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Report on UNDP in North Korea Raises More Questions Than It Answers

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

UNITED NATIONS, June 2 -- As the UN Development Program prepared put its gloss on a report by Hungarian prime minister Miklos Nemeth, in a hastily called press conference by UNDP Administrator Kemal Dervis, questions arose about the irregularities that the report confirms, in places begrudgingly. As so often happens at the UN, these confirmations are buried deep in the report. A wire service emphasized that the report "concluded that [Tony] Shkurtaj's claims of retaliation are without merit. As a contract employee he could not have been fired, it was just that his contract was not renewed, it said."

  But UNDP formally selected and notified Shkurtaj of his selection and hiring for a full-time UNDP staff position as UNDP's North Korea operation manager, out of a total of 174 applications and a finalist list of 29 applicants. (Click here for Inner City Press' interview with Shkurtaj at the time.) Then UNDP subsequently retracted that offer from Shkurtaj.  This fits any credible definition of retaliation. Significantly, despite UN Ethics Officer Robert Benson's plea to Dervis to allow his office, the UN specialist in whistleblower protection, to investigate the case, UNDP said no. Then UNDP said that this panel, which also included former World Bank official Chander Vasudev of India and former U.S. and U.N. official Mary Ann Wyrsch, would clear the air. But consider these questions about UNDP's operations:

  The Panel conducted "[a] review of documentation related to the Selected Projects budgets" and concluded that "[f]or 77 transactions (74%) the available supporting documentation was insufficient to determine whether the ultimate beneficiary is consistent with the payee name indicated in the financial system (pg 158).

    "38% of disbursements made by UNDP-DPRK" were to DPRK "government agencies" which constituted 11 of the top 20 of all payees and totaled $9.13 million (pg 100-101). This analysis does not even include "disbursements made on behalf of UNDP-North Korea by UNDP country offices and other UN agencies" which totaled in the range of $33.3 million -- $48.5 million (pg 118).  If at the same percentage payment rate to the DPRK government, then an additional $1 2.65 million to $18.43 million was paid directly to the DPRK government as part of the UNDP DPRK program.

  The Panel's review of the most sensitive items - those the Panel classifies as Level I and II -- exported by UNDP to North Korea focused on 151 pieces of equipment and found that 95 items were "classified as being on the Commerce Control List.... [and] would have required a licensee from the U.S. Commerce Department for export or re-export to the DPRK"? (pg. 210)  The Panel found many such items were "controlled by the U.S. for national security and anti-terrorism reasons.... and were of heightened concern" (pg. 213).

    "At the suspension of the UNDP program in the DPRK in March of 2007, the UNPD transferred a large amount of equipment in closed projects to agencies in the DPRK government.... [and] to the extent that this equipment included U.S.-origin items, the UNDP's retransfer to the DPRK government of U.S.-origin items subject to U.S. license requirements would likely be considered by the U.S. to contravene its export policies prevailing at the time"  (pg. 215-216).

            Assistant Secretary General for Legal Affairs Larry Johnson reportedly opined to UNDP that UNDP required a "retransfer authorization" from the U.S. to transfer the equipment to  the DPRK or other third parties and that UNDP did not obtain any such "retransfer authorization" prior to transferring these items to the DPRK government (pg. 220). But what did the UN's Office of Legal Affairs, of which Larry Johnson is the Deputy, do about this?

UNDP's panel of three, with Mr. Ban, findings about North Korea not shown

   The Panel concluded "that in the course of his duties and areas of oversight, Shkurtaj in fact reported conduct and facts about UNDP operations in the DPRK that required resolution and may well have been in violation of UNDP policies as well as applicable agreements with the DPRK" (pg. 312). 

  The Panel noted  a "management lapse" in UNDP's handling of the counterfeit currency (pg. 269).  The Panel "noted discrepancies" in the accounts that UNDP Comptroller Darshak Shah gave to the Panel regarding the counterfeit currency issue (pg. 267)  What action will be taken against Mr. Shah for his inconsistent statements to the Panel?

  While the UN system become ever-better known for lack of accountability, at UNDP this rises to the level of impunity.

Footnote: As Inner City Press has previously reported, well-placed sources said Friday that UNDP long-prepared whitewash of its retaliation against the exposure of irregularities in its North Korea programs was to be unfurled Monday and that, not surprisingly, the whistleblower is not protected. But as noted above, even the Kemal Dervis-selected panelists admitted systemic breakdown of safeguards within UNDP. On Sunday night, the UN te-mailed to the press that Dervis would brief, or brag, at 11 a.m. Monday (Inner City Press' UN bureau chief is in Africa, click here for the next of many articles.) The UN Ethics Office, which backed down or was called off this case once already, now has another chance, on this, the Koumoin / Cote d'Ivoire case, and the Somalia / KPMG cases, along others. Watch this site.

Footnote: back on May 22, Inner City Press asked UNDP these two questions, which have yet to be answered:

Q: What ever happened to the promised investigation by OAPR of UNDP's award of no-bid contracts to a firm called PRO-FIT?  At the time, UNDP promised its own investigation. did it ever happen?  will UNDP make it public? So far not answered.

Undp claimed a couple months ago that internal investigations and a Kimberly Process investigation had cleared undp from any wrongdoing in Zimbabwe, concerning undp's support of diamond mining operations.  but undp refuses to make public the investigations. what is the basis for undp not sharing copies of these investigation reports:  Will UNDP release the reports? So far not answered.

Q: Beyond UNDP, what about the question of UN requiring letter from a media's country's mission for accreditation?

Answered thusly: " I have been advised that for regular accreditation missions do not get involved. However, they do get involved when a visiting senior official travels with a press corps. In those instances, the mission would sent the UN Media Accreditation and Liaison Unit a list of journalists who need to get a one or two day pass."

  We less sure of this last answer, as several journalists have been asked to get letters from their country's mission to the UN. Developing.

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These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund.  Video Analysis here

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