As a result of an unfolding corruption scandal at the United Nations, serious unanswered questions have arisen about the rigor with which the UN vets the companies and their affiliated private foundations who seek to make donations to the UN. In order to keep the money flowing into UN coffers and make up for shortfalls in member state contributions to agency budgets, at least some UN offices appear willing to sell to private donors an opportunity to associate themselves with the image of noble sounding UN causes such as sustainable development.
The corruption scandal became public news last October when U.S. prosecutors brought federal charges against former president of the UN General Assembly, John Ashe. The charges related to bribes he allegedly received in exchange for reportedly using his influence in his official capacity, both during his General Assembly presidency and while serving as the UN ambassador of Antigua and Barbuda. Mr. Ashe allegedly endeavored to push through lucrative business deals in Antigua and China on behalf of his benefactors. The bribes he is alleged to have received were said to be channeled through the Sun Kian IP Group Foundation, controlled by indicted Chinese billionaire Ng Lap Seng, and through the Global Sustainability Foundation, whose CEO Sheri Yan served as an adviser to Mr. Ashe.
Ng Lap Seng and John Ashe have pleaded not guilty to the charges against them. Sheri Yan pleaded guilty in federal court in Manhattan to one count of bribery. The former finance director at the Global Sustainability Foundation, Heidi Hong Piao, and Francis Lorenzo, a former deputy UN ambassador from the Dominican Republic, have also pleaded guilty to charges related to the scandal.
Top honchos at the United Nations said they were “shocked” and “deeply troubled” to learn of the allegations involving the former president of the General Assembly. At the same time, UN Secretary General Ban Ki-moon’s spokesman Stephane Dujarric tried to distance the rest of the UN system from the corruption scandal, declaring that “Corruption is not business as usual at the U.N."
However, this strategy to contain the fallout from the scandal became more difficult for the Secretary General after it was revealed that personnel and offices within the UN Secretariat and the UN Development Program (UNDP) had questionable links with non-governmental organizations (NGOs)affiliated with Ng Lap Seng’s company and foundation. For example, the UN Secretariat over which Ban Ki-moon presides inappropriately revised an official UN document, adding a favorable mention of Ng Lap Seng’s company by name. Moreover, money channeled through Ng Lap Seng’s foundation had found its way to parts of the UN system other than Mr. Ashe’s office. In response to rising concerns about the reach of the scandal, Ban Ki-moon directed the Secretariat’s Office of Internal Oversight Services (OIOS) to conduct an audit of the interactions among the UN Secretariat, Ng Lap Seng’s affiliated business and foundation interests, and related non-governmental organizations. A completely separate audit is being conducted by the UNDP’s own audit department with regard to $15 million pledged by the Sun Kian IP Group to a unit within the UNDP bureaucracy known as the Office for South-South Cooperation.
The UNDP audit is still ongoing. It will not be completed until later this month. Conveniently, it appears that it will come out after the head of the UNDP, Helen Clarke, whom has submitted her name as a candidate to become the next Secretary General, appears at a hearing conducted by the General Assembly to question all candidates for the Secretary General position.
The UN Secretariat OIOS audit was completed on March 22nd but won’t be made public officially until a month later on April 22nd. However, it has been leaked, and was posted on line (credit to Inner City Press). The report graded the UN Secretariat’s governance, risk management and control processes as “partially satisfactory.” It recited a number of specific incidences of non-compliance with proper administrative procedures and offered remedial recommendations for the Secretariat to implement going forward, which the Executive Office of the Secretary General has reportedly accepted. The incidents included unauthorized funding of an exhibit at the UN, privately paid gifts and travel for UN Secretariat personnel, and the unauthorized revision of an official UN document.
The OIOS internal audit report is limited in scope. It is little more than a managerial tool focused on discrete shortcomings identified by the auditors while reviewing specific management activities or operational areas. The OIOS audit report is also artificially compartmentalized, as it intentionally omits any review of the UNDP’s relationship to groups affiliated with Ng lap Seng. Rather than join forces with the OIOS, the UNDP itself is conducting a separate audit of its relationship with many of the same individuals and entities covered in the OIOS report. Thus, there is no system-wide evaluation. It is as if the UN Secretariat and the UNDP were completely unrelated to each other, which gives a false impression of the true scope of the problem.
The OIOS recommendations, such as they are, consist of a series of tepid administrative fixes. Indeed, there was no intention to uncover and report on systemic wrong-doing.
Shockingly, the report did not even recommend immediate cessation of all dealings between the United Nations and the indicted Ng Lap Seng and his affiliated entities. In fact, it’s business as usual until the U.S. law enforcement proceedings are concluded:
“At this stage, the allegations are still under investigation by the concerned law enforcement authorities of the host country. There is a need for the Secretariat to monitor these proceedings and determine, at the appropriate time depending on their outcome, as to whether the United Nations would continue to engage in partnership with Sun Kian Ip Group and/or its affiliated NGOs.” (Emphasis added)
What exactly is the “appropriate time?” First of all, guilty pleas have already been entered in the criminal case, which should be more than sufficient grounds to immediately end any UN dealings with the Sun Kian Ip Group and its affiliated foundation and NGOs. Moreover, the UN should not have to wait for the outcome of a national criminal proceeding to determine whether its own ethical code has been grossly violated, based on the information known so far. The United Nations bureaucracy conveniently hid behind an immunity defense when sued in U.S. federal court for alleged wrong-doing relating to the introduction of cholera to Haiti by UN peacekeepers. Now it is hiding behind a U.S. federal court proceeding to delay severing all UN ties with the Ng Lap Seng network.
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Tellingly, Secretary General Ban Ki-moon asked the OIOS to conduct only an audit, not a full-scale investigation, which the OIOS is also empowered to conduct. An investigation would have been far broader in scope. As the OIOS described “investigation” on its website, “The focus is on possible misconduct by individuals and prohibited practices by vendors/third parties; however, some systemic issues might also be analysed at the same time.”
In conducting a full-scale investigation, the OIOS “has the right to direct and prompt access to all persons engaged in activities under the authority of the Organization, as well as all records, documents or other materials, assets and premises and to obtain such information and explanations as it considers necessary to fulfil its responsibilities.”
The OIOS’s description of sources it used or consulted to conduct its audit is far more limited in scope. That’s because the OIOS, under the UN leadership’s direction, was not interested in ferreting out wrong-doing or analyzing in depth any systemic issues. With blinders on, the OIOS confined itself to assessing “the existence and adequacy of internal controls” as they relate to “the Secretariat’s engagement” with “the specific NGOs and the related entity identified in the allegations and/or media reports.”
Ironically, the OIOS audit report mentioned the risk to the UN’s “reputation” as one reason the Secretary General asked for the audit. What this unfolding corruption scandal demonstrates is a deep flaw in the United Nations system relating to its reputation, which the audit report avoided altogether. Based on what is known so far, the UN has permitted, even encouraged, donations of money and in-kind contributions in return for such benefits to private concerns as steering of business and image laundering that leverages the UN’s “reputation” for commercial gain. The OIOS audit report does not reveal even the tip of the iceberg.
As a result of an unfolding corruption scandal at the United Nations, serious unanswered questions have arisen about the rigor with which the UN vets the companies and their affiliated private foundations who seek to make donations to the UN. In order to keep the money flowing into UN coffers and make up for shortfalls in member state contributions to agency budgets, at least some UN offices appear willing to sell to private donors an opportunity to associate themselves with the image of noble sounding UN causes such as sustainable development.
