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UN's Lute Admits No-Bid Lockheed Deal Caused "Confusion," No Conflict of Interest of Iraq Overlap

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

UNITED NATIONS, February 7 -- One hundred days after Lockheed Martin was granted a $250 million no-bid contract by the UN, the main proponent of the contract, the American officer-in-charge of the Department of Field Support, Jane Holl Lute, acknowledged that the lack of competition had caused confusion. While the UN General Assembly by a vote of 142 to 1, with only the United States dissenting, voted to express concern about the no-bid contract, Ms. Lute on Thursday claimed that the process had been transparent. Inner City Press asked, How so? "You have it in your hand," Ms. Lute replied, referring to documents that became public only after being leaked to Inner City Press by whistleblowers.

      Following the UN's claim that the sole source process began only after the Security Council's July 31 resolution authorizing the hybrid UN-African Union Darfur force, UNAMID, Inner City Press obtained an April 2007 memo from Ms. Lute pushing Lockheed's Pacific Architects & Engineers subsidiary for a sole source contract. Is that confusion or contradiction? Ms. Lute replied at some length, to her credit, that the April no-bid contract was for the so-called Heavy Support Package, but has ended up being regularized by a Ban Ki-moon edict waving all procurement rules for the UNAMID mission.  The General Assembly heard this story, behind closed doors, in December and still voted to express concern and call for an investigation into the waiving of procurement and hiring rules. "If the member states have questions in this regard," Ms. Lute said, she'll be happy to answer them. But where?

            In fact, the push to give Lockheed the sole-source Darfur contract stretches even further back, to late 2006. Inner City Press has obtained copies of letters to this effect from U.S. Secretary of State Condoleezza Rice and from DPKO's Jean-Marie Guehenno. Ms. Lute's February 7 story does not appear to account for these documents, nor for what Inner City Press is hearing about a "bridge" $10 million payment to Lockheed, ostensibly from the African Union but actually paid out by the United Nations. We'll have more on this.

            Ms. Lute was asked if she wants to remain as Under Secretary General of DFS, a post that the UN's budget says should go to a developing country. Lute said she would like the job, but it is not up to her. Asked to state her understanding of the budget provision, she said "I have no understanding other than what the reality is." Video here, from Minute 40:34. But reality is apparently whatever you say it is. Inner City Press asked if it wasn't a conflict of interest that her husband serves of President Bush's war czar for  Afghanistan and Iraq. "I absolutely deny that there is any conflict... There is absolutely no overlap," she said.

  (The UN's write-up's pat summary is that Ms. Lute "dismissed a reporter's concern that she had a possible conflict of interest in her United Nations role because her husband, Lt. General Douglas Lute, was the United States' Deputy National Security Advisor for Iraq and Afghanistan." But the concern is not only this reporter's -- it is frequently expressed by diplomats, though Lute has apparently never before been asked about it.)

Jane Holl Lute's war czar spouse: no overlap in Iraq and Afghanistan?

   Inner City Press asked about her recent trip to Afghanistan, a country for which her husband is the U.S. war czar. Are the UN's and U.S.'s position so in sync that there is not even the appearance of a conflict of interest? Ms. Lute acknowledged the trip, which was little publicized other than by a U.S. military photographer. She went on to say that, in one of the few differences with the Department of Peacekeeping Operations from which DFS was with so much fanfare split off, DFS is responsible for the the logistics for all 23 of the UN's "Special Political Missions." But one of the largest SPM's is that in Iraq, including the proposal, slated to be considered this Spring, that the UN spend $180 million to construct a UN "bunker" in the Green Zone in Baghdad. No appearance of conflict?

            On DFS, Ms. Lute predicted that the decision on who will be Under Secretary General will be made neither in hours nor in months. UN sources, including military advisers at Permanent Five members of the Security Council, cast their bets on the Argentine head of logistics for the World Food Program. "There is a Pakistani," one military adviser told Inner City Press, "but it is not their UN Ambassador Munir Akram." Would another head of DFS not push so hard for sole-source Lockheed contracts?  "I have no understanding, only what the reality is." We will continue to follow this.

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These reports are 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

  Because a number of Inner City Press' UN 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 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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Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

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

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