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In UN Pension Fund Outsourcing Controversy, Russia's Role Revealed in Just-Released Minutes

Byline: Matthew Russell Lee of Inner City Press at the UN

UNITED NATIONS, February 12 -- While the CEO of the UN Joint Staff Pension Fund Bernard Cocheme has refused to answer any questions about his inaction on the March 2006 investigative report by the UN Office of Internal Oversight Services recommending that action be taken against at least two members of senior management, information from those actually doing the work at the Pension Fund has continued to flow in.

            The picture that emerges is one of hierarchy and nepotism, with staff sometimes so abused they now side with management in trying to cover up the Fund's workings. Friday an email went out urging staff members not to speak with the media, specifically Inner City Press. That has done nothing to stem the flow of information. But it seems to call for a reiteration of mission. And to call, at least for now, for fewer names being named, other than those named in the OIOS report.

            For this report, we focus on the proposed outsourcing, following by one more in a series of (mis-) management vignettes.


The recently-released minutes of the November 10, 2006 meeting of the General Assembly's Fifth Committee show two countries supporting the rush to outsource management of the North American equities portfolio: the United States, and also the Russian Federation, even more emphatically. From the minutes:

38. Mr. Garcia (United States of America) welcomed the increase in the market value of the Fund's assets to over $33 billion as at 31 March 2006, a new all-time high, which testified to the benefits of sound long-term financial planning and strong management. He also welcomed the decision of the Board to approve the Secretary-General's proposal to passively manage the Fund's North American equities portfolio and outsource it to a private entity, but hoped that the members of the Board would return to their usual practice of taking decisions by consensus based on dialogue and negotiation.

39. The change in the management of the North American equities portfolio was in the best interests of the Fund and would eliminate the need to maintain a staff of managers for those investments, thereby incurring long-term savings; the shift would however cost $2.9 million to pay for transition services. In order to ensure that the money was spent wisely, the Secretariat should report on progress made in implementing the new arrangement. In that context, he took note of the recommendation of the Advisory Committee that the General Assembly should be provided with a report on the financial impact of the decision and that management of the portfolio should be outsourced only after a comprehensive review.

            Thus, the U.S. "took note" of the ACABQ's recommendation that outsourcing should take place only after a comprehensive review. The Russian Federation, on the other hand, said in essence, "Damn the torpedoes" --

47.      Mr. Kovalenko (Russian Federation), noting the further increase in the Fund’s assets and the good return on its investments in the previous biennium, expressed confidence that the Board would continue to give careful attention to the results of actuarial valuations and that any recommendation to change the parameters of the pension system and contribution rates would take into account the actuarial situation. The Board’s decision to endorse the intention of the Investment Management Service to shift to passive management of the North American equities portfolio and to index it was justified. His delegation had some doubts, though, about the Advisory Committee’s recommendations concerning management of the portfolio by the Investment Management Service itself, as it seemed to be the most costly option in that it required additional expenditure to provide the necessary infrastructure.

48.      He was pleased to note that the Board had managed to agree on the mandate of its Audit Committee; that experience could be used by the Fifth Committee when it came to consider the establishment of an audit committee of the General Assembly. He noted the Board’s productive work, and supported its decisions to move to an annual work format with shorter sessions, as that would enhance the effectiveness with which it performed its duties.

            This support for the Pension Fund's new audit committee, which we are told will meet this Thursday in New York, was echoed by the European Union, which also like the Group of 77 endorsed the ACABQ recommendation to wait on outsourcing. The EU "welcomed the decision to implement the recommendation of the Board of Auditors for the establishment of an audit committee, whose membership should meet the criteria specified by ACABQ, and endorsed the ACABQ recommendations on the management of the Fund's investments."

            Why is the Russian Federation so gung-ho for outsourcing? This is an open question. Inner City Press has also asked pension fund-related questions to Controller Warren Sach, resulting in this response:

Subject: Re: Press questions on UNJSPF...

From: Warren Sach

To: Inner City Press

Sent: Mon, 12 Feb 2007 10:01 AM

  Dear Mr Lee, Thank you for your e-mail...On Pension Fund matters I cannot advise you on matters which are under the responsibility of Mr Bernard Cocheme; my only responsibilities in that area relate to Investments by virtue of my role of Representative of the SG on Investments. There is a new audit committee being instituted by the Pension Board and it will meet this week. Matters are within the hands of Mr Cocheme. On the procurement issues you query I will seek the necessary input for you and revert.

            The audit committee, we're told, meets Thursday. And the OIOS report which Mr. Cocheme refused to act on will be considered by the General Assembly in March. On both accounts, watch this site.  For now, a bit more from the OIOS report, following by a Pension Fund-as-workplace annotation.

    Paragraph 70 of the OIOS report states that "Mr. Dooley was Chief of IMSS, Ms. Bull was Chief of Operations and Ms. Judy Charles and then Mr. Peter Goddard were the Executive Officers during the period at issue. Mr. Goddard told ID/OIOS that Mr. Dooley authorized payments to Sprig and Mr. Goddard certified them."

            Sprig was the company of Mr. Dooley's ex-supervisor Gerard Bodell, which got more then nine no-bid contracts from the Pension Fund. Peter Goddard was brought into the Fund by Dulcie Bull.  Mr. Goddard had previously served as financial officer for the UN's International Criminal Tribunal for Rwanda, which during six than six months "six memoranda setting forth complaints by other staff members of ICTR against" Mr. Goddard were recorded. Mr. Goddard played the UN justice system deftly and got these complaints removed, and later Dulcie Bull put him on the short list and hired him. By numerous accounts, he is abusive to staff including by shouting at them. "He is a military man," says one staffer. "He shouts at you as if you'd joined his army." But the climate of fear, and the lack of help for whistleblowers, at the UNJFPF is so pronounced that this has been allowed to go on and on.  Other profiles will follow, as supplements to analysis of outsources and lack of accountability.

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At UN Pension Fund, Gag Orders and Mental Health Accusations as Audit Committee Meets

Byline: Matthew Russell Lee of Inner City Press at the UN

UNITED NATIONS, February 11 -- As scandal grows around the UN Joint Staff Pension Fund, which is trying to outsource $9 billion in investments, the Fund's CEO Bernard Cocheme was in Geneva trying to rally other agencies to his side. As Inner City Press' now five-part series has shown and will show, it is the UNJSPF's arbitraging of its status as an inter-agency body, with the claimed ability to circumvent UN rules whenever it is convenience, that has allowed a lawless fiefdom to flourish with $36 billion to now dole out.

            Meanwhile in New York, the cover-up accelerated. Despite purported whistleblower protections and new Secretary General Ban Ki-moon's stated policy for the UN of transparency and of staff speaking to the media, on Friday the following email went out, referring to Inner City Press as "ICP," and attempting belatedly to block any whistle-blowing:

Subject: Pension Fund under attack in the media

From: Ibrahima Faye/UNJSPF/NY/UNO

To: UNJSPF IMS Staff Group, UNJSPF NY Staff Group, UNJSPF NY Consultants Group

Date: February 9, 2007, 10:19 AM

Dear all,

  For a week now, some of our colleagues within the Pension Fund are being subject to targeted attacks through one media press named ICP. In my qualify as your representative, it is my outmost duty, whether you are a manager or a simple staff member, weather [sic] you immediately involved or not, to defend you all from these yet to be substantiated attacks based on a supposedly Confidential OIOS report. I would like to caution myself and each one of you for jumping to immediate conclusions under the given circumstances and be emphatic to our colleagues whose names are mentioned in that press with possible target to their privacy and honorability.

  Furthermore, I would like to also caution each one of you for meeting with that press entity or reporter or any other request for interview as it is strictly forbidden by the Staff Rule for staff member to make any kind of press announcement or speech without prior approval, beside, this press ICP is neither a UN investigative body nor an asermented [sic] United Nations entity.

  As the situation may warrant, I would be obligated to come back to you with more indepth advises. Remember this is our Pension Fund, our working tool, our working environment and when the Fund's name is spoiled, we are all concerned and inbricated [sic] as one.

            Beyond the inappropriate and actionable gag-order nature of this message to all staff, a sad irony is that its putative author is in multiple insider accounts one of the victims of harassment at the Pension Fund, as well as a staff representative.

Mr. Cocheme- "Disagrees" with gag orders?

   The Office of Internal Oversight Services report, referred to above as "supposedly Confidential" but which Inner City Press provided to the UN Spokesperson's Office at their request on February 8, and has since showed up elsewhere -- contains three paragraph about an inappropriate relationship between a supervisor and subordinate, and chides the Pension Fund's management for allowing the supervisor to simply move on to another UN agency.  From the OIOS Report:

111. Although several examples of perceived favoritism as regards promotions were provided in ID/OIOS investigators, numerous comments were made about one particular case involving an alleged intimate affair between a supervisor and her subordinate, and also about the manner in which the UNJSPF management handled it.

112. The interviewees commented that the supervisor in question failed to maintain proper boundaries between her professional and personal life and exhibited bias in the performance assessment of the subordinate whom she favored, which had a negative effect on the workplace environment of that office.

113. After the alleged affair ended, ID/OIOS was told that the supervisor harassed the subordinate and denied him a promotion... Several interviewees added that the above mentioned subordinate staff surreptitiously taped his supervisor and played the tape to 'whoever wanted to listen.'

114. The OIOS subsequently learned that although both the UNJSPF management and OHRM were aware of the alleged affair, the supervisor left the UNJSPF and no formal inquiry was initiated on the matter.

            Since even OIOS found this more significant and than salacious, and since OIOS' pulling of punches may have played a role in the current lack of action or reform, Inner City Press will henceforth report on details behind and beyond the OIOS report.

            The relationship to which OIOS alludes was between Eleanor Phillip and the author of Friday's gag-order email. Ms. Phillip brought him along when she shifted units in the Fund, then later retaliated. She was allowed to move to ICSC at the UN, and is still in the UN phone book, hiding in plain sight. The retaliation efforts continued, for example when the now-gagger agreed as a favor to circulate a staff representative's email message to all staff. In that case, management used a "note into employment file" to get its point across. Ironically and sadly, the retaliation seems to have worked, leading to Friday's quite different mass email. When even a staff representative, a union man in essence, is turned into an enforcer of silence to protect management, a new low has been reached. This is the case in some but by no means all corners of the UN system.

Mental Health Accusations As Management Technique at UNJSPF

            UN Pension Fund management has used other, more sinister modes of retaliation. Among the most inappropriate has been accusing those it perceives as troublemakers of having mental problems. These individuals are then told to go to UN Medical Services on the 5th floor of the Secretariat building, and are told not to return to work while they are being evaluated and / or treated. One individual who nevertheless returned to the Pension Fund was humiliated by being escorted out by security.

            The use of mental health accusations as a management discipline tool is entirely inappropriate. The UN Pension Fund's use of this tool has created an atmosphere where even its victim have requested a continue veil of silence, concerned that being associated with even a spurious allegation of mental problems could hurt their careers and image. Out of respect, Inner City Press is withholding the names of people victimized by Pension Fund management's mental health accusations.

            The UNJSPF claims in numerous venues that is it exempt from UN rules. Mr. Dooley, for example, was rejected for a regular UN contract. But he was given what is called a Pension Fund contract, which does not entitle its holder to transfer elsewhere in the UN system. Technically, at least for one of the two time-determined categories of PF contracts, holders are not eligible for promotions from one UN employment grade to another. However, those favored within the Fund have been allowed such upgrades, including in salary, while others have been told no. The most favored people evade review by the UN's Office of Human Resources Management by entering on a Pension Fund contract, and then are later "regularized" into normal UN contracts and the benefits these convey.

            When the UNJSPF management team tries to get in a favored candidate through purported competition, the difficult stage is the composition of a short-list. Mr. Goddard, for example, Dulcie Bull wanted in the Fund. OHRM for once objected, but still Goddard got in. He got included in the short list, and after that it was hard to object. The supposition is that anyone on the short list is qualified. Those in charge at the Pension Fund know the best stage at which to intervene.

            Often OHRM's objections are only token and can be overcome. OHRM has for a long time -- too long, the Staff Council has voted -- been run by Ms. Jan Beagle. Dulcie Bull of the Pension Fund is close with Ms. Beagle, and has been able to thusly resolve what problems have arisen, and further limit any outside oversight of the Fund. One of the Staff Council's stated bases for voting to ask Ban Ki-moon to clean up OHRM is Ms. Beagle's insider status with the Kofi Annan administration. It is reported that Dulcie Bull, too, had inordinate sway under Annan, reaching all the way back to when both were at OHRM along with some other names which thereafter continued to appear, on the flight logs of UN plane trips and in other UN jobs including at the also scandal-plagued DESA. This personal connections have played a role in shielding the Pension Fund from any accountability, to the detriment of UN staff and pensioners.

            Sources Friday said that some Pension Fund staff, while initially exhilarated by the first installments of this Inner City Press series, later in the week grew concerned that the investigative scrutiny might go too far and "wash their dirty laundry in public," or play into the outsourcing agenda. While Inner City Press follows the facts where they lead, the series began by reporting widespread opposition to outsourcing management of even a portion of the Fund. Continued research reveals that it is a single Member State that is pushing for expedited outsourcing. We will have more on this, in connection it is hoped with the Pension Fund auditors' meeting, which should be considering this series.

  This investigative reporting is not among the pretexts for outsourcing. A nitty-gritty aspect that is often overlooked, sources say, is that the woman who was running the North American equities portfolio fell sick, asked management for help, but was not given any. Now the porfolio's performance is cited as militating for outsourcing and a shift in strategy.

            Having for years allowed nepotism and harassment to flourish at the Fund, Mr. Cocheme now faces a General Assembly inquiry into his failure to implement an Office of Internal Oversight Services report recommending action against Dulcie Bull and Paul Dooley, and a Pension Board audit committee meeting this week. Mr. Cocheme has still not made any Press replies, nor given any explanation of the basis for his stated "rejection" of the detailed factual findings and recommendations of the OIOS report. Beyond the report, sources say for example that now-barred contractor Gerald Bodell chose to live near Mr. Cocheme in order to when possible walk to work with him, to keep the money flowing. Mr. Cocheme has much to answer for, and although it is already late, this should begin at this week's meeting of the Pension Fund audit committee. Developing.

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service.

            Copyright 2006 Inner City Press, Inc. To request reprint or other permission, e-contact Editorial [at] -

UN Office: S-453A, UN, NY 10017 USA Tel: 212-963-1439

Reporter's mobile (and weekends): 718-716-3540