Monday, December 24, 2007

U.N. Body Plans to End Investigation of Contracts


UNITED NATIONS — The General Assembly is preparing to put an early end to an in-house panel that has exposed more than $600 million in tainted United Nations contracts and is currently investigating an additional $1 billion in suspect agreements. A budget committee of the General Assembly is scheduled to vote as early as Friday on a resolution that would force the panel to close down its operations in six months.

The effort to scuttle the panel is not a budget matter so much as a political one, and it represents the continuing suspicion developing countries have about international intervention in their affairs.

The fight has been led by one country, Singapore, which contends that a United Nations official from there has been treated unfairly in an investigation. The resolution also recommends that the panel itself be investigated for the way it has treated officials and diplomats.

In its effort to curtail the task force’s work, Singapore succeeded in winning over the powerful Group of 77, an assemblage representing the developing world that has grown over the years to 130 nations.

The threatened shutdown of what has been a penetrating inquiry comes at a time when the United Nations is still recovering from the findings of mismanagement and corruption in the oil-for-food program made by Paul A. Volcker. Mr. Volcker, a former Federal Reserve chairman, said in the 2005 report that the United Nations suffered from a “culture of inaction.”

The six-month cap would effectively finish off the investigative unit, said its director, Robert Appleton, a former assistant United States attorney in Connecticut. Mr. Appleton also served as special counsel to the inquiry into the program under which Iraq was allowed to sell some of its oil, despite United Nations sanctions, to meet the needs of its civilians.

“The investigations will obviously cease,” Mr. Appleton said Thursday, noting that the United Nations currently had no other unit “to address these matters.”

“We have five people who will leave because of the uncertainty, and it is difficult to recruit competent qualified investigators for six-month contracts,” he said. “Also, companies will delay and wait us out until we leave.”

Inga-Britt Ahlenius, the under secretary general for internal oversight services, said that letting the task force expire “would undo the great work that has been accomplished so far and expose the organization to greater risk.”

The 18-member procurement task force, seven of whose members came from the Volcker inquiry, was created in January 2006 to pursue irregularities in United Nations purchasing that had arisen in the earlier investigation.

United Nations officials have generally been supportive of the effort, noting approvingly that the investigation is one they created themselves. Secretary General Ban Ki-moon has said he supports full financing for the panel, though he added that ultimately the decision was the General Assembly’s.

Some of the task force’s work involves cases of graft and corruption in the developing world that many delegates do not want the United Nations looking into, but the major cases, according to investigators, involve large multi-national entities with teams of New York lawyers defending them.

Its findings that 10 significant instances of fraud and corruption had tainted contracts worth $610 million was published in The Washington Post on Tuesday.

Ms. Ahlenius told the budget committee last month that the panel’s work had been thorough and effective. She listed more than 300 accusations examined, 22 reports issued on 63 individual cases, 250 cases still open and 31 vendors disbarred as well as corruption discovered in several United Nations missions and large contracts abroad.

United States prosecutors used the task force’s work to help convict Sanjaya Bahel, a former United Nations procurement officer, on fraud and bribery charges for steering $100 million in contracts to an Indian company in exchange for cash and deals on Manhattan luxury apartments.

The current argument is not an economic one. The task force is asking the committee for $4.9 million for the whole year, an amount that would almost surely be offset by the amount of reimbursed and repatriated money the United Nations would receive from the outcomes of the task force’s work. It has already identified $25 million in misappropriated money.

The case that led Singapore to try to shut down the panel involves Andrew Toh, who has been in various forms of suspension and paid leave after questions were raised two years ago about the leasing of two Peruvian helicopters for a peacekeeping operation in East Timor.

This October, Mr. Toh was cleared of charges in that case but found negligent in not properly declaring his financial assets for 2004 and 2005 and not cooperating with the task force. Mr. Toh contends that he was denied legal counsel by the task force. The task force said that Mr. Toh was not entitled to it under United Nations practices.

Singapore contends that the panel is engaging in unfair tactics in trying to preserve itself. Kevin Cheok, the country’s deputy ambassador, complained to the budget committee on Monday.

“Anyone who voices concern about the behavior of the procurement task force has been painted as somehow being pro-corruption or anti-reform,” Mr. Cheok said.

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