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Wednesday
Oct142015

Dispatch from Turtle Bay: Short memories threaten the UN mission

There were expressions of surprise and shock at the UN last week over the arrest of former General Assembly President John Ashe on bribery and corruption charges. UN officials consistently said they had no idea of the scheme and that investigating it wasn't their responsibility.

During the chorus of denials and finger-pointing, it became clear that many at Turtle Bay have a short memory, and hadn't learned any lessons from the not-too-distant past.

Less than ten years ago, the United Nations was plagued by the largest bribery and corruption scheme in history -- the pilfering of the UN Oil for Food Program by Iraq's regime under Saddam Hussein. After the UN granted a reprieve from sanctions, the regime reaped more than $1.8 billion in profits from bribes for oil sales and kickbacks for humanitarian supplies.

The UN did not fully implement the program, but it held escrow and other supervisory responsibilities over the funds and program activities, which were conducted in its name.

Like last week, UN officials then expressed shock and surprise when allegations surfaced that the Hussein regime had completely corrupted the oil-for-food program.

Following that debacle, the UN had the wisdom to establish an ad hoc special anti-corruption investigation team. It was called the Procurement Task Force (PTF). I was appointed chairman of the PTF in 2006 and oversaw a team that included more than 30 white collar-crime experts from around the world.

In three years, we identified twenty corruption schemes and $630 million in tainted contracts. Our investigations led to 47 debarments of outside vendors and companies.

In addition, our investigations led to four major convictions for bribery and corruption in U.S. courts -- two heads of UN procurement, Alexander Yakovlev and Sanjay Bahel, and a Russian diplomat who oversaw the UN’s budget committee, Vladimir Kuznetsov.

The fourth was FCPA Blog contributing editor Richard Bistrong’s plea to an FCPA charge in U.S. District Court in Washington, DC after we shared the PTF's findings with the DOJ and Richard's company.

The UN had the foresight to create and fund the PTF after it saw how episodes of corruption could damage the institution's reputation and work, and put innocent UN officials and employees at risk. However, funding for the PTF was cut when important member states voted against against it, out of anger that we were investigating companies and important officials from their country.

Vigorous internal investigations into allegations of corruption at the UN should be well funded and supported, and investigators and witnesses should be free from fear of retaliation for doing their jobs. But today, thanks to some stunning institutional short-sightedness, there is no PTF or equivalent organization. The likely result will be irreparable long-term harm to the UN and its ability to function. The Ashe scandal is only the beginning.

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Robert M. Appleton is a partner in Day Pitney LLP, based in the firm's New York office. His practice focuses on FCPA matters, economic and financial sanctions, and compliance issues. In 2005, he served as former U.S. Federal Reserve Chairman Paul Volcker's Special Counsel in the Independent Iraqi Oil for Food investigation. In 2008, Appleton was selected by the U.N. Secretary General to serve as Chairman of the United Nations Procurement Task Force. He also served as a supervisory Assistant U.S. Attorney, in the U.S. Department of Justice, Office of the U.S. Attorney for the District of Connecticut, for more than 13 years. He can be contacted here.