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UN's Top Lawyer Calls for Pension Reform, Says Ethics Office Decided Not to Mention His $10,000 Monthly Swiss Subsidy

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

UNITED NATIONS, March 24 -- The UN's chief legal officer Nicolas Michel on Monday cited a conflict of interest as grounds to neither criticize or support the UN Ethics Office's decision not to include the Swiss government's housing subsidy in Michel's public financial disclosure form. Inner City Press had asked the UN Spokesperson about the omission but had not received an answer. In a phone conversation late Monday, Michel emphasized that he had asked Ethics Office chief Robert Benson, who said that "the policy of publication did not cover contributions of that sort."

    It is not clear who is making up this policy, and on what basis. The Secretary-General's web site states that the UN's public financial disclosure is important
because it "demonstrates that UN staff members understand the importance of the general public and UN Member States being assured that, in the discharge of their official duties and responsibilities, staff members will not be influenced by any consideration associated with his/her private interests."

Inner City Press e-mailed and read this statement to Nicolas Michel, emphasizing the word "any" and in that light if the fact that a senior UN official was receiving a housing subsidy of $10,000 or more every month should have been disclosed. "I cannot answer that," Michel said. "It would be a conflict of interest."

    The $10,000 a month figure is derived from Michel's account of the origins of the subsidy. He took the UN post in May 2004, and had a mere two and a half days to find a place to live. A colleague told him that it would be important to live in Manhattan, to be available for unscheduled emergencies. But of the apartments he looked at, the rents were "from twenty to twenty-six thousand dollars a month." Given the size of his family, Michel was looking for four or five bedrooms.

    Ultimately, Michel found accommodations for "about half that amount" in suburban Westchester County, from which he commutes, which he calls less than ideal. While this has saved the Swiss government money, it is not clear if the Swiss government put any cap on what it would pay.  Michel emphasized that the Swiss government agreed in writing to respect the tenets of Article 100 of the UN Charter, that Michel would be an international civil servant not subject to influence by his country. 

    Still, this arrangement was not made public at the time, nor earlier this year when the public disclosure forms went online. Michel's form, under the heading "Income," lists the renting-out of his house in Switzerland. On Monday Michel unprompted told Inner City Press that he inherited the house, and rents out two of the three floors.  These rent payments from two people who presumably have nothing to do with the UN is publicly disclosed as income, but $10,000 a month from a member state with interests at the UN and its legal department is not in the public disclosure form. Something is wrong with such a public disclosure regime, it seems clear. Michel said twice he would not comment on this, because "it would be a conflict of interest."

    Michel went on to criticize the UN's pension system, saying that if he leaves as he now will with less than five years' service, he gets back only what he put in with below market rate interest, and none of the UN's contribution.
Inner City Press has most often heard this complaint regarding those serving in UN peacekeeping missions, who generally stay for less than five years and feel that they are subsidizing other UN pensioners. Michel is losing, he told Inner City Press on Monday, some $20,000 a year.

Nicolas Michel: on the other hand...

    Back on September 12, 2006, Inner City Press asked Kofi Annan's spokesman for the identity of the one official whom the spokesman said was receiving housing subsidy. The spokesman in a public briefing declined to give the name. Michel was, in fact, the guest at that day's briefing. Afterwards, the spokesman said that the individual wanted to come forward, would soon be coming forward. That never happened.
    On Monday Inner City Press asked Nicolas Michel, "Was that you?" Michel did not say yes, but rather stated that he wished the spokesman had brought it to his attention at the time, that he was always ready and willing to go public. He said he obtained authorization for the subsidy before agreeing to accept the Office of Legal Affairs post. He said that he had put in a call mid-Monday afternoon to Ethics Office chief Robert Benson, to make sure they had similar recollections, but that Benson was and is away from the office. We will have more on this story of public financial disclosure.

    Why the UN Spokesperson's Office did not provide an answer about the omission of the housing subsidy from Michel's public financial disclosure on Ban Ki-moon's web site is not known.

From the UN briefing transcript of March 18, 2008:

Inner City Press: Mr. Michel was receiving housing subsidy from the Swiss Government.  It turns out that the Public Financial Disclosure of Nicolas Michel on the Secretary-General’s website for 2006 doesn't make any mention of this housing subsidy.  So I guess I want to know, first of all, is receipt of a benefit like housing that comes from the Government, the kind of thing that the Secretariat thinks should be in a financial disclosure? 

Spokesperson:  It was fully disclosed by Mr. Michel.

Inner City Press: But it's not in the Public Financial Disclosure.
Spokesperson:  Maybe it's not in the public disclosure, but it was fully, fully disclosed in 2006 by Mr. Michel.

Inner City Press: I'm sorry, I don't mean to, but, so, in the internal one, filed with PricewaterhouseCoopers, it was disclosed.  But who is vetting the public financial disclosures?  Because it says that the purpose of those is to show the public what conflicts of interest the officials may have and if these kinds of things are not being disclosed, then what’s it showing?

Spokesperson:  In the case of the Ethics Office and the Financial Disclosure Form, that we have been filing since Mr. Ban came to the Secretary-General’s post, publishing them is something that the new Ethics Office started.  So it is the responsibility of the Ethics Office now to put the financial disclosures out.  Before, in 2006, the Ethics Office was not doing it.  What I can tell you is that, in the case of Mr. Michel, everything received in terms of contributions was filed.  And it has been fully disclosed and the disclosure statements were cleared by the competent organs.  So he is not receiving any contribution in any form under his current contract that started as you know on 1 March 2007. 

Inner City Press: Okay, I'm sorry, just to clarify, although it was called 2006, recently when you read out the statement that now there is a website with the Public Financial Disclosures, the forms that went up were for the year 2006.  So it seems to me he was receiving a housing subsidy during that year.  This form was put up only recently, in 2008.  The Secretary-General created a website to put up Public Financial Disclosures.

Spokesperson:  That was for 2007.

Question:  It actually says right on the form it's for 2006.  It was the 2006 year.

Spokesperson:  I can check for you what's on the website, but I can tell you categorically that the contributions Mr. Michel received were explicitly authorized by the Organization before he accepted the position as Legal Counsel.  This was an arrangement, as you know, between the Swiss authorities and the Organization on the ground of exceptional family circumstances.  The practice of exceptional authorizations was well established then and supported by relevant administrative issuances.  And this was the case over a long period of time.  As I said, now Mr. Michel is not receiving any such contributions.  

For now Nicolas Michel is thanked for his time, particularly in the run-up to meetings this Thursday about the UN-affiliated tribunals in Lebanon and Cambodia.  And, at deadline, it emerged that the incoming prime minister of Pakistan says he will request a UN inquiry into the murder of Benazir Bhutto. Watch this site.

* * *

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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