At UN Pension Fund, Cocheme's Last Grab, Skirting Procurement Rules for JP Morgan Chase, Potential Outsourcer

Byline: Matthew Russell Lee of Inner City Press at the UN

UNITED NATIONS, July 12 -- The CEO of the UN Pension Fund, Bernard Cocheme, has been pursuing a plan to cut off the last strand of accountability to the UN Secretariat, a representative on the Fund's investment committee.

     But following the fourth of the UN Pension Board's five days of meetings, participants say that "Cocheme's coup is dead," that the proposal will not even come up for a vote. Others warn, "Cocheme's not dead, he could still pull it off on Friday. Didn't he escape without implementing the recommendations in the Office of Internal Oversight Services' audit?"

            In this context, a July 5, 2007 internal memo obtained by Inner City Press is instructive. The Secretariat's General Legal Division, Office of Legal Affairs, via Antigoni Axenidou, reports that Cocheme was trying to unilaterally, without using the UN's procurement machinery, extend and 'post-facto regularize[e]' a Pension Fund banking contract with JP Morgan Chase.  Paul Buades of the UN Procurement Service asked OLA "to clarify the appropriate procedure to follow."

            The response says that the statement that the "'UNJSPF was granted direct procurement authority by the General Assembly' does not appear to accurately reflect the decision of the Board and observed by the General Assembly."

            Cocheme was arguing that, despite General Assembly instructions that the Pension Fund should use the Secretariat's procurement "machinery" except in "special circumstances... expected to be quite rare." The situation in which Cocheme was trying to circumvent the usual procurement process was not special; it was merely a power grab, in this case turned down. Perhaps it is a trend.

Cocheme: shot down by the law, coup on ice

            It's worth noting that JP Morgan Chase, to which Cocheme wanted to give business by circumventing the rules, is one of the bidders on the proposed outsourcing of $10 billion of the pension fund. The volume, which began at $9 billion, keeps change, as even the Controller marvels at the current surge in the markets. Why it is proposed to be outsourced while performing this way leaves some befuddled.

            Also noted by some in the Pension Board's basement meetings on Thursday was a derivative report in the financial trade press, on GlobalPensions.com, that these reports have "charted Cocheme’s movements around Europe, apparently drumming up support for his proposed takeover as representative of the fund, a position currently held by secretary general Ban... Since the beginning of the year, the Office of Internal Oversight Services (OIOS) has investigated the award of service mandates by the pension fund." First mention of Ban Ki-moon in this financial publication. One can hear it now, from the (real) 38th floor: thanks, Bernard.

            Meanwhile, even Cocheme's budgetary proposal, including fully 43 new posts, is being whittled down. One way said, "He asked for 43, between the Pension Board and then the GA's Fifth Committee, they'll cut him down to six, just enough for pall bearers" for his plans. We'll see.

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