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At UNDP, Melkert's Toast and Aruna's on the Move, Sources Say, Procurement Task Force Needed

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

UNITED NATIONS, July 11 -- As questions multiply concerning the UN Development Program's financial and human resources practices, sources tell Inner City Press that the fix is in for Associate Administrator Ad Melkert to leave the agency. His contract expires in March 2008, but there are moves afoot for him to leave even sooner than that.

            Wednesday a Fox News online story reported on UNDP's use of an outside contractor, Professional Financial Temporaries, Inc. a/k/a PRO-FIT, in Darshak Shah's Office of Finance and Administration. As recounted in Fox's initial story, seven of PRO-FIT's up to 31 personnel at UNDP have access to the ATLAS financial system, a violation of UNDP's rules. Two portions of Fox's story:

Among the items paid there is a particularly unusual one: an invoice numbered 00040679, and dated April 26, 2006. It notes 'placement fees' totaling $12,715 for an individual named Fatima Ba -- a name almost identical to that of Administrator Dervis personal assistant, Fatimata Ba. Questioned by FOX News about her possible relationship with PRO-FIT, Fatimata Ba would only say that she 'did not know' if such a relationship existed, and referred FOX News to the UNDP press office.

            It should be noted that Ms. Ba would have access, as would Dervis' chief of staff Tegegnework Gettu, to all of Dervis' incoming e-mail.

PRO-FIT founder and president Alvin Galland declined to answer any questions from Fox News. (An associate who answered PRO-FITís telephone said that Galland 'was about to go on vacation.')

            Reached by Inner City Press on Wednesday, Mr. Galland claimed that his company's "long" relationship with UNDP has been "very professional," and that it began under a previous UNDP controller, Alan M. Potter, who remains a board member and vice chairman of the UN Federal Credit Union. (And see below.) UNDP insiders say that Potter is involved in PRO-FIT; Galland on Wednesday denied the connection. Galland said that PRO-FIT has tried to get work at UNDP's sister agency UNOPS, and that it does not have any personnel placed at UNICEF. We'll see.

            Soon to laterally transfer to another UN agency, according to well-placed UNDP sources, is Aruna Thanabalasingam, who along with being in charge of UNDP's Office of Human Resources is also the wife of UNDP's embattled finance chief Darshak Shah. Inner City Press has previously reported on this conflict of interest.

    Recently, according to UNDP sources, Kemal Dervis asked another UN agency head for the favor of "taking" Ms. Thanabalasingam and giving her a job. Inner City Press on Wednesday afternoon, admittedly late, asked the agency concerned to confirm or deny that a position is being offered to Ms. Thanabalasingam; the agency was not able to respond by deadline and so, this once, is being left unnamed for now. Inner City Press telephoned Ms. Thanabalasingam's (old) number at UNDP, and was told that "she is not here." When asked if Ms. Thanabalasingam would be making the transfer, the person answering the phone said, robotically, "I do not have that information." We will actively pursue and report this story.

Ad Melkert

            Fox News, after getting a call from Galland, and contradictory e-mails from Akiko Yuge and Darshak Shaw, also ran an update. According to Yuge, PRO-FIT was chosen through a competitive process, in 1998. That was nine years ago. Now, Yuge says, the work was finally re-bid out three months ago. But this is not borne out by a review of UNDP's list of bid-outs. As another glimpse into UNDP, the agency's Procurement Notices list includes, among others

a border post in Ferghana, Uzbekistan (June 2007)

milk powder in Gabon

computers and a "customs check point" in Turkmenistan

consulting services in Brazil (where, Inner City Press is told, the corruption has taken place in arbitraging interest rates, and helping the Brazilian government stealthly hire workers)

            The upshot is that what's needed on this at UNDP is a full investigation by the UN's Procurement Task Force. As the UNDP scandals widen, it become clear that the agency has long been in need of investigation and exposure. As simply one more demonstration, with regard to the above-mentioned ex-controller Alan Potter, consider this 1998 article from the Financial Times, about critical ("qualified") audits of UNDP:

The accounts of the United Nations Development Program, which assists some of the world's poorest nations in implementing sustainable development projects, have been qualified every year since at least 1989, it has emerged. The auditors' actions have never before been made public, in spite of being known to donors....

Alan Potter, senior adviser and coordinator at the bureau, said: "It is not a question of doubting the numbers which are in the statements."

A qualified opinion typically indicates that there is a limit on the scope of the auditors examination because some information is not to hand, or that the auditor disagrees with a specific accounting treatment.

Mr. Potter said: "UNDP's accounting standards are satisfactory. We have our own UN accounting standards, which generally follow internationally accepted accounting principles."

The UNDP would have to "keep the pressure on [governments] to improve," he added.

            But UNDP hasn't even kept pressure on itself to improve -- quite the opposite. And so it's time for housecleaning, all the way to the top, and for the Procurement Task Force to move in. Developing.

Click here for Inner City Press' report on Deputy Secretary General Asha-Rose Migiro's July 11, 2007 press conference

Feedback: Editorial [at] innercitypress.com

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

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