Inner City Press


- In Other Media   For further information, click here to contact us         .

Home -For the Media

Search is just below this first article

Bank Beat/ RSS Feed
Freedom of Information
Human Rights
Current Campaigns
How to Contact Us


Support this work by buying this book

Click on cover for secure site orders

also includes "Toxic Credit in the Global Inner City"

Inner City Press Podcast --

UN Silent As Congolese Kidnapper of UN Peacekeepers Is Made An Army Colonel: News Analysis

Byline: Matthew Russell Lee at the U.N.

   UNITED NATIONS, July 18 -- The Congolese warlord who kidnapped seven UN peacekeepers on May 28 and only released the last five of them on July 8 is now slated to become a colonel in the Congolese national army. The spokesman for Secretary-General Kofi Annan was asked Tuesday if this new post for Peter Karim played a part in the negotiations leading to the peacekeepers' release after forty days of captivity. The spokesman replied that "we did not try to have any conditions attached to their release. No ransom was paid... This happened afterwards." (Video here, Min. 26-28.)

        Written requests for comments on this news were sent Monday night to UN Under-Secretary General for peacekeeping Jean-Marie Guehenno and this deputy, Hedi Annabi. Twelve hours later, no response had been received. (Mr. Guehenno is in Brussels for a pledging conference for the African Union force in Sudan's Darfur region; Tuesday he telephoned other reporters at UN Headquarters, about Lebanon but not the Congo.)

    Beyond the factual question of the UN's awareness at the time of the UN peacekeepers' release that their captor would be given a position in the Congolese army -- which is accused for example of burning down the village of Kazana while UN soldiers in the MONUC mission watched, click here for more detail and see below -- additional questions need answering.

Congolese forces per MONUC

            Inner City Press has heard from senior UN officials who participated in the month-long negotiations that led to the peacekeepers' release that Peter Karim "changes from day to day" and "is on drugs." Given such knowledge at the highest levels of the UN, Inner City Press asked the Secretary-General's spokesman's office how the UN could remain silent and allow a known-to-be-unstable warlord to be given a senior position in the army of a country where more civilians have been killed by conflict than anywhere else since World War II. The responses ranged from noting that it is entirely the DRC government's decision to musing that this type of "reintegration" is common in order to settle civil wars. The speculative possibility of Joseph Kony being reintegrated into the Ugandan military, despite his kidnapping of children throughout Acholiland, was responded to surprisingly casually. "These things happen," was the answer.

            And so this question: how can the UN lead on human rights if it says nothing when a drugged-up warlord who kidnapped the UN's own peacekeepers is given further power as part of a national army?  "These things happen" in part because the international organization in charge of human rights says nothing.

            In other current Congo news, the UN MONUC's internal investigation of its involvement in the torching of Kazana and the burning-alive of the villages residents, exposed on Britain's Channel 4 last month, is still ongoing, Inner City Press was told Tuesday. With the DRC election slated for July 30, some surmise that the UN will not release any investigation results before then.  "When we have something more, we will share it with you," the spokesman said. (Video here, Min. 27:30) The local press reports that current President Kabila has silenced and marginalized nearly all of his opponents, and stands ready to win the UN-managed election.

   Tuesday across the street from UN Headquarters, Congolese-Americans demonstrated for a postponement of the July 30 elections. While predicting a Kabila victory, they said that a rally yesterday for Kabila in a Kinshasa stadium had a notably low turnout. The signs they held spoke of genocide and four million dead; Asked by Inner City Press about Peter Karim, demonstrator Yaa Lengi Ngemi called Karim a "mineral thief" and a "warlord." While there is a range of anti-UN protest, from the National Rifle Association to pro-sovereignty Republicans, the questioning of the UN among these Congolese protesters had roots that are more concrete.

            The UN has a long history in post-independence Congo. Under the leadership of Secretaries-General Dag Hammarskjold and, after his death in Northern Rhodesia, U Thant, the UN Operation in the Congo (ONOC) fought secessionists and mutineers from the Armee Nationale Congolaise (ANC) throughout the early 1960s. In the UN's Operation Onukat begun in December 1961, the UN's new air power resulted in the destruction not only of mines but also hospitals in Katanga province. Suspicions exist of UN involvement or indifference when Mobutu sent his opponent Lumumba to his execution by Belgian mercenaries. ("The Assassination of Lumumba," London: Verso, 2001).

            This is the historical context in which the United Nations is for now saying nothing as a senior position in the Congolese army is given to Peter Karim, who took as hostages seven UN peacekeepers and showed instability in negotiations with the UN, including reportedly demanding a large quantity of footwear. More seriously, Peter Karim is known for killing civilians in order to loot natural resources, including rare woods, from Eastern Congo. The questions raised should be answered, by UN Department of Peacekeeping Operations officials, and by the Secretary-General himself.

Feedback: editorial [at]

UN Office: S-453A, UN, NY 10017 USA Tel: 718-716-3540

Search WWW Search

At the UN, New Phrase Passes Resolution called Gangster-Like by North Korea; A Deputy on the Law

Byline: Matthew Russell Lee at the U.N.

  Updated July 25, 2006, out of respect for a Deputy Ambassador with a unique view of off-the-record status

UNITED NATIONS, July 15 -- Using a phrase that was until now nowhere in Google, the U.S. and Japan on Saturday got Security Council approval of a resolution condemning North Korea's missile tests. The phrase, leaked Friday night and seen in text on Saturday, is "acting under its special responsibility for the maintenance of international peace and security." As of 3:48 p.m. on Saturday as the Council met to vote, a Google search found not a single hit. Innovative, then. Or otherwise said, a legal fiction.

            At 3:48 p.m., the Security Council passed the resolution 15-0. The U.S. and Japan can claim it's binding, and China and Russia can point to the lack of any reference to the UN Charter's Chapter VII. In the lead up to the invasion of Iraq, the U.S. pointed repeatedly at three prior resolution under Chapter VII. While that Chapter was not cited in authorizing the 1950 action on the Korean peninsula, it may be hard to argue that the Council's practice in the 56 years since have not created a new understanding. We shall see. The matter will certainly be back.

Gangster-like? DPRK promises more missile tests

  After the vote, the Envoy of the DPRK stepped to the stakeout mike and said:  "It is gangster-like for the UN Security Council to debate the missile test trials of the Democratic People's Republic of Korea. We totally reject the resolution that was adopted at the current meeting of the Security Council." Then he strode away from the mike with his entourage, as Inner City Press asked, "Do you think the resolution is binding?"

  In a written statement, the North Korean envoy promised that North Korea "will go on with missile launch exercises" and "will have no option but to take stronger physical actions of other forms, should any other country dares [sic] take issue with the exercises and put pressure upon it." So more fireworks can be expected.

            In the interim it's the rule of law that's under fire. In post-vote stakeout interviews, both French Ambassador de La Sabliere and Russian Ambassador Churkin evaded questions about the effect of omitting the initial reference to Chapter VII from the final resolution.  In response to Inner City Press' question, Amb. de La Sabliere said only that the resolution is binding and he is happy with it.

            Of Amb. Churkin, Inner City Press asked, "Since the week's negotiations were about the inclusion or omission of Chapter VII, can you describe the effect of its omission? How is the resolution different? Is it on the use of force?"

            Amb. Churkin answered, "I don't want to enter into a very length expose of the various aspects of it. this is the best and balanced and adequate way to respond to the challenge posed by the missile launch in North Korea. Thank you very much." And then he left, as Ambassadors Bolton and Wang had, without taking any questions.

            Next week's action will include Iran, and the expanding Middle East war. Will Uganda, Ivory Coast, Somalia and the other crises recent cast even more to the side get consideration or action? The staff of the Security Council president has indicated to Inner City Press that Amb. de La Sabliere is aware of Gbagbo's backsliding in Ivory Coast, refusing to begin the identification process that's required before the already-delayed election can be held. The world is unraveling, and even the UN Charter Chapter concerning the maintenance or restoration of international peace and security goes unexplained by those who wield it.

 How is the rule of law possible if no one will explain what the law is? And again, where except at the point of a gun is the arbiter of the meaning of the UN Security Council's resolutions and actions?

   A Deputy UN Ambassador, who as noted above has since asserted that the comments below were "personal" and were not meant to be attached to the Deputy Ambassador's name (hereinbelow "DepAmb") answered some of Inner City Press' question in this regard in an impromptu interview on Saturday after the Security Council was briefed and consulted on Lebanon. DepAmb reminded reporters that the afternoon's agenda was for consultations and not voting.

  (At a formal stakeout, a representative of Lebanon described as that country's ambassador to Mexico said that only one country had opposed some action on Lebanon, that being the one which vetoed the draft Gaza resolution on July 13, the United States. "And the four abstainers on the Gaza resolution, did they support action on Lebanon?" "Yes," the representative answered. When asked for his name and title, there was no immediate answer.)

    Asked to explain the practical difference of dropping the reference to Chapter VII from now Resolution 1695 on the North Korean missiles, DepAmb said that China and Russia felt that Chapter VII would lead inexorably to one step after another toward military force. DepAmb predicted that if North Korea continues its current course, China and Russia would not oppose additional Council action. But if the situation calms down, and the U.S. or Japan seek further debate or resolutions, then the lack of Chapter VII in Resolution 1695 will be raised by China and perhaps also Russia.

    "But who decides on the meaning of Council resolutions?" asked Inner City Press. "In the U.S. for example there's a Supreme Court which rules on laws passed by Congress."

            "There may be some circumstances in which the International Court of Justice could rule on Council resolutions," DepAmb said. Later DepAmb amended the answer, nothing that the ICJ is, like such bodies at the International Atomic Energy Agency, under the jurisdiction of the Security Council. DepAmb said, "So you might call the Security Council..."


            "No, not that. Self-referential."

            "How can the UN promote the rule of law when there is no agreement on, and no process for deciding or publicly articulating what the law is?"

            DepAmb said, "You've got a point there," and headed out onto First Avenue.  As noted above, ten days later DepAmb asserted that the views above were "personal views" and the DepAmb would be "disappointed to see them associated" with DepAmb's name. So, one wag concluded, not only is there no one to determine or explain was Security Council resolutions mean, but even those Security Council (Deputy) Ambassadors who at first provide some views later run away from them. Generally, the presumption is that comments are on the record, unless "off the record" is clearly used (and also agreed to, in many journalists' view). But it's nice to be nice...

UN Stasis as World Unravels Gives Space to Ivory Coast's Gbagbo and Others

Byline: Matthew Russell Lee at the U.N.

UNITED NATIONS, July 14 -- The world, it is reported here and elsewhere, is unraveling. And as the UN Security Council remains this Friday night on hold, canceling a meeting scheduled for 5 pm so that the Permanent Five Plus Japan can meet at the U.S. mission, in the wider world there are grabs to take or cling to power. In Cote D'Ivoire, for example, the process of identification for the already-postponed election now slated for October 30 was supposed to begin this week. It did not however begin.

            At the UN, Inner City Press asked the Security Council president Jean-Marc de La Sabliere about events in Ivory Coast. The French mission provides this transcript:

Inner City Press Q: On Côte d’Ivoire, the identification process has been suspended. Do you have a comment?

Amb. de La Sabliere A: "This is a great concern. What the Council has done this month is to listen and react to a briefing from Mr. Guéhenno who was in Banjul and Yamoussoukro with the Secretary General. We are now preparing a PRST to support the conclusions of the Yamoussoukro meeting where new commitments were made. We want those commitments to be implemented. The PRST will be adopted, I hope, very early next week. Next step: the GTI will meet in Abidjan on the 20th of July. The Council will meet on the 26th.

"Going back to your question: the identification is a major element of the agreement. It was agreed upon by the parties of Côte d’Ivoire that identification and disarmament would go along. So, we cannot organize elections if the identification process is not done. So, identification is important, and the Council will have to assess what happened yesterday. As French Ambassador, I can say that the PRST will take that into account.

Q2: As French Ambassador, would it be your view that if elections are not held…?

A2: "My answer is that there will be a Summit in September. We will see what happens then."

   Unless of course there are other higher profile crises in September... In the run-up to the 90 p.m. let down, at 5 p.m. the press corps assembled for a scheduled Council consultation. Then cell phones and Blackberries went off, announcing the meeting was cancelled. In the lull before the 9:40 conclusion (see above), the stakeout scuttlebutt, at least among reporters, was that the U.S. veto on Thursday emboldens China to veto the draft Chapter 7 resolution on North Korea. Also in the lull, some drifted over to stakeout the U.S. mission. Others retired to the Delegates' Lounge, where Inner City Press Friday interviewed the Permanent Observer from Palestine, Riyad Mansour, who confirmed Inner City Press' finding that the U.S. government's Overseas Private Insurance Corporation insured the Gaza power plant, since Enron built it, click here for that harder-news story, and see below.

Bombed Gaza Power Station Insured by U.S. Government's OPIC

Byline: Matthew Russell Lee at the U.N.

UNITED NATIONS, July 14 -- The bombed Gaza power station was covered by a $48 million political risk insurance policy, it has emerged. The insurer is the U.S. government's Overseas Private Investment Corporation, OPIC. The current policy was signed in mid-2004, between OPIC and the U.S.-based company Morganti, which succeeded to the interest of Enron in the plant. OPIC has insured other Enron power plants, in the Philippines, Turkey and India. OPIC issued a press release in 2004, which was at, but has since been removed from OPIC's web site.

            The head of the UN's Office for the Coordination of Humanitarian Affairs (OCHA), Jan Egeland, told reporters on July 11 that the plant was insured by "an American insurance company" and that the policy might not be paid on, due to sanctions against the Hamas government. Immediately following Egeland's briefing, Inner City Press asked OCHA staff for the name of the American insurance company, as well as who had been paying the insurance premiums.  Having not heard back, on July 12 at the Office of the Spokesman for the Secretary-General's noon briefing, Inner City Press asked:

"In his briefing yesterday, Jan Egeland... mentioned that there is an insurance policy on the power plant by an American insurance company, but that they may not be able to pay because of US sanctions against Hamas. It’s a factual question of, like, what’s up with the insurance, but does the UN agree -– does the Secretariat agree with Jan Egeland that Israel should be responsible for rebuilding the power plant? 
Deputy Spokesman: ...In terms of the details of who’s paying for the insurance and all of that, I think that’s something you may want to follow-up with the agencies on the ground, or we could look into it for you. 
Question: I asked OCHA and, even though they said it, they didn’t seem to know. It would be good to know. 
Deputy Spokesman: We’ll address it to the agency on the ground."

     The answer subsequently provided, through officials who spoke only on background, is that the Gaza power plant was a joint venture between the Palestinian company Consolidated Construction Corporation and the Houston-based Enron, succeeded by Morganti, and was covered by a $48 million insurance policy from the U.S. Overseas Private Investment Corporation.

  On the afternoon of July 14, Inner City Press interviewed Riyad Mansour, the Permanent Observer of Palestine to the UN, who stated that OPIC is the insurer, and "they have to pay." Mr. Mansour added, "Let them collect from Israel."

            An agency of the U.S. government, OPIC describes itself as "support[ing] U.S. investment in emerging markets worldwide, fostering development and the growth of free markets." The description is from the web site, from which the 2004 press release about insuring the Gaza power station has been moved or deleted.

   OPIC previously provided insurance to Enron's Dabhol power plant in India, to other Enron power plants in Turkey and in Subic Bay in the Philippines, and other Enron projects in Argentina and Uzbekistan (a project that never came to fruition). A search on July 14, 2006, of results in only one mention of Enron, and that along with BP Amoco and ABB as being involved in renewal energy. The Gaza plant is not listed as one of OPIC's "project profiles," the lead one of which involves importing tea from Rwanda.

            The generators in the Gaza power plant were specially built by ABB, according to Jan Egeland. One of impacts of their destruction by bombs is to interrupt the flow of both water and sewage. UN's World Health Organization estimated, prior to the current crisis, that 64% of the health problems in Gaza were due to water quality.

            The officials interviewed by Inner City Press, speaking only on background, also noted that the blockade of Gaza has interrupted not only the trucking-in of gas, including for backup electricity generators, but also the flow of gas through the Nahal Oz pipeline, through which neither people nor arms could be traveling.

            On July 14 at the UN, Under Secretary for Political Affairs Ibrahim Gambari came to the Security Council stakeout and read a statement that "the Secretary General... reminds all of their obligations to take absolute care to spare civilian populations from harm, and to protect their life, infrastructure and livelihoods. In particular, care should also be taken to avoid damaging power stations, water supply and sanitation facilities."

            Mr. Gambari took a single question from the media: Inner City Press' question about the electrical power situation in Gaza. "This is about Lebanon," Mr. Gambari replied, adding before he left that the brief statement he had read was intended to help avoid a repetition in Lebanon of the bombing of the Gaza power station.

            Previously, Inner City Press asked Israel's Ambassador to the United Nations Dan Gillerman for his response to the UN's Jan Egeland's statement that Israel should repair the Gaza power plant. Amb. Gillerman responded that Israel does not intentionally target civilians, but that he has no information about Israel repairing the power plant.  Inner City Press asked U.S. Ambassador John Bolton if he had any comment on Jan Egeland's call for Israel to repair the power plant; Amb. Bolton said, "I have no comment on that."  Developing...

Feedback: editorial [at]

UN Office: S-453A, UN, NY 10017 USA Tel: 718-716-3540

BTC Briefing, Like Pipeline, Skirts Troublespots, Azeri Revelations

Byline: Matthew Russell Lee at the U.N

UNITED NATIONS, July 13 -- An oil pipelines gambit came to interim fruition on Thursday. The Baku - Tblisi - Ceyhan curving route, avoiding Armenia, breakaway parts of Georgia and most Kurdish parts of Turkey, is a testament to its precarious position. At a briefing at the UN, Inner City Press asked the outgoing Ambassador of Georgia Revaz Adamia to explain BP's funding of a 700 person defense force for the pipeline.  "They are not soldiers," Amb. Adamia answered. "They are high tech people."

            Inner City Press asked the Ambassador of Azerbaijan Yashar Aliyev about the avoidance of Armenia. We cannot deal with them until they stop occupying our territory, he said. "You mean Nagorno - Karabakh?" Not only that, Amb. Aliyev answered. That's only four percent. Few people know this, but Armenia has occupied twenty percent of our territory.

            But we digress. The pipeline is more than a tube for oil, the Ambassadors read from their scripts. A four-minute movie was shown. Later the full 20-minute film was screened, as waiters served lamp chops and salmon on a skewer. "Bill Clinton was there at the birth," a Georgian representative said. "He offered American guarantees so the work would get done. It avoids this" -- he pointed on a map at Russia -- "and here," pointing to Iran and the Middle East. "If only Turkmenistan agrees to provide its gas," he said wistfully. He added his view that Armenia gets away with incursions in Azerbaijan due to U.S. support. It's an issue rarely touched on at the United Nations.


            Inner City Press asked outgoing Georgian Ambassador Ademia where he's going.  "Back to science and business," he answered.  "Oil," guess-whispered one wag -- not this one -- in the crowd.

   Full disclosure: this reporter consumed, on the pipeline proponents' tab, several skewers of meat and a glass of Borjomi mineral water, named for a national park in Georgia which environmentalists say is put at risk by the BTC pipeline.

UN's Corporate Partnerships Will Be Reviewed, While New Teaming Up with Microsoft, and UNDP Continues

Byline: Matthew Russell Lee at the U.N.

UNITED NATIONS, July 13 -- The UN under Kofi Annan has increasingly worked with corporations. Questions have been raised about background checks and safeguards. A day after Inner City Press reported that the UN's Geneva-based refugee agency had not known that Swiss banker Ivan Pictet is on the UN Investment Committee when the UNHCR Kashmir Relief Note placed money with the Pictet Funds India Equity fund, the agency's spokesman mused, "Isn't the UN Investment Fund based in New York?"

            Inner City Press asked if it would have been helpful to UNHCR if the UN system had a database of the companies controlled by the outside business people who serve on bodies like the UN Investment Committee. A Google search for that committee and Pictet found close to nothing. It appears that there is no easy way to find who is on the UN Investment Committee.

            UNHCR's Ron Redmond answered that that it would "have been helpful to have that type of information... For UNHCR to look it up is labor intensive, with all the possible company names." He later added in writing, "Any additional information on prospective corporate partners is of course always welcome; it would facilitate our screening processes." Mr. Redmond states that UNHCR was never required to ask SocGen to cease using the UNHCR visibility logo, in part because the brochure that it was on was only intended to be used for a brief period. But records show that individuals high in UN Headquarters chided UNHCR for the use of such terms as UNHCR "teams up" with SocGen. Despite this in-house chiding, or perhaps because the chiders refuse in their defensiveness to comment for the record, this practice continues in the UN system to this day, literally. Click here to view the UN's World Tourism Organization's July 12, 2006 press release, "UN tourism agency teams up with Microsoft," which was published on the UN News Center just as UNHCR SocGen-derilab's April 5, 2006 press release was. They just keep teaming up.

            As the UN increasingly has intercourse with corporations, basic safeguards are still not in place. Inner City Press has previously reported on the lack of background checks when corporations are allowed to join the UN Global Compact, and has twice been rebuffed in requests to interview or ask questions of corporate CEOs who have come to meet the Secretary General or on other Global Compact business.

            At Thursday's noon briefing, spokeswoman Marie Okabe was asked if any of the individuals in the Secretariat who were asked to comment on the UNHCR - Pictet - Societe Generale transaction had in fact spoken or provided guidance. We're still working on it, Ms. Okabe answered.

            Near six p.m., Ms. Okabe called Inner City Press and said she had spoken about the matter, as requested, with Under Secretary General Mark Malloch Brown. "They are aware of the issues," Ms. Okabe said. "This case highlights the complexities of the UN's partnerships with the private sector and so current guidelines and practices of various funds and agencies and programs will be reviewed" to try to avoid "potential conflicts of interest" and misuses of UN logos.

            Great. But what about the continued "teaming up," now with Microsoft? There's more work to be done.

[A note on UNHCR's work about Uzbekistan: the agency managed to visit in Kazakhstan with Gabdurafikh Temirbaev, the Uzbek dissident threatened with refoulement back to Tashkent, and has, its spokesman said, gotten a commitment to be able to review Uzbekistan's extradition request.]

            Alongside UNHCR's work, unlike at the UN Development Programme, at least UNHCR answered the questions and acknowledged that things could be better. On UNDP and human rights, on UNDP and refusal to answer press questions, what will happen?


            On the issues surrounding UNDP, the Office of the Spokesman for the Secretary-General managed to get some response from UNDP to a question Inner City Press asked UNDP in writing more than a week ago: why does UNDP help the government of Uzbekistan to collect taxes, given the UN Office of the High Commissioner for Human Rights' finding that this government shot and killed its own people in Andijan in May 2005. Here now is UNDP's response:

"As far as your UNDP/Uzbekistan questions from the other week, here's what I can tell you... in Uzbekistan and most of the 140 developing nations where UNDP operates, UNDP works with government and civil society on a broad range of governance projects, including economic reforms, of which tax administration and fiscal policy are a significant component. Other governance projects in Uzbekistan focus on gender equality, internet access, and public administration reform. It may be worth noting that UNDP works in a wide range of political environments, from Costa Rica to North Korea, with the belief that UNDP's mandate as a development agency is to work constructively on behalf of the people of the developing world wherever and whenever possible."

            One wag wondered if UNDP's programs in Uzbekistan might involve technical assistance on not putting political dissidents in boiling water, as the U.K.'s former ambassador in Tashkent has testified takes place. And see above, that UNHCR has managed to visit in Kazakhstan with Gabdurafikh Temirbaev, the Uzbek dissident threatened with refoulement back to Uzbekistan, where he would face torture -- perhaps with tax funds UNDP helped to collect. UNDP has still not even purported to answer the week-old question about UNDP's funding of Robert Mugabe's purported "Human Rights Council." Now the Zimbabwe Lawyers for Human Rights has called for a boycott.  What was that again, about UNDP working with civil society? To be continued.

Feedback: editorial [at]

UN Office: S-453A, UN, NY 10017 USA Tel: 718-716-3540

Conflicts of Interest in UNHCR Program with SocGen and Pictet Reveal Reform Rifts

Byline: Matthew Russell Lee at the U.N.

UNITED NATIONS, July 12, 11:45 am, updated 7 pm -- Eager to "team up" with banks Societe Generale and Pictet & Company, the United Nations' refugee agency allowed SocGen to use the UN logo in a way subsequently criticized by UN legal staff, and to invest Kashmir Relief Notes funds in a Pictet & Cie fund despite owner Ivan Pictet being a member of the UN Investment Committee. Criticized by other UN units, UNHCR agreed to cease renting out the UN logo, but said nothing can be done about the investment with Pictet et Cie.

    Inner City Press first raised these matters in April 2006. Earlier today UNHCR in Geneva finally responded, confirming but defending the investment in a Pictet fund.  UNHCR's Ron Redmond wrote to Inner City Press that

"based on the information available to us, there is no conflict of interest created for Mr. Ivan Pictet, managing partner of Pictet & Cie, and ad hoc member of the UN Investments Committee, by the fact that Pictet Funds Indian Equities is one of the funds in which KRN funds are invested. Societe Generale, the issuer of the Note, is solely responsible for choosing the funds and this selection is based on recognized risk management and hedging criteria; UNHCR plays a purely passive role as the recipient of a donation and has no interest in the performance of the Note. Moreover, Mr. Pictet's membership in the UN Investments Committee was unknown to all parties involved in drawing up this investment product, and we trust therefore that the decision to include a fund managed by Pictet & Cie was taken in good faith."

         Whether this is in keeping with current and proposed UN standards of ethics and transparency will be seen in coming days. Whether the stated lack of knowledge of Mr. Pictet's membership on the UN Investment Committee comports with minimal corporate or competence standards is also in question. The problem is a wider one: in a defensive internal memo reviewed by Inner City Press, UNHCR lawyer Helmut Buss argues that UNICEF similarly partners with FIFA and NIS Petrol Co, and that the World Food Programme does the same with TNT Airways and the World Rugby Board. Nevertheless, UNHCR has agreed to drop the logo use and the "teams up" language deployed in its April 5 press release.

            The investment in a fund controlled by a member of the UN Investment Committee UNHCR defends, including by pointing out that Morgan Stanley's Francine Bovich is also on the UN Investment Board, while the UN does much business with JPMorgan Chase. (Morgan Stanley and JPMorgan Chase, despite the comment reference to Pierpont, are not related companies.) The UNHCR memo's argument is that it's too complicated or burdensome to avoid conflicts of interest. UNHCR's earlier justification to Inner City Press argued that "we are not talking about the usual procurement procedure," when talking about an investment in a fund controlled by a member of the UN Investment Committee.

            This conflict-or-reform debate has included at least in the carbon copies Deputy Secretary-General Mark Malloch-Brown, who appears to have agreed that UNHCR's actions were improper. The paper trail may be important. The story began with a UNHCR press release on April 5 of this year, headlined "New corporate investment scheme helps fund UN quake relief efforts" and stating that "the United Nations refugee agency has teamed up with two Swiss investment companies in a scheme that will benefit its earthquake relief operation in Pakistan. The joint project launched by the UN High Commissioner for Refugees (UNHCR), Zurich-based Societe Generale Corporate & Investment Banking, and derilab s.a., a derivatives company, will allow investors to participate in a financial product that affords a unique opportunity to support reconstruction and relief efforts."

   Inner City Press inquired into the release and published a round-up article on April 11 questioning the partnership: "It might well be on the level. But it's not yet clear that if it weren't, the scheme would not proceed. It would help if the follow-up questions were answered."

Inner City Press' article included at length the statement of UNHCR's Olivier Delarue:

From: Olivier Pierre Delarue
To: Matthew.Lee [at]
Sent: Thu, 6 Apr 2006 14:18:54 +0200
Subject: Re: Fwd: Press inquiry concerning how Societe Generale Corporate & Investment Banking, and derilab s.a were selected for participation with UNHCR

I work in UNHCR's Private Sector Fund Raising Service as Senior Corporate Relations Officer and your query about this fund raising initiative was forwarded to me... Based on the previous exchange of email you sent, your focus seems to be on the procurement and bidding process done by the UN. This particular initiative, however, is a fund raising project first proposed by  corporate entities and aimed at raising funds for UNHCR's humanitarian program.  Therefore, as with any fund raising project, we are not talking about the usual procurement procedure.

In my capacity as Senior Corporate Relations Officer, my role is to work on creating new partnerships with the corporate world in order to increase our donor base and receive greater financial and expertise from the private sector. In this particular case, Derilab s.a. approached us in the aftermath of the earthquake in South Asia and proposed to assist us pro bono in finding new ways of raising donations from the financial market for this emergency. As this was never done in the past, a financial product which incorporated a charity/donation component was not easy to build. Derilab presented the project to all the major banks involved in structured and derivative products. Only Societe Generale showed a serious interest in working on this new concept. As matter of principle, UNHCR screens all new partnerships with the private sector. Societe Generale, the only bank to show an interest for this project, was screened. As a result of our careful review, Societe Generale was screened positively for various reasons, including their participation in the UN Global Compact. Please note that in the case of this initiative, UNHCR is only a receiver of donations through this financial product -- but is not endorsing the product itself

  The phrase "we are not talking about the usual procurement procedure" may have been an understatement, given the investment with a company controlled by an individual who is a member of the UN Investment Committee. Regarding the last above-quoted phrase, even the UN Headquarters staff who subsequently questioned UNHCR's program apparently found dubious this last point: the use of the phrase "teams up" implies an endorsement, the question-memo noted. ICP reiterated its broader questions to UNHCR in Geneva on June 1, including directly to Mr. Delarue, to whom UNHCR's spokesman's office also forwarded the request.

     Several UN officials contacted Inner City Press about its initial story. Subsequently UN staff in New York wrote to UNHCR in Geneva, demanding an explanation including of the seemingly violative use of the UN logo contrary to GA Resol. 92(I) of 1946.  More than a month later, UNHCR's Helmut Buss sent back a multi-page memo, acknowledging the investment in Pictet Funds Indian Equity Fund, and that Ivan Pictet is on the UN Investment Committee. Mr. Buss claimed to have determined that this conflict had been stumbled into "in good faith," and that avoiding conflicts would be difficult, given for example that Morgan Stanley's Francine Bovich is also on the UN Investment Board.

   How will conflicts of interest be avoided in the future?  More than 12 hours before initial publication of this report, Inner City Press put these questions to UNHCR in Geneva, as well as to Ivan Pictet by fax at his place of work. Inner City Press' request for UNHCR's comment stated that "while it shouldn't need to be said, Inner City Press has been appreciative of UNHCR's responses, when received, on refugee-related questions on Zimbabwe, Uzbekistan, etc.. This inquiry, which began in April and was attempted to be concluded in June, is neither anti-refugee nor anti-UNHCR. As many have said, transparency is good for the UN system, in the long run. In this short-run, this is a formal request for UNHCR's written comment as quickly as possible."

            In the short and medium-run, UNHCR has declined to answer press questions about this, back in April, in early June, and now. What will happen in the longer run remains to be seen.

            At 8:15 a.m. New York time, 12 hours after sending its written request for comment, Inner City Press telephoned UNHCR deputy spokeswoman Jennifer Pagonis in Geneva and reiterated the request for comment. Ms. Pagonis indicated that the request had already been forwarded to Mr. Delarue for response by midday. But since he had been asked back in early June to comment on developments of which Inner City Press was even then aware, and he did not respond, to await Mr. Delarue's belated second response seemed neither necessary nor appropriate. "It is not really about Mister Delarue," Inner City Press explained to UNHCR's Jennifer Pagonis. "It's about UNHCR and the wider United Nations."  Subsequently, the following was received:

From: REDMOND [at]

To: Matthew.Lee [at], BUSS [at], DELARUE [at]

Sent: Wed, 12 Jul 2006 11:01 AM

Subject: Re: Request for comment asap on UNHCR / Societe Generale's Kashmir Relief Note/ Pictet Funds - on deadline

Dear Mr. Lee,

Olivier Delarue and colleagues have looked into your questions and their reply follows.

- Use of UN name and logo: UNHCR has not authorized Societe Generale to use the UN name and logo, nor of the UNHCR official logo, both of which are indeed protected under GA/RES/92(I) of 1946. In line with the "Guidelines on Cooperation between the United Nations and the Business Community", issued by the Secretary-General on 17 July 2000, however, UNHCR has, for the sole purpose of the raising of funds for UNHCR, allowed SocGen to use, on its brochure announcing the KRN, the UNHCR "visibility logo" with the addition "in support of". For your information, Article 16 (d) (ii) of the a/m Guidelines authorizes the use of the name and emblem "to assist in the raising of funds for the Organization".

- Potential conflict of interest: Based on the information available to us, there is no conflict of interest created for Mr. Ivan Pictet, managing partner of Pictet & Cie, and ad hoc member of the UN Investments Committee, by the fact that Pictet Funds Indian Equities is one of the funds in which KRN funds are invested. Societe Generale, the issuer of the Note, is solely responsible for choosing the funds and this selection is based on recognized risk management and hedging criteria; UNHCR plays a purely passive role as the recipient of a donation and has no interest in the performance of the Note. Moreover, Mr. Pictet's membership in the UN Investments Committee was unknown to all parties involved in drawing up this investment product, and we trust therefore that the decision to include a fund managed by Pictet & Cie was taken in good faith. In any event, Mr. Pictet had no involvement whatsoever in UNHCR's decision to accept the funds thus raised by SocGen. Finally, you may also note that the volume of this investment (US$1 million shared over a number of funds, only one of which is Pictet & Cie's) cannot be considered to benefit Mr. Pictet in any substantial manner.

- Screening of Corporate Partners: Societe Generale is a member of the Global Compact . Moreover, our research at the time demonstrated that Societe Generale was rated over the past years as one of the best banks in the world, and the best in terms of derivative products. For your information, private sector partnerships are a relatively recent addition to UNHCR's fundraising strategy. In its dealings with the private sector, UNHCR consistently bases itself on the a/m Guidelines issued by the Secretary-General. In addition, UNHCR is in the process of installing an advisory board to ensure even more checks and balances. This process, by the way, was already on the way before the KRN was even first considered.

Derilab, finally, is not a signatory to the Global Compact. It is a very small Swiss company consisting of former bankers, that offered to provide its expertise in the highly specialized field of derivative products to come up with innovative approaches that could increase UNHCR's ability to raise funds from the financial market.

Apologies for the delay in getting back to you. The past month is one of the busiest times of the year at UNHCR.

Regards, Ron Redmond

Head, Media Relations & Public Information, UNHCR Geneva

Update 1 p.m. July 12 -- Asked at the noon briefing if UNHCR is correct in invoking in its defense of this program and investments Kofi Annan's "Guidelines on Cooperation between the United Nations and the Business Community," spokeswoman Marie Okabe said that UNHCR has submitted a detailed response and that she, and presumably for now the Secretariat, have nothing to add to it. While UNHCR's written response was, as always, appreciated, on-the-record inquiries will continue, first into whether this UNHCR program, SocGen's initial use of the logo and the investment with Pictet & Cie, are viewed within the Secretariat and elsewhere as comporting with current and proposed standards of transparency and ethics.  Inner City Press is aware of views within the Secretariat, not close to the ground, which are at odds with UNHCR's positions and actions. These views are being solicited, on-the-record.

If Ambassadors to the UN, even from the Permanent Five, answer questions at the Security Council stakeout about their positions on such issues as amnesty for the Lords Resistance Army's Joseph Kony, and who should repair the Gaza electrical power plant, the Secretariat should answer regarding this UNHCR program. Watch this space [and see Report of July 13, 2006, above.]

Other Inner City Press reports are archived on

At the UN, New Phrase Passes Resolution called Gangster-Like by North Korea; UK Deputy on the Law(less)

UN's Guehenno Speaks of "Political Overstretch" Undermining Peacekeeping in Lower Profile Zones

In Gaza Power Station, the Role of Enron and the U.S. Government's OPIC Revealed by UN Sources

At UN, North Korean Knot Attacked With Fifty Year Old Precedent, Game Continues Into Weekend

UN's Corporate Partnerships Will Be Reviewed, While New Teaming Up with Microsoft, and UNDP Continues

Gaza Resolution Vetoed by U.S., While North Korea Faces Veto and Chechnya Unread

BTC Briefing, Like Pipeline, Skirts Troublespots, Azeri Revelations

Conflicts of Interest in UNHCR Program with SocGen and Pictet Reveal Reform Rifts

At the UN, A Day of Resolutions on Gaza, North Korea and Iran, Georgia as Side Dish

UN Grapples with Somalia, While UNDP Funds Mugabe's Human Rights Unit, Without Explanation

In North Korean War of Words, Abuses in Uganda and Impunity Go Largely Ignored

On North Korea, Blue Words Move to a Saturday Showdown, UNDP Uzbek Stonewall

As the World Turns in Uganda and Korea, the UN Speaks only on Gaza, from Geneva

North Korea in the UN: Large Arms Supplant the Small, and Confusion on Uganda

UN Gives Mugabe Time with His Friendly Mediator, Refugees Abandoned

At the UN, Friday Night's Alright for Fighting; Annan Meets Mugabe

UN Acknowledges Abuse in Uganda, But What Did Donors Know and When? Kazakh Questions

In Uganda, UNDP to Make Belated Announcement of Program Halt, But Questions Remain (and see The New Vision, offsite).

Disarmament Abuse in Uganda Leads UN Agency to Suspend Its Work and Spending

Disarmament Abuse in Uganda Blamed on UNDP, Still Silent on Finance

Alleged Abuse in Disarmament in Uganda Known by UNDP, But Dollar Figures Still Not Given: What Did UN Know and When?

Strong Arm on Small Arms: Rift Within UN About Uganda's Involuntary Disarmament of Karamojong Villages

UN in Denial on Sudan, While Boldly Predicting the Future of Kosovo/a

UN's Selective Vision on Somalia and Wishful Thinking on Uighurs

UN Habitat Predicts The World Is a Ghetto, But Will Finance Be Addressed at Vancouver World Urban Forum?

At the UN, a Commando Unit to Quickly Stop Genocide is Proposed, by Diplomatic Sir Brian Urquhart

UN's Annan Concerned About Use of Terror's T-Word to Repress, Wants Freedom of Information

UN  Waffles on Human Rights in Central Asia and China; ICC on Kony and a Hero from Algiers

At the UN, Internal Justice Needs Reform, While in Timor Leste, Has Evidence Gone Missing?

UN & US, Transparency for Finance But Not Foreign Affairs: Somalia, Sovereignty and Senator Tom Coburn

In Bolton's Wake, Silence and Speech at the UN, Congo and Kony, Let the Games Begin

Pro-Poor Talk and a Critique of the World Trade Organization from a WTO Founder: In UN Lull, Ugandan Fog and Montenegrin Mufti

Human Rights Forgotten in UN's War of Words, Bolton versus Mark Malloch Brown: News Analysis

In Praise of Migration, UN Misses the Net and Bangalore While Going Soft on Financial Exclusion

UN Sees Somalia Through a Glass, Darkly, While Chomsky Speaks on Corporations and Everything But Congo

AIDS Ends at the UN? Side Deals on Patents, Side Notes on Japanese Corporations, Salvadoran and Violence in Burundi

On AIDS at the UN, Who Speaks and Who Remains Unseen

Corporate Spin on AIDS, Holbrooke's Kudos to Montenegro and its Independence (May 31, 2006)

Kinshasa Election Nightmares, from Ituri to Kasai. Au Revoir Allan Rock; the UN's Belly-Dancing

Working with Warlords, Insulated by Latrines: Somalia and Pakistan Addressed at the UN

The Silence of the Congo and Naomi Watts; Between Bolivia and the World Bank

Human Rights Council Has Its Own Hanging Chads; Cocky U.S. State Department Spins from SUVs

Child Labor and Cargill and Nestle; Iran, Darfur and WHO's on First with Bird Flu

Press Freedom? Editor Arrested by Congo-Brazzaville, As It Presides Over Security Council

The Place of the Cost-Cut UN in Europe's Torn-Up Heart;
Deafness to Consumers, Even by the Greens

Background Checks at the UN, But Not the Global Compact; Teaching Statistics from Turkmenbashi's Single Book

Ripped Off Worse in the Big Apple, by Citigroup and Chase: High Cost Mortgages Spread in Outer Boroughs in 2005, Study Finds

Burundi: Chaos at Camp for Congolese Refugees, Silence from UNHCR, While Reform's Debated by Forty Until 4 AM

In Liberia, From Nightmare to Challenge; Lack of Generosity to Egeland's CERF, Which China's Asked About

The Chadian Mirage: Beyond French Bombs, Is Exxon In the Cast? Asylum and the Uzbeks, Shadows of Stories to Come

Through the UN's One-Way Mirror, Sustainable Development To Be Discussed by Corporations, Even Nuclear Areva

Racial Disparities Grew Worse in 2005 at Citigroup, HSBC and Other Large Banks

Mine Your Own Business: Explosive Remnants of War and the Great Powers, Amid the Paparazzi

Human Rights Are Lost in the Mail: DR Congo Got the Letter, But the Process is Still Murky

Iraq's Oil to be Metered by Shell, While Basrah Project Remains Less than Clear

At the UN, Dues Threats and Presidents-Elect, Unanswered Greek Mission Questions

Kofi, Kony, Kagame and Coltan: This Moment in the Congo and Kampala

As Operation Swarmer Begins, UN's Qazi Denies It's Civil War and Has No Answers if Iraq's Oil is Being Metered

Cash Crop: In Nepal, Bhutanese Refugees Prohibited from Income Generation Even in their Camps

The Shorted and Shorting in Humanitarian Aid: From Davos to Darfur, the Numbers Don't Add Up

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

In Congolese Chaos, Shots Fired at U.N. Helicopter Gunship

In the Sudanese Crisis, Oil Revenue Goes Missing, UN Says

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

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

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

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

For reporting about banks, predatory lending, consumer protection, money laundering, mergers or the Community Reinvestment Act (CRA), click here for Inner City Press's weekly CRA Report. Inner City Press also reports weekly concerning the Federal Reserve, environmental justice, global inner cities, and more recently on the United Nations, where Inner City Press is accredited media. Follow those links for more of Inner City Press's reporting, or, click here for five ways to contact us, with or for more information.

            Copyright 2005-2006 Inner City Press, Inc. To request reprint or other permission, e-contact Editors [at] - phone: (718) 716-3540