mr. Cocheme's knowledge. Asked about
his previous statements to staff that "it is not okay to accuse colleagues of
benefiting from preferential treatment," Mr. Cocheme said that this was not
intended to discourage whistle-blowing. He said that "anyone who knows" him
would know he would not say to not speak to the press. When told that many
Pension Fund staff feel, based on the two recent emails and Mr. Cocheme's
previous statement discouraging any complaint about favoritism or corruption,
that they are not to speak to the media, Mr. Cocheme respond, "But we are
talking to the press." Video
here,
from Minute 44:15 to the end.
Immediately following these questions and
answers with Mr. Cocheme, including follow-up questions in the hallway outside
the briefing room, Inner City Press returned a call to UN Security, specifically
to Victor Buttaro of the "Special Investigative Unit." Mr. Buttaro asked, "How
did you get into the Pension Fund last week?"
"Through the front door." Inner City
Press signed in, waited in a reception area, and left without incident as soon
as the request was made. Inner City Press further explained the attempt to
observe or ask questions of those entering the Pension Board Audit Committee
meeting on February 15.
Mr. Buttaro stated that a complaint had
been filed about Inner City Press' presence. When asked who had filed the
complaint, Mr. Buttaro declined to answer, saying his investigation is open.
When asked if the name of the complainant would be provided if and when his
investigation was closed, he said, "you could try to get a subpoena." He asked
for a written statement, which he said must be signed.
It seems clear that the Pension Fund
management filed this spurious complaint with UN Security, in order to
discourage coverage of the meetings of its Pension Board and Committees. Given
Mr. Cocheme's statement that the head of OIOS attended the meeting and absolved
Mr. Cocheme of any responsibility to take disciplinary action on the individuals
named in the OIOS Investigative Report, the attempt to make it impossible to
even observe who entered the meeting seems particularly unsavory. As the Pension
Fund has used complaints-in-file for domination and intimidation, including of
the current staff representative, it seems that the Pension Fund doesn't care
that their complaint is meritless. Its mere existence, particularly any
memorialization of it, is intended to have a chilling effect and to discourage
future coverage.
Other UN correspondents and staffers
consulted on Wednesday also opined that the complaint is absurd and abusive.
Reporters at the UN routinely wait outside any and all UN meetings in order to
try to ask questions. Most dispositive, a staffer pointed out, is that when the
Pension Fund's Ms. Pat Ryder, who functions as Mr. Cocheme's secretary,
suggested that Inner City Press leave and await answers later in writing or by
phone -- which never arrived -- Inner City Press immediately left. Despite UN
Security's current refusal to provide the name of the complainant -- which is
something that Mr. Cocheme himself derided in his press conference on Wednesday
-- most opined that the complaint can and should be ascribed to Mr. Cocheme, and
that it should be immediately withdrawn and expunged. We'll see.
As to the wider question of outsourcing,
which the Pension Fund's spurious complaints are meant to stop reporting on,
some observers argue that the question of passive indexation is much ado about
nothing. Lost in such arguments is that the proponents of outsourcing, in
mid-2006 at the type of Pension Board meeting where heretofore decisions had
been made by consensus, suddenly called for a vote, which the outsourcing side
one by 17-11-1, with nearly all staff and beneficiary representatives voting
against outsourcing. Some, hearing this, then characterize the questioning of
outsourcing as no more than a battle for turf, a power struggle. But with these
questions in the air, including the seeming impunity for irregularities in the
previous outsourcing of IT services, covered in the OIOS report, a call is
growing for Ban Ki-moon to at least delay the outsourcing until more is known,
not only from OIOS but also from the asset-liability management study which Mr.
Sach said will be finished in July 2007.
We will have more to report about the Feb. 28 press
conference and aftermath, but for now file this interim dispatch. Developing...
At UN Pension Fund, Outsourcing, Corruption and Abuse
of Staff To Be Questioned
Byline: Matthew Russell Lee of Inner City Press at
the UN
UNITED NATIONS, February 27 -- As questions snowball
around the UN Pension Fund, its CEO Bernard Cocheme is now slated to have to
give some answers, in a press conference Wednesday in United Nations
headquarters.
On February 5, UN Controller
Warren Sach purported to answer
questions about the proposal to outsource
$9 billion of the Pension Fund. Inner City Press asked for a copy of the Request
for Proposal which had already been circulated to, and has now been submitted
by, at least 13 investment banks. Not even the RFP has been provided. Inner City
Press has run a series of ten articles about the pension fund, and has requested
that Mr. Cocheme, who refused to answer telephone or email questions, come to
provide answers in the public briefing room.
There are at least three sets of issues:
outsourcing, employment and procurement abuses and inaction on a UN
investigative report.
The rush to outsource began under
previous Under-Secretary General for Management Chris Burnham. The Staff Council
and many others distrust the plan for that main reason and others. Mr. Burnham
having left the UN to return to Wall Street, specifically to Deutsche Bank, has
only fueled these suspicions.
The Pension Fund's own Annual
Report reports the Burnham-procured vote to move ahead with outsourcing, by a
17-11-1 margin. Previously, Pension Board decisions were by consensus. For that
reason, staff and beneficiaries saw no harm in having only one-third of the
votes on the Board. Then in the June 2006 vote in Nairobi, Burnham turned two
thirds against one third. Later the General Assembly deferred to that split
decision. (In between, the Fifth Committee said to wait until an asset-liability
study is completed). The rush to outsource gathered stream. Now
13 bids have been opened.
It is anticipated that once a winner is selected, there will be a rush to sign a
contract, so that there will be no turning back.
The Staff Council has
voted to explore the chance to sue.
Ban Ki-moon's new Under-Secretary for Management
Alicia Barcena
rushed to meet with the Staff Council, to
deride their legal theory.
But it's just as much a test case of management theory. Mr. Ban is the
fiduciary of the Pension Fund, and the legal representatives of the people whose
interests he is supposed to protect have opposed the outsourcing. Until now, Mr.
Ban has deferred to a plan that was set in motion before he took office. With
Burnham gone, Ban is in essence deferring to an empty chair. Will Ban now
reconsider the outsourcing, and the
unique legal status
of the Pension Fund?
A factor militating for
putting the outsourcing on hold is the UN Office of Internal Oversight Services'
detailed findings, in March 2006, that the Pension Fund's previous outsourcing
of IT contrasts were riddled with the appearance of conflict of interesting.
Paul Dooley fed no-bid contracts to his ex-boss Gerard Bodell, with the help of
Dulcie C. Bull and Sanjaya Bahel. The last of these three has been indicated and
just got out on bail. Ms. Bull and Mr. Dooley, on the other hand,
continue working for the Pension Fund,
because CEO Cochame has refused to act on the OIOS recommendations.
Bernard
Cocheme - soon, another UN picture
Bernard Cocheme, when Inner City Press
first reported on the OIOS report, told the staff that the report was only a
draft. Then, when that story could not hold up, he told them that OIOS had
agreed that all Cocheme needed to do was to form an internal advisory board. But
that is contradicted, too, by the Ban Ki-moon's spokesperson's office:
[See
above]
Mr. Cocheme on Wednesday will be expected
to explain his in-house spin of the OIOS report.
Finally, detailed accounts of
abuse of staff at the Pension Fund continue to accumulate. Executive Officer
Peter Goddard likes to shout at employees and
have them escorted from the building.
Dulcie Bull and Norah Fitzgerald like to hand jobs to their friends (in Ms.
Bull's case, according to the OIOS report, the favoritism extended to contracts
worth millions of dollars). Alan Blythe walks the floor as an enforcer.
Ostensible staff representative Ibrahima Faye, once a victim as noted, without
name by OIOS, now urges other staff not to speak to the press, not to speak of
OIOS, to cover up. Bernard Cocheme has long been
aware
of all of this, and has done nothing. Wednesday, however, he will be expected to
explain. And for time thereafter...
At UN Pension Fund, Cocheme Spins Staff Twice in Two
Days, As Scrutiny Closes In
Byline: Matthew Russell Lee of Inner City Press at
the UN
UNITED NATIONS, February 22 -- As questions mount
about the UN Pension Fund's inaction on a UN investigative report completed
nearly a year ago, CEO Bernard Cocheme has taken to the bully pulpit. On
February 21 at a Town Hall meeting, Cocheme derived this investigative series
and propounded a counter-history of the Fund. This was followed by a mass email
on February 22, ostensibly what Cocheme said at the February 15 Audit Committee
meeting which the press was not allowed to attend or even question Committee
members afterwards.
Cocheme's story is that the Office of
Internal Oversight Services report of investigation was only done because he
requested it. But the OIOS report itself makes clear that the trigger was two
staff members' October 4, 2005 eight-paragraph "memorandum to several
high-ranking UN officials, including the Under-Secretary-General" of OIOS, Inga-Britt
Ahlenius.
The resulting report of investigation
specifically calls for action to be taken on Dulcie Bull and Paul Dooley, for
their roles in the award of no-bid contracts to a company called Sprig, Ltd,
openly run by Mr. Dooley's ex-boss at New York Guardian Mortgage Company, Gerard
Bodell. [That the ownership connections to Sprig may run deeper yet is a matter
yet to be reported on.]
On February 22, Mr. Cocheme claimed that
he has spoken with OIOS, which has agreed that despite the plain language of the
investigative report, no action was or is needed on Ms. Bull or Mr. Dooley, just
the formation of another in-house advisory committee. With this claim, Mr.
Cocheme is directly contradicting a statement issued by the Office of the
Spokesman for the Secretary-General, which we will now quote in full:
Subj: Your
question on OIOS and the Pension Fund
Date: 2/8/2007
2:48:05 PM Eastern Standard Time
From: Farhan
Haq [at] un.org
To: Inner City
Press
In March 2006,
the OIOS completed an investigation into allegations of possible conflict of
interest, favoritism and mismanagement at the United Nations Joint Staff Pension
Fund. Based upon the evidence adduced, OIOS concluded that several staff members
- including two Senior UNJSPF staff - have acted improperly in connection to
contracts for information technology services awarded to a consultant retained
by UNJSPF.
OIOS issued
several recommendations in this case, including that UNJSPF management take
appropriate action against its two staff. The Chief Executive Officer of UNJSPF
informed OIOS that he disagrees with the findings and recommendations of the
report of investigation - as regards the actions of his staff - and advised that
he "intends to take no action" with regard to them. OIOS advised him that
pursuant to its mandate, it will report his response to the General Assembly.
Pursuant to
General Assembly resolution 59/272, the report is available to Member States
upon request. It has already been released, in redacted form, to two Member
States who have requested it.
Mr. Cocheme's spin does not appear to
hold up. It is time for Mr. Cocheme to take questions on the matter, rather
than one-way mass emails to staff.
Inga-Britt
Ahlenius: Cocheme says she gave OK for inaction
The OIOS report called for
action on three officials: Dulcie Bull and Paul Dooley of the Pension Fund, and
Sanjaya Bahel of the UN's Procurement Section. The first two continue untouched
and with impunity at the Pension Fund, while Mr. Bahel has been indicted and
faces trial. In Cocheme-logic, if an advisory committee had been set up for
Bahel, he too could still be teaching workshops about procurement.
Meanwhile at the Pension Fund, new video
surveillance camera are being installed. Dulcie Bull herself is out this week,
attributing this to back trouble. She has nearly dodged the bullet. She has told
staff that she intends to retire next year, but will not return, at least not
for long, to the UK. Her associate Norah Fitzgerald, known to some as Mother
Superior, for two days last week stopped answering her phone. At least as to the
Press, Bernard Cocheme long ago stopped answering...
UN
Pension Fund Outsourcing Draws 13 Bidders, Over 10 from USA, Kudos for
Shrink-Wrap
Byline: Matthew
Russell Lee of Inner City Press at the UN
UNITED NATIONS,
February 16 --Nine billion dollars of the UN Joint Staff Pension Fund's money
was up for bid on Friday. In a small conference room of a building on 45th
Street, the ritual opening of the bids -- thirteen in total -- was held. In
attendance were representatives of five of the bidders, four UN procurement
staff, a genial staff council representative, and a lone media representative,
from Inner City Press.
Journalist attendance became possible only at the last minute. Inner City Press
had written to UN Controller Warren Sach to request access, without receiving
any direct response. At the UN's noon briefing on Friday, Inner City Press asked
to be given access, to the opening then less than three hours away. The
spokesperson said she would check, but at 2:20 p.m. said she had not heard back,
and anyway "it's just the beginning of the process."
Inner
City Press got word that the Department of Management decided to allow access,
although this was never announced or communicated by the Department. Inner City
Press showed up, on the second floor of 304 East 45th Street, and the
procurement staff said they had been told to permit access. This time only, they
appear to think. Inner City Press was forbidden from audio or video taping.
These bid opening should always be public.
And so,
this exclusive Inner City Press report, one hour after the opening. Bidders
could apply for the "passive indexation" of the Pension Fund's North American
equity portfolio or for "transition management," or for both.
Indexation refers to a shift away from picking the stocks of individual
companies, and rather tracking the market as a whole. In the transition toward
that, well, someone would have to manage. The thirteen
bidders, in alphabetical order with package identifiers are as follows:
1. Alliance Bernstein
LLC (USA), for both, six envelopes each with three enclosures, two velobound and
one soft covered.
2. Barclays Global
Investors (USA), for both, two boxes full of binders by an institution who's
parent is based in London but has paid to put its name on a stadium in Brooklyn.
3. Blackrock (USA),
for both, four FedEx boxes, velobound volumes, black as in Blackrock.
4. Citigroup, Inc.
(USA), for transition management only, two boxes, six copies.
5. Goldman Sach
(USA), for transition management only, one FedEx box with thin velobound volume
stamped "Strictly Confidential and Private."
6. JPMorgan Asset
Management (USA), for passive indexation only, two soft FedEx envelopes.
7. Lehman Brothers
Asset Management (USA), for transition management only, six green binders.
8. MFC Global
Investment Management (USA), for passive indexation only, thin envelopes, thin
velobound volumes.
9. Russell Investment
Group (USA), for transition management only, a box, then wrapped in black paper,
then shrink-wrap (an "oooh" went up from the small crowd, and Russell's observer
said, "We don't mess around").
10. State Street
Corp. (USA), for both, six envelopes.
11. The Bank of New
York (USA), for both, six envelopes, wire-bound volumes.
12. The Northern
Trust (USA), for both, one FedEx, three thin velobound volumes and two
pamphlets, a slender and confident presentation by a firm already on the inside
(see below).
13. UBS, AG
(Switzerland), for passive indexation only, 3 UPS packages (that's right, UPS
for UBS).
By
mistake, but perhaps predictive, The Northern Trust's submission was opened
before The Bank of New York. The master of ceremonies, otherwise smooth as silk,
apologized for the gaffe, which had been pointed out by Northern Trust's
observer. Also in attendance was a Mr. Khan, who went to the door when it was
knocked on. The bidding room felt not unlike a small funeral parlor, with a
series of viewings throughout the day. This step to outsource $9 billion in UN
staffers' pensions took place mechanically, mundanely, with little notice, but a
bit more than the contracts described in the OIOS report, given to Sprig without
bidding, or with only sham bidding. The opening of bids took place as described
above. What happens next is again in the shadows....
When
asked at a February 5 town hall meeting how large a management fee would be
paid, UN Controller Warren Sach did not have an answer. Following the meeting,
Inner City Press asked Mr. Sach for the list of bidders, or those on the short
list who got the Request for Proposals, as well as for a copy of the RFP. For
the RFP, Inner City Press was referred to the administrative officer of the UN
Investment Management Service, Chieko Okudo, from where another referral was
made. As days and then a more than a week sent by, the RFP was never provided,
and Inner City Press was told that neither would the list of bidders be
released. Similar difficulties in obtaining answers and documents arose last
year during
Inner City Press' reporting on the
conflicts raised by UN investment fees being paid to Pictet & Cie.,
whose Ivan Pictet still serves as an "ad hoc" member of the UN Pension Fund's
Investment Committee, on which now sits a Vice Chairman of Merrill Lynch and
former directors of Morgan Stanley and Commerzbank.
That there are causes
of concern can be found in an until-now confidential report of investigation by
the UN's Office of Internal Oversight Services. In OIOS' "Investigation of
conflict of interest, favoritism and mismanagement at the UN Joint Staff Pension
Fund," the complaints of two whistleblowers are considered and upheld.
Specifically, OIOS confirmed that through the Pension Fund's Paul Dooley,
millions of dollars in contacts were given to a company called Sprig, Ltd, run
by Gerald Bodell, who was previously Dooley's supervisor at Guardian Mortgage
Corporation. According to the audit,
"OIOS found no evidence that UNJSPF [the
UN Pension Fund] considered candidates other than Sprig for any of these
contracts. Similarly, there is no evidence that UNJSPF made any checks on the
background of Sprig independently (for example by requesting a D&B report on
Spring) or that UNJSPF attempted to independently determine whether Mr. Bodell's
fees were consistent with those charged by other consultants."
The audit
reports that Sprig was "operated by Mr. Bodell from the basement of his home,"
but nevertheless was given a higher score for "Web experience" than the
accounting firm of Deloitte & Touche. Sprig's contract for "Strategic
Information Technology and Management Consulting Study" was signed for the UN by
Sanjaya Bahel, who was since by indicted and most recently had his bail revoked.
A subsequent contract amendment for Sprig was signed for the UN by Andrew Toh,
an Assistant Secretary General who is currently under investigation and for that
reasons has not been asked to resign by new Secretary-General Ban Ki-moon. The
audit concludes with the recommendation that "any contracting and procurement
activities undertaken by the CEO of the UNJSPF comply with the Pension Board's
directive that they be limited and only under exceptional circumstances."
Andrew
Toh and Ms. Frechette: back to the future?
At the
February 5 meeting, the Staff Council referred to documents which challenge Mr.
Sach's presentation of himself as having opposed an earlier attempt to outsource
Pension Fund business. After the meeting, Inner City Press asked Mr. Sach about
these documents. Mr. Sach showed a copy of a memo from Chieko Okudo to
then-Under Secretary General Christopher B. Burnham, on which was scrawled at
the bottom of the first page an instruction to "do this by the book, -CBB." Mr.
Sach said that some had circulated copies of this memo with the bottom notation
removed.
Inner
City Press has obtained copies of emails from the time at issue, which tell a
different story. After a decision was made to "liquidate" a small capitalization
fund managed for the Pension Fund by Lombard, Odier, Darier and Hentsch (LODH),
an internal debate ensued whether the liquidation contact could be given without
bidding to the Northern Trust bank, which was already the global Custodian of
the Fund. Despite the questions raised, by July 5 Northern Trust's Vice
President Robert Ernst wrote to two individuals at the UN that the liquidation
was finished, "would you like sales proceeds to remain in the LODH portfolio, or
transferred out to your own cash accounts?"
Before
this liquidation, there was a June 13, 2006 email to Ms. Okuda stating that:
"Chieko: I do have a problem with your
memo. The memo needs to state the complete additional services to be performed
other than NT [Northern Trust] act as the Master Record Keeper. Recently, a
number of changes and additional services outside the original scope have been
requested to be undertaken by Northern Trust. All this has been undertaken in a
non-competitive environment.... The organization is now open for criticism if we
continue to expand the scope of NT, which was not originally envisaged. This can
lead to other banks suggesting that we have not been open and transparent..."
But it is
now not only "other banks" who are complaining about a lack of transparency. The
majority of questions directed to Mr. Sach on February 5 were critical in
nature, asking "why fix it if it isn't broken" and why hand money to an outside
firm. Later the question was asked, can we see the Request for Proposals, and
know what firms are on the short list? No such information was provided, until
press access to the bid-opening was allowed at the last minute, after repeated
request, most of which met with no response. It shouldn't be like this. Nor
should the recruitment and employment practices of the Pension Fund. Watch this
site.
Other, earlier Inner
City Press are listed here, and
some are available in the ProQuest service.
Copyright 2006 Inner City Press, Inc. To request
reprint or other permission, e-contact Editorial [at] innercitypress.com -
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