U.N. sees failings in probe of graft

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NEW YORK -- U.N. officials acknowledge their internal investigation failed to produce evidence against a U.N. procurement officer who was convicted of taking kickbacks in federal court last week, and say U.N. oversight procedures still must be improved.

Former Commodity Procurement Section chief Sanjaya Bahel was found guilty on Thursday of steering $100 million worth of communications and other contracts to a Miami businessman in exchange for discounted real estate and cash.

Bahel, a 57-year-old Indian national, faces up to 30 years in prison. He maintained his innocence to the end, pointing to internal U.N. investigations that appeared to exonerate him.

"This was a witch hunt," Bahel attorney Richard Herman told the court. "This is an effort to clean up the bad public relations the United Nations suffered in the past few years."

U.N. officials deny that either of two internal investigations exonerated Bahel but acknowledged that their first probe was not "thorough enough."

A second investigation by a newly created procurement task force produced an 86-page dossier on complex transactions involving at least two Indian-owned companies and was forwarded to the federal prosecutor's office for the Southern District of New York.

Inga-Britt Ahlenius, head of the U.N. watchdog office, was hard-pressed to explain why the first investigation did not point to any wrongdoing in Bahel's unit.

But she noted that her department, the Office of Internal Oversight Services, has established a unit devoted to procurement and is reviewing 140 contracts with a total value of $1 billion -- representing half the value of all U.N. contracts.

"The recent events -- and also the number of cases which have required investigation -- really shows it's difficult to place any reliance on internal controls in the organization when it comes to procurement," Miss Ahlenius told reporters late last week. "There is a need for a major overhaul in the procurement system of the United Nations."

Bahel is the second procurement official to be convicted in federal court in the U.S.