- The Washington Times - Friday, January 19, 2007

NEW YORK — The U.N. Development Program (UNDP), which is under fire for sending millions of dollars to North Korea that it is unable to monitor, yesterday announced new operating procedures in an attempt to stave off opposition from the United States.

The UNDP said it will no longer pay North Korean suppliers and employees in hard currency after March 1, and will no longer allow the North Korean government to hire its in-country staff.

It also said it will put into place improved monitoring and auditing of funds.

The changes were prompted after Washington demanded a full audit of UNDP operations in North Korea, which is subject to U.S. economic sanctions for making nuclear weapons, money laundering and purported acts of terrorism.

The UNDP in North Korea “has for years operated in blatant violation of U.N. rules, served as a steady and large source of hard currency and other resources for the [North Korean] government with minimal or no assurance that UNDP funds and resources are utilized for legitimate development activities,” wrote Mark Wallace, a management and budget analyst at the U.S. Mission to the United Nations, in a recent letter to UNDP Administrator Kemal Dervis.

Washington fears some of the estimated tens of millions of dollars in the program that were exchanged through the country’s central bank have been siphoned off by the regime to help make atomic bombs.

Ad Melkert, the UNDP associate administrator, told reporters yesterday that he had no assurance that UNDP funds had not been diverted by the regime into it’s nuclear program.

But he urged reporters “not to put words in my mouth.”

Mr. Melkert was unable to say exactly how much money had been spent in recent years by the UNDP and other U.N. agencies in the hermit country, which allows few foreigners to enter.

In the past two years, however, he said the UNDP had spent between $4 million and $6 million, less than the $22 million that had been budgeted, in large part because of the difficulty of monitoring approved programs.

The disclosure cast new doubts on the ability of the United Nations to function transparently in deeply repressive societies.

Moreover, management lapses in the humanitarian program appear to echo those in the oil-for-food program, which allowed Saddam Hussein and his close associates to pocket as much as $2 billion from companies doing business with the United Nations in Iraq.

U.N. Secretary-General Ban Ki-moon yesterday demanded “an urgent, systemwide and external inquiry into all activities done around the globe by the U.N. funds and programs” after the irregularities were first reported in the Wall Street Journal.

Mr. Wallace, in correspondence to UNDP quoted in the Journal, estimated that the program had spent tens of millions since 1999 on dozens of programs to improve public health, agriculture and human development.

The Journal cited one source saying that up to $100 million had been spent by U.N. programs in North Korea since 1998.

UNDP is the lead U.N. agency in North Korea, coordinating work by UNICEF, the World Food Program, the U.N. Population Fund and other programs.

U.N. officials have long acknowledged difficulties in monitoring programs in repressive countries.

The subject is likely to dominate the annual UNDP Executive Committee meeting, which is convening in New York next week.

On Capitol Hill, Rep. Ileana Ros-Lehtinen of Florida, the ranking Republican on the House Foreign Affairs Committee, urged the UNDP to immediately suspend its North Korean efforts.

“The UNDP’s so-called ‘nationally executed programs’ in North Korea do not meet even minimal standards of transparency,” she said.

“[North Korean leader] Kim Jong-il has been very clear about his ‘military first’ policy of national development. As far as anyone knows, he is using this money to pay for his nuclear weapons program instead of feeding his people.”

Mr. Melkert said that it is important for international relief agencies to maintain a presence in North Korea, despite the difficulties of working there, to better respond to emergencies such as famines and floods.

“You can’t just come in when you don’t have any infrastructure whatsoever,” he said.s

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