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As Wolfowitz Totters, Lying in Wait Is Mark Malloch Brown As Well As UNDP's New Duo

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

UNITED NATIONS, April 22 -- As calls for Paul Wolfowitz to resign from the World Bank gather steam, joined Sunday by Germany's minister for development, names for a successor begun to be floated. The Washington Post and Bloomberg opine that Kemal Dervis, currently the Administrator of the UN Development Program, would be a "solid candidate," assuming that for once the post could go to a non-American.  (Given the Iraq-weakened condition of the Bush administration, that seems possible -- the non-American part, not necessarily Dervis. UNDP insiders continue to say that Dervis is more interested in politics in his native Turkey than anything else (except for his health, which is reportedly in shape not much better than Iraq or Wolfowitz).

            But hiding in plain site is Dervis' predecessor at UNDP, Mark Malloch Brown, native of Britain, now in waiting at Yale. The UK has argued in recent World Bank board meetings that it is time for a non-American. And who better than the soon to be Sir Mark?

            Those propounding this theory point to the role of UNDP Associate Administrator Ad Melkert Wolfowitz's downfall. Click here for that story. Melkert had competed with Dervis for the top spot at UNDP; both were on the "short list" composed by Kofi Annan and his Number Two, MMB. How and why Dervis was selected is a topic for another day. But, although it is rare for a person who ran hard for the top spot to accept play second fiddle -- witness the recent comments by Barak Obama to the suggest he run as Hilary Clinton's vice president -- Melkert accepted it, and now lies in the wings.


            There has still been no response, from Mr. Melkert or this spokespeople, to the hiring of Mr. Eelco Keij, who just happens to be the New York secretary of the Dutch Labor Party. Click here for that, and here for Mr. Keij's Labor Party blog.  It was raised to Inner City Press by UNDP staff that there are ethical issues with Mr. Melkert hiring with UNDP money, and outside of the normal, competitive channels, the New York secretary of the political party he used to serve. In March, Inner City Press directed an e-mail requesting an explanation to Mr. Melkert, Mr. Keij, UNDP's spokesman David Morrison, Administrator Kemal Dervis, and others, stating that the question was on deadline.  There was no response, even after the question was reiterated, now twice, to Mr. Melkert and Mr. Keij.

   In a December 15, 2006, press conference at the UN, Melkert answered Inner City Press that "I'd like to bring our transparency in line with the UN procedure." This answer came after UNDP had refused to provide copies or even summaries of audits of its admittedly troubled Russian Federation office, and after Inner City Press pointed out that the UN Secretariat at least provides full copies to any of the 192 member states which make a request. Mr. Melkert added, "That should be normal... Talking about transparency, the best criteria for me is my own transparency.. I'm looking into that right now." Video here, from Minute 45:46.

            Inner City Press inquired into a meeting Mr. Melkert held on December 1 with the staff of UNDP's Poverty Group, then headed by ex-World Banker Nora Lustig, concerning steps taken to bend or break UNDP hiring rules. Having just referred to transparency, Mr. Melkert nevertheless began with the "hope you are not going to ask me about all the meeting that I've had." He continued that "for this exception case, yes, this First December meeting, I was... It was a managerial decision to merge, it's my responsibility, everybody can and should work with that. With respect to staff rules, we have tried to make the best out of that."

    UNDP's hiring of Eelco Keij of the Dutch Labor Party is another example of Melkert "making the best" of the UNDP rules -- that is, bending or breaking them, as is alleged of Wolfowitz at the World Bank. While on December 15 confirming much of what Inner City Press sources have said about the December 1 meeting, Melkert denied that he has told staff not to speak to the press. Now he himself avoids the press, while dissembling through a spokesman about his role in human resources irregularities at his previous employer. Will it work? Time will tell.

            In recent years, World Bank staffers have cashed out to UNDP: MMB and Dervis, Ad Melkert, and down a rung Nora Lustig, until recently the head of the UNDP Poverty Group, and even now a consultant, in a second tier echo of Shaha Riza's trajectory.

            MMB in late 2006 strutted around UNDP saying that he would be back to compete with the agency. The idea then was a private firm. But why not the World Bank? This should be a developing story this week.

 Again, because a number of Inner City Press' UN and World Bank sources go out of their way to express commitment to serving the poor, and while it should be unnecessary, Inner City Press is compelled to conclude this installment in a necessarily-ongoing series by saluting the stated goals of the UN system agencies and many of their staff. Keep those cards, letters and emails coming, and phone calls too, we apologize for any phone tag, but please continue trying, and keep the information flowing.

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At the World Bank, Corruption-Fighting Claims Not Fully Matched by Actions, Though Better than UNDP

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

UNITED NATIONS, February 6 -- The World Bank is self-referential about its self-investigation. Most recent is a 64-page report, with multiple quotes from and photos of Paul Wolfowitz, discussing two years of inquiries by the Bank's Institutional Integrity Department, called INT. Notably, the head of INT is selected directly by, and reports only to, Wolfowitz. Unlike even the head of the UN Secretariat's Office of Internal Oversight Services, who is selected by the General Assembly as well as Secretary-General, the World Bank's investigative arm is entirely controlled by the agency's head. Structurally, then, any possible corruption at the highest levels would go undetected.

            The World Bank makes referrals, though, including in the UN to UNICEF and UNHCR, the agency for refugees. The report does not say what the referrals were about. While the World Bank's INT report names the names of sanctioned companies in an appendix, the circumstances of the infractions are not disclosed. Some can be found in the public record. For example, Thales Engineering and Consulting SA was disbarred for a year, since expired, reportedly for fraudulent practices in relation to the Cambodia Demobilization and Reintegration Project. Still, given that a high percentage of those disbarred are companies in Indonesia which most of the report's reader will never have heard of, sometimes merely "naming names" is not enough.

            The World Bank's INT is better, however, than the non-existent process at the UN Development Program. This is a comparison worth making, not only due to the two organization's overlapping mandates of top-down development, but also due to the railroad between the Bank and UNDP: Mark Malloch Brown, Kermal Dervis, and now the new Director of UNDPís Regional Bureau for Europe and the CIS, Kori Udovicki. Ms. Udovicki replaces the legendarily out-of-control Kalman Mizsei, and UNDP has told Inner City Press that "Dervis did not know her prior to her appointment... Please contact the World Bank for details on the supervisory relationships during any time Ms. Udovicki spent there." If as they claim it's "One UN," perhaps now some answers will be forthcoming.

            As Inner City Press has twice reported, Kalman Mizsei was a traveling -- and Daily Sustenance Allowance receiving -- embodiment of sexual harassment. Perhaps understandably, UNDP nowhere publishes figures on sexual harassment, but rather requires reporters to ask and remind and wait weeks for a response. The World Bank's report, which will be published on the agency's website as a public document, brags that the two year period reported-on, it "terminated three staff members for sexual harassment; disciplined two for failure to comply with personal obligations; and disciplined four others for conflict of interest or other violations."

            UNDP, on the other hand, provided the following only in belated response to requests from Inner City Press:

"On sexual harassment: In 2005, there were 14 formal complaints of harassment, and 28 requests for information and/or support, from UNDP staff. In 2006, there were 22 formal complaints of harassment and 16 requests for information and/or support from UNDP staff. These figures encompass all forms of harassment, not only sexual harassment."

            Beyond noting that complaints at UNDP rose by over 50% from 2005 to 2006, it is difficult to compare the two agencies, given the different definitions. Both are part of the UN system, but each goes its own way; each implicitly brags that it is the best. But it is a competition in laxity. UNDP, for example, does not publish any listing of corruption in its programs.  As evidenced by the Democratic People's Republic of Korea - UNDP scandal which has led new Secretary-General Ban Ki-moon to call for urgent audits of all UN funds, programs and specialized agencies  -- not, apparently, including the World Bank or IMF --  UNDP does not even provide copies of its internal audits to the member states which fund its operations.

            The UN Secretariat's OIOS does provide copies of such audits, which reporters can then get, like the OIOS audit entitled "Investigation of conflict of interest, favoritism and mismanagement at the UN Joint Staff Pension Fund,", which Inner City Press yesterday reported on and quoted from, including 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 OIOS 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."

                        The audit 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."

            Flash-forward to June of 2006, a period of time regarding which two starkly different versions were presented at Monday's UN Pension Fund 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." Such decisive (but not-followed) scrawling is consistent with the blustery approach of Paul Wolfowitz, and of this more-style-then-substance integrity report.

            Paul Wolfowitz, INT director Suzanne Rich Folsom and Chris Burnham are all Americans. But while the U.S. has insisted that the head of the UN Secretariat's OIOS not be controlled by the Secretary-General, it has apparently not even suggested that the head of INT should not be entirely controlled by the head of the World Bank. While clearly the U.S. is more comfortable with the one-dollar, one-vote structure of the World Bank, as opposed to the one-country, one-vote system of the UN General Assembly, one expects some structural consistency. Independence is good, no? And at the World Bank, who watches the watchers? 

            For example, despite the Wolfowitz-heavy report's near-religious inveighing against corruption, this fervor did not stop him from hiring Robin Cleveland, despite reports from the Wall Street Journal on email that "Air Force Secretary James Roche... sent at a critical point in 2003 as he sought to win over White House budget officials skeptical of the leasing costs. In the e-mail, Mr. Roche offered to help land a job for the brother of a senior official in the OMB who oversees defense acquisitions. ... In the e-mail that came to light last week, Mr. Roche discussed recommending the brother of OMB official Robin Cleveland for a job at defense contractor Northrop Grumman Corp., where the Air Force secretary had been an executive. Northrop says it received a referral about Peter Cleveland from Mr. Roche."

   Soon afterwards, according to Reuters, "White House officials... asked the Justice Department to probe any conflict of interest involving Air Force Secretary James Roche and Robin Cleveland, associate director at the Office of Management and Budget."

    Once Wolfowitz arrived at the World Bank, AFP reported that "Robin Cleveland, Wolfowitz's new counselor, was formerly associate director of the Office of Management and Budget in the White House. The World Bank's staff association, its de-facto trade union, says Wolfowitz's appointments risk opening the organization to charges of hypocrisy when it demands transparency of the poor countries that receive its aid. 'In order to be effective as an institution, we must exemplify the recommendations we make to others,' it said in a letter to Wolfowitz that was distributed to all staff members and obtained by AFP."  No glossy 64-page report can replace practicing what you preach.

Other Inner City Press reports are available in the ProQuest service and some are archived on --

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