By Matthew Russell Lee, Exclusive series
UNITED NATIONS, April 16 -- Irregularities at the $50 billion UN Joint Staff Pension Fund, which Inner City Press has previously exclusively covered, for example here, have grown worse, according to whistleblower communications received by Inner City Press from multiple sources, and published on March 29.
Secretary General Ban Ki-moon's chief of staff scheduled a "Global Town Hall Meeting" for April 16 to "provide reassurance concerning the health of the Fund itself... in response to recent attention surrounding the UN Joint Staff Pension Fund."
Inner City Press began this series with issues concerning UNJSPF CEO Sergio Arvizú, then also RSG Carolyn Boykin (who should belated answer questions on April 16, UN Spokesman Stephane Dujarric answered Inner City Press.)
Because the UN has dodged or refused all or nearly all Press questions on this, including those raised at the UN noon briefing, here are a few more issues and questions on the investment side:
Source indicate Boykin brags, internally, that the IMD fund has reached an all-time high, citing an April 10th report. There, the biggest share is public equity, which is 64.4%. In the last column, the fund return 5.15%, the line below is the equity market, which return 5.21%. That isunder performing the market. They ask:
Who leaked the hedge fund investment strategy to CNBC?
Why has Ivan Pictet resigned after such a long service?
On the D2 recruitment, below: Why the JO was cancelled? Why did she write such a discriminatory JO for D2 (Order 50 of the Tribunal court). On Para 30, why the Tribunal court is investigating discrimination and abuse of power?
Why in just 6 months, does she have a tribunal case about discrimination against her?
Why has Ivan Pictet resigned after such a long service?
On the D2 recruitment, below: Why the JO was cancelled? Why did she write such a discriminatory JO for D2 (Order 50 of the Tribunal court). On Para 30, why the Tribunal court is investigating discrimination and abuse of power?
Why in just 6 months, does she have a tribunal case about discrimination against her?
When was the last time she actually managed money? The UN sources say that after Maryland, she was not hired by any fund manager and she was consulting not managing money; she only consulted the clients of the firm Bolten Partners but has not managed portfolio).
Did she reveal her Maryland issue to the interview committee? Can interview report be made public?
Did she reveal her Maryland issue to the interview committee? Can interview report be made public?
Here is from UNDT/NY/2015/021
"The Respondent has misinterpreted the subject-matter of the motion for interim relief and disregards, briefly in four paragraphs, the central issues in this case which are (1) whether it is discriminatory to require a candidate to be the holder of CFA certification in order to be eligible for consideration for the post and (2) whether the decision to include the contested educational requirement was ill-motivated so as to exclude specific candidates, including the Applicant, and whether it constituted an abuse of authority."
And there's this:
RSG Boykin moved all IT to the UN International Computing Center without due process. Sources tell Inner City Press that on December 8, 2014, she left seven IT staff in a room without windows. They say they were not allowed to leave the room, use a batroom without beeing accompanied nor use any phone or PDA. In that time she ordered the transfer of IT credential to the UNICC. The rationale was that the IMD email was leaked - but ICC already had access to IMD email prior to 8 December 8, 2014. Sources assume she planned all this when she met with Mr. John Simon, Diretor of ICC, late November 2014.
The RSG is kicking out Charles River trade order management system; multiple sources say her goal is to replace it with Bloomberg AIM without going thru a due process, an RFP. As a result, the contract with Bloomberg is incresed to over $2 million per year. There are other UN connections with Bloomberg.
The RSG is kicking out Charles River trade order management system; multiple sources say her goal is to replace it with Bloomberg AIM without going thru a due process, an RFP. As a result, the contract with Bloomberg is incresed to over $2 million per year. There are other UN connections with Bloomberg.
On the other side, there are questions publicly raised, to be answered, including of course
-Attempts by the fund CEO, Sergio Arvizú, to recruit a new CFO, subsequent found to be unsuitable for the post.
- A consultancy services contract worth $520,000, divided into two, so as to avoid scrutiny by the Headquarters Committee on Contracts, a committee that only reviews procurement requests above $500,000.
- Attempts by the CEO to approve return air tickets from Mexico to New York for four individuals with no relationship, contractual or otherwise, to the fund.
- Irregular modification of a vacancy announcement in order to favor a particular candidate to the post of D-1 Chief of Legal Services.
- Attempts by the CEO to give a short-term contract to a 90 year-old referee on his CV -- this person was said, on March 31, to be closer to 100 years old.
A failure to disclose a conflict of interest involving JP Morgan Chase was also alleged.
- A consultancy services contract worth $520,000, divided into two, so as to avoid scrutiny by the Headquarters Committee on Contracts, a committee that only reviews procurement requests above $500,000.
- Attempts by the CEO to approve return air tickets from Mexico to New York for four individuals with no relationship, contractual or otherwise, to the fund.
- Irregular modification of a vacancy announcement in order to favor a particular candidate to the post of D-1 Chief of Legal Services.
- Attempts by the CEO to give a short-term contract to a 90 year-old referee on his CV -- this person was said, on March 31, to be closer to 100 years old.
A failure to disclose a conflict of interest involving JP Morgan Chase was also alleged.
On April 13, Inner City Press asked Ban's spokesman:
Inner City Press: This has to do with what you put out or what was put out from Under-Secretary-General [Yukio] Takasu about the pension fund. Now I'm aware there's going to be some kind of town hall meeting about it. I guess I would just wait to see what happens at the town hall meeting, except that I notice that the statement had almost nothing do about the investment component, Ms. [Carol] Boykin and the representative of the Secretary-General on investments, and I wanted to ask, one, there's an OIOS [United Nations Office of Internal Oversight Services] report about procurement of an IT contractor called [inaudible -- it's Murex] that remains outstanding. There's the postponement of a D-2 position based on a finding of dispute tribunal. So is this town hall meeting intended to address all of these issues?
Spokesman Stephane Dujarric: I think the town hall meeting is intending to address the concerns that staff members either through staff representatives or individually have raised. I think it's a very normal reaction to the concern. Whenever people talk about their pensions, I think people… it's their future. And I think it's… it's only normal that the management, senior management of this Organization would address directly and all the questions. There will be… there are no issues that are off-topic during the town hall meeting. If people want to raise issues about investment issues, about staffing issues.
Inner City Press: Will Ms. Boykin be there and be able to answer question?
Spokesman Dujarric: I don't know personally. I would assume… strongly assume and based on my assumptions that the leadership of the Pension Fund, whether it's on the investment side, the liability side, will obviously be there and be able to answer questions. I think… again, it's best to address these things head on.
If that's true, about addressing things head one, why did the UN resist confirming when Inner City Press three times asked if Investment Committee chair Ivan Pictet had resigned?
Why did Ban's representative to the Pension Fund Carolyn Boykin never appear to answer questions as had been proffered?
Now there's talk of a shift into hedge funds, and irregularities in contracting for IT services, from Murex (criticized by the UN's own Office of Internal Oversight Services) prospectively to Bloomberg without a full procurement process. The way to "provide clarity" is to answer or at least try to answer questions when they are asked. We'll have more on this.
Inner City Press: This has to do with what you put out or what was put out from Under-Secretary-General [Yukio] Takasu about the pension fund. Now I'm aware there's going to be some kind of town hall meeting about it. I guess I would just wait to see what happens at the town hall meeting, except that I notice that the statement had almost nothing do about the investment component, Ms. [Carol] Boykin and the representative of the Secretary-General on investments, and I wanted to ask, one, there's an OIOS [United Nations Office of Internal Oversight Services] report about procurement of an IT contractor called [inaudible -- it's Murex] that remains outstanding. There's the postponement of a D-2 position based on a finding of dispute tribunal. So is this town hall meeting intended to address all of these issues?
Spokesman Stephane Dujarric: I think the town hall meeting is intending to address the concerns that staff members either through staff representatives or individually have raised. I think it's a very normal reaction to the concern. Whenever people talk about their pensions, I think people… it's their future. And I think it's… it's only normal that the management, senior management of this Organization would address directly and all the questions. There will be… there are no issues that are off-topic during the town hall meeting. If people want to raise issues about investment issues, about staffing issues.
Inner City Press: Will Ms. Boykin be there and be able to answer question?
Spokesman Dujarric: I don't know personally. I would assume… strongly assume and based on my assumptions that the leadership of the Pension Fund, whether it's on the investment side, the liability side, will obviously be there and be able to answer questions. I think… again, it's best to address these things head on.
If that's true, about addressing things head one, why did the UN resist confirming when Inner City Press three times asked if Investment Committee chair Ivan Pictet had resigned?
Why did Ban's representative to the Pension Fund Carolyn Boykin never appear to answer questions as had been proffered?
Now there's talk of a shift into hedge funds, and irregularities in contracting for IT services, from Murex (criticized by the UN's own Office of Internal Oversight Services) prospectively to Bloomberg without a full procurement process. The way to "provide clarity" is to answer or at least try to answer questions when they are asked. We'll have more on this.
On April 8, after Inner City Press three times asked the UN spokespeople to simply confirm that Ivan Pictet resigned as chair of the Fund's Investment Committee, lead spokesman Stephane Dujarric belated acknowledged it.UN's transcript.
Then on April 10, against belatedly, the UN issued a lengthy statement, which in fairness we publish here in full, while our series on the Pension Fund, now on its Investment Committee, continues:
In response to recent reports about the Joint Staff Pension Fund, Under-Secretary-General for Management Yukio Takasu has the following to say:
Various communications, including in the media, have unfortunately been circulated recently alleging fraud and irregularities at the United Nations Joint Staff Pension Fund (“UNJSPF” or “the Fund”). I would like to provide some factual information to clarify any misunderstandings and misrepresentations.
The UNJSPF enjoys a healthy funded status in excess of 90%, and we are committed to preserving the sanctity of the Fund.
The UNJSPF takes every precaution they can to prevent fraud. Staff who have any information of alleged wrongdoing are obliged to report those concerns to the United Nations Office of Internal Oversight Services (OIOS). All allegations of fraud, misconduct, or violation of applicable human resources or financial rules and regulations are, and will continue to be, taken seriously and fully considered.
OIOS has confirmed that they have reviewed the nature of the recent allegations that have been brought to their attention. OIOS has indicated that none of the allegations that have appeared in the press thus far constitute financial fraud. OIOS is collecting all information available on this situation, and will examine closely every allegation.
As required for any large pension fund, the UNJSPF has a very robust internal control framework, with several oversight bodies including, but not limited to, internal auditors (OIOS), external auditors, a Pension Board, an Audit Committee, an Asset Liability Monitoring Committee, an Enterprise-wide Risk Management Working Group, and Risk Management & Compliance staff.
The governance structure of UNJSPF also reflects a clear delineation of responsibilities. Reporting to the UNJSPF Board, the Chief Executive Officer, Mr. Arvizú, is responsible for the liability side of the Fund, primarily for administration and benefit payments. Management of the investments of the Fund is the responsibility of the Representative of the Secretary-General (“RSG”), Ms. Carol Boykin, who reports to the Secretary-General.
In order to ensure the effective operation of the Fund, the United Nations Pension Board has long recognized the requirements of the Fund to have staff with very specific and long-term expertise, owing to the complex pension design, financial management and global payroll, and that the Fund’s human resources management should be in line with its operational and investment needs. As such, since 2000, there has been a memorandum of understanding in place which stipulates that UN administrative procedures and directives do not automatically apply to the Fund staff, since the requirements of the Board take precedence.
The United Nations Pension Board, and the General Assembly, have requested that this existing memorandum of understanding be reviewed and updated. Consideration on the elements of a revised memorandum of understanding is ongoing and will involve the appropriate consultations with staff.
Any decisions on human resources policies or the financial rules governing the operations of the UNJSPF will be taken with a view to ensuring they are best suited to meet the operational and investment needs of the Fund.
We'll have more on this - watch this site.
From the UN's April 8 transcript:
Inner City Press: This has to do with the Pension Fund, as I alluded to. I asked Farhan, then I asked you, whether the head of the investment committee of this $50 billion fund has resigned. And I wanted to ask now, that I've heard that a memo has gone to the Fifth Committee to that effect.
Spokesman: Yes, it has… he did leave. He did resign. And if I'm not mistaken, he said that after, I think, almost 10 years of service, he felt it was time to move on. We're obviously very grateful for the time and effort Mr. Pictet put into his role.
Inner City Press: I've heard also that his letter of resignation actually makes some criticism. Is that a full summary?
Spokesman: No, I would… I would not agree with that assessment.
Inner City Press: What's the process for actually appointing a new Chairperson of this $50 billion fund? What's the Secretary-General's role?
Spokesman: I will find out.
Spokesman: Yes, it has… he did leave. He did resign. And if I'm not mistaken, he said that after, I think, almost 10 years of service, he felt it was time to move on. We're obviously very grateful for the time and effort Mr. Pictet put into his role.
Inner City Press: I've heard also that his letter of resignation actually makes some criticism. Is that a full summary?
Spokesman: No, I would… I would not agree with that assessment.
Inner City Press: What's the process for actually appointing a new Chairperson of this $50 billion fund? What's the Secretary-General's role?
Spokesman: I will find out.
Well, Inner City Press is multiply informed that RSG Carolyn Boykin has been proposing current IC member Linah Kelebogile Mohohlo, but that there are attendance issues.
Other IC members with questions: Simon Zheng of China, about Boykin's (lack of) knowledge of the RMB, and Achim Kassow of Germany. There are others, and we'll have more.
On March 30, Inner City Press asked UN deputy spokesperson Farhan Haq:
Inner City Press.. about alleged irregularities in the Pension Fund and a desire by the current Chief of the Pension Fund to change the rules so there's less outside review. Is the Secretariat aware of these concerns and how does the Secretariat think they should be resolved, and how would staff in New York be represented as to this $53 billion fund?
Deputy Spokesman Haq: As you know, the Secretariat in the form of the Secretary-General does not have control over the Pension Fund. It's not something that I can comment on. You'd have to take that up directly with the Pension Fund.
Deputy Spokesman Haq: As you know, the Secretariat in the form of the Secretary-General does not have control over the Pension Fund. It's not something that I can comment on. You'd have to take that up directly with the Pension Fund.
It seemed a strange or telling answer, given that there is a Representative of the Secretary General to the pension fund, Caro Boykin, on whom Inner City Press has previously reported, here.
More recently, as first reported here by Inner City Press, Boykin's management has been questioned by the UN Dispute Tribunal on March 30, 2015, here, in Singh vs UNSG (Ban Ki-moon):
"the Applicant’s request for management evaluation was deem
ed premature, and thus not receivable. However, the MEU made the following observations:
ed premature, and thus not receivable. However, the MEU made the following observations:
"Following communications with the UNJSPF, the MEU noted that the job opening for the Post was exceptionally approved by [OHRM] and later reviewed and approved by the Central Review Board. The MEU learned that the CFA exception was granted because the future incumbent will be in charge of managing all investments of the [IMD], which are valued at USD 53 billion."
So after learning more about the growing scandal in the UN Pension Fund, including through a staff meeting on March 31 that was itself controversial, Inner City Press on April 1 asked Haq again.
Haq now said he had spoken with Boykin who might -- might -- speak to the press. Inner City Press asked, yes or no, if Investment Committee chairman Ivan Pictet has quit. Haq did not answer.
There are $53 billion at stake here, and the Secretary General appoints the members of the Investment Committee. We'll have more on this.
The UN Pension Fund, which has resisted not only Press coverage but also accountability to its own pensioneers, is said to be poised to implement a major reduction in staff rights, according to a communication a whistleblower directed to Inner City Press on April 2, 2014 and which Inner City Press published on April 3, here.
Inner City Press immediately began investigating the complaint, including a draft Secretary General's Bulletin said to be pushed by Pension Fund CEO Sergio Arvizu Trevino. From April 3 through the UN noon briefing on April 14, Inner City Press asked Secretary General Ban Ki-moon's spokespeople three times for a response, including to staff unions' letters of protest.
Finally on April 14 came this response from Ban's spokesman:
Subject: Your question on the Joint Staff Pension Fund
From: UN Spokesperson - Do Not Reply [at] org
Date: Mon, Apr 14, 2014 at 4:21 PM
To: Matthew.Lee [at] innercitypress.com
Cc: Stephane Dujarric [at] org
From: UN Spokesperson - Do Not Reply [at] org
Date: Mon, Apr 14, 2014 at 4:21 PM
To: Matthew.Lee [at] innercitypress.com
Cc: Stephane Dujarric [at] org
The UN Joint Staff Pension Fund (UNJSPF) is not a Secretariat entity but composed of many member organizations. The matter of formalizing delegation of certain authorities in human resources matters to the CEO of the UNJSPF follows discussions at the Board and the General Assembly. The General Assembly requested a review of the policies governing the recruitment, promotion and retention of the staff of the Fund and measures to find suitable candidates for certain Fund positions that were difficult to fill. The review found that the currently applicable memorandum of understanding between the Office of Human Resources Management and the UNJSPF no longer fully meets the needs of the Fund as a inter-agency entity with a unique mandate.
This despite extensive protest from impacted staff, for example this received by Inner City Press:
"There is no way they accept 'No" for an answer to this mandate even though they say we are here to listen to your concerns, unless you stand united and firm with details clearly expressed and drafted sitting with the staff and their representatives. This divide and rule must stop and an inclusive conversation guaranteeing staff rights for grievances and eliminating this mess until the IPAS goes live and works as necessary. Sending you the complete documents we have received so far, thanks to those who contributed some documents attached here that are taken from the various communications and found at printers (special thanks to those high level people). Will send more as they become available.
And so there will be more - watch this site. Tellingly, UN Management has engaged in what many view ascensorship, click here for that.
In the interim the old Staff Union has gotten involved, stating that it is "confident that the draft is real and is currently under consideration" --
In case this draft is approved the CEO of the fund will be able to:
remove the UN contracts of over 230 pension fund staff;
appoint, promote and terminate pension board staff at will;
make exceptions to the staff rules; and much more.
Worryingly, it was the Pension Board that was supposed to formulate proposals on HR issues and present them to the General Assembly. We understand that the CEO is now pressuring the Secretary-General to sign this off before the Pension Board even meets, thus making it a fait accompli. This would contradict the wishes of the General Assembly.
The staff of the fund manage $45 billion - your $45 billion. They rightly work in a diligent and independent manner, which is essential - it's your retirement income at stake.
We are aware of strange management practices at the Pension Fund for a while. Staff members there work under one of two types of contracts: a regular UN contract or a contract limited to service in the Pension Fund. If this draft goes forward, the Fund's CEO will have absolute power over his staff and we will have very little oversight on the way our pension fund is managed.
The whistleblower's summary points at CEO Sergio Arvizu Trevino and his deputy Paul Dooley. Back in July 2013 when the UN Pension Fund was poised to designate a new deputy director, sources told Inner City Press that first among the three finalists was an individual previously recommended for discipline by the Office of Internal Oversight Service, Paul Dooley.
Inner City Press, contacted by whistleblowers inside the Pension Fund, previously dug into a lack of accountability there. It obtained and reported on OIOS' "Investigation of conflict of interest, favoritism and mismanagement at the UN Joint Staff Pension Fund" describing how through the Pension Fund's Paul Dooley, millions of dollars in contacts were given to a company called Sprig, Ltd, run by Gerald Bodell, who was previously Dooley's supervisor at Guardian Mortgage Corporation.
Recommendations 1 and 2 of the OIOS investigative report directed that "appropriate action be taken” regarding Dooley as well as Dulcie Bull.
Previous chief Bernard G. Cocheme refused to implement the recommendation for discipline. Farhan Haq, then as now a UN spokesperson, confirmed to Inner City PressCocheme's decision not to discipline:
Subj: Your question on OIOS and the Pension Fund
From: Farhan Haq [at] un.org
To: Inner City Press
In March 2006, the OIOS completed an investigation into allegations of possible conflict of interest, favoritism and mismanagement at the United Nations Joint Staff Pension Fund. Based upon the evidence adduced, OIOS concluded that several staff members - including two Senior UNJSPF staff - have acted improperly in connection to contracts for information technology services awarded to a consultant retained by UNJSPF.
From: Farhan Haq [at] un.org
To: Inner City Press
In March 2006, the OIOS completed an investigation into allegations of possible conflict of interest, favoritism and mismanagement at the United Nations Joint Staff Pension Fund. Based upon the evidence adduced, OIOS concluded that several staff members - including two Senior UNJSPF staff - have acted improperly in connection to contracts for information technology services awarded to a consultant retained by UNJSPF.
OIOS issued several recommendations in this case, including that UNJSPF management take appropriate action against its two staff. The Chief Executive Officer of UNJSPF informed OIOS that he disagrees with the findings and recommendations of the report of investigation - as regards the actions of his staff - and advised that he "intends to take no action" with regard to them. OIOS advised him that pursuant to its mandate, it will report his response to the General Assembly.
That was one thing. But to now promote the individual to deputy chief? As one Pension Fund source put it to Inner City Press, there is less and less accountability in the UN, the more and more they talk about it elsewhere.
Back then, the UN fought back against Inner City Press' reports by a spurious Security complaint how Inner City Press went to the Pension Fund to cover a meeting. This was repeated last year when Inner City Press covered meetings of Herve Ladsous' Senior Advisory Group on Peacekeeping Operations including a Sri Lankan military figure depicted in the UN's own reports as engaged in war crimes.
In 2013, the UN threatened to suspend or withdraw Inner City Press' accreditation for merely hanging a sign of the new Free UN Coalition for Access, which it co-founded to oppose the earlier type of attacks, against any journalist.Labor rights, free press without favoritism or censorship - what is Ban's UN coming to? Watch this site.
