Friday, March 13, 2015
Fear of Car Bomb on FDR Off-Ramp Leads to Talk of UN Cafeteria Closing, May 2, Some Say
Thursday, August 9, 2012
As Sudans Disagree on Abyei, France Talks Legislature, US Half on Syria
Friday, December 30, 2011
At UN, US $100 M Savings Is Offset by Tax Equalization Fund, FOIA Stalled 10 Months
By Matthew Russell Lee
UNITED NATIONS, December 29 -- Five days after a $5.153 billion two-year budget was adopted by the UN General Assembly, the US Mission to the UN on December 29 put out a "fact sheet" declaring that "when factoring in the difference between the likely budget level based on historic patterns and the budget approved last week, this budget represents a savings to American taxpayers of as much as $100 million."
Even this inflated savings figure, however, is entirely offset by $100 million that had been due to the US Treasury from the UN, but that the UN was stealthly allowed to keep early this year, the so-called "Tax Equalization Fund." Click here for that story.
Faced with stonewalling about the legality of this equalization, and even about how the funds would be used, Inner City Press on February 11, 2011 filed a Freedom of Information Act request with the US State Department, for
"copies of any and all letters or emails or other records between or among Under-Secretary of State Patrick Kennedy and/or his subordinates and United Nations Secretary-General Ban Ki Moon and/or his subordinates concerning balances due to the United States from the Tax Equalization Fund, including the request by the UN (and the subsequent concurrence by the Department of State) for the so-called 'repurposing' of US-owned Tax Equalization Fund credits for security purposes, including as related to the UN Capital Master Plan. I am covering this TEF issues at the UN, asked Ambassador Rice about it this week - this is for news gathering purposes and is entitled to fee waiver, as receive from Federal Reserve and other gov't agencies."
The State Department confirmed receipt and said that "the process for completing your request will now begin" --
Subject: FOIA Request Letter
From: Freedom of Information Act [at] state.gov
Date: Fri, Feb 11, 2011 at 10:42 AM
To: matthew.lee[at] innercitypress.com
Thank you for filing your FOIA request online on 2/11/2011. The process for completing your request will now begin. Here is a review of your request: [for] copies of any and all letters or emails or other records between or among Under-Secretary of State Patrick Kennedy and/or his subordinates and United Nations Secretary-General Ban Ki Moon and/or his subordinates concerning balances due to the United States from the Tax Equalization Fund [etc]
Despite US Ambassador for Management and Reform Joe Torsella's repeated statements about transparency, and contrary to the time lines applicable to FOIA, ten and a half months later the State Department has yet to provide a single documents responsive to the FOIA request they acknowledged receiving on February 11, 2011.
Torsella at the Fifth Committee's first meeting on the budget spoke eloquently and even live tweeted about making the process visible to taxpayers around the world. But in the final 20 hours of the budget process, when deals were cut and votes taken, Torsella stopped any tweeting, and has not responded to tweeted questions since.
Rather than being described by him or the US Mission, Torsella's backroom moves, such as at the eleventh hour proposing increased flexibility for Secretary General Ban Ki-moon whom a number of budget committee diplomats referred to as a "tool of the US" on this issue, were only made public by other delegations.
Beyond the one page "deal sheet" which a non-US delegation provided to Inner City Press on the evening of December 23, Inner City Press has now exclusively obtained a copy of a spreadsheet from the UN budget negotiations, reflecting that the US was not the one proposing the largest cuts. We will have more on this -- watch this site.
Saturday, May 21, 2011
As US Doesn't Fund Slavery Memorial at UN, Tax Equalization Fund $100M Q-ed
By Matthew Russell Lee
UNITED NATIONS, March 25 -- To build at the UN a memorial to the Victims of Slavery and the Transatlantic Slave Trade, a committee is seeking to raise $4.5 million. So far the big donors are India with $260,000 and Australia with $100,000.
What about the United States, Inner City Press asked Ambassador Raymond Wolfe of Jamaica on Friday.
Ambassador Wolfe said he discussed the matter with US Permanent Representative Susan Rice but that she said the US Mission does not have money to make such contributions, it would have to go through Congress.
Inner City Press pointed out to Ambassador Wolfe that the US Mission and State Department recently allowed the UN to keep $100 million in US Tax Equalization Funds without any Congressional approval. Wolfe indicated he may look into that route.
Later in the Delegates' Entrance to the General Assembly, Wolfe and the Ambassador of Cameroon noshed on a sort of three bean salad and other Cameroonian specialties like dried bananas -- Inner City Press was told there's exploration of packaging for export. And so it goes at the UN.
Saturday, May 7, 2011
UN Corruption Scandal in ERP Extends from Hiring & PWC to Capital Master Plan
By Matthew Russell Lee, Exclusive upload
UNITED NATIONS, February 28, followed up March 5 -- A year ago in March 2010 Inner City Press asked the UN and wrote about corruption in the UN's Enterprise Resource Planning or UMOJA program, with the UN dodging questions about detailed hiring irregularities.
On March 9, 2010, Inner City Press asked
Inner City Press: Umoja, which is the ERP or Enterprise Resource Planning, Inner City Press received these documents that seemed to, that indicate that the head of the program, Mr. Paul van Essche, hired a colleague or friend of his, John Solem, who doctored his PHP, Personal History, to delete all references to Mr. van Essche having been previously his supervisor. These are documents. What I want to know is whether you can confirm that OIOS [Office of Internal Oversight Services] was informed of this, if there is an investigation of this and when it will be finished, and what the penalties are in the UN system for altering documents in order to be able to hire friends and cronies?
Spokesperson: Let me find out.
The UN's own Office of Internal Oversight Services investigated the hiring violations and confirmed them, also finding procurement irregularities in contracts to PriceWaterhouseCoopers.
When a short article on this appeared, Inner City Press asked Secretary General Ban Ki-moon's spokesman Martin Nesirky for the UN's response. He said that one would be forthcoming, then later declined to comment.
Now Inner City Press has obtained and is publishing the OIOS report, which is worse than previously reported. PWC was not the low bidder; the UN's Department of Management won't even commit to adopting rule about soliciting and taking Best and Final Offers.
The irregularities extend to the UN Capital Master Plan, into which an additional $100 million in US Tax Equalization Funds are being poured, so far with no paperwork.
Not addressed in the report is that UMOJA chief Paul von Essche took New York Knicks basketball tickets from PWC just when they were getting the contracts despite not being the low bidder.
While the OIOS report leaves names out, here's an insider's account and exegesis of the OIOS report:
Procurement Issues
1. PWC was once a major player in ERP system integration business but sold that practice to IBM in October 2002 (http://www-03.ibm.com/press/us/en/pressrelease/491.wss). This was after the Enron-Arthur Andersen scandal and there was a call to separate audit and consulting practices. When PWC bid for the UN contract in 2008, it was re-entering the integration market.
2. The UN uses two-envelops bidding process (technical and financial), which is normal in public sector. The panel for the technical evaluation, which was set up by the Project Director, was deemed as unfit. The high ratings of the panel gave PWC an advantage even though as a new player it was not the lowest cost bidder, as typical of new entrants.
3. There was no BAFO or cost for deliverables - meaning there is no true cost or time limit for PwC services. When the UN failed to reach a contract with SAP, PwC continued to report to work even though there was no application to work with. The negotiation with SAP ultimately lasted for 16 months. During that time, PwC continued to work
4. Each contract in the UN has an NTE (not-to-exceed) amount which serves as a ceiling for amount to be expended. To exceed that amount, the Headquarters Committee on Contract must approve. Mr. van Essche exceeded the amount with PwC without HCC approval. (Audit Report)
5. In submitting its bid, PwC used profiles of people who did not show up. (Audit Report)
6. A typical ERP implementation requires a single system integrator that stays with the project till conclusion. The project director changed broke the integration services into (Design and Build). That piece-meal approach that favored PwC, as a new entrant, which quite simply did not have the resources for a life cycle integration services at the time of bidding.
7. To curb any unfair advantage PwC may have for the next phase (Build), Procurement Division proposed that PwC does not participate in the next phase. But again, Mr. van Essche persuaded the UN that PwC would install a firewall to ensure that its staff preparing for the next bid have not worked on the project or information about the project aren’t transferred from current project staff to those preparing proposals for the next bid. Unfortunately, there are no mechanism to ensure the integrity of that firewall. Is the UN monitoring PwC emails or movement of its people?
8. A separate contract for the provision of strategic services was entered into with Deloitte. However, many of the deliverables agreed to under this contract were assigned to PwC by the Project Director. The lack of BAFO, conversely the open-ended service contract under which the Project Director can assign anything to PwC makes all of this possible. All PwC has to do is submit attendance and other administrative charges and the UN pays. Some of the deliverables assigned to PwC are project charter, business case, project plan and strategy.
9. After winning the contract, PwC provided free office accommodation to the project for over three months. When questions were raised about the practice, the Project Director altered an invoice for services (man-day) in order to show that accommodation was actually paid for.
Hiring Corruption
1. Mr. Jon Solem and Mr. van Essche have been friends for more than 15 years. In fact, the VA was specifically tailored to Mr. Solem’s expertise. The title was changed; Mr. Solem changed his resume as well removing any mention of Mr. van Essche as his previous supervisor and the fact that he was a P4, two levels below the level of the new post he was applying to. It should be noted that Mr. van Essche chaired the two panels the interviewed Mr. Solem for the P5 and D1 posts and was fully of aware of the changes of Mr. Solem’s resume.
2. The other D1 VA was used to hire Ms. Ann Kerney, another friend of Mr. Paul van Essche.
3. Some of the friends he brought in include: Mr. Robert Holden as a P5 and without any selection. Under a special arrangement made solely for Mr. Holden, he works two weeks in NYC and two weeks in Geneva because his family refused to move to NYC. Mr. Holden and Mr. van Essche have been friends for 17 years now dating back to Cambridge Technology where they worked in early 90s. Mr. Holden did not participate, even remotely, in preparation of the business case for the project.
4. Since the audit, the practice has continued. Mr. van Essche has also brought in two more friends – Ms. Patricia Dann as a P5 and Mr. Ronald DeGroot (a naturalized Canadian of South African descent) as a P5 as well. This was based on temporary VAs. Each of these VAs were specifically tailored to suit these external candidates. Mr. deGroot is also listed on Paul’s best friend Jon’s PHP as a reference.
5. Mr. van Essche has also sent resumes of friends for recruitment by consulting companies he has hired to work for the project. Two of such candidates are Brad Manila and Hugh Jetha. These friends were hired by PWC and another was hired by Deloitte. By recruiting them through the consulting companies, they can maximize their renumeration such as paid travel and hotel as well as a hefty $175 per hour. Brad and Hugh reside in Florida and commute weekly to NYC.
6. It is true that there were no background checks done on Mr. van Essche hiring. There was an anonymous letter claiming that he had inflated his background. Including claims that he owned a company called Left Brain when the company was founded by one Richard King. When auditors requested a record of the background checks, they were informed that he got lost while offices were being relocated as a result of CMP.
7. The audit alleges the hired persons were qualified based on a review of their PHP but that is because the VA/TVAs were specifically designed for these people.
Now what will the UN do? The spokesperson's office has so far refused to comment. Angela Kane, who applied for and it's said was initially give post at the top of the UN in Geneva, now won't get that post, which is being given an Italian spokesperson says to Carlo Trezza. Inner City Press has repeatedly asked that Ms. Kane belatedly give a briefing and take questions but this hasn't happened. Watch this site.
Saturday, March 5, 2011
As UN Refuses to Account for $100 M, Ban Ki-Moon Doggle Alleged
By Matthew Russell Lee
UNITED NATIONS, February 10, 1pm -- On the $100 million of US Tax Equalization Funds that are being “re-purposed” for use at the UN, Secretary General Ban Ki-moon's spokesman Martin Nesirky repeatedly told Inner City Press this week to “ask the US State Department.”
While Inner City Press did ask US Ambassador Susan Rice, it seemed strange for the UN to refuse to provide information about its own plans and use of $100 million.
On February 10, Inner City Press asked Nesirky about a statement by US Under Secretary of State for Management Patrick Kennedy, that “In this case the United Nations notified the State Department that it intended to use [TEF funds] for security enhancement.”
Inner City Press asked Nesirky who in the UN told the State Department that the UN intended to repurpose the $100 million in US funds: was it Capital Master Plan director Michael Adlerstein? Department of Management chief Angela Kane? Or Secretary General Ban Ki-moon himself? Nesirky would not answer.
Inner City Press asked if the $100 million will be paid to the UN selected contractor Skanska, recently charged in New York City with defrauding minority sub-contractor rules and involved in South America in what is called the Skanska Scandal. Nesirky would not answer.
Given that the Capital Master Plan is ostensibly subject to UN General Assembly oversight, with reports that purport to disclose cost overruns, Inner City Press asked if this $100 million is anywhere in the UN budget documents. Nesirky would not say.
Cutting off the questions, he said that this should be dealt with “off line” - that is, not in the press briefings. But Inner City Press has submitted a number of written questions to Nesirky's office that have not been answered.
Beyond the above, there is unclarity about the TEF. Inner City Press on February 9 asked in writing, with no acknowledgment much less answer:
What are the sources of funds which are deposited into the TEF? Isn't the TEF funded only through the Staff Assessment? You seem to be saying that the TEF is funded through the Staff Assessment AS WELL AS through "reimbursements" from the United States. Please provide a balance sheet of the TEF which shows the deposits made into it as well as the disbursements made from it for 2009 and 2010.
You answered that the "net balance of $179 million" was "due to the United States" from the TEF as of 31 December 2009. What was the net balance due to the United States from the TEF as of 31 December 2010, and what is the net balance due to the United States as of today, 9 February 2011?
You stated that "The US levies taxes on its nationals in respect of their UN earnings, and reimburses the UN for the same." Are you saying that the US makes payments to the UN which are deposited into the TEF, and that these payments are equal to the amount it receives in taxes from its nationals who work for the UN?
Regulation 4.12 of the UN Financial Regulations states that --
“In accordance with regulation 3.2, any balance on a Member State’s tax equalization account after the obligations referred to in regulation 4.11 have been satisfied shall be credited against the assessed contributions due from that Member State the following year.”
Were the balances from 2009 credited toward the US' assessment for 2010, as required by UN Financial Regulation 4.12? If not, then why? Was the UN not following its own financial regulations when it allowed the "balances due" to the US to reach $179 million as of the end of 2009? Please explain.
None of these questions have been answered. One problem here is that by refusing to state which UN officials notified the US State Department about the re-purposing of $100 million, responsibility must go to the top. And when Ban said that 99% of his officials make public financial disclosure and Inner City Press showed this is untrue, Nesirky said it was all a metaphor. Watch this site.
At UN, Re-Purposing of US $100 M Defended by Susan Rice, Noone Else Paid
By Matthew Russell Lee
UNITED NATIONS, February 9 -- When US Ambassador Susan Rice came to the UN Security Council stakeout late Wednesday morning, she was prepared to answer questions about the Tax Equalization Fund, some of which Inner City Press submitted to the US Mission Tuesday morning.
In the House of Representatives a proposal is being considered to get the $179 million owed to the US applied to future UN dues. At some date still undisclosed, some US State Department official told the UN it could keep $100 million for security upgrades in the Capital Master Plan renovation, beyond the CMP security elements already approved by the General Assembly, for which the US pays 22%.
Inner City Press asked Ambassador Rice who had approved this, and if any other country would be contributing toward the $100 million in additional security.
Ambassador Rice said that the Obama Administration opposes the House legislation. She cited Republican Congressman Peter King of Long Island as supporting this position. Her answer implied that no other country is contributing to the $100 million -- she spoke only about $79 million of the $179 million being put toward UN dues. She did not say who had approved the $100 million.
Inner City Press began asked what Ambassador Rice would say to those who now consider the $179 million, or at least $78 million of it, to be a slush fund -- Ambassador Rice asked, “Slush fund? There is no slush fund,” and her spokesman moved on to another questioner. Transcript below.
Minutes later at the UN noon briefing, Inner City Press asked UN spokesman Martin Nesirky who the UN had spoken to within the US government to conclude that these $100 million could be spent, and if it had ever been approved or presented to the UN General Assembly.
Nesirky again said, ask the State Department -- we have -- and said he would look into whether there are other Capital Master Plan related funds that have not been disclosed or voted on by the General Assembly.
When asked to explain why the $100 million was so urgent it could not go through regular budgeting (and disclosure) procedures, Nesirky said to ask the State Department.
Earlier, Inner City Press had asked Nesirky's office
Ultimately, who within the Secretariat is responsible for spending this money? DM? DSS?
Has the General Assembly given its approval to this project? Is there a mandate from the GA for this activity?
How was the referenced money “repurposed”? Did the US Mission or State Department indicate how it could be repurposed? How? What other countries have allowed extra budgetary money to be similarly repurposed and how much?
Answers will be reported when they are received. Watch this site.
From the US Mission to the UN's transcript:
Inner City Press: On Sudan, what do you make of this fighting in Malakal? The army, there are several dozens of people who have been killed of late, what does the US think of that? And I wanted to ask, on the Tax Equalization Fund—there’s a dispute in the House about this $100 million that the State Department has told the UN it can use for security improvements. Who approved that at the State Department and are other countries going to be contributing to that, or is the US paying the whole $100 million with no offset on the CMP payments?
Ambassador Rice: Well, let me start with Malakal. Obviously we’re very concerned about the violence in Malakal and along that border area. This is a function, as you know, of the need for these units that have been joint to now separate, and it is of concern that lives have been lost and violence has occurred, and it underscores the need for this process of disintegrating the joint units to be done carefully and with some supervision.
Let me turn now to the Tax Equalization Fund, and the application of these credits. The legislation that is pending in the House today is a piece of legislation the administration strongly opposes. And we do so because it was the City of New York that underscored the vital importance to US national security to enhance security—physical security—in this structure, above and beyond what was originally contemplated during the Capital Master Plan. We have thousands of New Yorkers who pass through this building and under this building every day. We have school children, we have members of the public, we have the President of the United States, come in this building on a regular basis. And the City of New York and the State Department and the administration feel that it’s in our national interests and in the interests of the people of New York that steps be taken swiftly to upgrade the physical security of this building. And that is what we have done, in coordination with the United Nations. That is also why Representative Peter King—a New Yorker—who is chairman of the Homeland Security Committee in the House, said very plainly yesterday that this is a crucial commitment that we’ve made, one that should be honored, and he opposes this legislation because it unwisely would make that impossible.
Let me just say also, Matt, we share, however, the spirit in which the legislation is offered, which is to reduce the deficit and to address the need for spending reductions. But the other portion of those credits—the $79 million—will do just that, because we intend to apply those to assessments that we would otherwise have to request resources from Congress to pay. So this is a way of ensuring that we are utilizing taxpayer dollars wisely.
Inner City Press: So it’s kind of a slush fund, there’s no approval?
Ambassador Rice: Slush fund? No, there’s no slush fund.