UNITED
NATIONS,
April 16 --
Irregularities
at the $50
billion UN
Joint Staff
Pension Fund,
which Inner
City Press has
previously
exclusively
covered, for
example here,
have grown
worse,
according to
whistleblower
communications
received by
Inner City
Press from
multiple
sources, and
published on
March 29.
So Secretary
General Ban
Ki-moon's
chief of staff
scheduled a
"Global Town
Hall Meeting"
for April 16
to "provide
reassurance
concerning the
health of the
Fund itself...
in response to
recent
attention
surrounding
the UN Joint
Staff Pension
Fund."
But when Inner
City Press
arrived at 9
am to cover
the meeting,
the sign
outside said
"Closed." Nonetheless,
numerous
sources in the
meeting,
including by
video,
informed Inner
City Press how
it went.
Amazingly,
neither RSG Boykin
nor Sergio
Arvizu spoke a
single world.
The outgoing
chief of the
Office of
Internal
Oversight
Services was
cited as
having investigated
and found no
basis to the
fraud charges
- but when
asked, could
not provide
any case
number of any
investigation.
The plea was
to not speak
to the press,
to avoid
social media,
to keep the
investigation
in-house. But,
what
investigation?
Chief of staff
Malcorra ran
the meeting,
and reported
said she would
answer all
questions. But
as Inner City
Press
witnessed in
the hallway
outside the
ECOSOC Chamber
afterward, the
person who won
the most
recently held
Staff Union
election was
not even
called on and
allowed a question.
So, we quote
here from his
prepared
remarks,
referring to
the statement
sent to the
Press for the
Under
Secretary General
for
Management:
"When we see
the Chief
Surgeon
intervene in a
routine surgery,
or the Fire
Chief rushing
to douse a
kitchen fire,
the writing is
on the wall
that something
is amiss."
It is, and it
has not been
addressed. A
speaker from
the floor who
was critiquing
pensions funds
was told to
wrap up his
remarks, while
those praising
management
went on and
on. This is
the same as
the UN
propping up
its UN Censorship
Alliance,
which not only
doesn't push
Ban to answer
more questions
but even tried
to get the investigative
Press thrown
out for its reporting
on Sri Lanka
and conflicts
of interest.
While Herve
Ladsous openly
refuses,
even those
saying they
answer all questions
appear to mean
only those
questions they
pick. But
unanswered
questions
don't go away.
We'll have
more on this.
Inner City
Press began
this series
with issues
concerning
UNJSPF CEO
Sergio Arvizú,
then also RSG
Carolyn Boykin
(who should
belated answer
questions on
April 16, UN
Spokesman Stephane
Dujarric
answered Inner
City Press.)
Because the UN
has dodged or
refused all or
nearly all
Press
questions on
this,
including
those raised
at the UN noon
briefing, here
are a few more
issues and questions
on the
investment
side:
Source
indicate
Boykin brags,
internally,
that the IMD
fund has
reached an
all-time high,
citing an
April 10th
report. There,
the biggest
share is
public equity,
which is
64.4%. In the
last column,
the fund
return 5.15%,
the line below
is the equity
market, which
return 5.21%.
That is under
performing the
market. They
ask:
Who
leaked the
hedge fund
investment
strategy
to CNBC?
Why has Ivan
Pictet
resigned after
such a long
service?
On the D2
recruitment,
below: Why the
JO was
cancelled? Why
did she write
such a
discriminatory
JO for D2
(Order 50 of
the Tribunal
court). On
Para 30, why
the Tribunal
court is
investigating
discrimination
and abuse of
power?
Why in just 6
months, does
she have a
tribunal case
about
discrimination
against her?
When
was the last
time she
actually
managed money?
The UN sources
say that after
Maryland, she
was not hired
by any fund
manager and
she was
consulting not
managing money;
she only
consulted the
clients of the
firm Bolten
Partners but
has not
managed
portfolio).
Did she
reveal her
Maryland issue
to the
interview
committee? Can
interview
report be made
public?
Here
is from
UNDT/NY/2015/021
"The
Respondent has
misinterpreted
the
subject-matter
of the motion
for interim
relief and
disregards,
briefly in
four
paragraphs,
the central
issues in this
case which are
(1) whether it
is
discriminatory
to require a
candidate to
be the holder
of CFA
certification
in order to be
eligible for
consideration
for the post
and (2)
whether the
decision to
include the
contested
educational
requirement
was
ill-motivated
so as to
exclude
specific
candidates,
including the
Applicant, and
whether it
constituted an
abuse of
authority."
And
there's this:
RSG
Boykin moved
all IT to the
UN
International
Computing
Center without
due process.
Sources tell
Inner City
Press that on
December 8,
2014, she left
seven IT staff
in a room
without
windows. They
say they were
not allowed to
leave the
room, use a
batroom
without beeing
accompanied
nor use any
phone or PDA.
In that time
she ordered
the transfer
of IT
credential to
the UNICC. The
rationale was
that the IMD
email was
leaked - but
ICC already
had access to
IMD email
prior to 8
December 8,
2014. Sources
assume she
planned all
this when she
met with Mr.
John Simon,
Diretor of
ICC, late
November 2014.
The RSG is
kicking out
Charles River
trade order
management
system;
multiple
sources say
her goal is to
replace it
with Bloomberg
AIM without
going thru a
due process,
an RFP. As a
result, the
contract with
Bloomberg is
incresed to
over $2
million
per year.
There are
other UN
connections
with
Bloomberg.
On
the other
side, there
are questions
publicly
raised, to be
answered,
including of
course
-Attempts
by the fund
CEO, Sergio
Arvizú, to
recruit a new
CFO,
subsequent
found to be
unsuitable for
the post.
- A
consultancy
services
contract worth
$520,000,
divided into
two, so as to
avoid scrutiny
by the
Headquarters
Committee on
Contracts, a
committee that
only reviews
procurement
requests above
$500,000.
- Attempts by
the CEO to
approve return
air tickets
from Mexico to
New York for
four
individuals
with no
relationship,
contractual or
otherwise, to
the fund.
- Irregular
modification
of a vacancy
announcement
in order to
favor a
particular
candidate to
the post of
D-1 Chief of
Legal
Services.
- Attempts by
the CEO to
give a
short-term
contract to a
90 year-old
referee on his
CV -- this
person was
said, on March
31, to be
closer to 100
years old.
A
failure to
disclose a
conflict of
interest
involving JP
Morgan Chase
was also
alleged.
On
April 13,
Inner City
Press asked
Ban's
spokesman:
Inner City
Press: This
has to do with
what you put
out or what
was put out
from
Under-Secretary-General
[Yukio] Takasu
about the
pension
fund.
Now I'm aware
there's going
to be some
kind of town
hall meeting
about it. I
guess I would
just wait to
see what
happens at the
town hall
meeting,
except that I
notice that
the statement
had almost
nothing do
about the
investment
component, Ms.
[Carol] Boykin
and the
representative
of the
Secretary-General
on
investments,
and I wanted
to ask, one,
there's an
OIOS [United
Nations Office
of Internal
Oversight
Services]
report about
procurement of
an IT
contractor
called
[inaudible --
it's Murex]
that remains
outstanding.
There's the
postponement
of a D-2
position based
on a finding
of dispute
tribunal.
So is this
town hall
meeting
intended to
address all of
these issues?
Spokesman
Stephane
Dujarric:
I think the
town hall
meeting is
intending to
address the
concerns that
staff members
either through
staff
representatives
or
individually
have
raised.
I think it's a
very normal
reaction to
the concern.
Whenever
people talk
about their
pensions, I
think people…
it's their
future.
And I think
it's… it's
only normal
that the
management,
senior
management of
this
Organization
would address
directly and
all the
questions.
There will be…
there are no
issues that
are off-topic
during the
town hall
meeting.
If people want
to raise
issues about
investment
issues, about
staffing
issues.
Inner City
Press:
Will Ms.
Boykin be
there and be
able to answer
question?
Spokesman
Dujarric:
I don't know
personally.
I would
assume…
strongly
assume and
based on my
assumptions
that the
leadership of
the Pension
Fund, whether
it's on the
investment
side, the
liability
side, will
obviously be
there and be
able to answer
questions.
I think…
again, it's
best to
address these
things head
on.
If that's
true, about
addressing
things head
one, why did
the UN resist
confirming
when Inner
City Press
three times
asked if
Investment
Committee
chair Ivan
Pictet had
resigned?
Why did
Ban's
representative
to the Pension
Fund Carolyn
Boykin never
appear to
answer
questions as
had been
proffered?
Now
there's talk
of a shift
into hedge
funds, and
irregularities
in contracting
for IT
services, from
Murex
(criticized by
the UN's own
Office of
Internal
Oversight
Services)
prospectively
to Bloomberg
without a full
procurement
process. The
way to
"provide
clarity" is to
answer or at
least try to
answer
questions when
they are
asked. We'll
have more on
this.
On
April 8, after
Inner City
Press three
times asked
the UN
spokespeople
to simply
confirm that
Ivan Pictet
resigned as
chair of the
Fund's
Investment
Committee,
lead spokesman
Stephane
Dujarric
belated
acknowledged
it. UN's
transcript.
Then on
April 10,
against
belatedly, the
UN issued a
lengthy
statement,
which in
fairness we
publish here
in full, while
our series on
the Pension
Fund, now on
its Investment
Committee,
continues:
In response to
recent reports
about the
Joint Staff
Pension Fund,
Under-Secretary-General
for Management
Yukio Takasu
has the
following to
say:
Various
communications,
including in
the media,
have
unfortunately
been
circulated
recently
alleging fraud
and
irregularities
at the United
Nations Joint
Staff Pension
Fund (“UNJSPF”
or “the
Fund”). I
would like to
provide some
factual
information to
clarify any
misunderstandings
and
misrepresentations.
The UNJSPF
enjoys a
healthy funded
status in
excess of 90%,
and we are
committed to
preserving the
sanctity of
the Fund.
The UNJSPF
takes every
precaution
they can to
prevent fraud.
Staff who have
any
information of
alleged
wrongdoing are
obliged to
report those
concerns to
the United
Nations Office
of Internal
Oversight
Services
(OIOS). All
allegations of
fraud,
misconduct, or
violation of
applicable
human
resources or
financial
rules and
regulations
are, and will
continue to
be, taken
seriously and
fully
considered.
OIOS has
confirmed that
they have
reviewed the
nature of the
recent
allegations
that have been
brought to
their
attention.
OIOS has
indicated that
none of the
allegations
that have
appeared in
the press thus
far constitute
financial
fraud. OIOS is
collecting all
information
available on
this
situation, and
will examine
closely every
allegation.
As required
for any large
pension fund,
the UNJSPF has
a very robust
internal
control
framework,
with several
oversight
bodies
including, but
not limited
to, internal
auditors
(OIOS),
external
auditors, a
Pension Board,
an Audit
Committee, an
Asset
Liability
Monitoring
Committee, an
Enterprise-wide
Risk
Management
Working Group,
and Risk
Management
&
Compliance
staff.
The governance
structure of
UNJSPF also
reflects a
clear
delineation of
responsibilities.
Reporting to
the UNJSPF
Board, the
Chief
Executive
Officer, Mr.
Arvizú, is
responsible
for the
liability side
of the Fund,
primarily for
administration
and benefit
payments.
Management of
the
investments of
the Fund is
the
responsibility
of the
Representative
of the
Secretary-General
(“RSG”), Ms.
Carol Boykin,
who reports to
the
Secretary-General.
In order to
ensure the
effective
operation of
the Fund, the
United Nations
Pension Board
has long
recognized the
requirements
of the Fund to
have staff
with very
specific and
long-term
expertise,
owing to the
complex
pension
design,
financial
management and
global
payroll, and
that the
Fund’s human
resources
management
should be in
line with its
operational
and investment
needs. As
such, since
2000, there
has been a
memorandum of
understanding
in place which
stipulates
that UN
administrative
procedures and
directives do
not
automatically
apply to the
Fund staff,
since the
requirements
of the Board
take
precedence.
The United
Nations
Pension Board,
and the
General
Assembly, have
requested that
this existing
memorandum of
understanding
be reviewed
and updated.
Consideration
on the
elements of a
revised
memorandum of
understanding
is ongoing and
will involve
the
appropriate
consultations
with staff.
Any decisions
on human
resources
policies or
the financial
rules
governing the
operations of
the UNJSPF
will be taken
with a view to
ensuring they
are best
suited to meet
the
operational
and investment
needs of the
Fund.
We'll
have more on
this - watch
this site.
From the UN's
April 8
transcript:
Inner
City Press:
This has to do
with the
Pension Fund,
as I alluded
to. I
asked Farhan,
then I asked
you, whether
the head of
the investment
committee of
this $50
billion fund
has
resigned.
And I wanted
to ask now,
that I've
heard that a
memo has gone
to the Fifth
Committee to
that effect.
Spokesman:
Yes, it has…
he did
leave.
He did
resign.
And if I'm not
mistaken, he
said that
after, I
think, almost
10 years of
service, he
felt it was
time to move
on.
We're
obviously very
grateful for
the time and
effort Mr.
Pictet put
into his role.
Inner City
Press:
I've heard
also that his
letter of
resignation
actually makes
some
criticism.
Is that a full
summary?
Spokesman: No,
I would…
I would not
agree with
that
assessment.
Inner City
Press: What's
the process
for actually
appointing a
new
Chairperson of
this $50
billion
fund?
What's the
Secretary-General's
role?
Spokesman: I
will find out.
Well, Inner
City Press is
multiply
informed that
RSG Carolyn
Boykin has
been proposing
current IC
member Linah
Kelebogile
Mohohlo, but
that there are
attendance
issues.
Other IC
members with
questions:
Simon Zheng of
China, about
Boykin's (lack
of) knowledge
of the RMB,
and Achim
Kassow of
Germany. There
are others,
and we'll have
more.
On March 30,
Inner City
Press asked UN
deputy
spokesperson
Farhan Haq:
Inner
City
Press..
about alleged
irregularities
in the Pension
Fund and a
desire by the
current Chief
of the Pension
Fund to change
the rules so
there's less
outside
review. Is the
Secretariat
aware of these
concerns and
how does the
Secretariat
think they
should be
resolved, and
how would
staff in New
York be
represented as
to this $53
billion fund?
Deputy
Spokesman
Haq: As
you know, the
Secretariat in
the form of
the
Secretary-General
does not have
control over
the Pension
Fund.
It's not
something that
I can comment
on.
You'd have to
take that up
directly with
the Pension
Fund.
It seemed a
strange or
telling
answer, given
that there is
a
Representative
of the
Secretary
General to the
pension fund,
Caro Boykin,
on whom Inner
City Press has
previously
reported, here.
More recently,
as first
reported here
by Inner City
Press,
Boykin's
management has
been questioned
by the UN
Dispute
Tribunal on
March 30,
2015, here,
in Singh vs
UNSG (Ban
Ki-moon):
"the
Applicant’s
request for
management
evaluation was
deem
ed premature,
and thus not
receivable.
However, the
MEU made the
following
observations:
"Following
communications
with the
UNJSPF, the
MEU noted that
the job
opening for
the Post was
exceptionally
approved by
[OHRM] and
later reviewed
and approved
by the Central
Review Board.
The MEU
learned that
the CFA
exception was
granted
because the
future
incumbent will
be in charge
of managing
all
investments of
the [IMD],
which are
valued at USD
53 billion."
So after
learning more
about the
growing
scandal in the
UN Pension
Fund,
including
through a
staff meeting
on March 31
that was
itself
controversial,
Inner City
Press on April
1 asked Haq
again.
Haq
now said he
had spoken
with Boykin
who might --
might -- speak
to the press.
Inner City
Press asked,
yes or no, if
Investment
Committee
chairman Ivan
Pictet has
quit.
Haq did not
answer.
There
are $53
billion at
stake here,
and the
Secretary
General
appoints the
members of the
Investment
Committee.
We'll have
more on this.
The UN Pension
Fund, which
has resisted
not only Press
coverage but
also
accountability
to its own
pensioneers,
is said to be
poised to
implement a
major
reduction in
staff rights,
according to a
communication
a
whistleblower
directed to
Inner City
Press on April
2, 2014 and
which Inner
City Press
published on
April 3, here.
Inner City
Press
immediately
began
investigating
the complaint,
including a
draft
Secretary
General's
Bulletin said
to be pushed
by Pension
Fund CEO
Sergio Arvizu
Trevino. From
April 3
through the UN
noon briefing
on April 14,
Inner City
Press asked
Secretary
General Ban
Ki-moon's
spokespeople
three times
for a
response,
including to
staff unions'
letters of
protest.
Finally on
April 14 came
this response
from Ban's
spokesman: