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At UNOPS, Side Deals for Danish Relocation, Mattsson and Dalberg and the DSA Farming of Vitaly Vashelboim

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

UNITED NATIONS, January 23 -- The UN Office of Project Services is two years late in certifying its financial statements. As new UN Secretary General Ban Ki-moon calls for an "urgent, system wide and external inquiry into all activities done around the globe by the UN funds and programs," UNOPS stands out for not even having a certified audit in place.

            An investigation of UNOPS by Inner City Press has found a hotbed of favoritism, of supervisors distracting line employees from their logistical tasks in support of such efforts as mine removal, and of financial mismanagement hidden from the Executive Board.

            Last January, the Board was told that UNOPS wanted to move its "headquarters functions" from New York to Copenhagen. Bids had been selected, not only by Denmark, but also France, Germany, Italy and Spain. (Dubai later joined the bidding.) Denmark was selected, sources say, due to the inclusion in its package of a "transition fund," which UNOPS insiders call no more than a slush fund for management. The quid pro quo was a requirement that 120 jobs be moved to Copenhagen, a condition not disclosure to the Board one year ago, and resulting in disruption of such functions as mine removal now.

            Current UNOPS head Jan Mattsson previously served as the head of the UN Development Program's Bureau of Management, where as Inner City Press has reported, he handed out controversial contracts to Dalberg Global Development Advisors, whose founder Henrik Skovby worked for UNDP "both at their headquarters and in the field," and is still listed as a UNDP employee. (The lead person on Dalberg's advisory board, Sam Nyambi, lists his experience as having supervised 110 staff at UNDP and served as UNDP Resident Representative in Ethiopia.)

            Now it emerges that once Mattsson took over at UNOPS, he has also handed this agency's money to Dalberg. In an August 16, 2006 email to all UNOPS staff, Mattsson announced that Dalberg would be paid to "help us build a better UNOPS."

What could this Guatemalan kids do with Vitaly V.'s Daily Sustenance Allowance? See below.

            By most accounts, and as reflected by its inability to file certified financial statements, UNOPS has been in decline for years. It began as a unit of UNDP then spun off as independent, and proudly self-supporting. Then-chief Reinhart Helmke hung a banner at a staff retreat, "UNOPS, the One Billion Dollar Agency."

            Moving from the Daily News building to the Chrysler Building, money was overspent. Soon UNOPS was paying, it claimed, $20,000 per year for each computer terminal used, not including salary or benefits. An idea arose to relocate jobs out of New York. Proposals arrived from France and Germany, Italy and Denmark, talk of the Swiss and of Dubai. One year ago, the Board was informed that "headquarters functions" would be relocated, under a business case of cost-savings.

            Behind the scenes, interim Executive Director Gilberto Flores, who preceded Jan Mattsson, had cut a deal with Denmark: 120 jobs as a quid pro quo for, among other things, a transition fund with very few restrictions.  There was only one problem: the "headquarters function" remaining in New York did not add up to 120 jobs. And so a decision was made to relocate operating units as well, including those which service mine removers in the field.

            This being the UN, a veneer of participation was demanded. While behind closed doors Gilberto Flores declared he would never break his job commitment to the Danes, Ms. Roswitha Newels, who had made the misleading presentation to the Board, emerged to dialogue with staff. Facilitators arrived, ostensibly from UNDP's Management Change Team, run by one Tina Friis-Hansen. The facilitators' names were Georges Von Montfort and Lisa Rienarz.  (As it turns out, they are employees of Mattsson's favorite consultant Dalberg, and not UNDP staffers at all.) These facilitators nodded at angry staff talked, then mis-summarized the complaints to now-director Mattsson.  A proposal emerged to relocate personnel not only to Denmark but also Nairobi.

            With the staff more and more restive, Ms. Newels decided to commission a study to resolve the matter. Such studies require at least the veneer of objectivity. But Ms. Newels issued a sweetheart contract, which she only later entered in the system, to a close friend of hers, Ivo Pokorny.  For $700 a day, Mr. Pokorny produced a barely two and a half page memo, followed by a one page, hand-drawn chart. Requests to see Pokorny's final product have been rebuffed, as have question of when UNOPS will come clean to the Board, as well as file financial statements.

            UNOPS does appear, however, in the public audits of other UN agencies. The most recent public audit of UNICEF, for example, states that

"UNICEF is supporting construction projects for schools, health centers, and water and sanitation networks in Indonesia, Sri Lanka and the Maldives that represent an aggregate budget of $152.1 million. The three country offices have little experience, if any, overseeing major construction works. They entered into contracts with UNOPS (for permanent structures) and with IOM (for temporary schools in Indonesia) without clearing their clauses with the UNICEF senior advisor (Legal) resulting in the interesting of UNICEF not adequately safeguarded. For instance, the Indonesian school construction contract with UNOPS ($90 million) committed UNICEF to a set unit cost per building, over a three-year period, with no clause covering a rise in prices.... UNICEF failed to set up a consistent mechanism to follow up the implementation of the projects, monitor the work of the contractors and management the relationship with UNOPS." A/61/5/Add.2, page 42-43.

            As this interim profile of UNOPS should make clear, issues to be inquired into in the wake of the UNDP scandals should not be limited just to North Korea, or to hard currency, secondment and auditors' access. The problems at UNOPS are systematic and require full public review and disclosure, and then substantive action. This is what Ban Ki-moon called for on January 19, then appeared to turn away from on Jan. 22. With the poor and needy be served by reform and accountability of these agencies in charge of money to serve them? We'll see.

            Other UNOPS issues involve Daily Sustenance Allowance abuse and overpaying of Mattsson's deputy Vitaly Vanshelboim. Mattsson brought Vashelboim to New York, and has now sent him back to Copenhagen (where Mattsson's yet to move).  The totals paid to Mr. Vanshelboim for multiple relocations, travel and Daily Sustenance Allowance are the subject of outrage even within UNOPS staff, who says that the Board of Auditors inquiry recently announced by Ban Ki-moon should act on them.  And what does Dalberg do for Mattsson? Inquiring minds want to know. But UNOPS.org does not list any media contact, and UNDP has still not responded to Inner City Press' January 16 questions about Dalberg and related policy issues.

            Documents, however, require no comment to report. Inner City Press has obtained a copy of a January 15, 2007 email from UNDP's Arne Christensen bragging that "UNDP / IAPSO has recently placed an order for several units of thermo vision equipment installed in mini-busses (surveillance equipment) for the State Border Guard Service of Ukraine... UNDP / IAPSO would be pleased to offer our expertise in procurement of material and equipment for border enhancement to other CO offices, as well as other UN offices involved in similar programs."

            Beyond the question, "what is UNDP doing buying surveillance equipment for Ukraine," we note that UNOPS in its search for survival is lobbying behind the scenes to acquire the "P" (procurement") from UNDP's IAPSO. But why would the UN system allow an agency which is so far delayed in filing its certified financials to acquire anything, or to continue to mislead its Board about a deeply flawed proposed move of core operating functions like mine removal to Denmark because of a secret slush fund deal? Developing.

  Because a number of Inner City Press' UNOPS 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 UNOPS 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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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.

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

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Kofi Annan Questioned about Congolese Colonel Who Kidnapped Seven UN Soldiers

UN Silent As Congolese Kidnapper of UN Peacekeepers Is Made An Army Colonel: News Analysis

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

UN's Corporate Partnerships Will Be Reviewed, While New Teaming Up with Microsoft, and UNDP Continues

BTC Briefing, Like Pipeline, Skirts Troublespots, Azeri Revelations

Conflicts of Interest in UNHCR Program with SocGen and Pictet Reveal Reform Rifts

UN Grapples with Somalia, While UNDP Funds Mugabe's Human Rights Unit, Without Explanation

UN Gives Mugabe Time with His Friendly Mediator, Refugees Abandoned

At the UN, Friday Night's Alright for Fighting; Annan Meets Mugabe

UN Acknowledges Abuse in Uganda, But What Did Donors Know and When? Kazakh Questions

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

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

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