http://www.foxnews.com/story/0,2933,244799,00.html
U.S. State Department Reveals North Korea’s Misuse of U.N. Development
Program Funds and Operations
Friday, January 19, 2007
By George Russell
NEW YORK — Has North Korean leader Kim Jong Il subverted the United
Nations Development Program, the $4 billion agency that is the U.N.’s
main development arm, and possibly stolen tens of millions of dollars of
hard currency in the process?
According to a top official of the U.S. State Department — using
findings made by the U.N.’s own auditors — the answer appears to be a
disturbing yes, so far as UNDP programs in North Korea itself are
concerned.
And just as disturbingly, the U.N. aid agency bureaucracy has kept the
scamming a secret since at least 1999 — while the North Korean dictator
and his regime were ramping up their illegal nuclear weapons program and
making highly publicized tests of intermediate range ballistic missiles.
Nothing was disclosed even to the UNDP Executive Board, which oversees
its operations and is composed of representatives of 36 nations —
including the United States and, this year, North Korea itself.
That fact is sure to be a bombshell at the Executive Board’s regular
annual meeting, which begins Friday and extends through Jan. 26. Among
the main items to be discussed is the $18 million, two-year UNDP budget
in North Korea.
Moreover, the period of scandal and secrecy in the UNDP’s North Korean
operations coincided in large measure with the tenure of Mark Malloch
Brown, most recently Deputy Secretary General of the United Nations
itself, as administrator of the UNDP.
Malloch Brown took over the UNDP in July 1999, and stayed in his post
even after August 2005, when he also became chief of staff for then-U.N.
Secretary-General Kofi Annan, who at the time was reeling under the
effects of the Oil for Food scandal.
In March 2006, Malloch Brown took over as Deputy Secretary General from
Louise Frechette, who suddenly left the U.N. ahead of schedule, after
her own role in Oil for Food became widely known and criticized. Only
then did Malloch Brown give up his UNDP fiefdom.
Malloch Brown left the U.N. along with Annan at the end of last year and
has since been harshly critical of the Bush Administration and its
former ambassador to the U.N., John Bolton, for their demands for
greater U.N. transparency and reform.
From at least 1999 to at least 2004, it appears the UNDP, and the U.N.
itself, had no idea what Kim Jong Il did with the aid agency’s money,
ostensibly intended for aid programs ranging from development of energy
programs and small and medium sized businesses, and for environmental
protection.
But the UNDP had plenty of warnings from auditors it had contracted to
look at the program during that period, and who signaled loudly that
something was badly awry.
In a letter sent to the UNDP on Jan. 16, Mark Wallace, the U.S. State
Department ambassador at the U.N. for management and reform, wrote that
the auditors’ testimony shows it is “impossible” for the U.N. aid agency
to verify whether its funds “have actually been used for bona fide
development purposes or if the DPRK [North Korea] has converted such
funds for its own illicit purposes.”
Click here to read U.S. Ambassador Mark Wallace's letter to the UNDP.
(pdf)
Ironically enough, neither Wallace nor the U.S. government has been
allowed to obtain copies of the audits, which are deemed “management
tools” by UNDP bureaucrats and therefore not even available to
governments that pay for the organization.
Their contents came to light only after Wallace and the U.S. demanded an
opportunity to view the audits at UNDP headquarters, and took careful
notes based on the documents. Wallace reiterated the contents in his
letter, addressed to Ad Melkert, the UNDP’s No. 2 official.
The difficulties in finding out what the UNDP was doing in North Korea
were apparently something that U.S. diplomats and UNDP auditors shared.
Wallace relates in his letter that whenever the auditors, contracted
from the consulting firm KPMG, tried to discover what was going wrong,
they were either limited in what they were allowed to investigate, or
they were forced to accept “sham” audits done by the North Koreans
themselves.
The picture painted by the auditors, according to Wallace, shows a U.N.
agency that “operated in blatant violation of U.N. rules.”
The UNDP allowed members of Kim’s regime to “dominate” local UNDP staff,
who were apparently first selected by the North Korean government
itself, the auditors said, and added that Kim’s operatives even ran
“core” financial and managerial functions directly.
The regime also demanded cash payments from the aid agency in violation
of U.N. rules, and kept UNDP officials from visiting many of the sites
where development projects were supposed to be underway.
On at least three occasions, in 1999, 2001 and 2004, the KPMG auditors
filed reports that brought troubling aspects of the situation to the
attention of UNDP headquarters, recommending “timely corrective action.”
There is no evidence that any such action took place.
Just exactly how much money the UNDP funneled into North Korea in all
those years is not revealed in Wallace’s letter. But he notes that in
1999 there were 29 ongoing UNDP projects in North Korea, with a total
budget of $27.86 million. Two-thirds of the programs were so-called
“National Execution programs” run by North Korea directly, using UNDP
money. The other third was ostensibly run by UNDP itself.
But that may not have made a difference. The auditors complained that
even UNDP-run programs paid for everything in cash, which is against
UNDP policy, at prices set by the Kim regime, and to suppliers that the
regime designated. There were not even any purchase orders involved. The
regime provided no audits of the programs under its own direct control.
In his letter to Melkert, Wallace called for a “full independent and
outside forensic audit” of UNDP’s programs in North Korea, going back to
at least 1998.
Only “the bright light of real oversight” would allow the UNDP’s
overseers to decide whether any or all of the programs should be
continued, he said.
UPDATES:
In the wake of this FOX News story, Republicans in Congress have started
to take up the issue. Florida Rep. Ileana Ros-Lehtinen, ranking
Republican member of the House Foreign Affairs Committee, called on the
UNDP Friday to end its project funding in North Korea. She further
called on newly inaugurated U.N. Secretary-General Ban Ki-Moon to hold
accountable officials who had allowed the North Korean regime to control
UNDP programming. "This is yet another example of the abuses made
possible by the lack of accountability within the U.N. system," Ros-
Lehtinen said.
A representative speaking for Ban Ki-Moon announced Friday that in
response to the allegations regarding North Korea and the UNDP, the
secretary-general has called for "an urgent, systemwide and external
inquiry into all activities done around the globe done by the U.N. funds
and programs."
George Russell is Executive Editor of FOX News Channel.
Fox News also mentioned this book when talking about the scandal this
morning:
The U.N. Exposed: How the United Nations Sabotages America's Security
and Fails the World (Hardcover)
http://www.amazon.com/U-N-Exposed-Sabotages-Americas-
Security/dp/1595230203
--
GET THE UN-OUT!
The UN is the biggest threat to individual liberty in the world!
"Get the U.S. out of the UN and the UN out of the U.S."!
http://groups.yahoo.com/group/UN-OUT/
.
|
