Ban Ki-moon Narrows Scope of UNDP Inquiry While Euro Focus Spreads to UNFPA and WFP, Feeding Koreans

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

UNITED NATIONS, January 22 -- What a difference a weekend makes. On Friday, UN Secretary General Ban Ki-moon reacted to the breaking scandal at the UN Development Program by calling for an "urgent, system wide and external inquiry into all activities done around the globe by the UN funds and programs."

            By Monday, "around the globe" had been scaled back to North Korea, and "all activities" had been limited to "hard currency transactions, independence of staff hiring and access to reviewing local projects." The "external inquiry" that now involves the same UN Board of Auditors which has chosen to exclude from the public documents it produces any mention of damning internal audits like KPMG's of UNDP-North Korea.

            Sources within UNDP and other funds and programs were left wondering: who got to Ban Ki-moon, to so dramatically cut back the scope of proposed clean-up? Some say the fight-back was by entrenched powers in UNDP, not only Messrs. Dervis and Melkert but even Asia Pacific assistant administrator Hafiz Pasha, finance director Darshak Shah, and Bruce Jenks of UNDP's "Bureau of Resources and Strategic Partnerships." Jenks knows were the bodies are buried in UNDP's system of 400-plus trust funds. Jenks is reported to communicate to the South Korean mission, including on what the ramifications of a comprehensive inquiry could be.

            Others, looking wider, say that certain member states chimed to demand a more limited review. That Mr. Ban's home country South Korea, which he served as Minister of Foreign Affairs, is a main funder of hard currency-paying UN programs in North Korea is deemed significant. Inner City Press has been told that South Korea's payments to UN agencies for North Korea passed through and were signed (off) on by not only the Ministry of Unification, but also the Ministry of Foreign Affairs.

            Some in the UN are already reaching conclusions on Ban. They point as examples to his lack of action to data on the Department of Economic and Social Affairs scandal, and to his decision announced Monday to speak at a DESA "global forum" conference in Vienna on June 26, along with, among others UNDP's Hafiz Pasha and Kathleen Cravero. They claim that DESA's Guido Bertucci's reach-out to Mr. Ban is through DESA advisor Elia Yi Armstrong. They question whether for example Italy's dictating that its funding be used exclusively to hire Italians is different from secondment, and must now be subject to even the scaled-down inquiry offered as a substitute on Monday, with its reference to independence of hiring. Others argue that while the Old Guard was able to reign Ban in on Monday, this will not go on forever. Time will tell.

            While for now the prospective inquiry appears to be cut back, Ban Ki-moon "has also requested the Administrator of UNDP to provide information in detail concerning the corrective actions taken in response to the internal audit findings of 1999, 2001 and 2004." In the case of Kemal Dervis, the question will be, seventeen months and what actions? And unlike in the past, will the answers be made public?

UNDP in North Korea, hard currency not shown

            Meanwhile, Inner City Press' inquiry into UNDP and other funds and programs continues, for this report on the World Food Program's activities in North Korea, including in comparison to what UNDP has admitted, the paying of the salary of all national staff in North Korea in hard currency, Euros, directly to the DPRK government.

            WFP pays half of its local staff in North Korea in won, the local currency, Inner City Press was told Monday by WFP spokesperson Bettina Luescher. These are 15 National Program Officers, nominated and seconded by DPRK's National Coordinating Committee, or NCC.  This money, however, is paid not paid directly to the staff, but rather to the NCC.

            The other 15 of WFP's local staff -- nine drivers and six support staff including cleaners -- are referred by DPRK's General Service Bureau, GSB, and are paid directly in hard currency, Euros.  WFP in North Korea also has 14 international staff members.

            WFP emphasizes through its spokesperson that North Korean staff are not permitted access to WFP's global accounting software. WFP does not pay rent to the North Korean government, but rather to the Bulgarian ministry of foreign affairs, for space in the former Bulgarian embassy. Utilities, though, are paid in Euros, by check for service provided, pursuant to WFP rules.

  Inner City Press has also asked these agencies about the substance of their programs, in North Korea as elsewhere. As it did with Congo-Kinshasa, WFP by Monday afternoon proffered a response:

Subject: Re: Hi, Qs re WFP in North Korea, Zimbabwe, etc., NEX, hard currency, thanks

From:Bettina Luescher, WFP Chief Spokesperson, North America
To: Inner City Press
Sent: Mon, 22 Jan 2007 5:46 PM

Dear Matthew, Here is some more information on our operation in DPRK:

 WFP has identified some 1.9 million people in North Korea who need food aid. These are among the most vulnerable people, including women and children, they live in both urban and rural areas. The two-year operation (2006 / 2007) aims to feed 1.9 million and would require 102 million US Dollars. Until now we have raised some 16 percent. With current limited funding, WFP feeds more than 700,000 people in 29 counties. Financial constraints are hampering expansion efforts to reach all 1.9 million in the 50 most insecure counties.

The statistics are sobering: A seven-year-old child in North Korea is likely to be 8 inches (some 20 centimeters) shorter, 9 kg lighter and lives some 10 years shorter that his South Korean peer. While malnutrition rates have fallen since the late 1990ies, they are still relatively high: 37 percent of young children are chronically malnourished , and one third of mothers are malnourished and anemic, based on a 2004 WFP/UNICEF survey.

 It is vitally important that the hard-won improvements in nutritional standards of recent years not be reversed in the counties where WFP distributions are concentrated . WFP's "no access, no food" policy continues to be strictly enforced. WFP will only provide food in areas where we can assess needs and monitor distributions. Accountability to our donors remains a top priority for WFP.

 I am checking on information for the other countries you mentioned.

 Mr. Morris is currently in Laos, then going to Hawaii, Australia, New Zealand, Indonesia, East Timor... meeting governments, donors, private sector partners and WFP operations. Ambassador Sheeran's schedule is being handled by the State Department. She will start with us in early April.

            Inner City Press asked if WFP has a Standard Basic Assistance Agreement with the DPRK government, and has been told that WFP operates under a "letter of understanding." Inner City Press has asked for a copy of this letter, and has asked for WFP's policy on providing internal audits. On both, answers have been promised for tomorrow.

            Less responsive, perhaps understandably, has by the UN Population Fund. Inner City Press asked UNFPA's spokespeople the same questions, and was told by Abubaker Dunga that information would be provided on Monday ("I will put together the information and send it to you as soon as possible today"). However, despite multiple email and telephone reminders, UNFPA did not end up answering the questions or providing any information by 9 p.m. on Monday. A profile of UNFPA is coming together. Developing.

Again, because a number of Inner City Press' UNDP sources go out of their way to express commitment to serving the poor, and while it should be unnecessary, Inner City Press is compelled to conclude this installment in a necessarily-ongoing series by saluting the stated goals of UNDP and many of its staff. Keep those cards, letters and emails coming, and phone calls too, we apologize for any phone tag, but please continue trying, and keep the information flowing.

Feedback: Editorial [at] innercitypress.com

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As UNDP Auditor Leaves, a Secret Test is Proposed, Which Executive Board May Act On, UNFPA Also Under Fire

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

   Jan. 21 -- As the scandal that broke Friday around the UN Development Program's audits of its North Korea program is slated to be considered by UNDP's Executive Board this week, UNDP's Associate Ad Director Melkert has reportedly decreed that UNDP's Office for Audit and Performance Review should "have no Americans," particularly to replace the head auditor who is leaving.

            Very recently, OAPR director Jessie Rose Mabutas decided to leave UNDP in mid-February. The deputy auditor spot below her is also being filled. Unless and until the UNDP Executive Board decides differently at its meetings this week, those installed in these audit position will be chosen by UNDP's Administrator, Kemal Dervis.

   As with UNDP's refusal to provide copies of internal audits even to member states on its Executive Board, this UNDP policy differs from that of the UN Secretariat.  The head of the audit unit for the Secretariat, the Office of Internal Oversight Services, is subject to review and confirmation by the 192 member states of the UN General Assembly.

            Some are predicting rare push-back this week from the UNDP Executive Board, including not only a move to ensure that Dervis not select Ms. Mabutas' replacement -- reportedly, Dervis' desperate search for a successor is Francophile focused -- but also perhaps one to hold Ms. Mabutas and UNDP Asia Pacific director Hafiz Pasha, among others, accountable for the non-action on KPMG's 1999, 2001 and 2004 audits of UNDP's North Korea programs. 

Finance & North Korea, problem for UNDP

            As reported, UNDP paid hard currency directly to the Kim Jong Il regime. On January 19, Ad Melkert claimed that this did not violate any UNDP rules. This is repeated on UNDP's web site, click here to view, with its carefully edited version of Melkert's Jan. 19 press conference. But UNDP's operations in North Korea, as in the other countries in which it operates, is governed by a Standard Basic Assistance Agreement or SBAA. The UNDP North Korea SBAA provides that payments must be in local currency: "all payments will be made in local currency on the basis of monthly invoices submitted to the Resident Representative." The SBAA also provided that the government would not charge for rent or electricity -- but UNDP has been paying hard currency to the government for both, in violation of the SBAA. Just as UNDP has withheld from Inner City Press the SBAA for Liberia, UNDP has withheld from all requesters the above-quoted North Korea SBAA.

            Focus has also shifted to the source of the hard currency which UNDP has paid to the North Korean government. Much has been so-called "pass through" funding, from South Korea. Some question whether Ban Ki-moon, after serving as South Korea's foreign minister, will have an interest in full disclosure of the findings of a detailed audit of the source of the hard currency UNDP handed to the Democratic People's Republic of Korea.

            Inner City Press has previously requested, received and reported on the "discretionary" budget of UNDP Administrator Kemal Dervis. In this budget in 2006, along with payments for a book about UNDP that does not mention North Korea, there was a $67,000 expenditure described as "Funding for Special Audits," and described in full as "additional resources were made available to fund an urgent, unscheduled audit to investigate concerns that had arisen in one country office" -- a country left unidentified. That is may have been North Korea is now in question.

            While such an audit within the UN Secretariat would have to be disclosed to any of the 192 member states upon their request, at UNDP things are quite different. Only a summary would be provided, and only to the countries on UNDP's Executive Board. While some have said this inconsistency, of UNDP lagging behind the UN Secretariat in terms of transparency, will be fixed soon, Mr. Dervis on December 21 said this might not happen, due to "privacy" concerns. Dervis has also stated that the audits must be withheld because they are "management tools." Management, however, did not address or fix the issues raised in the audits about North Korea, just as management has resisted evaluation of, and inquires about, even its Millennium Development Goals operation, now in the embattled Poverty Group.

            On Jan. 19, responding to the UNDP scandals, Secretary-General Ban Ki-moon called for an "urgent, system wide and external inquiry into all activities done around the globe" by UN funds, programs and agencies.  His spokeswoman has said that the results will be made public. UNDP will be asked to name the country which in 2006 required an "urgent, unscheduled audit to investigate concerns that had arisen" there. Since the North Korea issues which UNDP says have been taken so seriously were not even mentioned in the most recent publicly-available audit of UNDP, Inner City Press has asked Ad Melkert and UNDP Communications Director David Morrison to now disclose any other problem countries -- or "tough cookies," as Ad Melkert put it during his January 19 press conference -- that are not identified in UNDP's public audit.

           David Morrison, who ran UNDP's January 19 press conference, was in North Korea for UNDP as far back as 1988. According to NetAid.org, "Mr. Morrison began his career with the United Nations Development Programme (UNDP) in North Korea in 1988, becoming one of the few Westerners ever to have lived in that country." Click here for more.

            During the January 19 press conference, Ad Melkert referred reporters to UNICEF and to the World Food Program. He did not mention, however, that other UN agencies in North Korea, as in many other countries, operate under UNDP's agreements and guidance, a power currently proposed to further expand under "coherence" plans announced under Kofi Annan and his deputy Mark Malloch Brown. And even so, Inner City Press is informed that the World Food Program does not pay in hard currency in North Korea, it pays in local currency and does not pay rent to the North Korean government, as it uses space in the Bulgarian embassy.

            There are, for sure, other UN agencies accepting seconded staff in North Korea. Inner City Press has learned that a November 2006 KPMG audit of the North Korean operations of the UN Population Fund, UNFPA, made similar findings.

        UNFPA accepts staff seconded by the North Korean government, making "competitive selection not advisable." UNFPA in North Korea raised this issue to the regional director for Asia and the Pacific, but UNFPA never formally responded, to provide an exemption or not. Inner City Press is finalizing a companion piece on UNFPA, including its practices with respect to currency, and is submitting questions to other funds, programs and agencies. UNFPA sources tell Inner City Press that this non-response by headquarters to serious questions from the field is common, as a way to keep senior management's hands clean.

            The Asia and Pacific regional director for UNDP, Hafiz Pasha, is looked at as the first in a chain of accountability for the UNDP North Korea scandal. It was his region. But some are saying that the accountability must move up the chain, as early as the Executive Board meetings this week. Developing.

  Again, because a number of Inner City Press' UNDP sources go out of their way to express commitment to serving the poor, and while it should be unnecessary, Inner City Press is compelled to conclude this installment in a necessarily-ongoing series by saluting the stated goals of UNDP and many of its staff. Keep those cards, letters and emails coming, and phone calls too, we apologize for any phone tag, but please continue trying, and keep the information flowing.

Other Inner City Press reports are available in the ProQuest service and some are archived on www.InnerCityPress.com --

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In UNDP, Drunken Mis-Managers on the Make Praised and Protected, Meet UNDP's Kalman Mizsei

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At the UN, Positions Are Up For the Grabbing, Sun's Silence on Censorship, Advisor Grabs for Gun

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At the UN, Housing Subsidy Spin, Puntland Mysteries of UNDP and the Panama Solution

In Campaign to Head UN WFP, A Race to Precedents' Depths, A Murky Lame Duck Appointment

At the UN, Gbagbo and his Gbaggage, Toxic Waste and Congolese Sanctions

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At the UN, the Unrepentant Blogger Pronk, a Wink on 14 North Korean Days and Silence on Somalia

At the UN, Literacy Losses in Chad, Blogless Pronk and Toothless Iran Resolution, How Our World Turns

Sudan Pans Pronk While Praising Natsios, UN Silent on Haiti and WFP, Ivorian Fingers Crossed

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At the UN, Silence from UNDP on Cyprus, from France on the Chad-Bomb, Jan Pronk's Sudan Blog

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At the UN, North Korea Sanctions Agreed On, Naval Searches and Murky Weapons Sales

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At the UN, Incomplete Reforms Allow for Gifts of Free Housing to UN Officials by Member States

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Inquiry Into Housing Subsidies Contrary to UN Charter Goes Ignored for 8 Weeks, As Head UN Peacekeeper Does Not Respond

On the UN - Corporate Beat, Dow Chemical Luncheon Chickens Come Home to Roost

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In UN's Lebanon Frenzy, Darfur Is Ignored As Are the Disabled, "If You Crave UNIFIL, Can't You Make Do With MONUC?"

UN Decries Uzbekistan's Use of Torture, While Helping It To Tax and Rule; Updates on UNIFIL and UNMIS Off-Message

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At the UN, Jay-Z Floats Past Questions on Water Privatization and Sweatshops, Q'Orianka Kilcher in the Basement

In the UN Security Council, Speeches and Stasis as Haiti is Forgotten, for a Shebaa Farms Solution?

UN Knew of Child Soldier Use by Two Warlords Whose Entry into Congo Army the UN Facilitated

Impunity's in the Air, at the UN in Kinshasa and NY, for Kony and Karim and MONUC for Kazana

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UN's Guehenno Says Congo Warlord Just Needs Training, and Kazana Probe Continues

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In DR Congo, UN Applauds Entry into Army of Child-Soldier Commander Along with Kidnapper

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At the UN, Dow Chemical's Invited In, While Teaming Up With Microsoft is Defended

Kofi Annan Questioned about Congolese Colonel Who Kidnapped Seven UN Soldiers

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UN's Guehenno Speaks of "Political Overstretch" Undermining Peacekeeping in Lower Profile Zones

In Gaza Power Station, the Role of Enron and the U.S. Government's OPIC Revealed by UN Sources

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In Uganda, UNDP to Make Belated Announcement of Program Halt, But Questions Remain (and see The New Vision, offsite).

Disarmament Abuse in Uganda Leads UN Agency to Suspend Its Work and Spending

Disarmament Abuse in Uganda Blamed on UNDP, Still Silent on Finance

Alleged Abuse in Disarmament in Uganda Known by UNDP, But Dollar Figures Still Not Given: What Did UN Know and When?

Strong Arm on Small Arms: Rift Within UN About Uganda's Involuntary Disarmament of Karamojong Villages

UN's Selective Vision on Somalia and Wishful Thinking on Uighurs

UN Habitat Predicts The World Is a Ghetto, But Will Finance Be Addressed at Vancouver World Urban Forum?

UN's Annan Concerned About Use of Terror's T-Word to Repress, Wants Freedom of Information

UN  Waffles on Human Rights in Central Asia and China; ICC on Kony and a Hero from Algiers

UN & US, Transparency for Finance But Not Foreign Affairs: Somalia, Sovereignty and Senator Tom Coburn

Human Rights Forgotten in UN's War of Words, Bolton versus Mark Malloch Brown: News Analysis

In Praise of Migration, UN Misses the Net and Bangalore While Going Soft on Financial Exclusion

UN Sees Somalia Through a Glass, Darkly, While Chomsky Speaks on Corporations and Everything But Congo

Corporate Spin on AIDS, Holbrooke's Kudos to Montenegro and its Independence

The Silence of the Congo and Naomi Watts; Between Bolivia and the World Bank

Human Rights Council Has Its Own Hanging Chads; Cocky U.S. State Department Spins from SUVs

Child Labor and Cargill and Nestle; Iran, Darfur and WHO's on First with Bird Flu

Press Freedom? Editor Arrested by Congo-Brazzaville, As It Presides Over Security Council

The Place of the Cost-Cut UN in Europe's Torn-Up Heart;
Deafness to Consumers, Even by the Greens

Background Checks at the UN, But Not the Global Compact; Teaching Statistics from Turkmenbashi's Single Book

Ripped Off Worse in the Big Apple, by Citigroup and Chase: High Cost Mortgages Spread in Outer Boroughs in 2005, Study Finds

Burundi: Chaos at Camp for Congolese Refugees, Silence from UNHCR, While Reform's Debated by Forty Until 4 AM

The Chadian Mirage: Beyond French Bombs, Is Exxon In the Cast? Asylum and the Uzbeks, Shadows of Stories to Come

Through the UN's One-Way Mirror, Sustainable Development To Be Discussed by Corporations, Even Nuclear Areva

Racial Disparities Grew Worse in 2005 at Citigroup, HSBC and Other Large Banks

Mine Your Own Business: Explosive Remnants of War and the Great Powers, Amid the Paparazzi

Human Rights Are Lost in the Mail: DR Congo Got the Letter, But the Process is Still Murky

Iraq's Oil to be Metered by Shell, While Basrah Project Remains Less than Clear

Kofi, Kony, Kagame and Coltan: This Moment in the Congo and Kampala

As Operation Swarmer Begins, UN's Qazi Denies It's Civil War and Has No Answers if Iraq's Oil is Being Metered

Cash Crop: In Nepal, Bhutanese Refugees Prohibited from Income Generation Even in their Camps

The Shorted and Shorting in Humanitarian Aid: From Davos to Darfur, the Numbers Don't Add Up

UN Reform: Transparency Later, Not Now -- At Least Not for AXA - WFP Insurance Contract

In the Sudanese Crisis, Oil Revenue Goes Missing, UN Says

Empty Words on Money Laundering and Narcotics, from the UN and Georgia

What is the Sound of Eleven Uzbeks Disappearing? A Lack of Seats in Tashkent, a Turf War at UN

Kosovo: Of Collective Punishment and Electricity; Lights Out on Privatization of Ferronikeli Mines

Abkhazia: Cleansing and (Money) Laundering, Says Georgia

Post-Tsunami Human Rights Abuses, including by UNDP in the Maldives

Citigroup Dissembles at United Nations Environmental Conference

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