U.N. Insider: ‘There Is No Transparency’

BRETT D. SCHAEFER

An internal memo reveals the downward spiral of U.N. oversight and accountability.

It’s often tempting, after the latest scandal, to think that the United Nations’ reputation for shoddy oversight and lack of transparency can’t sink any lower. And yet it keeps doing so.

The latest charges of mismanagement, corruption, and fraud come from the organization’s own bureaucracy. An internal memo by Inga-Britt Ahlenius, a Swedish auditor whose non-renewable five-year term as undersecretary-general of the Office of Internal Oversight Services (OIOS) ended last week, charged U.N. secretary-general Ban Ki-moon and his associates of undermining efforts to combat corruption in the organization.

This has long been obvious to observers of the U.N. Efforts to improve accountability, transparency, and oversight are often attacked from within. Many member states become angry if their citizens are fingered for corruption, and U.N. officials seem fearful that any report of problems will damage the organization’s reputation. Thus the decision to eliminate the Procurement Task Force — the only truly independent investigatory and oversight body the U.N. has ever had — in December 2008 was a frustrating but not surprising example of how effective and independent oversight is discouraged and attacked in Turtle Bay.

This also explains why scandals keep occurring. A few notable ones include:

the Iraqi Oil-for-Food scandal that Saddam Hussein used to generate some $10 billion in illegal revenue, according to the U.S.Government Accountability Office;

a huge corruption scandal in which more than 40 percent of U.N. procurement for peacekeeping was revealed to be tainted by fraud, leading to three U.N. officials’ being charged in American courts;

widespread incidents of sexual exploitation and abuse by U.N. personnel in Bosnia, Burundi, Cambodia, Congo, Guinea, Haiti, Ivory Coast, Kosovo, Liberia, Sierra Leone, and Sudan.

Only rarely, however, are the efforts of those seeking to impede U.N. oversight reported by the media or otherwise brought to light. But now, we have first-person testimony from a U.N. official about just how effective the efforts to hamstring U.N. oversight have been. Among the harsh assessments relayed by Ahlenius to Ban in the summary of her end-of-assignment report, according to Foreign Policy’s Turtle Bay blog, is this:

There is no transparency, there is lack of accountability. Rather than supporting the internal oversight which is the sign of strong leadership and good governance, you have strived to control it which is to undermine its position. I do not see any signs of reform in the Organization.

I regret to say that the [U.N.] Secretariat now is in a process of decay. It is not only falling apart into silos — the secretariat is drifting, to use the words of one of my senior colleagues. It is drifting into irrelevance.

Additional comments attributed to Ahlenius in the Foreign Policypost placed the blame squarely on Secretary-General Ban:

Your actions are not only deplorable, but seriously reprehensible. No UN Secretary-General before you has questioned the authority delegated to the [undersecretary-general of OIOS] to appoint the staff in OIOS. Your action is without precedent and in my opinion seriously embarrassing for yourself.

Ban’s defense, offered by his chef de cabinet Vijay Nambiar, essentially denies responsibility, changes the subject, and questions Ahlenius’s version of events. A choice quote:

This secretary-general, like his recent predecessors, has had to strike a balance between acting as a chief administrative officer of the United Nations on the one hand, and providing truly global leadership on the other. A look at his record shows that Secretary-General Ban has provided genuine visionary leadership on important issues from climate change to development to women’s empowerment. He has promoted the cause of gender balance in general as well within the organization. He has led from the front on important political issues from Gaza to Haiti to Sudan. And today, he is in Afghanistan.

Well, as long as the gender balance in the U.N. is being addressed, the secretary-general must be doing his job, right?

Outgoing comptroller accuses Ban Ki-moon of thwarting war on corruption at UN

In a 50-page document, the official responsible for fighting corruption in the organization levied unprecedented accusations at Ban Ki-moon for undermining her efforts.

By Shlomo ShamirTags: United Nations

A Swedish diplomat who recently quit her post as Undersecretary-General and Comptroller of the United Nations has launched accusations unprecedented in their severity against Secretary-General Ban Ki-moon in a memorandum that was leaked on Tuesday to the Washington Post.

The 50-page memo, which was circulated to only 9 persons, was authored by Inga Britt-Ahlenius, who recently completed her five-year term at the United Nations.

Britt-Ahlenius, a well-known figure in the hallways of the United Nations building, wrote in the memo that the secretary-general – who is currently in Kabul for an international conference about the future of Afghanistan – "undermined and sabotaged the responsibilities and independence that were granted to her office" as the senior official responsible for the war on corruption in the organization.

"Your action is without precedent," wrote the former comptroller, "Your actions are… reprehensible…and in my opinion seriously embarrassing for yourself."

The senior diplomat did not restrict herself to politically correct language in her complaints against Ban: "I regret to say that the [UN] Secretariat now is in a process of decay. It is not only falling apart.… It is drifting into irrelevance."

Britt-Ahlenius continued, "There is lack of transparency, there is lack of accountability. Rather than supporting the internal oversight which is the sign of strong leadership and good governance, you have strived to control it which is to undermine its position."

Ever since the secretariat of the organization was blamed for the financial scandal surrounding the Oil for Food program, which was revealed a decade ago and was the reason that the previous Secretary-General Kofi Annan did not pursue a second term, there have not been such serious accusations against the secretary-general of the organization, the likes of which appear in the memorandum that was leaked Tuesday.

The memo is especially embarrassing for Ban, who took office in 2007 as someone who would "clean house" and improve the image of the organization, which was seriously harmed in the wake of the revelations of the extent of the corruption that occurred as part of the Oil for Food program.

Behind the scenes and in private conversations, the current secretary-general is the target of much criticism by senior diplomats and veteran commentators. Ban, who previously served as the foreign minister of his native country South Korea, is accused of having surrounded himself with advisers who don't dare contradict him.

Ban also made a number of blunders with world powers, and it is widely known that many in the UN are unsatisfied with his work habits and with his responses to regional crises.

The Washington Post, however, also quoted senior officials in the UN Secretariat who stated that the accusations put forth by Britt-Ahlenius are not balanced and that her criticism is unfair.

Floating Your Boat? U.N.'s 'Flotel' in Haiti Is Vastly Overpriced, Says Expert

By George Russell

Published June 10, 2010

| FOXNews.com

A comfortably-appointed passenger ship that United Nations peacekeepers in earthquake-battered Haiti call home is still on duty, its rental meter running at $72,500 per day. The tab for U.N. member states is more than $6.5 million since March — and counting.

Both the 480-foot vessel namedOla Esmeralda, and its smaller companion the Sea Voyager — known among U.N. staffers as the "Love Boat" — have been generating controversy ever since their arrival in Haiti was reported on by Fox News.

On May 11, the Love Boat left Haiti after completing its 90-day initial contract with the U.N. — at a cost of roughly $3.5 million. A recent U.N. peacekeeping budget, however, has set aside an additional $6.5 million for Ola Esmeralda to cover rental until the end of August.

According to an expert in international shipping operations, management and finance consulted by Fox News, however, that $13 million projected tab for Ola Esmeralda, an 11,000-ton Venezuelan-registered vessel whose owners have close ties to the Hugo Chavez government, is "outrageous, ridiculous, whatever bad words you can use. I'd love to have that contract."

He estimates that the ship deal is spinning off cash for its owners at a rate that is two or three times what is normal for the "flotel" — floating hotel — business.

Welcome to the "Love Boat," a chartered cruise ship where many U.N. relief workers are living while they stay in Haiti's ruined capital of Port au Prince, where most residents are homeless. The U.N. is paying over $10 million to rent a pair of ships, because "you have to be in good shape in order to help the Haitians," a senior U.N. official told Fox News.

The expert's estimate of the lucrative nature of the Ola Esmeraldacontract raises new questions about the choice of the vessel for U.N. peacekeeping work by the agency that struck the deal, the World Food Program (WFP).

According to WFP, Ola Esmeralda was chosen after rigorous competitive bidding, in which five different vessels were vying for the job on the basis of the lowest competitive price. Said a WFP spokesman: "The Ola Esmeralda is relatively old and was the most cost effective in terms of price per cabin."

The expert consulted by Fox News, however, was skeptical. His conclusion: "It's a dream deal for somebody."

Using the "most generous" operating cost assumptions, plus the actual technical specifications of the ship, the expert concluded that the U.N. is paying at least 100 percent more than Ola Esmeraldacosts to operate — a tally that the expert said should be no more than $36,200 per day.

That would leave an estimated excess of revenue over operating expenses of more than $36,280 per day, and even after making further allowances for administrative overhead, the Ola Esmeralda is likely generating a cash flow for its owners of at least $29,000 per day — more than $2.6 million during its first three months in Haiti.

Normal cash flow in the floating hotel business, the expert said, would be more like $10,000 to $15,000 a day.

Indeed, the operating costs for Ola Esmeralda could be even lower than that, the expert concluded — and the cash flow could be a lot higher. Among other things, Fox News' expert — who requested anonymity — based his cost calculations on the likelihood that Ola Esmeralda, which can carry a maximum of 482 passengers, was hosting 375 U.N. staffers per day, or 78 per cent capacity.

According to a spokesman for the U.N. peacekeepers the ship has recently been hosting about 250 passengers, or 52 percent capacity.

That should lower expenses for such things as hot meals, laundered sheets and other personal services — all of which make Ola Esmeralda a luxury pit-stop on the ravaged island — by another 25 percent, and add another estimated $1,400 per day to Ola's potential profit margins.

"These are huge, huge commissions," said the expert. "Somebody's making a fortune."

Fox News first revealed the murky ownership details of Ola Esmeralda last April, as the U.N. agency that contracted for the vessel, the World Food Program, was ridding its web-site of a photo-essay and story about the two ships' arrival.

According to WFP, the ship's owner is a Miami company called Lighthouse Ship Management LLC, whose office address is that of a suburban Miami residence.

But in fact, as of the end of January 2010, the registered owner of the Ola Esmeralda, according to official ship registries, is a Venezuelan company, Servicios Acuaticos de Venezuela, C.A., or Saveca. Lighthouse Ship Management is the vessel's manager, a fact confirmed to Fox News by a Saveca executive who otherwise declined to answer questions.

Saveca, in turn, boasts on its website that it has an "alliance" with a Venezuelan shipyard, Dianca, that is jointly owned by the Chavez government and its state-owned oil firm.

Neither Saveca nor Lighthouse Ship Management has answered questions about their relationship initially posed by Fox News in April.

Through a spokesman, however, WFP has tersely defended to Fox News both its procurement procedures in the Ola Esmeralda selection and the cost of the ship's rental. According to the spokesman, ten ships were originally offered for the contract, and half of them survived a technical analysis to determine if they could adequately provide the required services.

Ola Esmeralda was chosen from among the surviving five on the basis of lowest price bid, WFP's spokesman said.

When informed that Fox News had been told the cost of renting the Ola Esmeralda was considered to be high, the spokesman replied that its expenses included "refueling costs over a three-month period, and food requirements of passengers."

"Refueling costs alone account for almost one-third of the daily rate," the agency's spokesman declared.

Fox's expert agreed that fuel costs made up one-third of his own estimated operating costs for the vessel — but that was $12,000 out of an estimated total expense of $36,200, rather than the $72,500 the U.N. is paying for the ship.

He based his estimate on normal commercial rates for fuel oil and lubricants and the consumption rates of the diesel "generator" engines listed in Ola Esmeralda's specifications. He noted that in a moored "flotel," those "generator" engines would be used to produce roughly 4,000 kilowatts of energy per day for the vessel in port, rather than the main engines, which are used to propel the ship at sea — and which use much more fuel.

The Fox News expert's numbers also included food and laundry services for a crew of 150 plus the 375 assumed passengers.

"The galley and housekeeping is where the real labor is aboard this kind of ship," he said, and those workers are often less expensive than the operating crew.

According to the shipping expert, it would be "very difficult" for any costs to be higher than his estimates, given the labor markets and wage rates in the Caribbean zone where Ola Esmeraldaoperates.

As for food costs, he mused, "maybe they're flying in porterhouse steak and lobster tails. But I don't think so."

George Russell is executive editor of Fox News.