Baseball Crank
Covering the Front and Back Pages of the Newspaper
March 13, 2007
WAR: Son of Oil-for-Food

What would you say if I told you that a UN agency was undermining U.S.-led diplomatic and economic sanctions by funnelling untraceable cash to a dangerous rogue regime?

Shocking, I know. But this time it's not the Iraq Oil-for-Food program, nor for that matter is it UNRWA providing cover for Palestinian terror attacks on Israel. This time, it's North Korea:

The United Nations Development Programme office in Pyongyang, North Korea, sits in a Soviet-style compound. Like clockwork, a North Korean official wearing a standard-issue dark windbreaker and slacks would come to the door each business day.

He would take a manila envelope stuffed with cash -- a healthy portion of the UN's disbursements for aid projects in the country -- and leave without ever providing receipts.

According to sources at the UN, this went on for years, resulting in the transfer of up to $150 million in hard foreign currency to the Kim Jong Il government at a time when the United States was trying to keep North Korea from receiving hard currency as part of its sanctions against the Kim regime.

"At the end, we were being used completely as an ATM machine for the regime," said one UN official with extensive knowledge of the program. "We were completely a cash cow, the only cash cow in town. The money was going to the regime whenever they wanted it."

Is the UN interested in getting to the bottom of this?

Earlier this month, the development program, known as UNDP, quietly suspended operations in North Korea, saying it could not operate under guidelines imposed by its executive board in January that prohibited payments in hard currency and forbade the employment of local workers handpicked by the North Korean government.

But some diplomats suspect the timing of the suspension was heavily influenced by a looming audit that could have proved embarrassing to the UN.

Documents obtained by the Tribune indicate that as early as last May, top UNDP officials at headquarters in New York were informed in writing of significant problems relating to the agency's use of hard foreign currency in North Korea, and that such use violated UN regulations that local expenses be paid in local currency. No action was taken for months.

Then, under pressure from the United States, UN Secretary General Ban Ki Moon on Jan. 19 ordered an audit of all UN operations in North Korea to be completed within 90 days, or by mid-April.

The Board of Auditors, the UN body tasked with the audit, made no movement on the audit for 40 days after Ban's order. It sent out its notification letter for the beginning of the audit on the same day the development program announced the closure of its office--March 1.

That timing, combined with past concerns about the UNDP's transparency, has raised suspicions that suspending operations would be a way to hamstring the audit, the results of which may prove damning to the organization.

"The office was closed precisely for that reason," said another UN official with extensive knowledge of the program. "With no operations in place, first of all, you have no claim to get auditors into the country. Second, it will take months and months to get documentation out of the office there, to transfer to somewhere else like New York."

Again: shocking, I know. Maybe this was rogue UN officials acting outside of their organization's policy?

UNDP spokesman David Morrison said the use of hard currency and the hiring of staff through local governments was standard practice in authoritarian countries like North Korea.

So is there anyone in this picture who is willing to stand up for accountability and integrity?

"I don't think this is an audit you can whip through in 30 days; this may take some time," John Bolton, the U.S. ambassador to the UN until the end of last year and a staunch critic of the world body, said when contacted by the Tribune for a reaction to the newspaper's reporting of the cash payments. "But I think for the reputation and integrity of the UN system, it's critical that it proceed without delay."

There will be more talk, of course, in the coming months, of UN economic sanctions against Iran. Just remember where the Iranians will go whenever they want to get around those sanctions.

The simple fact is, stories like this one are not about UN programs being subverted by rogue employees, but rather about the inherent structure of the UN. The UN is a trade association of heads of state and de facto states like the Palestinian Authority, staffed by people who have dedicated their careers to an organization separate and apart from loyalty to their own home countries. Nobody at the UN draws their authority, or depends for their salary, on the consent of the governed. Thus, inevitably, when push comes to shove, the UN staff will - even more than is usually true of bureaucracies - serve the interests of heads of state, of the status quo, of the international "community," and of the UN as an institution - the common people and the goals of particular policies don't merit a place on that list. And this will always be true of organizations structured in this way - so long as they draw their power, money and legitimacy without ultimately having to answer to the people.

Posted by Baseball Crank at 9:30 AM | War 2007-14 | Comments (10) | TrackBack (0)
Comments

The UN is a drag on the resourses of the world and contributes little to the actual good of society. The world would be a better place if the UN closed its doors.

We all know the UN isn't going anywhere, but we can dream.

Posted by: maddirishman at March 13, 2007 12:33 PM

All money sent to the UN is wasted. The money sent through the state department is pretty close to wasted as well. A true conservative will actively seek to defund the entitlement programs for the world's worst offenders of human dignity. Romney, Guilani, McCain - will any of them stand up to the thugocracy?

p.s. I have a plan to relocate the UN a few 100 miles east of it's current location.

Posted by: Brendan at March 13, 2007 2:22 PM

As usual, the hand wringers will cave (we've done it too sadly), but will then ask us to bail the planet out. I think behind the scenes, the US and China are doing some serious planning about what to do about the Kims and their band of henchmen. In the end, it's the US, China and Japan , well the US and China most, with the UK and the Aussies, that will have to deal with it, and the French and Germans to do nothing.

Posted by: Daryl Rosenblatt at March 13, 2007 4:04 PM

Close the UN, shut down the State Dept., and the Dept. of Education, arrest Pelosi and Murtha, then commence bombing of North Korea, Iran, and 5 or 6 other countries .... thats what you whack job fundies and wingnuts dream about isn't it?

Posted by: Redrum at March 14, 2007 8:52 AM

What, no front page story on firing US attorneys? I'm shocked.

Posted by: AstroFan at March 14, 2007 9:07 AM

AstroFan, thus far my views are about the same as Orin's. The story as a whole is overblown, but the parts that are troubling are still coming into focus.

However, Patterico has a really good detailed post on the topic, as usual.

Posted by: The Crank at March 14, 2007 12:36 PM

I think the one to watch is the firing of Carol Lam. Head of FBI's reaction was "politics were involved", denied by the AG's office. We shall see. I don't think the firing of a US Attorney for political reasons in the middle of a public official investigation that climbs into the administration is "overblown" in any way. Particularly when it took this long to even become a story at all.

"Nothing to see here, please disperse!"

Interesting that not a single Republican candidate for President has commented on the story.

Posted by: AstroFan at March 14, 2007 4:16 PM

It certainly does have the appearance that in each case these attorney's were let go for either not investigating Dems quickly or thoroughly enough or they were investigating GOPers. What is as disconcerting is what is up with the ones that kept their jobs. A recent report showed that since 2002 their were 7 times more investigation of corruption by Dems than GOP. The odds of that stat reflecting the reality of the world is pretty much zero. I would think for the attorneys on this site the idea that AsG are being used as political tools would be especially repulsive.

Posted by: jim at March 14, 2007 4:46 PM

" A recent report showed that since 2002 their were 7 times more investigation of corruption by Dems than GOP. The odds of that stat reflecting the reality of the world is pretty much zero"

I agree. Every knows Dems are at least 10 times as corrupt as Republicans.

Posted by: abe at March 15, 2007 1:49 PM

Conservative humor. Oxymoronic, yes. It still kills me though. Give Ann Coulter a call. You could write for her.

Posted by: jim at March 15, 2007 5:33 PM
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