Hampered by corruption, U.N. reform remains far off

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The United Nations has lost hundreds of millions of dollars from corrupt practices and is years away from reform, the U.S. comptroller-general told a House committee yesterday.

U.N. "reform has thus far been slow and uneven," while the institution's "funds are vulnerable to fraud, waste and abuse," said Comptroller David M. Walker, testifying a day after the United Nations confirmed that its procurement office for peacekeeping operations was being investigated by the U.S. Attorney's Office.

Mr. Walker presented a Government Accountability Office (GAO) study that said management and oversight of procurement for U.N. peacekeeping operations is weak, especially the U.N. Office of Internal Oversight Services (OIOS), where the ability to investigate "high-risk areas" is compromised by a lack of budgetary independence.

The United States contributes 22 percent to 25 percent of the United Nations' annual $3.8 billion budget, Mr. Walker told the House International Relations Committee, giving it "incentive to see that corruption is minimized."

Stephane Dujarric, spokesman for U.N. Secretary-General Kofi Annan, stressed that reform "is an ongoing process."

"The reports echo a lot of the findings of our own reviews," Mr. Dujarric said.

"In terms of procurement, there were weak internal controls that led to the possibility of waste and maybe even fraud. That is being addressed by the department of management to see how they strengthen procurement service."

Earlier this year, eight senior U.N. staff members were suspended with pay after an inquiry by the U.N. inspector general's office uncovered lax management and possible corruption. A U.N. task force is investigating.

During yesterday's hearing, committee Chairman Henry J. Hyde, Illinois Republican, repeated his call for the U.S. to withhold its financial contributions to the United Nations until reform is achieved.

"There will be no reform until funding is withheld from the United Nations," said Mr. Hyde, who apologized to the witnesses for the sparse attendance at the hearing. "Waiting for the United Nations to reform itself is a fool's errand."

Mr. Walker said that there are "pros and cons" to holding back funding, but that ultimately, it is more important to establish the necessary tools to allow the oversight office to effectively do its job.

"Is the U.N. going to do what is has to or is it going to do what is right?" Mr. Walker said.

Although the GAO study prompted Mr. Walker's appearance, the committee hearing covered a broad range of U.N.-related topics. Democrat Adam B. Schiff of California raised protocol questions about prosecuting people who steal from the United Nations.

Mr. Walker confirmed that only one U.N. official so far had lost diplomatic immunity in connection to abuse of the U.N. oil-for-food program.

"When we ask questions, we get very, very poor answers," New Jersey Republican Christopher H. Smith said of the U.S. pressure for agency reform.

The GAO study recommends that the U.S. secretary of state and the U.S. ambassador to the United Nations "work with the member states to support: (1) budgetary independence for the OIOS; (2) measures for OIOS to more closely adhere to international standards; and (3) improvements to U.N. procurement internal controls and processes."

The study said the State Department and oversight office generally agreed on the overall findings and recommendations, but that the United Nations did not provide written comments on its peacekeeping procurement operation, which has a $1.6 billion budget.

The oversight office was created in 1994 to assist the U.N. secretary-general with the monitoring of U.N. resources and staff.

• Betsy Pisik contributed to this report.