Inner City Press -- Investigative Reporting From the Inner City to Wall Street to the United Nations

Amid Scandals, UN Claims Paperwork for Filipino Peacekeeping Payments, None for US $100 M Tax Equalization Fund

By Matthew Russell Lee

UNITED NATIONS, February 11 -- How does the UN transfer money to member states, and to whom does it have to answer about it? Amid a developing scandal in the Philippines about UN payments, Inner City Press began last month to ask the UN about its peacekeeping payments, including asking do

“DPKO, Alain LeRoy and the UN think that the practice by the Phillipines military of skimming a certain percentage off the salaries paid by the UN to its solders is appropriate, yes or no?”

While the UN e-mailed back any answer, all it said was that this was entirely up to the country concerned, in this case the Philippines. So at the February 1 noon briefing Inner City Press asked UN deputy spokesman Farhan Haq about a Filipino

“House hearing on money that’s gone missing in terms of what the UN paid to the Philippines. There is separately an issue that the Government is saying, has apparently acknowledged that, of salaries paid by the UN for peacekeepers, it takes a relatively high percentage. And the Resident Coordinator in the Philippines has been quoted as saying that she sent… Jacqueline Badcock has said that 'she sent the issue to UN Headquarters, then it’s going to be addressed by UN Headquarters.' So, I wanted to know, who in UN Headquarters is handling this issue and also what is the UN’s policy on the peacekeepers actually in the field keeping the money that is meant for them?

 Haq replied that “our peacekeeping departments deal with Governments and it is up to the Governments to reimburse the individual peacekeepers.”

 When Inner City Press asked again about the scandal and Ms. Badcock deflecting the local press to New York, Haq said “I have just told you what the line from Headquarters is and that’s what we have e-mailed to you.”

 Inner City Press continued to pursue it, alongside a separate inquiry into another $100 million pool of US Tax Equalization Funds which the UN says the US told it it can keep for security improvements, without the UN saying either who told them this, or who in the UN asked for the money.

As that TEF inquiry has heated up, now the UN has e-mailed to Inner City Press a more detailed, but still evasive, answer about the Philippines:

From: UN Spokesperson - Do Not Reply [at] un.org
Date: Thu, Feb 10, 2011 at 4:42 PM
Subject: Your questions on the Philippines
To: Matthew Russell Lee [at] InnerCityPress.com

We have the following information in response to your earlier questions.

Can you confirm that a cheque for payment was personally picked up at UNHQ New York by a Filipino General?

This is not the case. Since its contribution to the INTERFET peace operation in 1999, all Contingent Owned Equipment (COE) payments made to the Government of the Philippines have been made in accordance with this practice (as per payment instructions received in writing from the Permanent Mission and signed by the Ambassador).

Before 1 July 2005, a Government could elect to be paid by check or wire transfer (after that date only bank wire transfer were used).

Was a $5 million check for UN reimbursements handed over by UN personnel to a Philippine military officer in 2002?

This is not the case. All payments/checks were issued under a cover letter to the Permanent Representative at the Permanent Mission of the Republic of the Philippines.

We have tracked all payments and there was no COE payment of $5 million.

While appreciated, this leaves open several questions, including all questions beyond the contingent owned equipment. Even on COE, it seems odd that that from 2003 onwards, payment instructions would have been received "in writing from the Permanent Mission" instructing the UN to remit reimbursements directly to the AFP [Philippines military] account in UCPB-Alfaro branch.


UN's Ban Ki-moon & spokesman, no on record TEF figures, Filipino email shown above

 This is what actually happened, according to the testimony by Philippines' Under Secretary of Foreign Affairs Erlinda Basilo:

DFA Undersecretary Erlinda Basilio informed the committee that between 1999 and 2002, UN reimbursements were coursed through the DFA and deposited in a Land Bank account in the JP Morgan Chase bank in New York City. The Land Bank then transferred the money to its Greenhills, San Juan branch, where the AFP maintained an account, she said. However, starting in 2003, upon the request of the AFP, the UN directly remitted the reimbursements to the AFP account in UCPB-Alfaro branch.

Why would the Philippines Mission to the UN instruct the UN to make payments to the Philippine Military? To some, this is not a credible explanation from the UN. These informed skeptics believe that in all likelihood, the UN accepted fraudulent instructions from the Philippines Military itself, which (they say) could make the UN even an accessory to the crime. They conclude that the onus should be on the UN to prove that they were instructed by the Permanent Mission of the Philippines to make payment to "the AFP account in UCPB-Alfaro branch."

All of this makes the UN's refusal to date to provide any paperwork for the $100 million in US Tax Equalization Funds all the more problematic. We will have more on both of these cases. Watch this site.