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As UN Refuses to Account for $100 M, Ban Ki-Moon Doggle Alleged

By Matthew Russell Lee

UNITED NATIONS, February 10, 1pm -- On the $100 million of US Tax Equalization Funds that are being “re-purposed” for use at the UN, Secretary General Ban Ki-moon's spokesman Martin Nesirky repeatedly told Inner City Press this week to “ask the US State Department.”

  While Inner City Press did ask US Ambassador Susan Rice, it seemed strange for the UN to refuse to provide information about its own plans and use of $100 million.

  On February 10, Inner City Press asked Nesirky about a statement by US Under Secretary of State for Management Patrick Kennedy, that “In this case the United Nations notified the State Department that it intended to use [TEF funds] for security enhancement.”

  Inner City Press asked Nesirky who in the UN told the State Department that the UN intended to repurpose the $100 million in US funds: was it Capital Master Plan director Michael Adlerstein? Department of Management chief Angela Kane? Or Secretary General Ban Ki-moon himself? Nesirky would not answer.

 Inner City Press asked if the $100 million will be paid to the UN selected contractor Skanska, recently charged in New York City with defrauding minority sub-contractor rules and involved in South America in what is called the Skanska Scandal. Nesirky would not answer.

  Given that the Capital Master Plan is ostensibly subject to UN General Assembly oversight, with reports that purport to disclose cost overruns, Inner City Press asked if this $100 million is anywhere in the UN budget documents. Nesirky would not say.

  Cutting off the questions, he said that this should be dealt with “off line” - that is, not in the press briefings. But Inner City Press has submitted a number of written questions to Nesirky's office that have not been answered.

With Spokesman, without answers, Ban Ki-moon doggle?

  Beyond the above, there is unclarity about the TEF. Inner City Press on February 9 asked in writing, with no acknowledgment much less answer:

What are the sources of funds which are deposited into the TEF? Isn't the TEF funded only through the Staff Assessment? You seem to be saying that the TEF is funded through the Staff Assessment AS WELL AS through "reimbursements" from the United States. Please provide a balance sheet of the TEF which shows the deposits made into it as well as the disbursements made from it for 2009 and 2010.

You answered that the "net balance of $179 million" was "due to the United States" from the TEF as of 31 December 2009. What was the net balance due to the United States from the TEF as of 31 December 2010, and what is the net balance due to the United States as of today, 9 February 2011?

You stated that "The US levies taxes on its nationals in respect of their UN earnings, and reimburses the UN for the same." Are you saying that the US makes payments to the UN which are deposited into the TEF, and that these payments are equal to the amount it receives in taxes from its nationals who work for the UN?

Regulation 4.12 of the UN Financial Regulations states that --

In accordance with regulation 3.2, any balance on a Member State’s tax equalization account after the obligations referred to in regulation 4.11 have been satisfied shall be credited against the assessed contributions due from that Member State the following year.”

Were the balances from 2009 credited toward the US' assessment for 2010, as required by UN Financial Regulation 4.12? If not, then why? Was the UN not following its own financial regulations when it allowed the "balances due" to the US to reach $179 million as of the end of 2009? Please explain.

None of these questions have been answered. One problem here is that by refusing to state which UN officials notified the US State Department about the re-purposing of $100 million, responsibility must go to the top. And when Ban said that 99% of his officials make public financial disclosure and Inner City Press showed this is untrue, Nesirky said it was all a metaphor. Watch this site.

* * *

At UN, Re-Purposing of US $100 M Defended by Susan Rice, Noone Else Paid

By Matthew Russell Lee

UNITED NATIONS, February 9 -- When US Ambassador Susan Rice came to the UN Security Council stakeout late Wednesday morning, she was prepared to answer questions about the Tax Equalization Fund, some of which Inner City Press submitted to the US Mission Tuesday morning.

  In the House of Representatives a proposal is being considered to get the $179 million owed to the US applied to future UN dues. At some date still undisclosed, some US State Department official told the UN it could keep $100 million for security upgrades in the Capital Master Plan renovation, beyond the CMP security elements already approved by the General Assembly, for which the US pays 22%.

Inner City Press asked Ambassador Rice who had approved this, and if any other country would be contributing toward the $100 million in additional security.

Ambassador Rice said that the Obama Administration opposes the House legislation. She cited Republican Congressman Peter King of Long Island as supporting this position. Her answer implied that no other country is contributing to the $100 million -- she spoke only about $79 million of the $179 million being put toward UN dues. She did not say who had approved the $100 million.

Inner City Press began asked what Ambassador Rice would say to those who now consider the $179 million, or at least $78 million of it, to be a slush fund -- Ambassador Rice asked, “Slush fund? There is no slush fund,” and her spokesman moved on to another questioner. Transcript below.

Susan Rice at UN stakeout, Tax Equalization Fund not shown

Minutes later at the UN noon briefing, Inner City Press asked UN spokesman Martin Nesirky who the UN had spoken to within the US government to conclude that these $100 million could be spent, and if it had ever been approved or presented to the UN General Assembly.

Nesirky again said, ask the State Department -- we have -- and said he would look into whether there are other Capital Master Plan related funds that have not been disclosed or voted on by the General Assembly.

When asked to explain why the $100 million was so urgent it could not go through regular budgeting (and disclosure) procedures, Nesirky said to ask the State Department.

Earlier, Inner City Press had asked Nesirky's office

Ultimately, who within the Secretariat is responsible for spending this money? DM? DSS?

Has the General Assembly given its approval to this project? Is there a mandate from the GA for this activity?

How was the referenced money “repurposed”? Did the US Mission or State Department indicate how it could be repurposed? How? What other countries have allowed extra budgetary money to be similarly repurposed and how much?

Answers will be reported when they are received. Watch this site.

From the US Mission to the UN's transcript:

Inner City Press: On Sudan, what do you make of this fighting in Malakal? The army, there are several dozens of people who have been killed of late, what does the US think of that? And I wanted to ask, on the Tax Equalization Fund—there’s a dispute in the House about this $100 million that the State Department has told the UN it can use for security improvements. Who approved that at the State Department and are other countries going to be contributing to that, or is the US paying the whole $100 million with no offset on the CMP payments?

Ambassador Rice: Well, let me start with Malakal. Obviously we’re very concerned about the violence in Malakal and along that border area. This is a function, as you know, of the need for these units that have been joint to now separate, and it is of concern that lives have been lost and violence has occurred, and it underscores the need for this process of disintegrating the joint units to be done carefully and with some supervision.

Let me turn now to the Tax Equalization Fund, and the application of these credits. The legislation that is pending in the House today is a piece of legislation the administration strongly opposes. And we do so because it was the City of New York that underscored the vital importance to US national security to enhance security—physical security—in this structure, above and beyond what was originally contemplated during the Capital Master Plan. We have thousands of New Yorkers who pass through this building and under this building every day. We have school children, we have members of the public, we have the President of the United States, come in this building on a regular basis. And the City of New York and the State Department and the administration feel that it’s in our national interests and in the interests of the people of New York that steps be taken swiftly to upgrade the physical security of this building. And that is what we have done, in coordination with the United Nations. That is also why Representative Peter King—a New Yorker—who is chairman of the Homeland Security Committee in the House, said very plainly yesterday that this is a crucial commitment that we’ve made, one that should be honored, and he opposes this legislation because it unwisely would make that impossible.

Let me just say also, Matt, we share, however, the spirit in which the legislation is offered, which is to reduce the deficit and to address the need for spending reductions. But the other portion of those credits—the $79 million—will do just that, because we intend to apply those to assessments that we would otherwise have to request resources from Congress to pay. So this is a way of ensuring that we are utilizing taxpayer dollars wisely.

Inner City Press: So it’s kind of a slush fund, there’s no approval?

Ambassador Rice: Slush fund? No, there’s no slush fund.

* * *

As US Let UN Keep $100 M for Security, Who Decided, Will $78M Be Offset & Will Other Countries Pay?

By Matthew Russell Lee, Exclusive

UNITED NATIONS, February 9 -- Who approved the use of $100 million in US funds to pay for the entirety of a security project in the UN's Capital Master Plan renovation?

  As the battle to have the funds returned heats up in the House of Representatives, the UN on Wednesday belatedly answered some of the questions asked by Inner City Press.

  UN deputy spokesman Farhan Haq on February 9 e-mailed Inner City Press that “the present discussion about additional security upgrades reflects heightened security concerns by the Host Country and UN security authorities. The US, under its Host Country obligations, is funding these new security upgrades. The total anticipated cost of the new security upgrades is $100 million.”

  While the US Mission to the UN has not responded in writing to questions Inner City Press put to it, the position is that the UN approached the US State Department to ask for $100 million from the $179 million which otherwise would reduce the US' dues to the UN.

  The UN said that the improvements, which have be tied in FP's Cable blog to dangers posed by car bombs on the FDR Drive, were urgent. The conference rooms over the FDR Drive are currently empty, undergoing asbestos abatement. It is hard to understand how merely reconfiguring the rooms would cost $100 million, or be urgent.

  But even if it is urgent, why is the US paying the whole $100 million, and not just the $22 million that would represent its 22% share of CMP costs?

  Will the extra $78 million be subtracted from what the US would otherwise pay for the rest of the CMP? Inner City Press recently asked the CMP about contributions of $2 million and $1 million to the CMP from Norway and China.

  The response were article the CMP had placed on the UN's i-Seek web site. If the UN publicized $1 million from China, why no secretive on $100 million from the US?

Hillary Clinton & UN Ban on Feb 5, $100 million not shown

  Inner City Press understands that the decisions on this $100 million (or $179 million ) slush fund were made at a level above Assistant Secretary of State Brinner. So should or will it be called Hillary's slush fund? Watch this site.

  Cynics say that with the US trying to show it deals differently with the UN, it is or was convenient to have $100 million in discretionary funds. But there are questions about the approvals.

Here is what the UN sent Inner City Press on the morning of February 9. Other questions remain pending.

From: Deputy Spokesman [at]
Date: Wed, Feb 9, 2011 at 10:29 AM
Subject: Re: Press questions II on Tax Equalization Fund
To: Matthew Russell Lee [at]

Regarding your questions on the tax equalization fund, we have the following information:

The 31 December 2009 audited accounts of the UN showed as balance due to the United States of $179.0 million as of that date. The US levies taxes on its nationals in respect of their UN earnings, and reimburses the UN for the same. The balance represents the net amount due to the United States after such reimbursements have been taken into account. In some financial periods there is a surplus, and in others a deficit. The net balance of $179.0 million has accumulated since 1 January 1996.

Regarding security improvements: The Capital Master Plan (CMP) already includes a number of security improvements for the delegates, staff, and visitors who work at or visit the premises. Those security improvements have been designed after consultation with the Host Country security authorities. They are covered by the budget of the CMP, to which the U.S. contributes 22%, and which was approved by the General Assembly in 2006. The present discussion about additional security upgrades reflects heightened security concerns by the Host Country and UN security authorities. The U.S., under its Host Country obligations, is funding these new security upgrades.

The total anticipated cost of the new security upgrades is $100 million.

 Click here for an Inner City Press YouTube channel video, mostly UN Headquarters footage, about civilian deaths in Sri Lanka.

Click here for Inner City Press' March 27 UN debate

Click here for Inner City Press March 12 UN (and AIG bailout) debate

Click here for Inner City Press' Feb .26 UN debate

Click here for Feb. 12 debate on Sri Lanka

Click here for Inner City Press' Jan. 16, 2009 debate about Gaza

Click here for Inner City Press' review-of-2008 UN Top Ten debate

Click here for Inner City Press' December 24 debate on UN budget, Niger

Click here from Inner City Press' December 12 debate on UN double standards

Click here for Inner City Press' November 25 debate on Somalia, politics

and this October 17 debate, on Security Council and Obama and the UN.

* * *

These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund.  Video Analysis here

Feedback: Editorial [at]

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Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

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