UN Clears Self of Hemorrhaging Cash in North Korea
by Richardson ~ June 3rd, 2008. Filed under: Economics, Law, UN.The UN’s audit of the UNDP – which last June the internal audit was noted as being somewhat of a fiasco – has, surprise, surprise, cleared the UNDP and itself of any wrongdoing in the matter:
The case has in part revolved around accusations that some of the hard currency UNDP spent in North Korea ended up in the hands of Pyongyang-linked entities abroad that Washington has said are suspected of money laundering and arms dealing.
But in its 353-page report, the three-person panel said the UNDP had no way of knowing what use North Korea would make of the money it spent there.
The panel further dismissed as “without merit” claims by a former UNDP contract employee in North Korea that he had been victimized by the United Nations for blowing the whistle on alleged abuses by the agency.
The United Nations appointed the panel — former Hungarian prime minister Miklos Nemeth, former World Bank official Chander Vasudev of India and former U.S. government and U.N. official Mary Ann Wyrsch — last September.
[…]
[UNDP head Kemal Dervis] called some of the allegations “fantastic and irresponsible,” making clear he was referring mainly to press reports. There was no immediate comment from U.S. officials.
The report can be downloaded here.
After links to accounts used for weapons sales, perhaps punishing the whistle-blower, and other known details of the case, forgive me for being skeptical of the UN basically clearing itself of wrongdoing. Probably a look at the panel is in order.
June 3rd, 2008 at 8:41 am
[…] Here is the report (hat tip DPRK Studies) […]
June 3rd, 2008 at 9:21 am
While I think the UNDP did take great pains to ensure that the panel did indeed conduct an unusually external and transparent audit, I’m not certain that the findings really “clear” the UNDP program in the DPRK.
Kemil Davis’ OWN WORDS:
http://content.undp.org/go/newsroom/2008/june/kemal-dervis-statement-on-nemeth-report.en
*Regarding action and inaction by UNDP officials, the Panel finds that representatives of the Country Office and UNDP Headquarters knew of concerns about counterfeit currency in the DPRK. At a minimum, warning signs existed that required a more timely and effective response. There is no evidence that anyone acted in bad faith or in a fraudulent or deceptive manner. Instead, the Panel finds that there was a clear lack of attentiveness at the Country Office and Headquarters levels and that communications between the Country Office and UNDP Headquarters were inadequate.
*The Panel notes that prior to 2002, UNDP was using US dollars as the foreign currency for its DPRK operations. The evidence indicates that circulation of counterfeit US dollars was widely prevalent in the DPRK. After 2002, UNDP-DPRK’s use of US dollars ceased, after which UNDP started using Euros as the foreign currency for disbursements. The possibility of UNDP disbursement procedures being misused for circulation of counterfeit dollars was thus minimized.
June 3rd, 2008 at 5:32 pm
An inability to conduct any sort of meaningful investigation in North Korea is also a major impediment; they cannot have a clear idea of how much of the funds were used.