The United Nations, which is struggling to redeem its public image over charges of nepotism and mismanagement in its $64-billion now-defunct Oil-for-Food Programme in Iraq, has admitted to another growing scandal relating to its procurement activities.
“Clearly, I think the potential abuse could go into tens of millions of dollars,” said Christopher Burnham, UN under secretary general for management and administration.
Asked about the sums involved, he told reporters this week: “It could go higher than that, but we are in the middle of looking at 200 different reports of abuse.”
The abuses relate mostly to UN supplies and services — both in the departments of management and of peacekeeping operations.
With a new “whistle-blower protection policy” now in force, Burnham predicted that the number of cases under investigation could balloon over the next six months.
A preliminary investigation by the UN’s Office of Internal Oversight Services (OIOS) has resulted in eight officials being placed on “special leave with pay” — four from the department of management and four from the department of peacekeeping operations.
The highest-ranking official on “special leave” is Andrew Toh, a national of Singapore and an assistant secretary general in charge of the UN’s central support services.
“These measures are administrative, not disciplinary, and they fully respect the due-process rights of the staff members concerned and do not presume any wrongdoing,” Burnham said, pointing out that ongoing UN procurement activities have not been affected.
He said the investigations had raised “a number of serious allegations and concerns” about UN procurement practices.
“The design and maintenance of controls needed to ensure that UN procurement complied with financial rules and regulations were insufficient,” said Burnham, a former official of the United States State Department. “Important controls were lacking, while existing ones were often bypassed.”
He complimented “the courageous men and women of the United Nations who have continued to come forward to report fraud”. There was anecdotal evidence, he said, that more staffers are “blowing the whistle” but it is too soon to tell.
“We are doing all the right things to ensure that the global taxpayer’s money will be protected going forward, and we are ferreting out corruption and fraud where it existed and where it exists,” he added.
While the UN is not making the recent audit public, he said, there was substantial evidence of abuse in procurement for peacekeeping operations leading to financial losses and significant inaccuracies in planning assumptions.
Since 1948, the UN has spent $41-billion in its peacekeeping operations worldwide. With 15 peacekeeping operations in force, the total peacekeeping budget has reached more than $5-billion for 2005/06, compared to the UN’s regular biennial budget of more than $4-billion.
There are nearly 85 000 personnel serving in UN peacekeeping operations — from Lebanon and Western Sahara to Kosovo and Haiti. As UN peacekeeping costs have skyrocketed over the past two decades, waste and corruption have correspondingly continued to increase.
The Procurement Fraud Task Force of the OIOS is conducting the current investigations. The audit is being confined to five years of peacekeeping-related procurement, including major UN procurement contracts.
Besides the eight staffers on “special leave”, an additional four from the peacekeeping department were recalled from their assignments overseas. After being questioned, they have returned to their posts.
This week, Burnham insisted that most UN staff were “completely innocent”. The vast majority of men and women working in the procurement area are hard-working, honest and sincere, he said. And a good number of them have come forward with reports of fraud and abuse.
The UN Secretariat has singled out the UN’s much-criticised Oil-for-Food Programme in Iraq — aimed at easing the suffering of Iraqis from economic sanctions — as a prime example of gross mismanagement.
After 18 months of investigation, the former US Federal Reserve chairperson, Paul Volcker, concluded that, of the 4 758 companies in the programme, more than 2 260 companies and individuals paid kickbacks to former Iraqi president Saddam Hussein to win contracts — mostly under the supervision of the UN Secretariat. — IPS