UN
Corruption
Scandal
in ERP Extends from Hiring & PWC to Capital
Master Plan
By
Matthew
Russell
Lee, Exclusive upload
UNITED
NATIONS,
February
28, followed
up March 5 -- A year ago in March 2010 Inner City Press
asked the UN and wrote
about corruption in the UN's Enterprise
Resource Planning or UMOJA program, with the UN dodging questions
about detailed hiring irregularities.
On March
9,
2010,
Inner City Press asked
Inner
City
Press:
Umoja, which is the ERP or Enterprise Resource Planning,
Inner City Press received these documents that seemed to, that
indicate that the head of the program, Mr. Paul van Essche, hired a
colleague or friend of his, John Solem, who doctored his PHP,
Personal History, to delete all references to Mr. van Essche having
been previously his supervisor. These are documents. What I want to
know is whether you can confirm that OIOS [Office of Internal
Oversight Services] was informed of this, if there is an
investigation of this and when it will be finished, and what the
penalties are in the UN system for altering documents in order to be
able to hire friends and cronies?
Spokesperson:
Let
me find out.
The
UN's own
Office of Internal Oversight Services investigated the hiring
violations and confirmed them, also finding procurement
irregularities in contracts to PriceWaterhouseCoopers.
When a short
article on this appeared, Inner City Press asked Secretary General
Ban Ki-moon's spokesman Martin Nesirky for the UN's response. He said
that one would be forthcoming, then later declined to comment.
Now
Inner City
Press has obtained
and
is publishing the OIOS report, which is worse
than previously reported. PWC was not the low bidder; the UN's
Department of Management won't even commit to adopting rule about
soliciting and taking Best and Final Offers.
The
irregularities
extend to the UN Capital Master Plan, into which an additional $100
million in US Tax Equalization Funds are being poured, so far with no
paperwork.
Not
addressed in
the report is that UMOJA chief Paul von Essche took New York Knicks
basketball tickets from PWC just when they were getting the contracts
despite not being the low bidder.
UN's Ban & Kane over left
shoulder, CMP Alderstein at right, action on OIOS on ERP not shown
While
the
OIOS
report leaves names out, here's an insider's account and exegesis of
the OIOS report:
Procurement
Issues
1.
PWC
was once a major player in ERP system integration business
but sold that practice to IBM in October 2002
(http://www-03.ibm.com/press/us/en/pressrelease/491.wss). This was
after the Enron-Arthur Andersen scandal and there was a call to
separate audit and consulting practices. When PWC bid for the UN
contract in 2008, it was re-entering the integration market.
2.
The
UN uses two-envelops bidding process (technical and
financial), which is normal in public sector. The panel for the
technical evaluation, which was set up by the Project Director, was
deemed as unfit. The high ratings of the panel gave PWC an advantage
even though as a new player it was not the lowest cost bidder, as
typical of new entrants.
3.
There
was no BAFO or cost for deliverables - meaning there is no
true cost or time limit for PwC services. When the UN failed to reach
a contract with SAP, PwC continued to report to work even though
there was no application to work with. The negotiation with SAP
ultimately lasted for 16 months. During that time, PwC continued to
work
4.
Each
contract in the UN has an NTE (not-to-exceed) amount which
serves as a ceiling for amount to be expended. To exceed that
amount, the Headquarters Committee on Contract must approve. Mr. van
Essche exceeded the amount with PwC without HCC approval. (Audit
Report)
5.
In
submitting its bid, PwC used profiles of people who did not
show up. (Audit Report)
6.
A
typical ERP implementation requires a single system integrator
that stays with the project till conclusion. The project director
changed broke the integration services into (Design and Build). That
piece-meal approach that favored PwC, as a new entrant, which quite
simply did not have the resources for a life cycle integration
services at the time of bidding.
7.
To
curb any unfair advantage PwC may have for the next phase
(Build), Procurement Division proposed that PwC does not participate
in the next phase. But again, Mr. van Essche persuaded the UN that
PwC would install a firewall to ensure that its staff preparing for
the next bid have not worked on the project or information about the
project aren’t transferred from current project staff to those
preparing proposals for the next bid. Unfortunately, there are no
mechanism to ensure the integrity of that firewall. Is the UN
monitoring PwC emails or movement of its people?
8.
A
separate contract for the provision of strategic services was
entered into with Deloitte. However, many of the deliverables agreed
to under this contract were assigned to PwC by the Project Director.
The lack of BAFO, conversely the open-ended service contract under
which the Project Director can assign anything to PwC makes all of
this possible. All PwC has to do is submit attendance and other
administrative charges and the UN pays. Some of the deliverables
assigned to PwC are project charter, business case, project plan and
strategy.
9.
After
winning the contract, PwC provided free office
accommodation to the project for over three months. When questions
were raised about the practice, the Project Director altered an
invoice for services (man-day) in order to show that accommodation
was actually paid for.
Hiring
Corruption
1.
Mr.
Jon
Solem and Mr. van Essche have been friends for more than 15
years. In fact, the VA was specifically tailored to Mr. Solem’s
expertise. The title was changed; Mr. Solem changed his resume as
well removing any mention of Mr. van Essche as his previous
supervisor and the fact that he was a P4, two levels below the level
of the new post he was applying to. It should be noted that Mr. van
Essche chaired the two panels the interviewed Mr. Solem for the P5
and D1 posts and was fully of aware of the changes of Mr. Solem’s
resume.
2.
The
other D1 VA was used to hire Ms. Ann Kerney, another friend
of Mr. Paul van Essche.
3.
Some
of the friends he brought in include: Mr. Robert Holden as
a P5 and without any selection. Under a special arrangement made
solely for Mr. Holden, he works two weeks in NYC and two weeks in
Geneva because his family refused to move to NYC. Mr. Holden and Mr.
van Essche have been friends for 17 years now dating back to
Cambridge Technology where they worked in early 90s. Mr. Holden did
not participate, even remotely, in preparation of the business case
for the project.
4.
Since
the audit, the practice has continued. Mr. van Essche
has also brought in two more friends – Ms. Patricia Dann as a P5
and Mr. Ronald DeGroot (a naturalized Canadian of South African
descent) as a P5 as well. This was based on temporary VAs. Each of
these VAs were specifically tailored to suit these external
candidates. Mr. deGroot is also listed on Paul’s best friend Jon’s
PHP as a reference.
5.
Mr.
van Essche has also sent resumes of friends for recruitment
by consulting companies he has hired to work for the project. Two of
such candidates are Brad Manila and Hugh Jetha. These friends were
hired by PWC and another was hired by Deloitte. By recruiting them
through the consulting companies, they can maximize their
renumeration such as paid travel and hotel as well as a hefty $175
per hour. Brad and Hugh reside in Florida and commute weekly to NYC.
6.
It
is true that there were no background checks done on Mr. van
Essche hiring. There was an anonymous letter claiming that he had
inflated his background. Including claims that he owned a company
called Left Brain when the company was founded by one Richard King.
When auditors requested a record of the background checks, they were
informed that he got lost while offices were being relocated as a
result of CMP.
7.
The
audit alleges the hired persons were qualified based on a
review of their PHP but that is because the VA/TVAs were specifically
designed for these people.
Now what
will the
UN do? The spokesperson's office has so far refused to comment. Angela
Kane, who applied for and it's said was initially give post at
the top of the UN in Geneva, now won't get that post, which is being
given an Italian spokesperson says to Carlo Trezza. Inner City Press
has repeatedly asked that Ms. Kane belatedly give a briefing and take
questions but this hasn't happened. Watch this site.
Update of March 5, 2011: we have published
in full a belated submission by the UN, and responded to it --
click here.
* * *
At
UN,
Ban's
Claim
of 99% Public Financial Disclosure Called
“Metaphorical”
By
Matthew
Russell
Lee
UNITED
NATIONS,
January
28
-- Rather than admit that UN Secretary General Ban
Ki-moon misspoke when he claimed two weeks ago that 99% of his
officials have made public financial disclosure, Ban's spokesman
Martin Nesirky told Inner City Press on Friday, “I wouldn't get
hung up on the ninety nine percent figure as a mathematical absolute,
because it is also a metaphorical expression, that nearly everyone”
disclosed. Video here,
transcript
below.
But
this claim of
99% transparency has been Ban's response to questions about the UN's
lack of accountability under his watch. On January 14,
Ban told the
press that “now ninety nine percent of senior advisers of the
United Nations have declared their financial assets publicly on the
website.”
Inner
City
Press
reviewed
the UN's web site and found that this was not the case. On
the eve of hearing before the US House of Representatives Foreign
Affairs Committee about the UN, Inner City Press published
a list of
the many Ban officials who instead of making even basic disclosure
state that “I have chosen to maintain the confidentiality of the
information disclosed by me in order to comply with the Financial
Disclosure Program.”
The
officials not
making public disclosure range from Ban' two Sudan envoys Ibrahim
Gambari and Haile
Menkerios through Rule of Law chief Dmitry Titov to
Ban's close ally and envoy to Cote d'Ivoire Choi
Young-jin.
The
lack of public
disclosure came up at the House of Representatives hearing on January
25, and Inner City Press that day and each day since has e-mailed
Ban's spokesman Martin Nesirky with this request:
“Please
explain Ban Ki-moon statement that 99% of his officials have made
public financial disclose in light of the actual, much lower figure
on [the UN website], with non public disclosure by inter alia
Gambari, Choi Young-jin, Jan Mattsson, Greg Starr, Iqbal Riza, Terje
Roed-Larsen, Said Djinnit, Mr. Diarra, Ajay Chhibber, Haile
Menkerios, Ray Chambers, Peter Sutherland, dead links Nicolas Michel
and Achim Steiner, only "outside activity" and no finance
or clients for Alexander Downer, Douste Blazy, etc.”
Nesirky,
who
on
January
21 after Inner City Press asked about the UN's seeming
failure to comply with its own Regulation 1.2 said he
wouldn't answer
any more questions until Inner City Press somehow acted
“appropriately,” never answered this e-mail question.
UN's Ban & Nesirky on Jan 14: transparency claim
now called "metaphor"
At
the UN noon
briefing on January 28, Inner City Press finally asked Nesirky
directly about Ban's statement that 99% of his officials have made
public financial disclosure.
Nesirky
began
by
dodging
the questions, saying that "financial disclosure means to
disclose to the United Nations what your assets are and so on. And then
it is fully within the rights of the individual to elect or not to
elect for that to be publicly disclosed. And I think you will see that
in the vast majority of cases, this is publicly disclosed."
But
Ban
specifically used the word “publicly” on January 14, saying that
“ninety nine percent of senior advisers of the United Nations have
declared their financial assets publicly on the website.” Click here
for
footage
of
Ban's claims from a recent piece on Swedish TV
including Inner City Press and a FAC hearing witness.
Inner
City Press on January 28 asked Nesirky if Ban considered disclosing a
refusal to make
public any financial information to be “public financial
disclosure.”
This
is
when
Nesirky
told Inner City Press, “I wouldn't get hung up on the 99%
figure as
a
mathematical
absolute, because it is also a metaphorical expression,
that nearly everyone” disclosed. Video here.
So
at the UN, a
claim by Ban Ki-moon that 99% of his officials have made public
financial disclosure is just a metaphor.
From
the
UN's
transcript
of January 28:
Inner
City
Press:
In
his last press conference in here, the
Secretary-General said when asked about the [Inga-Britt] Ahlenius
book, that 99 per cent of officials have made public financial
disclosure. And just having looked at the website of disclosures, it
doesn’t, that number is not the number. The number of his
officials including Mr. Choi [Young-jin] of Côte d'Ivoire,
[Ibrahim]
Gambari, [Haile] Menkerios, Said Djinnit, Michael Williams, whom you
mentioned, they have all filled out a form saying “we chose not to
disclose”. So, I just… I have been trying to figure out, what is
the 99 per cent figure based on? Does he include people that say “I
won’t disclose” as having made a public disclosure? Or, what is
the actual number?
Spokesperson
Martin
Nesirky:
Financial
disclosure means to disclose to the United
Nations what your assets are and so on. And then it is fully within
the rights of the individual to elect or not to elect for that to be
publicly disclosed. And I think you will see that in the vast
majority of cases, this is publicly disclosed.
Inner
City
Press:
When
he said public, that’s the phrase that he used —
he said that 99 per cent of my officials have made public financial
disclosures. So, is that… that’s not what he meant? He meant
that they have actually… they have made disclosure to the UN?
Spokesperson:
Well
I
think also I wouldn’t get hung up on the 99 per cent figure
as a mathematical absolute, because it is also a metaphorical
expression meaning nearly everyone, okay?
Inner
City
Press:
But,
Mr. Choi, does he think that Mr. Choi, kind of a
close ally, long-time person that he has worked with, does he think
that Mr. Choi should publicly disclose? Would he call on him to
publicly disclose?
Spokesperson:
Again,
this
is a matter for the individuals concerned. Okay, yes?
No,
not okay. Watch
this site.
* * *
, 
