Pension Fund Outsourcing Draws 13 Bidders, Over 10 from USA, Kudos for
Russell Lee of Inner City Press at the UN
February 16 --Nine billion dollars of the UN Joint Staff Pension Fund's money
was up for bid on Friday. In a small conference room of a building on 45th
Street, the ritual opening of the bids -- thirteen in total -- was held. In
attendance were representatives of five of the bidders, four UN procurement
staff, a genial staff council representative, and a lone media representative,
from Inner City Press.
Journalist attendance became possible only at the last minute. Inner City Press
had written to UN Controller Warren Sach to request access, without receiving
any direct response. At the UN's noon briefing on Friday, Inner City Press asked
to be given access, to the opening then less than three hours away. The
spokesperson said she would check, but at 2:20 p.m. said she had not heard back,
and anyway "it's just the beginning of the process."
City Press got word that the Department of Management decided to allow access,
although this was never announced or communicated by the Department. Inner City
Press showed up, on the second floor of 304 East 45th Street, and the
procurement staff said they had been told to permit access. This time only, they
appear to think. Inner City Press was forbidden from audio or video taping.
These bid opening should always be public.
this exclusive Inner City Press report, one hour after the opening. Bidders
could apply for the "passive indexation" of the Pension Fund's North American
equity portfolio or for "transition management," or for both. The thirteen
bidders, in alphabetical order with package identifiers are as follows:
1. Alliance Bernstein
LLC (USA), for both, six envelopes each with three enclosures, two velobound and
one soft covered.
2. Barclays Global
Investors (USA), for both, two boxes full of binders by an institution who's
parent is based in London but has paid to put its name on a stadium in Brooklyn.
3. Blackrock (USA),
for both, four FedEx boxes, velobound volumes, black as in Blackrock.
4. Citigroup, Inc.
(USA), for transition management only, two boxes, six copies.
5. Goldman Sach
(USA), for transition management only, one FedEx box with thin velobound volume
stamped "Strictly Confidential and Private."
6. JPMorgan Asset
Management (USA), for passive indexation only, two soft FedEx envelopes.
7. Lehman Brothers
Asset Management (USA), for transition management only, six green binders.
8. MFC Global
Investment Management (USA), for passive indexation only, thin envelopes, thin
9. Russell Investment
Group (USA), for transition management only, a box, then wrapped in black paper,
then shrink-wrap (an "oooh" went up from the small crowd, and Russell's observer
said, "We don't mess around").
10. State Street
Corp. (USA), for both, six envelopes.
11. The Bank of New
York (USA), for both, six envelopes, wire-bound volumes.
12. The Northern
Trust (USA), for both, one FedEx, three thin velobound volumes and two
pamphlets, a slender and confident presentation by a firm already on the inside
13. UBS, AG
(Switzerland), for passive indexation only, 3 UPS packages (that's right, UPS
mistake, but perhaps predictive, The Northern Trust's submission was opened
before The Bank of New York. The master of ceremonies, otherwise smooth as silk,
apologized for the gaffe, which had been pointed out by Northern Trust's
observer. Also in attendance was a Mr. Khan, who went to the door when it was
knocked on. The bidding room felt not unlike a small funeral parlor, with a
series of viewings throughout the day. This step to outsource $9 billion in UN
staffers' pensions took place mechanically, mundanely, with little notice, but a
bit more than the contracts described in the OIOS report, given to Sprig without
bidding, or with only sham bidding. The opening of bids took place as described
above. What happens next is again in the shadows....
asked at a February 5 town hall meeting how large a management fee would be
paid, UN Controller Warren Sach did not have an answer. Following the meeting,
Inner City Press asked Mr. Sach for the list of bidders, or those on the short
list who got the Request for Proposals, as well as for a copy of the RFP. For
the RFP, Inner City Press was referred to the administrative officer of the UN
Investment Management Service, Chieko Okudo, from where another referral was
made. As days and then a more than a week sent by, the RFP was never provided,
and Inner City Press was told that neither would the list of bidders be
released. Similar difficulties in obtaining answers and documents arose last
Inner City Press' reporting on the
conflicts raised by UN investment fees being paid to Pictet & Cie.,
whose Ivan Pictet still serves as an "ad hoc" member of the UN Pension Fund's
Investment Committee, on which now sits a Vice Chairman of Merrill Lynch and
former directors of Morgan Stanley and Commerzbank.
That there are causes
of concern can be found in an until-now confidential report of investigation by
the UN's Office of Internal Oversight Services. In OIOS' "Investigation of
conflict of interest, favoritism and mismanagement at the UN Joint Staff Pension
Fund," the complaints of two whistleblowers are considered and upheld.
Specifically, OIOS confirmed that through the Pension Fund's Paul Dooley,
millions of dollars in contacts were given to a company called Sprig, Ltd, run
by Gerald Bodell, who was previously Dooley's supervisor at Guardian Mortgage
Corporation. According to the audit,
"OIOS found no evidence that UNJSPF [the
UN Pension Fund] considered candidates other than Sprig for any of these
contracts. Similarly, there is no evidence that UNJSPF made any checks on the
background of Sprig independently (for example by requesting a D&B report on
Spring) or that UNJSPF attempted to independently determine whether Mr. Bodell's
fees were consistent with those charged by other consultants."
reports that Sprig was "operated by Mr. Bodell from the basement of his home,"
but nevertheless was given a higher score for "Web experience" than the
accounting firm of Deloitte & Touche. Sprig's contract for "Strategic
Information Technology and Management Consulting Study" was signed for the UN by
Sanjaya Bahel, who was since by indicted and most recently had his bail revoked.
A subsequent contract amendment for Sprig was signed for the UN by Andrew Toh,
an Assistant Secretary General who is currently under investigation and for that
reasons has not been asked to resign by new Secretary-General Ban Ki-moon. The
audit concludes with the recommendation that "any contracting and procurement
activities undertaken by the CEO of the UNJSPF comply with the Pension Board's
directive that they be limited and only under exceptional circumstances."
Toh and Ms. Frechette: back to the future?
February 5 meeting, the Staff Council referred to documents which challenge Mr.
Sach's presentation of himself as having opposed an earlier attempt to outsource
Pension Fund business. After the meeting, Inner City Press asked Mr. Sach about
these documents. Mr. Sach showed a copy of a memo from Chieko Okudo to
then-Under Secretary General Christopher B. Burnham, on which was scrawled at
the bottom of the first page an instruction to "do this by the book, -CBB." Mr.
Sach said that some had circulated copies of this memo with the bottom notation
City Press has obtained copies of emails from the time at issue, which tell a
different story. After a decision was made to "liquidate" a small capitalization
fund managed for the Pension Fund by Lombard, Odier, Darier and Hentsch (LODH),
an internal debate ensued whether the liquidation contact could be given without
bidding to the Northern Trust bank, which was already the global Custodian of
the Fund. Despite the questions raised, by July 5 Northern Trust's Vice
President Robert Ernst wrote to two individuals at the UN that the liquidation
was finished, "would you like sales proceeds to remain in the LODH portfolio, or
transferred out to your own cash accounts?"
this liquidation, there was a June 13, 2006 email to Ms. Okuda stating that:
"Chieko: I do have a problem with your
memo. The memo needs to state the complete additional services to be performed
other than NT [Northern Trust] act as the Master Record Keeper. Recently, a
number of changes and additional services outside the original scope have been
requested to be undertaken by Northern Trust. All this has been undertaken in a
non-competitive environment.... The organization is now open for criticism if we
continue to expand the scope of NT, which was not originally envisaged. This can
lead to other banks suggesting that we have not been open and transparent..."
But it is
now not only "other banks" who are complaining about a lack of transparency. The
majority of questions directed to Mr. Sach on February 5 were critical in
nature, asking "why fix it if it isn't broken" and why hand money to an outside
firm. Later the question was asked, can we see the Request for Proposals, and
know what firms are on the short list? No such information was provided, until
press access to the bid-opening was allowed at the last minute, after repeated
request, most of which met with no response. It shouldn't be like this. Nor
should the recruitment and employment practices of the Pension Fund. Watch this
UN Office: S-453A,
UN, NY 10017 USA Tel: 212-963-1439
(and weekends): 718-716-3540
Pension Fund, Outsourcing Is Set to Be Sued, While UN Medical Services Abuse
Paper Trial Surfaces
Matthew Russell Lee of Inner City Press at the UN
February 15 -- In the drive to outsource $9 billion from the UN Pension Fund,
meetings are held behind closed doors, even when presented as public. For that
reason and others, on Thursday the UN Staff Council passed a motion authorizing
a lawsuit in Federal Court to try to stop the deal.
Thursday the Pension Board's Audit Committee met. Inner City Press attempted to
stakeout the meeting -- that is, to ask participants questions on their way in
and out. Inner City Press waited outside the meeting room, on the 38th Floor of
One Dag Hammarskjold Plaza. While this is done routinely outside even closed
meeting held in the UN Secretariat building, at the UN Pension Fund such waiting
draws stares and suspicion. One officious man demanded, "How did you get in
Eventually a woman named Pat Ryer, from Meeting Services, told Inner City Press
she would tell the Audit Committee members and management of the questions to be
answered. On this basis, Inner City Press headed back to the Secretariat
building, and formalized the questions in writing:
Since one function of the Audit Committee
is to liaise between OIOS and the Pension Board, when is the Audit Committee
going to discuss OIOS' 20-page, 124-paragraph Report of Investigation, dated
March 28, 2006, ID Case No. 0543/05, calling among other things for action be
taken on Dulcie Bull and Paul Dooley?
According to a statement released last
week by the S-G's spokesperson's office to Inner City Press, Mr. Cocheme
"informed OIOS that he disagrees with the findings and recommendations of the
report of investigation - as regards the actions of his staff - and advised that
he 'intends to take no action' with regard to them. OIOS advised him that
pursuant to its mandate, it will report his response to the General Assembly."
Inner City Press tried to reach Mr.
Cocheme by telephone for an explanation of his disagreement and refusal to act
on UN investigators' recommendations, and left a detailed voice mail, but still
a week later no response has been received... Is it appropriate for Pension
Fund staff to be told not to speak to the press?
On outsourcing, to which firms was the
RFP circulated and when it is due? Why have we still not been able to see a copy
of the RFP? Will the Audit Committee consider the many requests that it await an
asset liability management study? Could Deutsche Bank bid? Could Merrill
Lynch?There are other questions, but rather than keep asking, we'll await
answers to the above.
The questions were
also sent to the staff representative and to CEO Cochame, as well as to UN
Controller Warren Sach. By midnight, none of the questions were answered. Nor
had Mr. Sach responded to a direct media request to attend the opening of the
bids for the $9 billion to be outsourced. At the UN's noon briefing, Inner City
Press asked the General Assembly President's spokesman why the four GA
representatives on the Pension Board are not responsible for bringing to the
GA's attention for action that Pension Fund management's refusal to implement
the recommendations of an OIOS report. From the
Inner City Press: The board of the UN Joint
Staff Pension Fund seems to have, the General Assembly sends four members to
it. So, I’m wondering, first, how they’re elected by the GA, by the General
Assembly or by some Committee, and also whether they can, the issue I’ve
asked you about, these OIOS reports that now supposedly go back to the GA,
can these four individuals, do they play any role –- because they’re on the
Pension Fund Board, in bringing this back to the GA?
Spokesperson: No, no. The Chairman of the
Board sends his report, the annual report of the Board, to the Fifth
Committee. It's a standing item. I think it’s an annual item. If not
annual, it's one of the biennial items. And, once that report is made to
the Fifth Committee, the Member States can either endorse the report of the
Pension Fund, ask questions of the Pension Fund about why they did not
accept recommendations made by OIOS, and it's either that the Chief can
persuade Member States that this was the right decision to make, or Member
States can easily take a decision or resolution telling him, "No, you have
to accept the recommendations made by OIOS."
see. The Staff Council passed a resolution authorizing litigation, and
allocation of up to $250,000 from the reserve fund to that end. The resolution
expressed "dismay" at the Secretary-General and "alarm" at the speeding toward
Ms. Alenius: miscellaneous?
of OIOS, Inga-Britt Ahlenius, Warren Sach, the previous Deputy Secretary General
and UN Medical Services' Agnes Pasquier and Sedershan Narula were all informed,
on March 6, 2006, of the Pension Fund management's abusive practice of
unilaterally declaring that staff they have put on sick leave "are not to enter
UNJSFP office space over the same period." This particular order came from the
Pension Fund's Peter Goddard, regarding whom we have more to report. In this
case raised and documented, the above-named were notified that the staff member
was "escorted out of the building - and this is not the first staff member to
have endured such humiliating treatment -- simply for having expressed a
different opinion from the 'management.' Many staff members question why Mr.
Goddard, in particular, has not been escorted out of the building, as valid
reason abound... His infamous 'paper-throwing' incident at a Town Hall meeting
demonstrated his flagrant disrespect toward staff members."
On May 3,
2006, Medical Services' Dr. Sedershan Narula and OHRM's Netta Avedon and Barada
Weisbrot were informed of staff's concern "that UN funds and time are being
squandered by Pension Fund management, where some Pension Fund staff members are
forced to undergo unnecessary psychiatric evaluations. This is purely a tool to
enable the continual harassment by Pension Fund management and some supervisors
toward certain staff members... Pension Fund staff members who were sent for
psychiatric evaluations have ALL made the 'mistake' of merely challenging
Pension Fund management / supervisors with regard to managerial opinions /
decision to try to push this outsourcing through, behind closed doors. As one
staff member put it, "Who's crazy?" Developing.
Pension Fund, UN Directives Are Said to Not Apply, Per Jan Beagle Memo, Making
Cocheme an S-G in the Shadows
Matthew Russell Lee of Inner City Press at the UN
February 14 -- As the UN Pension Fund lurches toward the
outsourcing of $9 billion dollars,
while its CEO Bernard Cocheme refuses to implement a UN investigative report
that found systemic irregularities in previously outsourced computerization
contracts, sources continue to come forward. The picture they paint of Mr.
Cocheme is as a non-manager who allows senior officials to hire and fire
whomever they want, and ignores lower level staff's complaints whatever their
Memorandum of Understanding granted by the UN's Jan Beagle to the UN Pension
Fund exempts the Fund from many of the UN's rules and directives. This has led
to abuse of staff, to a lawless parallel world of the UN, and to contracting
Underlying the UN Office of Internal Oversight Services report of investigation
that was first reported on by Inner City Press on February 5 was a detailed
September 2, 2004, memo provided to Mr. Cocheme, to Barada Weisbrot of the UN's
Office of Human Resources Management and that offices then-boss Catherine
Bertini. The memo detailed examples of favoritism, "lobbyism" and intimidation
Find Jan Beagle of UN OHRM
nothing was done to act on that memo, the proponents moved to a Staff Council
Resolution, Number 69 of 2005, which identified the loophole through these
irregularities occur: the Memorandum of Understanding signed between the Fund
and OHRM's Jan Beagle. The resolution, which passed by a vote of 17-0, expressed
"concern that recent personnel decisions made by the Chief Executive Officer
of the UNJSPF might be considered arbitrary, and would constitute a violation of
the rights of staff members within the Pension Fund secretariat." The resolution
was brought to the attention of the members of the Pension Board as well as the
UN's Fifth Committee.
Subsequently OIOS opened an investigation, conducted by two investigators sent
from Vienna, who have been identified by sources as Mr. Florin Postica and Ms.
Margaret Gichanga. They did detailed work, and issued a 20-page, 124-paragraph
Report of Investigation, dated March 28, 2006, ID Case No. 0543/05. It called
among other things that action be taken on
Dulcie Bull and Paul Dooley,
for contracting irregularities and, as least as to the former, on other grounds
as well. Mr. Bahel, subsequently indicted for corruption, was also identified in
the report. He is the only one so far on whom action has been taken.
Cocheme has said, without explanation, that he "disagrees"
with the report, and will not act on it.
It then goes to the General Assembly. Wednesday at the UN's noon briefing,
Inner City Press asked the spokesman for the GA what are the next steps. He
said, "If the General Assembly disagrees with what the Pension Fund did, they
can do something." Video
from Minute 24:16.
Memorandum of Understanding that Jan Beagle gave to the Pension Fund states that
"the UN's administrative procedures and directives are not automatically
applicable to Fund staff, since the requirements of the Board take precedence."
Cocheme and his team, including Peter Goddard, Dulcie Bull and Norah Fitzgerald
and, take this phrase to mean they can do anything they want. Thus, the first of
these two laugh together at how far above the law they are. They only have to
answer, if to anyone, to the Pension Board, which they think they control. We'll
see, through time, if their analysis is correct.
UN Pension Fund, Question of Special Status As A Second Gag Order Is Issued
Matthew Russell Lee of Inner City Press at the UN:
February 13 -- At the UN Pension Fund on Tuesday, CEO Bernard Cocheme was seen
laughing with his Executive Officer Peter Goddard.
Sources say the laughter, which they characterized as forced, was directed at
Office of Internal Oversight Services
and at this follow-up
on why the recommendations were never enacted. Under Mr. Cocheme's watch, $9
billion of investments stand to be outsourced, in a process with little
transparency. And Mr. Cocheme laughs.
Cocheme: laughs, at OIOS, apparently
Tuesday, another gag order email was sent out to all staff, following up on
Friday's, and is
reproduced below, along with a staff member's description of Pension Fund
management's extensive use of the UN's $22,000 retirement-worker loophole. But
first, the OIOS report on which Cocheme has refused to act.
report states for example that Dulcie "Bull failed to properly manage the
contracts awarded to Sprig. She simply accepted Mr. Dooley's recommendations of
the use of Mr. Bodell / Sprig, despite serial exceptions to procurement
regulations and practices which left the UN unprotected. Mr. Bahel approved the
substitution of the requirement of a performance bond by Sprig, which was
contrary to the best interests of the UN, with no reason for doing so."
the Pension Fund, senior management needs no reasons and offers no explanations.
In a portrait now painted by multiple sources, while Bernard Cocheme dreams big
dreams in his skyscraper office -- it is on the 38th floor, if only of
One Dag Hammarskjold Plaza -- Dulcie Bull and Norah Fitzgerald hire their
friends and stigmatize anyone who complaints. Peter Goddard threatens longtime
employees with being escorted from the building and barks military orders,
disproportionately to staff members of color, some say. They've brought in Alan
Blythe, called Captain Bly or "The Floor Watcher" because he paces the office
looking for infractions to report to senior management.
surveillance, however, has not kept the information from emerging. Tuesday a
second gag order mail was sent out. This one has fewer mis-spellings than
Pension Fund Updates from the Staff Rep.
To: UNJSPF IMS
Staff Group, UNJSPF NY Staff Group, UNJSPF NY Consultants Group
9, 2007, 10:19 AM
flowing of attacks on our colleagues in ICP, I, as your representative must
continue to call upon you to honor your oath of office as international civil
servants.... When we, the staff disagree with our managers, we may challenge
their decisions through the proper institutional mechanism but by no means, we
have the right to display our grievances by means of mass press disclosure of
have been tagged as a 'gagger' or having made a gag order for reminding you not
to make press announcement without proper approval from the organization, while
I may agree with my detractor that it must be the duty of international civil
servants we are, to report any breach by managers of the organization's
Regulations and Rules to a higher level officials, whose responsibility it is to
take appropriate action, and thus by making such kind of report any staff member
has the right to be protected against reprisals or sanctions in accordance with
the whistle-blower policy, it is entirely improper for any one of us to air
grievances or criticize each others in public through the press... We have the
obligation at all time to promote a positive image of our Fund in conformity
with our oath of loyalty to the organization we serve.
possibly stop you from doing whatever you feel right to serve your agenda, but I
would have reached my goal as your representative by asking you to exercise
judgment on how your actions and relationship with the media are in line with
your own oath of loyalty to the organization in general.
problem, it seems, is that Pension Fund staff have seen who those who tried to
complain through "institutional channels" were treated -- one was forcibly
escorted from the Pension Fund's offices and several were speciously referred to
UN Medical Services. Staff have seen that even when two of them persevered to
whistle-blow, and met with OIOS which after a length investigation issued a
20-page, 124-paragraph report, those recommended for action are still in charge
at the Pension Fund, and CEO Cocheme can refuses to act, and laugh about it.
And so yet more staff members step forward. Here is a missive from one of them,
with some names redacted out of respect to privacy:
Thank you for doing such a great job
covering the out of control management in the Pension Fund. We need your help,
since no one will take any action to correct the problems in this office.
Enclosed is a copy of the memo of
understanding signed by Jan Beagle and Raymond Gieri, the former CEO of the
Fund, granting the Pension Fund special status. This memo has been used by the
Fund not only to give Paul Dooley a special Pension Fund-only contract, but has
been sued to give Frank De Turris, son of the former deputy CEO, a pension fund
only contract... Dulcie Bull, Norah Fitzgerald and Bernard Cocheme have used the
memo of understanding to retain in service beyond the normal retirement age Ms.
Aine Murphy. This was done despite the fact that OHRM did not want her here...
Ms. Murphy is part of the inner family of Ms. Bull and Ms. Fitzgerald. She
listens and observes everything going on in the office and then reports directly
back to Norah Fitzgerald and Dulcie Bull. As a result several hardworking staff
have been subject to harassment. It's like working in a police state... They
brought Ms Murphy back to work on January 31, 2007 and have given her a contract
for four months until May 30, 2007. The UN has a very strict policy against
bringing retired staff members back to work after they leave, but the Pension
Fund bypasses all the rules and regulations of the UN, to do whatever they
On February 2, 2007, management (Ms. Bull
and Ms. Fitzgerald) brought back [Name redacted 1] to work here again, since he
can make $22,000 net per year without stopping his pension. He retired in 1992
and starting in 1999 has returned every year to work three months a year. He is
now 76 years old and spending most of his day talking on the floor to people and
asking for assistance in how to do things. [He] lives in California and I
believe the Fund pays for his air ticket as well.
[Name redacted 2] retired from the Fund in
2004 and returns every year to work five or six months in order to get his
$22,000. He lives in Uruguay and I believe the Fund pays for his air ticket
[Name redacted 3] retired from the fund on
February 28, 1999 and since 2000 has returned every year to work five or six
months a year for his $22,000, and then in 2005 when he reached the ceiling of
$22,000 had his pension stopped and re-entered the pension fund as an active
full time employee and has never left. He is 68 years old and just received an
extension of his fixed term appointment for one year through January 19, 2008.
Why does OHRM continue to allow the
Pension Fund to do this? There is no reason for this with so many young educated
people in the UN system who need jobs. Barada Wiesbrot and Netta Avedon from
OHRM have signed off on all these actions. Why?
Did Jan Beagle of OHRM have the authority
on her own to sign this memo of understanding given the Pension Fund this
special status? Do the Member States know about this Memo of Understanding? Can
the General Assembly do anything about this Memo of Understanding?
For now, note
that the two OHRM staff named above have been identified as involved in the
Pension Fund management's unique use of the UN Medical Service, to retaliate
against whistle-blowers (although one of the two has called this "ludicrous" and
then offered a series of "no comments"). And as to what the Member States and
General Assembly, or even Pension Fund board, know, including about the opaque
and rushed drive to privatize, watch this site.
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.
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.
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