UNDP North Korea Investigation Limited in Murky Deal with U.S., Independence of Hiring at Issue

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

UNITED NATIONS, January 25 -- A murky deal was reached Thursday on the North Korea programs of the UN Development Program. As explained by UNDP's Ad Melkert, by March 1 no more hard currency will be paid to the Kim Jong Il government. UNDP will also stop handing the government funding to carry out programs, and will focus less on programs perceived as building the capacity of the North Korean government.

   On this basis, the U.S. did not even speak at Thursday's UNDP Executive Board meeting. To the surprise of many, the U.S. mission expressed satisfaction that an audit would be carried out by the UN's own board of auditors, rather than the previously demanded "full independent and outside forensic audit."

            In the hallway outside the meeting, Inner City Press asked U.S. Alejandro Wolff whether the deal included requiring that UNDP's internal audits be made available, which was a central demand to the series of letter U.S. Amb. Mark D. Wallace sent to UNDP.  A January 4, 2007 letter from Amb. Wallace to Kemal Dervis stated that "UNDP's refusal to provide copies of its internal audits... is not sustainable." So is the U.S. getting a change of this unsustainable secrecy as part of the ill-defined deal? "No," Amb. Wolff said, "today we are focused on North Korea. But it's a good question."

            Isn't it. In the hours since the deal was announced, and after the U.S. team has long decamped, Inner City Press has been told by well-placed UNDP sources that UNDP has made a commitment that the replacement for the head of UNDP's audit unit, Jessie Rose Mabutas, who leaves in mid-February, will now be an American.

            So it was wrong for North Korea to tell UNDP who to hire -- and this is solved by UNDP agreeing to let the U.S. tell it who to hire, mused bitterly but logically one UNDP source. And the resolution of a campaign ostensibly for transparency is a secret deal. By the terms of even Ban Ki-moon's January 22 announcement, of audits into lack of independence in hiring with regard to UNDP and North Korea, Thursday's deal should be audited and fully disclosed.

Mr Wolff, Mr Ban

            The debate on the floor of Conference Room 2 on Thursday concerned the politicization of aid. The North Korean representative Mr. Jang Chunsik thanked Melkert and UNDP's Hafiz Pasha, and denounced the "sinister attempt to politicize international assistance." Both Bangladesh and Guatemala followed suit, using identical phrases: universality and national ownership of development programs.

   Japan went further than the U.S. letters to Dervis and said that no country that disrespects Security Council resolutions should get development aid. Russia disagreed, calling the singling-out of North Korea "unfair" and saying it should not be a precedent. The UK returned to the ongoing reform issue, reciting that "when information becomes available through audit, management controls or other sources that questions whether those standards are being met, then this must be treated with the utmost concern, and urgent steps put in place to resolve the matter, through independent investigation, and if necessary management actions."

            Inner City Press asked UNDP's Ad Melkert, what about making audits available to the public? Once again, Mr. Melkert expressed generalized support for the idea. But during this week's Executive Board meeting, the issue has not been raised, according to the Board's chairman. Melkert continues to say that UNDP has to confer with other funds and programs, like UNICEF, the World Food Program and the UN Population Fund, UNFPA.

   UNICEF for now repeats that internal audits are "management tools," and therefore confidential. As to UNFPA, of which Inner City Press has obtained internal management audits from multiple sources, click here for that, the policy is still not clear, as UNFPA spokesman Abubakar Dungus continued hiding in plain sight on Thursday.  On Monday Mr. Dungus said the answer would be provided that day. It wasn't, and then Mr. Dungus sent out a message that he would be away until Thursday. He was spotted in the building, and even as Thursday ended, no response has been received. Transparency at the UN? Calling Mister Dungus...  [Click here for today's story on the UNOPS portion of the afternoon's meeting.]

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Before UNDP Meeting, North Korea Reaches out to G-77 and Deal for Silence Reached, Unless a "Wrinkle"

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

UNITED NATIONS, January 15, 11:10 am, updated 4:45 pm -- The night before the expected showdown on North Korea and audits at the UN Development Program's Executive Board meeting, a deal was reached, Board diplomats say. Under the deal, according to one of its proponents, UNDP would suspend its programs in North Korea pending an audit. The diplomats predicted that unless any "wrinkles" emerge when the agenda item is called later this morning, the United States will not speak on the item. With a whimper, not a bang, one observer mused.

            A delegate from Lebanon provided a different perspective on the process. North Korea made a pitch to the Group of 77 organization of developing countries, rallying support to the idea that suspension and an audit would create a precedent for further "politicization" of development and of UNDP. This too appears to have had its effect.

            A diplomat seen as demanding reform pointed out that even if the audits are done by the same Board of Audit which previous concealed the North Korea - UNDP internal audits of 2004, 2001 and 1999, this time that Board is led by France, which has said it can and does use outside counsel and auditors. It is said that between Ban Ki-moon's Friday announcement of urgent worldwide inquiry into all activities of UN funds and programs and his Monday narrowing of scope, agencies and diplomats complained of the dangers of a full external audit. And so this deal, which as of 11 a.m. in the press gallery appears to be on track. We'll see -- it sounds as if the sides' understandings or spin of any deal are quite different.

UNDP & flags

            Also seen from the bleachers, to which the working press was confined, was a team from UNDP's Communications Office, including a blond woman accused by an Executive Board member's spokesperson of seeking to eavesdrop of what the spokesperson was saying. Notes were being taken, and spin was being prepared. It has twice been announced that UNDP's Ad Melkert -- who is said to have led the overnight negotiations, rather than Administrator Kemal Dervis -- will take media questions after the morning's session.

Update of 4:45 p.m. -- The fix in fact was in, or was finalized between 12 noon and 12:30. Ad Melkert read out a statement, and the chairman banged the gavel to approve it. Only then did the speechmaking start, following by two Q&As at the Security Council stakeout. And they will be reviewed, on this site, after UNDP makes available information it said it would, including on the specifics of the Nationally Executed programs it has allowed in North Korea, and after a few further inquiries. Watch this site. [See above]

On UN Reform, Grandstanding and Apathy, on UNFPA at Least, Despite Tax Evasion on Milk and Cars, UNDP to Follow

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

UNITED NATIONS, January 24 -- While the UN Development Program scandal and why Ban Ki-moon so quickly scaled back his announced investigation were discussed Wednesday at the UN's noon press briefing, downstairs on similar issues lethargy and grandstanding slipped back in.

            At the Executive Board meeting, the UN Population Fund's country programs including in North Korea were up for debate -- except that there was none. It required five countries' request to get a country plan discussed. On UNFPA's North Korea plan, only the United States and Japan spoke up. Afterward Inner City Press trailed a U.S. representative into the hall and asked, "Is it that the U.S. couldn't get three more votes?"

            "I wasn't in there when it happened," the representative answered. Journal jeremiads have many after-the-fact parents, but failure like this is an orphan.

            After the U.S. and Japan spoke -- followed by Moldova on the topic of Transdniestria -- it was announced that Thoraya Ahmed Obaid, director of UNFPA, saw nothing in what was said to respond it. Among the things said was a call that internal audits of UNFPA, of the type Inner City Press quoted from in yesterday's story, click here to view, should be made available to the public. No comment on that?

Thoraya Obaid up against the wall, no comment

            At the UN's noon briefing, Inner City Press asked what had happened, to have Ban Ki-moon scale his January 19 call for a worldwide, external inquiry into all funds and programs back to his Jan. 22 recitation that the same old board of auditors will review three and only three issues with regard to North Korea. Video here, from Minute 9.

            "That's just the first step," the spokesman answered, adding that the UN's Warren Sach -- who readers will last remember dodging phone calls about wasteful spending at the Vienna Cafe -- and "at least one auditor" will be taking questions on Friday. We'll be there.

   Inner City Press also asked the new spokesman for the General Assembly President if either the Secretary General has spoken with her about the upcoming audit and inquiry. Video here, from Minute 37:57. "No, I don't think that came up," the spokesman said. But they met, or took another photo, on Tuesday...

            Meanwhile, UNFPA spokesman Abubakar Dungus has ostensibly gone missing. On Monday he emailed Inner City Press promising answers on that day, to questions about UNFPA's payments in North Korea and elsewhere, and policy on audits. But Monday passed without a single piece of information. Inner City Press called and emailed again, and repeated the process on Wednesday. Now Mr. Dungus has deployed an auto-respond message that he is out until Thursday (after the UNFPA votes). But a number of Mr. Dungus' own colleagues concede that he is around. So why the hiding? Where are the answers? One production wag muttered that Mr. Dungus has left a big news hole.

            We'll use the opportunity to provide further detail on a UNFPA issue previously alluded to: the "post-facto approval" for the purchase of 4 million cans of baby milk for $6.3 million on behalf of the Egyptian Ministry of Health and Population.

            The Contract Review Committee recites that concerns were expressed "to the Egypt UNFPA Representative as to whether or not UNFPA should be buying baby milk at all and whether this was within the mandate of the fund. [Nevertheless] Hooweget International was selected to supply the baby milk at a total cost of Euro $4,883,284.50... The funds were converted into USD dollars by the UNDP Treasury and placed into UNFPA bank account." Of course, "the usual applicable fee for third party procurement services of 5%" was collected. The quid pro quo, as with much of what UNDP does, was the evasion of applicable taxes...

            Here's another tax evasion scheme, by an individual lists as joint UNDP / UNFPA: Alaadin Morsy. Mr. Morsy was confronted with a threat of prosecution concerning "the vehicle that you imported when you were first place on the ATR Project in Egypt... the vehicle was imported for your personal use without paying customs duties to the Government of Egypt.  If you were employed for less than three years on the project, you were obligated to either re-export the vehicle or pay the customs duty that would have been owed when you imported the car in 2002. Your employment with the project was terminated after one year and you should have taken one of these two action. To the best of our knowledge and that of the Ministry of Foreign Trade and Industry and the Egyptian Customs Authority, you have not done so. Mr. Tim S. Buehrer of the Secretary-General's office has stated that he has contacted you on numerous occasions concerning this matter but that you have not responded."

            Ah, UNFPA and UNDP. The latter will be the topic in Conference Room 2 on Thursday, and Inner City Press will be there. Watch this space.

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

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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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