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by Thalif Deen

The Overlooked Outcome of UN Oil For Food Probe

(IPS) UNITED NATIONS -- The United Nations, which is struggling to redeem its public image over charges of nepotism and mismanagement in the now-defunct oil-for-food program in Iraq, has admitted to another growing scandal relating to its procurement activities.

The abuses relate mostly to UN supplies and services -- both in the department of management and the department of peacekeeping operations.

"Clearly, I think the potential abuse could go into tens of millions of dollars," said Christopher Burnham, UN under-secretary-general for management and administration.

Asked about the sums involved, he told reporters Monday: "It could go higher than that, but we are in the middle of looking at 200 different reports of abuse."

With a new "whistle-blower protection policy" now in force, Burnham predicted that the number of cases under investigation could balloon over the next six months.

A preliminary investigation by the UN's Office of Internal Oversight Services (OIOS) has resulted in eight officials being placed on "special leave with pay" -- four from the department of management and four from the department of peacekeeping operations.

The highest ranking official on "special leave" is Andrew Toh, a national of Singapore and an assistant secretary-general in charge of UN's central support services.

"These measures are administrative, not disciplinary, and they fully respect the due process rights of the staff members concerned and do not presume any wrongdoing," Burnham said, pointing out that ongoing UN procurement activities have not been affected.

He said the investigations had raised "a number of serious allegations and concerns" about UN procurement practices.

"The design and maintenance of controls needed to ensure that UN procurement complied with financial rules and regulations were insufficient," said Burnham, a former official of the U.S. State Department. "Important controls were lacking while existing ones were often bypassed."

He complimented "the courageous men and women of the United Nations who have continued to come forward to report fraud." There was anecdotal evidence, he said, that more staffers are "blowing the whistle" but it is too soon to tell.

"We are doing all the right things to ensure that the global taxpayers money will be protected going forward, and we are ferreting out corruption and fraud where it existed and where it exists," he added.

While the United Nations is not making public the recent audit, he said, there was substantial evidence of abuse in procurement for peacekeeping operations leading to financial losses and significant inaccuracies in planning assumptions.

Since 1948, the United Nations has spent 41 billion dollars in its peacekeeping operations worldwide. With 15 peacekeeping operations currently in force, the total peacekeeping budget has reached over five billion dollars for 2005-2006, compared to the UN's regular biennial budget of over three billion dollars.

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 over the last two decades, waste and corruption have continued to increase correspondingly.

The current investigations are being conducted by the Procurement Fraud Task Force of the OIOS. The audit is being confined to five years of peacekeeping-related procurement, including major UN procurement contracts.

The 191-member General Assembly has already mandated the OIOS to conduct a wide-ranging investigation into UN peacekeeping operations, focusing specifically on supplies and services.

Besides the eight staffers on special leave, an additional four from the peacekeeping department were recalled from their assignments overseas. After being questioned, they have returned to their posts.

Briefing reporters, Burnham insisted that most UN staff were "completely innocent." The vast majority of men and women working in the procurement area are hardworking, honest and sincere, he said. And a good number of them have come forward with reports of fraud and abuse.

Last month, the United Nations announced a new "whistle-blower protection policy" aimed at encouraging staffers, contractors, consultants and even the public to help expose corruption in the world body.

The new policy assures whistleblowers there will be no retaliation for reporting misconduct and "for cooperating with duly authorized audits or investigations."

The protection policy came into effect on Jan. 1 pending the establishment of a UN Ethics Office. The proposed office has "broad support" within the General Assembly, but there has been an ongoing debate on staffing levels.

The UN's 64-billion-dollar oil for food program in Iraq -- aimed at easing the sufferings of Iraqis from economic sanctions -- has been singled out as a prime example of gross mismanagement by the UN Secretariat.

After 18 months of investigations, the former U.S. Federal Reserve Chairman Paul Volcker concluded that of the 4,758 companies in the program, over 2,260 companies and individuals paid kickbacks to former Iraqi President Saddam Hussein to win contracts -- mostly under the supervision of the UN Secretariat.

The Volcker inquiry found "illicit, unethical and corrupt" behavior in the tainted oil-for-food program, which was created in April 1995.