UNITED
NATIONS,
April 12 --
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.
Now Secretary
General Ban
Ki-moon's
chief of staff
has scheduled
a "Global Town
Hall Meeting"
to "provide
reassurance
concerning the
health of the
Fund itself...
in response to
recent
attention
surrounding
the United
Nations Joint
Staff Pension
Fund."
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.
And
on this, the
allegations of
(some) staff:
-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.
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:
, 
