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Inner City Press Global Inner Cities Report - March 7, 2006

UN Reform: Transparency Later, Not Now -- At Least Not for AXA - WFP Insurance Contract

Byline: Matthew Russell Lee, Inner City Press U.N. Correspondent

  UNITED NATIONS, March 7 -- A plan for management reform of the United Nations system was presented Tuesday to the General Assembly, including a proposal for outsourcing of work and improvement procurement procedures. A senior UN official who asked not to be named emphasized that the UN currently spends only $20,000 a year to train its 70 procurement staffers; the proposal would raise that figure to $10,00,000. It's unclear whether that training would extend to entities like the UN's World Food Programme, which on March 6 announced a $930,000 contract with the French financial services company AXA Re, to insure against drought in Ethiopia.

   At an on-the-record briefing Tuesday afternoon, Inner City Press asked how AXA had been selected for this contract. It has been reported that there were four other bidders, left unnamed.  Inner City Press was referred to WFP's New York based spokesman, who said he didn't know who else bid for the contract, and said that "if you are suggesting that there's something inappropriate, you're barking up the wrong tree."

            To ask for information about a near-million dollar contract is not to suggest anything. Among the questions: while it was initially said that the selected insurer would pay out $15 to $20 million in the event of drought, the AXA contract calls for a $7.1 payment. To ask for an explanation of the difference is not to cast aspersions. But there is a climate of paranoia and defensiveness these days at the UN, at least in New York. Inner City Press immediately emailed written questions to the WFP in Rome and to Richard Wilcox, the WFP's Business Planning Director, who was asked what screening procedures the WFP uses in procurement. (As simply one example or question, AXA founder Claude Bebear and its CEO Henri de Castries have been caught up in a money laundering investigation, the point being not the outcome but the WFP's procedures).  At press time, only the following was received:

-----Original Message-----

From: Senior Public Affairs Officer, World Food Programme


Sent: Tue, 7 Mar 2006 20:08:05 +0100

Subject: Re: Press inquiry

"AXA won the contract with WFP through a competitive international tender. Five re-insurance companies bid for the contract, and AXA was chosen on the basis of price and technical competence. I'm afraid I don't have the details of the other four bidders, and while we publish the winners of tenders, we don't make the bids themselves public."

            Not even the names of the bidders? The Secretary General's March 7 reform proposal states, at page 28, that "in May 2006, I shall submit... a detailed policy proposal containing new and clear rules on public access to United Nations documentation." That will or would be not a moment too soon.

 Leaving Ethiopia

            Also at the UN headquarters on Tuesday, ex-Knicks player John Starks spoke in advance of a March 15 event scheduled Madison Square Garden, Dunk Malaria. The sponsor is Hedge Funds Versus Malaria, whose founder Lance Laifer also spoke, along with the UN's Djibril Diallo (himself a malaria survivor, from Senegal). When asked by Inner City Press which hedge funds are involved, Mr. Laifer mentioned several including his own (Hilltop Partners), and Seneca Capital. He agreed that recruiting the area's other (more winning) team, the (Bed) Nets, makes sense. A Knicks representative said that the wider NBA will be involved, and that the NBA wanted to attend but was focused Tuesday on the first sporting event in New Orleans since Hurricane Katrina. The press release, reiterated by public address system five minutes before the event, said Alan Houston would be there. John Starks filled in ably, even joking that he'd better dunk carefully, given his shooting percentage...


Empty Words on Money Laundering and Narcotics, from the UN, Georgia and Equatorial Guinea

Byline: Matthew Russell Lee, Inner City Press U.N. Correspondent

UNITED NATIONS, Feb. 28 – The International Narcotics Control Board released its 2005 annual report on Tuesday, during an embargoed briefing by retired U.S. diplomat and Board member Melvyn Levitsky. Asked by Inner City Press if the Board has taken a position on statements about coca by Bolivia’s new president Evo Morales, Mr. Levitsky responded that while the report ends with November 2005, Bolivia is a signatory to treaties that cover coca, and that the twenty five year opt-out for medical uses is not applicable. Mr. Levitsky confirmed that opium production in Afghanistan has increased since 2001, and ascribed this to areas of the country being outside of government control. The question arose, if the military firepower currently supporting the government of Hamid Karzai can’t or won’t turn the tide on opium production, it will be difficult to see anti-drug goals of the Board realized.

            Earlier in the briefing Mr. Levitsky had said that Afghan production is moving through Iran and “Russia;” asked to clarify, he said trafficking would have to move through the “former Soviet republics” of Central Asia in order to get to Russia.
            The report, in its 552nd paragraph on page 79, states that “Turkmenistan, whose extensive borders with Afghanistan, the Islamic Republic of Iran, Kazakhstan and Uzbekistan are inadequately controlled, continues to be used as a transit country by trackers of Afghan opiates.”

            Also reported, but not connected, is the Board’s note a page earlier that “current legislation in Armenia, Georgia and Turkmenistan is insufficient to deal with the problem of money laundering; the Board urges the Governments of those countries to remedy the situation without delay.”

     Interviewed after the briefing by Inner City Press, Mr. Levitsky said that money laundering is not in the mandate of the International Narcotics Control Board. “We don’t have a section that monitors flows,” he said. Asked if the Board provides narcotic-specific information to the Financial Action Task Force, Mr.Levitsky shook his head and mentioned changes in Swiss and even Russian banking secrecy laws, but nothing about Turkmenistan, much less Georgia.

            Georgia’s permanent representative to the UN, Revaz Adamia, confirmed in a Feb. 1 press briefing quotes by National Bank of Georgia president Roman Gotsiridze regarding Russian banks money laundering in Abkhazia.  Mr. Adamia spoke of money laundering for “terrorism,” and said that he would more get more specifics from the National Bank of Georgia. While such information has yet to be provided, in Tbilisi Mr. Gotsiridze has said more, being quoted in a Rustavi-2 TV report on February 23 that

“The National Bank has asked the FATF to examine illegal activities of Russian commercial banks in Abkhazia. Here is a list of the Russian commercial banks that have been illegally operating in Abkhazia and laundering massive amounts of black money. It is not ruled out that there may be even more serious violations, for example financing of terrorism, going on in this uncontrolled area. Banks operating in Abkhazia are illegal and unlicensed banking establishments. The Russian legislation itself prohibits any economic relations with unlicensed organizations.”

            Inner City Press on Feb. 28 posed written questions to Georgia’s mission to the UN; the questions were not responded to by deadline.

Footnote on a footnote: The report states that “Equatorial Guinea remains the only State in Africa that is not yet a party to any of the three main international drug control treaties” (page 42). The Secretary-General on Feb. 27 met with the long-time president of Equatorial Guinea, Teodoro Obiang Nguema Mbasogo, and afterwards hailed him. One wonders if the topics of money laundering came up...

On the Web:

A related previous Inner City Press report --

Abkhazia: Cleansing and (Money) Laundering, Says Georgia, Even Terror’s Haven

Byline: Matthew Russell Lee, Inner City Press U.N. Correspondent

UNITED NATIONS, Feb. 1 -- The situation in Abkhazia should be internationalized, said Georgia’s ambassador to the United Nations, Revaz Adamia, on February 1. Briefing reporters at the UN Headquarters, Mr. Adamia characterized the plight of ethnic Georgians in Abkhazia as one of ethnic cleansing and even genocide. He cited a figure of 10,000 dead (as well as 100 Russian soldiers killed). His prepared remarks referred to “de facto annexation” and that “acquisition of property in the conflict zones, including property of refugees and IDPs, by the Russian entities is underway at full steam.”

            As Inner City Press reported in December, the President of Georgia's National Bank Roman Gotsiridze has accused Russian banks in Abkhazia of money laundering and of financing terrorism. At the Feb. 1 UN briefing, Mr. Adamia responded to questioning by reiterating the allegation, and specifying that the perpetrator of particular terror attacks in Turkey is living in Abkhazia, “he has a shelter there.” Mr. Adamia promised to provide Inner City Press with further information and evidence; watch this space.

            On January 31, the Security Council extended the UN Observer Mission in Georgia (UNOMIG) until March 31. The mission consists of 122 military observers and 13 civilian police officers.

After the briefing, in an interview with Inner City Press, Ambassador Adamia provided an update on the Baku-Tblisi-Ceyhan pipeline. He stated that the Georgian section pipe is full of oil, but that this is not yet the case in Turkey. He stated that Turkmenistan wants to use the BTC pipeline, but that the Kremlin for now is blocking it. This, Adamia said, makes more likely the construction of an underwater trans-Caspian pipeline. Pipe dream? Rose (revolution) colored glasses? Only time will tell.

Other Inner City Press reports are archived on

In Locked Down Iraq, Oil Flows Unmetered While Questions Run in Circles

What is the Sound of Eleven Uzbeks Disappearing? A Lack of Seats in Tashkent, a Turf War at UN

Kosovo: Of Collective Punishment and Electricity; Lights Out on Privatization of Ferronikeli Mines

Abkhazia: Cleansing and (Money) Laundering, Says Georgia, Even Terror’s Haven

Post-Tsunami Human Rights Abuses, including by UNDP in the Maldives

Halliburton Repays $9 Million, While Iraq’s Oil Remains Unmetered

Darfur on the Margins: Slovenia’s President Drnovsek’s Quixotic Call for Action Ignored

Who Pays for the Global Bird Flu Fight? Not the Corporations, So Far - UN

Citigroup Dissembles at United Nations Environmental Conference

Other Inner City Press reports are archived on

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