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January 17, 2006

UN Probes Peacekeeping Contracts Fraud

by Thalif Deen

UNITED NATIONS - Amid charges of waste, fraud, and malfeasance in its multi-billion-dollar peacekeeping operations, the United Nations has suspended one contractor and eight staff members pending further investigations into potential wrongdoing.

The focus of the investigation is procurement, which, according to one UN source, could emerge as a major financial scandal in the history of the organization.

The audit is being confined to five years of peacekeeping-related procurement, including major UN procurement contracts.

A UN staffer who served in one of the peacekeeping missions and is familiar with several others told IPS that "corruption and kickbacks were taken for granted in most overseas operations."

He cited two examples from recent peacekeeping missions: A former diplomat, currently with a peacekeeping mission in Europe, is said to have received a Mercedes Benz car as a kickback for favoring a particular contractor. The vehicle was sent to an address in a third country and is awaiting shipment until the staffer gets back to his home country.

In another mission, he said, a husband-and-wife team was working in tandem to defraud the organization – mostly on procurement.

"The higher-ups either don't take notice or are working in cahoots," he added.

According to a UN statement released Monday, "the secretary-general [Kofi Annan] is confident that the steps now being taken will help ensure that remaining deficiencies in the UN procurement systems will be quickly uncovered and corrected."

Another four staff members in the Department of Peacekeeping Operations were recalled from overseas missions in order to assist with the audit. But they will be returned to their duty stations.

Placing eight staff members on special leave is an administrative, not disciplinary, measure that "fully respects the due process rights of the staff members concerned and does not presume any wrongdoing on their part."

While the audit report is not yet finalized, "it raises a number of issues of serious concern," the UN statement said.

"In light of the critical importance of an efficient and effective procurement system to the proper functioning of the United Nations, the Secretariat has provided additional resources to the Office of Internal Oversight Services (OIOS) in order to expand its investigation of procurement allegations as quickly as possible," the statement added.

The United Nations said it is also continuing to "cooperate fully with ongoing investigations into UN procurement being undertaken by national law enforcement authorities."

Since 1948, the United Nations has spent a staggering $41 billion in its peacekeeping operations worldwide.

With 15 peacekeeping operations currently in force, the total peacekeeping budget has reached over $5 billion for 2005-2006, compared to the UN's regular biennial budget of over $3 billion.

Currently, there are nearly 85,000 personnel serving in UN peacekeeping operations – from Lebanon and Western Sahara to Kosovo and Haiti.

As UN peacekeeping costs have skyrocketed arithmetically over the last two decades, waste and corruption have continued to increase geometrically.

One of the biggest setbacks suffered by the United Nations was the loss of about $3.9 million from a compound that housed the offices of the UN peacekeeping operations in Somalia in 1993.

Although Britain's Scotland Yard was called in to investigate the loss, the United Nations never recovered the stolen money.

In 1996, the United Nations mistakenly overpaid nearly a million dollars to its peacekeeping staff in Iraq and Kuwait – and tried to rectify the error by frantically demanding its money back.

The overpayment of more than $800,000 was made to about 150 staffers, including military observers, local recruits, and headquarters personnel who served with the UN Iraq-Kuwait Observation Mission (UNIKOM).

But despite an investigation, the United Nations was unable to track down the staffer responsible for the overpayment.

UNIKOM was established immediately after the January 1991 Gulf War to monitor a demilitarized zone (DMZ) along the boundary between Iraq and Kuwait.

According to an OIOS report, however, UNIKOM had eventually overpaid staff allowances to the tune of more than $6.3 million. These payments continued despite the irregularities pointed out by the auditors. Only a small percentage of this amount was recovered.

In the peacekeeping mission in Angola, transportation and related services were procured, and payments of $677,000 were made, without following the applicable financial rules, regulations, and procedures.

A large number of requisitions were raised for goods and services that were not essential or urgently needed. When this was brought to the attention of the management, immediate steps were taken to cancel these requisitions valued at more than $15 million.

In the UN Peace Forces (UNPF) in Zagreb, an examination of payments for rations indicated that discounts of more than $700,000 were lost as a result of payments not being made promptly.

An audit of military contingent claims for reimbursement of vehicle spare parts disclosed a pattern of unjustified claims by one contingent, thereby preventing more than $1 million in unfounded expenditures.

The UN's peacekeeping operations in Cambodia, however, suffered the most – with a spate of robberies amounting to millions of dollars in stolen trucks, cars, phones, and computers.

A total of more than $8 million in equipment was stolen – mostly by unknown persons – from the UN Transitional Authority in Cambodia (UNTAC) during 1992-1993.

The stolen equipment included $3 million worth of vehicles, $2.5 million in communications equipment, $1.5 million in laptop computers, half a million dollars in prefabricated accommodation, and $453,000 in generators.

The United Nations was also forced to write off about $3.6 million worth of vehicles, photocopiers, fax machines, and prefabricated accommodation.

No one has been held responsible for the robberies in Cambodia, although staffers were accused of not doing enough to protect UN property.

(Inter Press Service)

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    Thalif Deen has been Inter Press Service's U.N. Bureau Chief since 1992. A
    former Information Officer at the U.N. Secretariat and a one-time member of
    the Sri Lanka delegation to the General Assembly sessions, he is currently
    editor of the Journal of the Group of 77, published in collaboration with
    IPS. A Fulbright-Hayes scholar, he holds a Master's degree in Journalism
    from Columbia University in New York.

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