Pension Fund Outsourcing Controversy, Russia's Role Revealed in Just-Released
Matthew Russell Lee of Inner City Press at the UN
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.
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.
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, we focus on the proposed outsourcing, following by one more in a series
of (mis-) management vignettes.
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
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
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.
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
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
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."
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.
UN Office: S-453A,
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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
UNITED NATIONS, February 11 -- As
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
Pension Fund under attack in the media
To: UNJSPF IMS
Staff Group, UNJSPF NY Staff Group, UNJSPF NY Consultants Group
9, 2007, 10:19 AM
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.
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.
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.
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:
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.
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.
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
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.
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
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UN Office: S-453A,
UN, NY 10017 USA Tel: 212-963-1439
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