U.S. probe targets U.N. department

NEW YORK -- The United Nations confirmed yesterday the U.S. Attorney's Office is investigating suspected wrongdoing in the office that handles procurement for U.N. peacekeeping operations.

In a further blow to the troubled peacekeeping department, a report by the Government Accountability Office (GAO) to be delivered to Congress today describes the procurement office as understaffed, poorly trained and badly lacking the oversight that would uncover corruption, fraud and waste.

Eight senior staff members were suspended with pay earlier this year, after an inquiry by the U.N. inspector general's office uncovered lax management and possible corruption.

Each will be reinstated or disciplined after a U.N. task force investigates nearly 500 procurement-related tips.

"The United Nations currently has an aggressive internal investigation into all aspects of the U.N. global procurement operations," said Undersecretary General for Management Christopher B. Burnham.

"There is also an ongoing investigation by the [U.S. Attorney for the] Southern District [of New York] into the procurement office, and the United Nations is cooperating fully."

The officials involved likely have diplomatic immunity, but Mr. Burnham said U.N. Secretary-General Kofi Annan would lift that protection if authorities request it.

Reports by the GAO will be presented today to the House International Relations Committee, where the United Nations is likely to draw sharp criticism from lawmakers who are exasperated by the Iraq oil-for-food scandal and frustrated by the slow pace of management reforms.

The United States last year contributed about $8 billion to the U.N. regular and peacekeeping budgets, and the Bush administration and lawmakers are intent on improving the international organization's accountability.

"Brazen corruption in procurement shocks the conscience of everyone paying attention," said Rep. Henry J. Hyde, Illinois Republican and chairman of the House International Relations Committee. "The January release of a [U.N. Office of Internal Oversight] peacekeeping procurement report illustrates that corruption has risen to crisis levels."

The 56-page review by the GAO finds deep flaws in the management, coordination, and oversight in the procurement office that spent about $1.6 billion last year on everything from trash disposal in the Balkans to fresh food rations in Sudan to helicopters and cargo planes in the Democratic Republic of the Congo.

The research was conducted over a 10-month period with U.N. assistance.

The GAO audit found key procurement departments understaffed. Although eight missions have been added in seven years and the peacekeeping budget has tripled, the procurement staff and related oversight bodies remained stable.

"U.N. resources are unnecessarily vulnerable to mismanagement, waste, fraud and abuse," the GAO report says, "because the procurement process is improperly managed; has not committed to maintaining a professional, trained work force; and has failed to adopt a full range of ethical guidelines."

An audit by Deloitte Consulting late last year also revealed shortcomings in peacekeeping procurement. Some of the deficiencies were identified as far back as 1992, when Mr. Annan ran the peacekeeping department.

The Bush administration lately has been pressing for reforms in the procurement and management divisions, but according to the GAO report, its efforts are long-delayed.

The U.S. Mission to the United Nations was without an ambassador-level officer for administration and management for 13 months, until Mark Wallace arrived in March.

The GAO auditors said that left meetings unstaffed, or attended by diplomats of a lower rank who lack "impact and influence."

"This key vacancy represents a missed opportunity for the United States in the formation of the U.N. management reform agenda agreed upon at the World Summit in 2005," the GAO report says.

The report recommends several reforms, including stronger oversight of the field, a database with contractors' performance histories and better mechanisms for vendors to report the irregularities that might indicate patterns of bid-rigging or influence.

There are 270 U.N. procurement officers spread over 19 far-flung peacekeeping missions, many of those in conflict areas with limited local resources.