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UN Performance Problems UN Management Accountability Struggles Where is the Rule of Law? Inadequate UN Oversight Recent Developments
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A single process -- the choice of the second head of OIOS in late 1999 and
early 2000 -- underscores basic doubts about the
professionalism, seriousness and credibility of the UN's new internal
oversight and corruption-fighting body. The 1994 General Assembly resolution establishing the OIOS emphasized that the OIOS head should be an expert in oversight work. As noted in the preceding subsection, a set of excellent, highly-professional, and experienced candidates worldwide was readily available and well-known to the UN through the more than 170 national audit institutions in INTOSAI, many of whose top officials in turn know the UN programmes well from having served as external auditors for UN System organizations in the past. Yet
the first OIOS head chosen was a German diplomat, and the second a banker and civil
servant, Dileep Nair of Singapore, in a selection process which has
many gross flaws. This
extremely disappointing choice process was succinctly revealed, in at
least five distinct ways, in a single excellent article on this high-level
UN leadership change: (a) Succession planning was
very poor. Mr. Paschke ended
his five-year term in November 1999, but his successor was chosen by the
Secretary-General only in February 2000. He assumed his office in April,
leaving the post vacant for five months with no overlap or orderly
transition. {The article
observed that "OIOS has been leaderless since November …
[and] there has been widespread concern over the lapse in
leadership.)" (b) The UN's top legal
official (and its "chief prosecutor" in staff "internal justice" appeals
cases), Mr. Hans Corell of Sweden, was chosen to "fill in" as the interim
head of OIOS, including the Investigation Section and its confidential
records. This raises serious conflict-of-interest issues that may have
compromised the "independent" and "arms length" OIOS status and its
responsibilities to protect staff confidentiality. (c) Some UN officials
asserted that the job requires a "deft diplomatic touch", a skill not
required by the Assembly resolution, nor emphasized in the audit
literature, but certainly a criterion quite helpful to the many diplomatic
candidates who lusted after this high-profile, Under-Secretary-General
post. (d)
UN officials also asserted that the UN USG salary (dubiously stated as
being "only" $95,000 a year), was too paltry to attract well-qualified
public or private sector candidates. This sour and cynical stance ignores
that UN salaries are linked to the highest-paid national civil service
worldwide, and is also a crude insult to existing UN staff as second-rate
people. (Contemporary articles noted that Secretary-General Kofi Annan, only two levels
above a USG, earned a very handsome $270,000 or so in annual total
remuneration, tax-free], while another contemporary UN job announcement
for a junior Director in New York, three levels below USG, offered a
starting net salary of $98,000-107,000, plus substantial additional
benefits.) [The
comparative salary information is from "Global fat cats", The
Economist, September 23d, 2000, p. 106,
and "Chief, D-1,
Information management … Humanitarian Affairs", The Economist,
September 2000. ] e) While there were
reputedly "some two dozen" candidates to head OIOS, there was little
transparency. Only the single
nominee chosen by Secretary-General Annan -- who is inter alia the chief UN administrative
officer whose programmes are subject to OIOS review -- was identified to
the General Assembly for its rubber-stamp approval. Betsy Pisik, "Annan
picks Singaporean for U. N. Inspector-General's job", Washington
Times, February 22, 2000. All
these elements grossly undermine the legitimacy of the UN's senior-level
appointments process (but fit firmly within defective methods for choosing
other UN senior officials).
Experts have repeatedly urged that such leaders be chosen not primarily on political
considerations but by finding and choosing among the best-qualified candidates
worldwide, in a transparent and publicly-scrutinized selection process.
Although
Secretary-General Annan has publicly stated that choosing the
"highest-calibre" people is his goal, senior-level appointments such as
that of Mr. Nair at the OIOS, are made under his discretionary power, with
no vacancy announcement, no publicized job descriptions, and no standard
recruitment or promotion procedures.
These problems have been well-analysed
in: Brian Urquhart, and Erskine Childers, A world in
need of leadership: Tomorrow's United Nations: A fresh appraisal,
revised second edition, Dag Hammarskjold Foundation and Ford Foundation,
Uppsala, Sweden, 1996, and Joint Inspection
Unit, "Senior-level appointments in the United Nations, its programmes and
funds", UN document A/55/423,
2000, "Executive
Summary" and pp. 2-10. The
second selection to head OIOS also clearly undermined, again, the
insistence of experts in the early 1990s that a strong "Inspector General"
was needed. As Childers and
Urquhart stated: "To carry maximum credulity
and universal confidence the appointee must be of impeccable repute and
with top-calibre qualifications for such
work." Erskine Childers, with Brian Urquhart, "Renewing
the United Nations system", Development Dialogue, 1994:1, Dag
Hammarskjold Foundation, Uppsala, Sweden, 1994, pp. 146-147. [emphasis
added]
Experts
in democratization say that it is the second election in a country that
shows whether meaningful reform has really taken hold. The UN's first choice to head the
new OIOS in 1994 was dubious.
But the second choice process and outcome in 2000 (however
excellent a person Mr. Nair may be) was even worse in indicating serious
disdain for proper, transparent, and professional selection of an
oversight expert. Yet once again, no one raised any serious objections,
and it appears that the selection of unqualified "diplomat
Inspector-Generals" may well continue on in the future. (A new head of OIOS is due to be
appointed in 2005.) Mr. Nair's OIOS
largely carried on as it did under Mr. Paschke. However, the pivotal incident in
Mr. Nair's term may well have occurred early on, in September 2000. An article in the Observer (UK)
reported that: "The United
Nations has been hit by an unprecedented wave of fraud, waste and
corruption. Officials at its
antifraud investigation unit say they are expecting to have to run more
than 350 inquiries by the end of the year -- nearly twice the total for
1998, and a 50 per cent increase on last year. Thousands of staff, contractors,
and consultants have been interviewed in scores of countries. … The revelations
will embarrass Kofi Annan, the UN Secretary-General, who is to welcome
national leaders … to the 'Millenium Summit' in New York next
week. … Annan is hoping to convince
skeptical heads of state that the UN has provided value for money and that
its role should be expanded. … One senior
investigator said last week that the UN investigations unit's workload was
greater than ever. 'We are seeing more and more frauds and abuses of
authority.' … The OIOS's
annual report, due out next month, will reveal cases of sloppy management,
lax enforcement, harassment and outright criminality. … OIOS is
working with dozens of interntional police forces -- including Scotland Yard -- on
inquiries into the activities of UN
personnel." Jason
Burke, et. al., "UN rocked by flood of fraud cases: Officials were
'addicted to luxury," The Observer International (UK), September
3, 2000. [Note: any such
interviews with OIOS staff seem to have come to an abrupt end thereafter,
as discussed in the subsection on OIOS investigations which follows.] The OIOS annual report
for 2000, the first under Mr. Nair, was issued only a month later. It
lacked the "fire" of the interview, but did indeed state impressively
that: "The Investigations Section investigated 38 cases which were
presented for administrative or disciplinary action: 22 of those cases
were recommended for criminal prosecution by national law enforcement
authorities." "Report of the OIOS", UN document A/55/436 of 2 October 2000, para. 156. The
2000 OIOS annual report also cited increasing workloads, declining cost
savings, no new staff, and oversight work that was overly-centralized in
New York rather than out in the field. The 2001 report was more upbeat.
It discussed new arrangements to make overall assessments of the
implementation of critical OIOS recommendations. OIOS reorganized, in
order to gather monitoring, inspection, evaluation and consulting units
into a new division to "leverage" the limited OIOS resources in a more
integrated approach, and for: "improved management
consulting services to client departments and offices." "Report of the OIOS", UN document A/55/436 of 2 October 2000,
"Report of the OIOS", UN document A/56/381 of 19
September 2001,
and "UN's
internal oversight office launches refocused annual report at Headquarters
…", Press release ORG/1139 of 24 October 2001.
In
2002 the OIOS "responded with determination to calls by Member States for
better use of [UN resources] by focusing its services to instil a greater
sense of accountability throughout the Organization." It continued a strategy focused on
three objectives: qualified staff, a culture of continuous improvement,
and improved client relations.
It introduced new initiatives of risk assessment; prioritizing
investigative assignments to handle the increasing caseload; applying its
internal management consultants to meet demands for services; supporting
self-evaluation by program managers; and upgrading its performance
management information systems.
To meet these new tasks, the office appealed to Member States for
extra-budgetary resources for a "Trust Fund for Enhancing Professional
Capacities for Internal Oversight" that it established in 2001.
"Report of
the OIOS", UN document A/57/451 of 4 October, 2002, "Preface", pp. 7-9.
The 2003 OIOS annual
report highlighted its new approach of identifying key risk areas for
oversight in its annual work plan: the highest risks were safety and
security, procurement, and peacekeeping. It hoped to get managers involved
in identifying the most serious risks in their operations, using as well
the combined expertise of the OIOS staff, and to work in collaboration
with Member States and other oversight bodies. "Report of the OIOS", UN document A/58/364 of 11
September 2003,
and "United Nations internal office
reports potential savings of $37 million identified in work of
organization," Press release ORG/1398 of 16 October
2003. [Note: these annual reports and
press releases are available at The 2004-2005 United Nations Proposed Programme Budget
showed that the OIOS has become robust and well-established. It now has
overall resources for the biennium of some $21 million plus estimated
extra-budgetary resources of another $23 million, and thus total expenses
which amount to about $22 million per year. OIOS has grown to 128
professional-and-above posts, plus 55 general service and local ones, for
a total of 183 posts. About half the posts are temporary ones,
either regular budget or extra-budgetary. OIOS headquarters are in New
York, with units in Geneva and Nairobi, and a much-expanded presence
(including some resident auditors) in field operations as well. "Proposed programme budget for the biennium 1994-1995, UN document A/58/6 (Sect. 30) of 17 March 2003, and "United Nations internal
oversight," booklet, available at the OIOS website. The OIOS website also highlighted its results in
combating waste and fraud during 2004 on its website, as a lead element of
its achievements: "Financial
benefits:
Since 1995, OIOS has exposed waste and fraud in the Organization
totaling some $290 million, of which $130 million was recovered and saved.
"
[Available at www.un.org/Depts/oios/ ]
Specifying cost savings is a tricky business,
involving estimates of possible savings, savings actually achieved, and
also waste stopped and therefore not continuing on in future years. However, at
least three overall points should be noted. ?
First, in its 10 years since the temporary unit began
in 1993, OIOS operations have cost some $170 million (10 x about $17
million per year). This is less than the total waste and fraud exposed,
but more than that recovered and saved. A good audit and investigation
unit should definitely more than pay for itself. ?
Second, the very large "waste and fraud" amounts
appear to be mostly waste, especially from careless financial management
errors involving benefits and claims. For instance, an OIOS audit in 2001 of
mission subsistence allowance rates of selected peacekeeping missions led
to recommendations which, if implemented, could save about $45 million
per year. ?
It
can take years to recover what can be recovered or to realize cost savings
identified, requiring, as OIOS notes, determined follow-up actions by
itself and UN programme managers. Meanwhile, a very high-profile new "integrity
initiative" was also cited in the 2003 OIOS annual report: " … in May 2003, the United
Nations launched the organizational integrity initiative, a three-year
programme aimed at strengthening integrity and professional ethics in the
Organization … funded by a generous contribution from the Government of
Norway … [and resulting from] cooperation between OIOS and United Nations
departments (including [OHRM]) … The initiative consists of ethics
training, staff perception surveys and outreach activities aimed at
raising awareness about the importance of integrity in the workplace. A related
objective is to enhance the
profile of the United Nations integrity-building and corruption-control
efforts just as Member States gather in Mexico to sign the United
Nations Convention against Corruption at the end of the year. The United Nations itself must
lead by example and ensure that integrity and professional ethics guide
all its work." "Report of the OIOS", UN document A/58/364 of 11 September 2003, "Preface," p.3 [emphasis added.]
The OIOS biennual programme plan for 2005-2006 stated
that OIOS assists the Secretary-General in fulfilling his internal
oversight responsibilities, with operational independence under his
authority, and the authority itself to undertake any action it considers
necessary to fulfill its responsibilities. These actions include protection of
assets, compliance of programmes with UN resolutions and rules, preventing
and detecting waste and mismanagement, and improving programme
delivery.
The OIOS strategy is to ensure an effective and transparent system
of accountability in place and to help identify, assess and mitigate risks
and threats to achieving its objectives. "Proposed strategic framework for the period
2006-2007: Programme 25: Internal oversight", UN document A/59/6 (Prog.
25), 20 April 2004, paras. 25.1-25.4. The annual report of the OIOS for 2004,
the fifth and final report submitted to the General Assembly by Mr. Nair,
marked the end of a full decade of OIOS work. It included an
Office-wide self evaluation, citation of its operational independence and
the need to ensure its independence as a cornerstone of good governance,
and the need for a proper delegation of authority to OIOS for this
end. IO
Watch will explore this OIOS self-evaluation in more detail at a later
date, recognizing that it is better (more professional) than the standard,
self-serving UN self-evaluations, in light of concurrent developments
during 2004. "Report of the Office of
Internal Oversight Services" Note by the Secretary-General", UN document
A/59/359 of 13 September 2004, Preface. In
fact, during 2004 the central issues and tensions of the operational
"independence" of the OIOS under the authority of the Secretary-General,
and its role in ensuring "an effective and transparent system of
accountability in place", were thrown into sharp relief in what became a
most interesting -- and very troubling year. Mr. Paschke had ended his five year term expressing
considerable pride in what he had achieved, citing much critical
accountability and oversight work still to be done (as if he had been an
observer rather than the key responsible official), and with unequivocal
accolades from Secretary-Annan, who stated in his covering note to the 1999 annual report
that: "The
Secretary-General concurs with the observations of the
Under-Secretary-General [of OIOS] in his preface that the independence of
the Office has never been compromised during his tenure. He has enjoyed
the complete support of the Secretary-General." "Report of the
Secretary-General on the activities of the OIOS", UN document A/54/393, of
23 September 1999, Covering
Note,
para. 2. IO
Watch believes that overall the OIOS of Mr. Nair did a much better job
than that of Mr. Paschke. It became regularly involved in (instead of
avoiding) broad management audits of key areas such as peacekeeping, human
resources management, and management systems. It performed
more, and more substantive, investigations of fraud and mismanagement
scandals in the Secretariat, even those involving some senior officials
(although only after the stories hit the media), and generally upgrading
the quality of OIOS work and financial support to expand its
activities. But there were continuing fundamental problems as
well. The
OIOS took its eye off the key task of putting a transparent and effective
accountability system in place, choosing instead to work closely
to help and support managers. In addition, the OIOS was hampered
because the General Assembly continued to be rather awkward and
inconsistent in handling and acting on substantive OIOS reports, a major
continuing failing which this archive explores further with calls for
annual results and status reporting to the General Assembly and especially
the creation of a General Assembly audit subcommittee under Recent
Developments . Above all, the actual "independence" of this internal
oversight unit under the authority of the Secretary-General was called
into severest question. Six key developments occurred (plus the
fundamental weakness of OIOS as an investigative "fig leaf", which is
discussed in the next subsection). FIRST,
as already noted, in 2003 the OIOS established a three-year Organizational
Integrity Initiative, funded by Norway, to strengthen integrity and
professional ethics in the UN and enhance United Nations
integrity-building and corruption-control efforts alongside the new United
Nations Convention against Corruption established in late 2003. The OIOS
also joined with Harvard University in establishing an Executive Programme
on Corruption Control and Organizational Integrity designed for executives
from the public, private and not-for-profit sectors around the world. And
in addition, the UN underscored that it too must exemplify these processes
in its own operations. As a message from Secretary-General
Annan informed a Global Forum in 2003: [Secretary-General
Kofi Annan, in a statement to a global forum on Fighting Corruption and
Safeguarding Integrity, in Seoul, Korea in May 2003] .. emphasized that
corruption facilitates organized crime, human trafficking, and terrorism
and asked the delegates to support the … pending UN Convention on
Anti-Corruption. … 'For too long, the
world has looked the other way while corrupt elites looted their countries
of hundreds and even billions of dollars …' Mr. Annan said. Continuing, he said,
'The United Nations itself has launched an Organizational Integrity
Initiative designed to promote professional ethics, improve accountability
and better protect our resources and reputation. … After all, if United Nations agencies are advocating
integrity and good governance, we ourselves have a duty to lead by example
and practice what we preach.' "Global Forum III: Ongoing challenges, shared
responsibilities", US Agency for International Development, Newsletter of
the Americas' Accountability/Anti-Corruption Project (AAA), No. 33, p.
1,
at www.respondanet.com/english . However, in the midst of all this enthusiasm, the OIOS
and the UN got far ahead of themselves. A UN Organizational Integrity survey
responded to by some 6,000 UN staff and issued in June 2004 showed some
quite negative findings within the Organization itself on unaddressed
integrity and accountability problems. "A new survey of …
[UN integrity perceptions] has found that while structures for
reporting and combating corruption exist, most staff members are
either unaware of how to use them or afraid to do so for fear of high-level
retaliation. 'The UN has a 'phone book' of rules and regulations
which are totally useless as they are never practiced', a staff member
is quoted as saying … [Another says,] 'Senior
leaders caught in serious breaches of ethics should be punished, not
promoted as usual.' …
[The study] is being made public at a time when Secretary-General Kofi
Annan has been forced by the widespread publicity [about corruption in the
Iraq oil-for-food program] to appoint a high-level panel to look into
them. … The new study records relatively high levels of worker
satisfaction …
but its most negative
findings have to do with ingrown leadership and the lack of response to
reports of corruption. 'Get rid of the old boy network,' one staff member
…
[says.]
'That network is wide, tenacious and powerful.
…
So long as you can wind
your way into that network, you are OK. … Opposing the network is certainly the end of a UN
career.'" Warren Hoge, "Report criticizes
the way UN fights corruption", International Herald
Tribune, June 16, 2004.
[emphasis added.] [Note: The actual survey, based
on responses from some 6,000 UN staff, is "United Nations organizational integrity
survey", Final Report, prepared by Deloitte Consulting LLP, June 2004. It can be found at http://www.un.org/News/ossg/sg/index.shtml
. It is also
interesting to note, in comparing this 2004 survey with a similar one in
1995, that things have indeed gone downhill -- staff in both surveys
sought better management, but in 2004, even after a decade of "management
reform", UN staff were much more concerned with, and disturbed by, senior
management accountability issues.] These quite surprising survey findings led
Secretary-General Annan to issue the integrity survey results with a
placating cover letter, which stated inter alia
that: " … According to the
survey, staff generally
perceive that breaches of integrity and ethical conduct are insufficiently
and inequitably addressed by the disciplinary system. At the same
time, they voice concern about the consequences of 'whistle-blowing' or
reporting on misconduct, and certainly about the mechanisms for such
reporting. … Clearly … these need to be better known and made more
accessible to staff at large. We will inform all staff about the means
available to them for reporting on suspected misconduct. We will also develop measures
to reinforce formal protection for whistle-blowers, while ensuring
that they are not used to cloak false accusations. … it is interesting to note
that, while the great majority of staff believe that their own
immediate supervisors demonstrate integrity and uphold the United Nations'
values, the general view of
senior leaders is less positive. The survey rightly emphasizes the need for senior leaders to
lead by example, living up to the commitments they make in their annual
compact with me. … I will therefore be directing my senior
colleagues to make much greater efforts in this area …" Kofi A. Annan, "Dear
colleagues", letter of 4 June 2004 , p. 3. An
equally strong admonishment came from staff representatives before the
Fifth Committee of the General Assembly in October 2004. "Rosemarie Waters,
President of the United Nations Staff Union, said that the measures
introduced in the past six years had had a profound and sometimes
deleterious effect on the staff of the Organization. … management
had been reforming itself and increasing management authority, while
reducing accountability. The Staff Union had the greatest respect for
the Secretary-General's vision for the Organization and had supported the
goals of his reform programme. It could not, however, support the erosion of staff
rights and dissolution of oversight mechanisms as a means of
implementation, and it could not continue legitimizing actions in which
staff, through their elected representatives, had no meaningful role to
play. … The organization had
yet to establish concrete measures for individual accountability, she
continued.
It was essential that areas with expanded delegation of authority
for personnel decisions … should be carefully examined, and, if abuses
were found, such delegation should be revoked. The … [OHRM]
had informed staff representatives of its inability to enforce
accountability because they lacked central authority. The Fifth
Committee may wish to recommend that concrete individual accountability be
developed, in consultation with staff representatives, on a priority
basis." "UN staff committee
representatives tell budget committee concerns ignored in management
reform report", Fifth Committee, Press Release GA/AB/3641 of 29 October 2004, pp. 2-3.
[emphasis added] SECOND,
the UN indeed had a wave of major corruption and scandal allegations and
findings which emerged during the last half of 2004. They are
discussed in many places in this archive, including in particular the
subsections on Late 2004: A "tipping point" for the
UN? , Refugee Sexual
Abuses , the Iraq oil-for-food
programme , Corruption in the
UN , Corruption
characteristics , and in the next
subsection on Investigation efforts: Is the OIOS a fig
leaf? . THIRD, a major case of sexual harassment allegations involving a top UN official emerged in 2004 and was then eventually snuffed out. The development of the case is discussed more fully under the archive subsection on Anti-harassment efforts , and is noted here only in the following brief quotes which underscore the issues of OIOS independence versus the Secretary-General's ultimate authority to overrule any findings. "Ruud Lubbers, the
high commissioner for refugees [UNHCR] … confirmed … a sexual harassment
complaint filed against him by a staff member. Lubbers, 65, a former
Dutch prime minister, denied the allegations. … The woman … said the
incident occurred at the end of a meeting as she, Lubbers and five male
staff members were leaving the room. The woman told other staff members that
she was "shocked and horrified," associates said. Lubbers said Dileep
Nair, chief of the [OIOS} had told him of the complaint … filed … four
months after the alleged harassment took place. Two UN investigators
were sent … to Geneva by OIOS …" Fiona Fleck, "Harassment
complaint lodged against UN official", International Herald Tribune, May 19, 2004. "[Mr. Lubbers] has
written a staff member who formally accused him of sexual harassment,
asking that she drop the case and promising to protect her from reprisals,
people familiar with the case said. The charge has been
under investigation by [the OIOS]. … … [Lubbers received]
the investigators' final report in June … [which was] in New York awaiting
official action. … In the May 28 staff
message, Lubbers acknowledged an incident with the … staffer but disputed
its interpretation as abuse. … he concluded, 'I'm really sorry for
that.' Fiona Fleck and Warren Hoge,
"UN official is said to ask for dropping of sex case", International Herald Tribune, May 19, 2004. "One of the UN's most
senior figures has been cleared of sexual harassment by Secretary-General
Kofi Annan. … Mr. Annan found that
the complaint against [High Commissioner for Refugees Ruud Lubbers] 'could
not be sustained by the evidence,' [a UN spokesman] said. However, Mr. Annan
said in a letter to staff of the [UNHCR] that he had written to Mr.
Lubbers 'conveying in the strongest terms my concerns about the incident
which gave rise to the complaint.' Mr. Annan's spokesman said
the matter was now 'considered closed' and that efforts were being made to
'rebuild trust and confidence' among UNHCR staff.'" "Lubbers cleared of UN sex claim", BBC NEWS, July 15,
2004.
"A senior UN official
[Ruud Lubbers] was cleared of sexual harassment earlier this year because
the secretary general rejected the verdict of an internal watchdog. … But a revised report
issued by UN watchdogs on Thursday revealed that investigators supported
the allegation … [and recommended appropriate action.]. Mr. Annan refused to
take action, saying the allegations were 'not sustainable.' … Despite the
recommendation, Mr. Annan dismissed the complaint, but instead wrote to
Mr. Lubbers stressing his concerns 'in the strongest terms.' UN spokesman Fred
Eckhard attempted to explain the secretary-general's verdict on Thursday,
asserting that Mr. Annan decided the allegations were unsustainable after
seeking legal advice on the matter. 'He did not say there
was no evidence.
He said he found the evidence unsustainable on a legal basis', Mr.
Eckhard said."
"Kofi Annan
'vetoed UN sex claim'", BBC News, October 28,
2004. “The lawyer for the
[UN] staff member who brought sexual harassment charges [at UNHCR] … has
said that [Secretary-General Annan’s admission] … of having overruled his
own investigators in clearing [Ruud] Lubbers would spur an appeal … … the admission that
UN investigators had found the woman’s complaint valid and had recommended
punishment emerged this past week in the [OIOS] annual report … [which
restored this damning disclosure in a last-minute restoration] … A senior UN official
had said earlier that if the claims against Lubbers were found to be true,
he would be obliged to resign. … When he cleared
Lubbers of the formal charges in July, Annan … did not reveal the negative
findings of his own investigators … and said that the complaint against
Lubbers ‘could not be sustained.’ … [The lawyer, Edward
Patrick] Flaherty, argued that the doctored document strengthened his
client’s case … ‘This demonstrates
that there are two sets of [UN] rules …’ Flaherty said. ‘One for the
protected class and one for the rest. Mr. Lubbers is part of the protected
class. My
client is not.’ The appeal … cites 12
instances of Lubber’s alleged attempts to intimidate the complainant …
“ Fiona Fleck and Warren Hoge, “Appeal is expected in UN
sex case: Lawyer cites Annan’s overruling of his own investigators”, International Herald Tribune, November 1, 2004. This very serious set of allegations of sexual
harassment by Mr. Lubbers was thus "put to rest", but in a very
heavy-handed and damaging way. Not only did Secretary-General Annan
overrule the findings and recommendations of the in-depth study made by
his investigators, but the Secretariat then withheld the release of the
OIOS annual report to the General Assembly to attempt to cover up the
actions he took.
Saving an "old boy" had a heavy cost in top leadership credibility
(and directly confirmed the staff suspicions of self-serving old boy
manipulations as expressed in the Integrity Survey of June 2004. FOURTH,
however, there was still much more to come. Even as Mr. Nair and his OIOS staff
investigated the serious allegations in the UNHCR and battled with
Secretariat officials over the OIOS annual report release, Mr. Nair
himself was enmeshed in a scandal of mismanagement allegations within his
OIOS, as shown by the following quotes.
"The United Nation's
anti-corruption department has been rocked by accusations that the office
itself is corrupt. The head of the
[OIOS] … , Dileep Nair, has been accused of promoting and recruiting
people in ways that are not consistent with U. N. rules and
regulations.
Also, a senior investigator has been suspended and there have been
accusations of financial and sexual misconduct. The scrutiny of Nair
and his division comes at a delicate time, as the United Nations is under
intense scrutiny for alleged abuse of the Iraqi oil-for-food program. Nair has been accused
of covering up abuses [in that] … program. … Other allegations of
impropriety include charges that some inside the OIOS received financial
kickbacks in return for promoting people and that some people were
promoted in exchange for sexual favors." Jonathan Hunt, Watching the UN's watchdog", Fox News, June 16,
2004.
"Former top civil
servant and banker Dileep Nair has been accused of violating UN
regulations in the way he promoted and recruits people. … The United Nations
Staff Union has asked UN Secretary-General Kofi Annan to establish an
independent investigation of the OIOS, alleging that personnel decisions
made by Mr. Nair
'violated the rights of staff members.' … The union has also
expressed concern over the possibility that Mr. Nair suspended Mr.
Francois Pascal, a senior investigator in his organisation, 'because he
was making waves over controversial recruitment and promotion decisions
Nair had made.' Mr. Annan -- who
handpicked the Singaporean for the job four years ago -- has asked Mr.
Nair for an explanation. Fox News reported
that Mr. Nair, currently on sick leave, denied all the allegations made
against him. He stressed that he
had done nothing wrong and would step down if the investigations found
problems in the OIOS. Said Mr. Nair: 'That goes
without question because that would mean my integrity is impugned and the
only thing I work upon in this office is integrity and the credibility
that people have in this office …'" Lee Ching Wern, "S'porean UN
anti-graft unit chief under probe", newstoday.com.sg , June 19,
2004. Several months passed, with much attention devoted to
the UNHCR sexual harassment allegations. Then, in mid-November, after the blocked
OIOS report on the Lubbers case had finally been issued, the UN announced
the results of its "investigation" of the allegations concerning Mr. Nair
and the OIOS.
The reaction was quick and fierce. "An exhaustive probe
has cleared the head of [the UN's OIOS] of alleged staff rules violations
and has found no credible information to back corruption and other charges
against him, a UN spokesman said today. The investigation was
ordered after the UN Staff Council … [reported allegations against Mr.
Nair] … of violations of appointments and promotion in OIOS, as well as
allegations of corrupt practices in the Office and 'other misconduct' by
Mr. Nair. Spokesman Fred
Eckhard said … 'a thorough review' conducted by [UN top manager] Catherine
Bertini found that "no staff regulations or rules were violated …, and
that the relevant personnel procedures were followed.' With regard to the
other allegations, the investigation did not receive 'credible information
on which to follow-up and, therefore, recommended that no further action
was necessary in the matter', the spokesman said. He added that Mr.
Annan had accepted the investigation's findings and recommendations … [and
that he told] Mr. Nair 'that he had every confidence that the
good
work of the [OIOS] under his leadership would
continue." "Thorough probe finds no
evidence of wrongdoing by UN official", UN News Service, 16 November 2004. "Integrity sponsor
unit 35: The staff
council: [Recalling its April
2004 request for an independent investigation of violations in the OIOS]
… Noting that the
investigation apparently … [made no attempt] … to elicit information from
the staff union clarifying the violations cited; Concerned that the
action taken was insufficient and [fails] … to properly investigate and
determine the full facts of the case; Regrets the decision
of the Secretary-General to accept the findings of an incomplete
investigation; … Further considers
that the failure to fully investigate … upholds the findings of the [staff
integrity survey of] … a lack of integrity particularly at the higher
levels of the organization; Recalls that the
Secretary-General declined to accept … [the deputy Secretary-General's tendered
resignation after 22 staff members died in the Baghdad UN compound
bombing] … , to hold accountable the head of UNHCR for alleged sexual
harassment and to hold accountable the chef de cabinet whose son was
employed by the Secretariat in contravention of staff rules; Decides that the
senior management no longer displays the level of integrity expected of
all employees of the organization; Requests: i. … [a] vote of
no confidence to the Secretary-General …"
"Raw data:
U.N. staff resolution", Fox News (US) website,
November 19, 2004. Note: Fox News stated that the
above was the text of a UN staff resolution which it received, calling for
a vote of no confidence in Kofi Annan. "UN management will
meet next week with a [staff body over the handling of the investigation
of mismanagement in the OIOS] … Original media
reports indicating that the Staff Council would hold a vote of
no-confidence today misconstrued what was taking place, spokesman Fred
Eckhard said … 'although they are dissatisfied with senior management,
particularly in the way this whole OIOS matter was dealt with', he
said. Mr. Eckhard said that
when the Department of Management submitted its report, staff members were
also briefed and given additional details … [and were] not happy with the
results. UN management was
prepared … to deal with their concerns. 'The idea is to keep dialogue going … so
that it isn't necessary to adopt resolutions saying they have
no-confidence in senior management', he said. 'We'd
certainly like them to have more confidence in us and we hope we can
achieve that through dialogue.' … Asked why the Staff
Council wasn't consulted during the OIOS investigation, the spokesman said
that [would be discussed and that] … in the investigation, one of the
things brought forward initially had been an unsigned letter, and no one
came forward to explain further." "UN management prepared to hold dialogue with Staff Union over concerns", UN News Service, 19 November, 2004. [Note: three regular tactics
used by UN top management to evade proper investigation of alleged UN
mismanagement are displayed here: when forced to act, produce a report
prepared in secret and without prior consultations; insist earnestly on
eagerness for "dialogue" (but little else) with staff; and after receiving
confidential reports, insist that there was "no one to talk with", without
ever seeking out the people involved, in this case the Staff
Council.] "UN employees were
readying on Friday to make a historic vote of no confidence in
scandal-plagued Secretary-General Kofi Annan, sources told AFP. … Annan has been in the
line of fire over a high-profile series of scandals … But staffers said the
trigger for the no-confidence measure was the announcement … that Annan
had pardoned the UN's top oversight official, who was facing allegations
of favoritism and sexual harassment [after a 'thorough review' by UN top
manager Catherine Bertini.] … 'This was a
whitewash, pure and simple', said a [staff representative.] … In a letter sent to
the union, … Annan's chief of staff, Iqbal Riza said Nair had been
'advised that he should exercise caution' in future to 'minimise the risk
of negative perception.' … In a [draft]
resolution …, the union said Riza's statement 'substantiates the
contention of the staff that there was impropriety' and that there exists
'a lack of integrity, particularly at the higher levels of the
organization.' … Staffers who asked
not to be named, afraid that speaking out could damage their future
prospects in the United Nations, said the Nair decision was emblematic of
widespread corruption by Annan and his senior staff." Marc Carnegie, "UN staff lose
faith in Kofi Annan", iafrica.com/news, 19
November, 2004. "Angered at
Secretary-General Kofi Annan's dismissal of allegations against the U.N.'s
top investigator, union leaders met for a second day on Friday to decide
what action to take. … Nonetheless, the
union was clearly upset at Annan's exoneration of U.N. watchdog Dileep
Nair earlier this week. … In a letter to [the
Staff Union] … Annan's chief of staff, Iqbal Riza … wrote that the
allegations 'required careful review and, inevitably, took some time to
complete.'
But the Staff Union
stressed … that during the six-month U.N. investigation, despite being the
complainant, 'the Staff Committee was neither informed that an
investigation was taking place nor asked to clarify its concerns or
provide testimony.' [Spokesman Fred]
Eckhard said, 'If they say they were not consulted, I think that's
definitely something we'd like to discuss with them next week. That doesn't
seem right.'" "Kofi Annan no confidence
vote?", CBSNEWS.com, November 19, 2004.
FIFTH,
while all the tumult about the Integrity Survey, the oil-for-food scandal,
and the Lubbers and Nair investigations was going on, a very important and
relevant finding by the UN Board of Auditors was being ignored. In their
report for 2004, the Board found that the UN has no comprehensive
anti-fraud plan, and many UN offices have little or no policy and mandates
in this area. It recommended that the UN adopt a comprehensive corruption
and fraud prevention plan with a coordination committee, appropriate
training, follow-up processes, and a review of investigation processes
away from headquarters. The Secretariat swiftly buried this
warning by stating smugly that: " ,,, some of the Board's
comments may give the mistaken impression to the uninitiated reader that
the potential for large-scale fraudulent and corrupted activities is
widespread. The Administration assigns high priority to the issues of
fraud and corruption …" "Financial reports and audited financial statements for the biennium ended 31 December 2003 and Report of the Board of Auditors", Vol. I, UN document A/59/5 of 22 July 2004, p. 12, item (u), paras. 15(f) and 344-349, and "First report on the implementation of the recommendations of the Board of Auditors … for the financial period ended 31 December 2003: Report of the Secretary General", UN document A/59/318 of 1 September 2004, paras. 124-126. [Note: This important recommendation is discussed
further in the next subsection of this archive, and also as the first item
under the
subsection on Answers, A starting
point.] SIXTH,
while Mr. Annan's transmittal letter for Mr. Paschke's last OIOS annual
report had commented warmly that the independence of the OIOS had never been
compromised during his tenure, and that he had enjoyed Mr. Annan's
complete support, he ended his letter on Mr. Nair's last
report with a much different message: "This year marks the
tenth anniversary of the [OIOS] … Given the critical nature of the
responsibilities entrusted to the Office, and that since its inception no
independent evaluation has been carried out … it may be timely for
the General Assembly to consider initiating a comprehensive review of its
operations …
Such a review
should be aimed at determining how to strengthen the capacity to
deliver the mandates given by the General Assembly. The review
will also provide me, as
chief administrative officer of the Organization, an assessment of how well OIOS
can assist me in the efficient and effective management of the
United Nations.
Should this proposal be endorsed by the General Assembly, I would be ready to establish a
multidisciplinary panel of outside experts to conduct the
review."
"Report of the Office of
Internal Oversight Services" Note by the Secretary-General", UN document
A/59/359 of 13 September 2004, (page 1.) [emphasis
added]
IO Watch finds this proposal by Mr. Annan to be
troubling on many counts. The OIOS just completed its own
self-evaluation of its work. The General Assembly itself was due to
make another five-year assessment of OIOS work in 2004, and Mr. Annan's
proposed review might compete with or actually derail the General Assembly
review. A new head of OIOS is to be appointed in 2005 and
should be given flexibility in establishing himself. Mr. Annan
himself is becoming a lame duck, and should not generate changes in OIOS
functioning with a late-2005 or early 2006 report which locks his
successor into policies that he might not want. Further, the
proposal occurs just after Mr. Annan engaged in an awkward battle with
the OIOS leadership leading to "exoneration" in the Lubbers sexual
harassment allegations at UNHCR, and as the UN is plagued by accusations
of many other scandals as well. This proposed review would also be another of the "independent reviews" which Mr. Annan is quite fond of, where he sets the terms of the review, selects the people who will lead it, receives the final report, and decides what to do with it. This is not at all independent. (For instance, his proposal that he assemble a "multidisciplinary" panel to examine the OIOS seems like a code phrase for picking diplomatic friends to conduct this review, rather than expert oversight professionals from the International Organization of Supreme Audit Institutions (INTOSAI), (as this archive in fact proposes, see the subsection on External experts oversight review under Answers: A starting Point .) And any such report on OIOS functioning, if it is to be truly independent, should be made directly to the General Assembly which established it, not to the outgoing chief administrative officer of the troubled Secretariat, Mr. Annan himself. SEVENTH, another important and very current OIOS matter was
being conspicuously ignored (or hidden) by Mr. Annan. As noted at
the beginning of this subsection, he very awkwardly left the OIOS
succession process hanging in 1999. His chief legal officer was in charge of
the OIOS for half a year after Mr. Paschke left and before Mr. Nair was
finally chosen and arrived. As already stated, any believer in good and
professional management would strongly hope that (a) Mr. Annan, in
selecting this third head of the OIOS, will indeed select a
highly-qualified and experienced professional auditor from among the many
deserving candidates from the worldwide ranks of INTOSAI, and (b) will not
allow OIOS to drift without a head after Mr. Nair leaves in April (but it
seems in early 2005 that this secretive and delayed-succession process may
indeed reoccur). EIGHTH, finally, and most discouragingly of all, the Fifth
Committee of the General Assembly -- in which UN Member State
representatives supposedly provide oversight on behalf of the UN's
worldwide constituency -- seems asleep at the switch. To recapitulate the early 2005 situation, the OIOS
made a generally positive self-evaluation of its performance during its
first decade in 2004. But looking back on the year, the Office
has in fact travelled a quite rocky road, with no end in sight. To
recapitulate its struggles and challenges from the enumeration above, and
add a few others. 1. The UN organizational integrity survey in 2004 fund
that UN
staff mistrust the existing processes for reporting and combating
corruption, ingrown leadership and the indulgences of the "old boy
network". 2. Several scandals and conflicts arose which led to
perceived "whitewash reports" to exonerate senior officials by OIOS, most
notably in two successive cases involving the top UN corruption-fighters,
and OIOS disparagement of refugee sexual abuse scandals in 2002, only to
see them return virulently as a scandal in 2004 (see also Top corruption-fighter
corrupted and Refugee Sexual
Abuses elsewhere in this
archive.) 3. The high-profile sexual harassment case involving
the head of UNHCR was a positive moment for OIOS, as its investigators
substantiated the charges and called for sanctions, followed however by
exoneration granted by Mr. Annan and then covered up for a month by
attempted alteration of the OIOS 2004 annual report (see also Anti-harassment
efforts .) 4. The OIOS and Mr. Nair himself had its own internal
scandal with allegations of mismanagement, and financial and sexual
misconduct, in which the UN's top manager and Mr. Annan duly exonerated
Mr. Nair in a secretive investigation much objected to by staff
representatives. 5. The UN Board of Auditors reported in 2004 that the
UN Secretariat has little or no anti-fraud plan, policy and mandates, and
should urgently adopt them (which the Secretariat smugly characterized as
a "mistaken impression" (see also A real UN fraud prevention
programme .) 6. Secretary-General Annan proposed in late 2004 that
another of his "independent panels", in this case a "multidisciplinary"
one, assist him in determining how OIOS can best assist him, to the
detriment of such assessments and judgements by the General Assembly. 7. After selecting two diplomats to fill the
critically-important post of the UN "inspector general" with a very
awkward interregnum between them, Mr. Annan has not initiated an orderly
and open process for picking a top professional as the third head of the
OIOS during 2005. 8. Investigations of waste, fraud, mismanagement and
abuse, the only truly new function given to the OIOS in 1994, started
slowly and reluctantly, and had some dynamic moments, but has since almost
disappeared as a priority activity, providing only a few exciting
corruption-fighting stories each year in the annual OIOS report (see the
next subsection and the two subsections on the sorry fate of UN
whistle-blowers.) 9. The US GAO in-depth review of UN management reform
in 2004
(following one made in 2000) found that nearly half of UN programme
managers do not monitor or evaluate performance and are not held
accountable, after a decade of OIOS and other effort and two lost decades
before that, with a system only to be ready -- maybe -- by late 2006
(see Programme planning system
(PPBE) .) 10. The established OIOS strategy of working in close
partnership with managers rather than firmly enforcing management
accountability has backfired, as the 2004 GAO review found that a
significant reason for progress in establishing UN accountability systems
was determined and continuing resistance to such change from UN managers,
and the need for training to overcome this resistance (see The winner" "Free the
managers" .) 11. The enthusiasms of Mr. Paschke to involve UN
managers in investigations (a very serious and professional investigative
process) as amateur "Inspector Closeaus" has led to very disturbing
activities, and new hazards for UN staff (Unleashed managers, which the
General Assembly is slowly beginning to comprehend (see Unleashed
managers .) 12. And the UN Code of conduct on staff
rights and obligations of 1998 (updated in 2002) is quite explicit on
staff obligations to cooperate fully with investigations by OIOS and any
"authorized" managers, but totally silent on the parallel staff rights to
due process and protection from retaliation which the General Assembly had
insisted on in 1994 ( see UN Code of
Conduct .) So how has the Fifth Committee of the General
Assembly, the group that sets the integrity and accountability tone for
the entire Organization, that is responsible for ensuring proper use of
the funds provided by Member States, and indeed the body that is
"accountable for accountability", responded to all these grave indications
of OIOS shortcomings and UN weakness in accountability and
corruption-fighting matters? Very weakly. In the midst of all the severe questions about OIOS
functioning outlined above, the Fifth Committee blithely assembled in late
December 2004, before rushing off on holiday, to pronounce itself on the
activities of the OIOS. It "noted with appreciation" the OIOS activities,
urged OIOS to conform fully with its mandate, and called form support for
OIOS recommendations on a few items -- compensations claims
processes,
procurement practices, use of consultants in UNHCR, control of
field mission assets, control of assets and use of vehicles in UN field
missions, and its earlier pondering on the OIOS review of UN information
centers. The Fifth Commmitee reports and the resulting General
Assembly resolution did indeed note with concern one item, but it was none
of those scandals, fumbles, and breakdowns cited above. The Assembly
called on the Secretary-General to develop rules and procedures to manage
UN travel documents (laissez-passer) and to report to it thereon. "Report of the
Secretary-General on the activities of the OIOS: Report of the Fifth
Committee", UN document A/59/648 of 22 December
2004, and "Report of the Secretary-General on the activities of
the OIOS", General Assembly resolution 59/271 of 23 December 2004. Even worse, the Fifth Committee and the General
Assembly were just as unconcerned about the long-term as they were about
the current situation. In 1999, they had conducted a mandated five-year
"evaluation" of OIOS operations, which at least took almost a year of
discussion, and expressed some mild concerns and suggestions for
improvement. In 2004 another five-year review was due. But this
time the Assembly acted with incredible swiftness, dispatching the topic
with a very brief resolution dashed off as the Member State
representatives rushed to their year-end vacations. The resolution did at
least succinctly recognize the failure of managementaccountability and
oversight efforts of the last ten years (as kind of a memorial service),
stating that it: "4. Affirms its
primary role in the consideration of and action taken on the reports
presented to it; 5. Notes that no
mechanism has been established for the follow-up of [OIOS]
recommendations, including those considered by the General Assembly; 6. Emphasizes the
importance of establishing real, effective and efficient mechanisms for
responsibility and accountability; 7. Regrets
that despite previous information provided by the Secretary-General on the
establishment of accountability mechanisms, including the
accountability panel, such mechanisms are not in place, thereby affecting
the efficient and effective functioning of the
Organization;" "Review of the implementation
of General Assembly resolutions 48/218B and 54/244: Report of the Fifth
Committee", UN document A/59/649 of 22 December
2004, esp. paras. 4-7, and "Review of the implementation of General Assembly
resolutions 48/218B and 54/244", General Assembly resolution 59/272 of 23 December 2004. paras. 4-7. The Assembly then moved on to some housekeeping
details on OIOS reports, to reaffirm as always the roles of the various
external oversight bodies, to reaffirm its oversight role and that of the
Fifth Committee, and called on Mr. Annan and external bodies to report on
how to guarantee OIOS full operational independence (inherently impossible
for an internal body). Its major initiative, although feeble, was to agree
with OIOS that the Secretary-General should report on measures implemented
to strengthen accountability and the results achieved, and establish a
"high-level" mechanism of Secretariat officials (plus "at least one" with
UN oversight body expertise) to feed oversight findings into UN operations
to improve them.
Finally, the General Assembly announced casually that it: "Decides to evaluate
and review at its sixty-fourth session the functions and reporting
procedures of the [OIOS} and any other matter which it deems appropriate
…" "Review of the implementation
of General Assembly resolutions 48/218B and 54/244: Report of the Fifth
Committee", UN document A/59/649 of 22 December
2004, esp. paras. 8-10 and 16. and "Review of the implementation of General Assembly
resolutions 48/218B and 54/244", General Assembly resolution 59/272 of 23 December 2004. [Note: The 64th session will begin only n the autumn of 2009.] IO Watch finds all this extremely troubling. The General
Assembly established the OIOS to hold the "old boy" senior and lesser
officials of the Secretariat accountable. Yet clearly the OIOS itself has been led
by "old-boys" Mr. Paschke and Mr. Nair, and compromised thereby as the
managers were progressively freed. Even worse, the General Assembly shows
through its "see no evil" approach in late 2004 that despite all the grave
UN operational difficulties enumerated above, it too is also collectively
an "old boy" outfit (or composed of many people who want very badly to
become "old boys" or girls.) The best it can do is call for a group
of senior "old boys" to decide how best (read whether!) to use OIOS and
other recommendations. What hope is there for General Assembly (let alone
Secretariat) leadership to ensure that the $6 to $10 billion that the
world entrusts to the UN each year is effectively used, and the urgent
programme needs addressed by UN field operations are at least improved
somewhat? The downplayed and papered-over "annus horribilis" of
the OIOS in the year 2004, as described in some detail in the preceding
pages, and the feeble response of the General Assembly to this situation,
were decisively contradicted and undermined in early January 2005. The
Volcker group released its preliminary report on the UN's administration
of the oil-for-food programme, as well as the set of OIOS audits of that
programme. The assessments were quite critical. They underscore the frailties of the OIOS in risk
assessment, corruption-fighting, adequacy and deployment of investigative
and audit resources, and the grave lack of actions taken on OIOS findings
by UN senior officials. "United Nations
officials today welcomed initial findings by [the Volcker probe] into the
UN Oil-for-Food programme in Iraq, acknowledging deficiencies … and
pledging to revamp the world body's current overall management
structure. [UN spokesman
Stephane Dujarric told a press briefing that the preliminary analysis] …
'is just one step in the … inquiry which the Secretary-General initiated,
and which continues to enjoy his full support and cooperation …' 'What this initial
briefing from the Committee does show is that there was a dynamic auditing
process generated by the UN itself, as well as the audits of external
auditors …'
He noted that all audits … were conducted in accordance with
internationally recognized standards … [and that] 'We
ourselves are already focused on issues of management and accountability …
in a critical review … which will lead to a broad overhaul of the UN's
management structure and systems …' Mr. Dujarric pointed
out that the Oil-for-Food programme 'did fulfil its main objective by
providing humanitarian relief to 27 million Iraqis …' … [He] stressed that … 'the
audits that were released today are just one snapshot of the
programme.
… they are part of a whole process.'" "UN undertaking
management review in response to early findings I Oil-for-Food probe", UN News Service, 10 January
2005. "The UN failed
properly to oversee contractors hired to inspect Iraq's multi-billion
dollar oil-for-food programme, according to … fifty-six audits conducted
over several years … [to be] released today by the [Volcker group.] … Mr. Volcker has said
the audits contain 'no flaming red flags.' … But they do raise
important questions over the way in which the United Nations managed the
programme … The UN claims the
audits' existence demonstrate there was substantial oversight of the
oil-for-food programme, but it is unclear to what extent their advice was
heeded. According to Associated Press, two … audits examined
irregularities, … including overcharging by two companies that were hired
to monitor oil sales and the import of humanitarian goods … while another
detailed financial mismanagement by a United Nations agency administering
humanitarian aid. The Volcker
committee's own preliminary report is scheduled for release at the end of
January."
Mark Turner, "Internal audits
may increase pressure on UN to reform its management", Financial Times (UK), January 10, 2005. 'According to an
early sampling of 10 [UN audit reports on oil-for-food]… the UN Office of
the Iraq Program [OIP], which was led by Benon Sevan … allowed major
contractors to overcharge the United Nations and to understaff [monitoring]
posts at ports and borders … The audits reviewed …
identify problems with all three of the program's main contractors hired
to inspect transactions … The United Nations,
however, denied allegations that the audits show that the United Nations
did not adequately monitor the program. … Still … congressional
investigators … say [the audits] reinforce questions about [whether] poor
stewardship by the United Nations played a major role in widespread
corruption in the administration of sanctions against Iraq. The reports cite many
accounting and operational lapses within the [OIP]. The auditors
write that Sevan's office permitted its own employees to lose money and
thousands of dollars' worth of equipment in the field, and allowed its
contractors to overcharge the United Nations and to understaff critical
inspection posts … One congressional
investigator who has examined [most of] the documents said it was clear
that Sevan's office failed to supervise the program's inspections. 'They did not
do their job', he said.'" Judith Miller, "UN
audits fault running of Iraq oil-for-food program", International Herald Tribune, January 10, 2005. "[The Volcker
commission's 36-page "provisional' assessment of UN auditors' performance
says they] … did not adequately monitor its giant oil-for-food program in
Iraq and that in some cases UN officials ignored recommendations deemed
crucial by the auditors. … … … The audits make
clear that many of the deficiencies were known in the late 1990s, at a
time when indications of corruption of the program by Saddam Hussein and
others were reaching the UN. … The briefing paper
chronicles numerous shortcomings in the Iraq auditors' activities. [It cites] …
the auditors' failure to monitor in depth the New York headquarters of the
office that administered the program, where nearly 40 percent of the $1
billion of the program's administration costs were spent. In addition, the
commission noted, the auditors failed to monitor contracts for the oil
sales … or those for the purchase of goods … to ease the debilitating
effect of sanctions on Iraqis. Nor did the auditors examine the letters
of credit issued by the program's major banker … The program, the
commission said, suffered from a 'chronic shortage' of auditors assigned
to monitor the UN's largest aid program, financed through 2.2 percent of
Iraq's oil revenue." Judith Miller,
"Oil-for-food auditors failed", International
Herald Tribune, January 11, 2005. "[The Volcker
preliminary report] … has sharply criticized the United Nations for
insufficiently auditing operations [of the oil-for-food program,
especially] … at its New York headquarters. 'There were no
examinations of the oil and humanitarian contracts … during the OFFP.
… Oil
contacts were not examined … despite the fact that UN officials had
contract-approval responsibilities.' It was also 'unclear'
why the audits … 'focused on areas and operations peripheral to or … away
from, headquarters operations of the OIP.' Even where audits of
the programme were done, there was often no follow-up. … The UN has explained
many of the programme's problems in terms of political games between
powerful countries, but the audits reveal that the UN secretariat itself
failed to exert necessary oversight. The report said more
comprehensive monitoring could have deterred the surcharge scheme on Iraqi
oil contracts, … as well as undercutting the Iraqi government's kickback
scheme for goods purchases. … [It found] … no
examination of the processing of letters of credit by the … bank that
handled the oil-for-food account, 'even though UN officials were
overseeing the work of the BNP and had approval roles in oil sales and
payments to vendors." Mark Turner, "UN
criticized by Iraq oil-for-food inquiry", Financial
Times (UK), January 11, 2005. "The man appointed to
oversee a management shake-up at the United Nations has warned that it
must brace itself for wide-ranging reform … 'The crisis is still
building,'
[Mark] Malloch Brown said. 'It's very hard after [last] week's
revelations to believe there isn't going to be some pretty tough stuff on
management.' Paul [Volcker's
group] last week criticized the UN for its limited response to internal
audits showing irregularities in the $65 billion [Iraq oil-for-food]
programme.
… Mr. Malloch Brown
also warned that it was no longer only the institution's traditional,
conservative critics that were calling for a shake-up. Mr. Volcker also
claimed the volume of allegations surrounding the former [head of the
Iraq] programme, Benon Sevan, suggested there must have been some 'monkey
business.' At the end of January
Mr. Volcker will issue his preliminary findings. 'That may be a
transition point', Mr. Malloch Brown said … 'It should be a
mainstream preoccupation of every government share holder of the UN.'
,,, A reshuffle of Mr.
Annan's cabinet would take place within six weeks, maybe sooner, he said.
… … The management
shuffle would be followed by 'human accountability' reforms addressing
other recent scandals." Mark Turner, "UN
warned to get ready for sweeping reforms", Financial Times (UK), January 17, 2005. In
early February 2005 the Volcker investigative group released its full
preliminary report on the Secretariat's oil-for-food programme, and it
contained more bad news for the UN. Mr. Annan responded dutifully with
promises to take action against wrongdoers and pursue renewed management
reforms. "[The Volcker panel
interim report] … investigating the [UN] oil-for-food program in Iraq
severely criticizes its director and depicts the program as 'tainted' for
failing to follow the organization's own procedures. In an essay Thursday
in The Wall Street Journal, Volcker … said the
report …. accused Benon Sevan, the Cypriot who had headed what was once
the world body's largest humanitarian effort, of
'irreconcilable conflict of interest.' … An official [said
that the report] … also criticized … Joseph Stephanides, a senior official
on the Security Council staff, for failing to ensure that the
organization's own rules for buying oil, selling goods and selecting
contractors were followed. … In his essay, Volcker
said that … 'The findings do not
make for pleasant reading' … … The interim report
concluded that the auditing system was 'underfunded and undermanned' and
hence, 'unable to meet effectively the challenge posed by a really unique,
massive and complex program of humanitarian assistance.' … …. The auditing
system … lacked 'clear reporting lines and the management responsiveness
critical to achieving a fully effective auditing process.' … [Further, he wrote,] the commission … found what he called 'a clear lapse from disciplined judgement.'" Judith Miller, "Panel calls
oil-for-food program 'tainted'", International
Herald Tribune, February 4, 2005. "Reaffirming his
pledge to act resolutely on any findings of staff misconduct in connection
with the United Nations Oil-for-Food programme for Iraq, Secretary-General
Kofi Annan today announced … disciplinary proceedings against
officials involved in the operation and … broader management measures in
response to the [release of the Volcker panel report on ] … the
management of the now-defunct relief effort. 'Should any findings
of the Inquiry give rise to criminal charges, the United Nations will
cooperate with national law enforcement authorities pursuing those
charges, and … I will waive the diplomatic immunity of the staff member
concerned,' Mr. Annan said in the statement … … The statement noted
the [Volcker panel's] intention to publish a further interim report
dealing with [his son Kojo's involvement, which Mr. Annan awaited] … 'with a clear
conscience' …' [Spokesman Mark]
Malloch Brown acknowledged that 'we're dealing with critical and vital
breakdowns in the management of the UN' … [On the inadequate UN
auditing process, he stated that] 'we'll have to look again at what we can
do to strengthen the external independence of audit, to strengthen the
assurance that it will have the resources it needs to do the task' …" "Acting on Oil-for-Food report, Annan takes
disciplinary action, further management steps", UN
News Service, 3 February 2005.
To sum up the very-muddled situation of the OIOS at
the end of its first decade, IO Watch concludes that the "play-acting" at
accountability of UN senior officials -- as enacted by Mr. Annan, Mr.
Lubbers, Mr. Nair, Ms. Bertini, Mr. Eckhard, and many other senior
officials -- in 2004 is definitely NOT the UN's "finest hour." Especially when considered against the findings of the
Integrity Initiative survey, the burgeoning UN-administered oil-for-food
programme scandal, the UN security mismanagement involved in the Baghdad
UN headquarters bombing, the anti-fraud programme warnings of the Board of
Auditors and the UN's dismissive response, and the multiple other scandals
brewing, the Secretariat's and the General Assembly's accountability and
oversight performance crisis has suddenly become very clear. Claudia Rosett, who has closely followed the evolution
of the oil-for-food scandal for several years, had a very perceptive take
on the key factors underlying this messy situation. " … the UN has
[examined the] … Secretariat's perception of its own integrity. … As Mr. Annan
recounts, [the Integrity Survey contains] considerable focus on 'tone at
the top' (while most staffers trust their immediate bosses, their opinion
of U.N. senior leaders is 'less positive'). And as the report politely explains,
there are concerns about accountability ('Most of the infrastructure to
support ethics and integrity is in place, accountability is not.') … Having [found] … that
Secretariat staff don't trust the top management and are afraid to speak
out for fear of reprisals, Mr. Annan's response will be to convene a group
of top managers and invite staff members to speak out. … Does anyone see a
problem here? The basic flaws are
simple: Anytime you create a large institution, accord it great privileges
of secrecy, give it a big budget and have it run immune from any sane
standard of accountability, you are likely to get a corrupt organization.
… The problem with the
Secretariat isn't 'tone' at the top. It's accountability at the top and
secrecy throughout. … [A real solution] …
would probably require setting up a competing international institution,
based on openness and accountability." Claudia Rosett, "The problem
with the Secretariat", The Wall Street Journal, June 16, 2004. The UN is thus presently being challenged as never
before to firmly install, and then apply and oversee, management
accountability processes, not only in the OIOS, but in the Secretariat at
large, among the top leadership, and in the Fifth Committee of the General
Assembly, and is failing. One more aspect deserves detailed attention --
investigations, which were the only new element added when the OIOS was
created.
The next subsection of this archive details the weak development of
this unique function, including its mandated use of staff whistle-blowing
(confidential reporting of wrongdoing to an OIOS hot line). It further
demonstrates how desperately the UN needs to address its management
accountability, corruption-fighting, and rule-of-law deficiencies in order
to attain credibility for its future operations. |
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