In 2006, the United States Mission to the United Nations began
investigating the claims of a whistleblower who alleged significant
problems and rule violations associated with the U.N. Development
Program's (UNDP) activities in North Korea. After months of delay
and obfuscation by UNDP officials, the U.S. successfully led an
effort by the UNDP Executive Board to suspend UNDP activities in
North Korea and convinced Secretary-General Ban Ki-Moon to call for
an independent audit of U.N. activities in the country. The
preliminary audit confirmed the allegations.
The UNDP fired the whistleblower in March 2007. The U.N. Ethics
Office subsequently concluded that the firing was retaliatory. The
UNDP has rejected the conclusions of the U.N. Ethics Office,
arguing that it lacked jurisdiction to investigate the case.
Secretary-General Ban Ki-Moon has sided with the UNDP. This is a
serious abdication of his responsibility to promote an effective,
accountable United Nations. Congress and the Administration should
demand that Secretary-General Ban implement a consistent,
system-wide code of ethics subject to investigation by the Ethics
The UNDP-North Korean Scandal
Informed by details provided by the whistleblower, the United
States began questioning the influence that North Korea had over
personnel and financial decisions made by the UNDP in 2006. Under
the leadership of Ambassador Mark Wallace, in a series of meetings
and letters, the U.S. began asking questions in order to clarify
details and access internal UNDP reports and audits of the
organization's activities involving the secretive regime of Kim
The UNDP strongly resisted U.S. efforts to investigate the
situation, causing considerable frustration that was made public in
January 2007 through a letter from Ambassador Wallace to the UNDP
that was leaked to the press, which concluded:
[B]ecause of the actions of the DPRK government and the
complicity of UNDP, at least since 1998 the UNDP DPRK program has
been systematically perverted for the benefit of the Kim Jong Il
regime-rather than the people of North Korea. The UNDP DPRK program
has for years operated in blatant violation of UN rules, served as
a steady and large source of hard currency and other resources for
the DPRK government with minimal or no assurance that UNDP funds
and resources are utilized for legitimate development activities.
Forced to react to media coverage of the letter, in late January
2007, U.N. Secretary-General Ban Ki-Moon announced that he would
have the U.N. Board of Auditors conduct an audit of all U.N.
activities in North Korea. The U.N. Board of Auditors completed a
preliminary audit report of UNDP activities and projects in North
Korea in May 2007. The audit confirmed the whistleblower's
allegations: The UNDP had indeed hired local staff through a North
Korean government agency in violation of "relevant instructions and
procedures"; the UNDP paid the government their salaries and
allowances and did not confirm that the government paid the staff
in full; the UNDP had paid for expenses in hard currency rather
than in local currency in violation of UNDP rules; the UNDP did not
have complete access to its projects in North Korea in violation of
its rules; and site visits by international UNDP staff to its
projects were rare.
The UNDP has subsequently been accused by the U.S. of concealing
its possession of counterfeit U.S. currency distributed by the
North Korean government, as well as providing dual-use technology
subject to U.S. export controls to North Korea, even though the
U.S. Department of Commerce declined a previous UNDP request to
export identical items to North Korea.
The reaction of the UNDP to the North Korea scandal has been
disturbing. Nearly two months after Mr. Ban called for the audit,
on March 5, 2007, the UNDP was forced to suspend its work in North
Korea when the North Korean government failed to meet conditions
set by the UNDP Executive Board following U.S. demands for an
investigation. The UNDP then yielded to North Korean
demands that it pull its staff out and transfer ownership of UNDP
assets in North Korea-valued at $2 million-to the government. The
UNDP downplayed and distorted the conclusions of the Board of
Auditors report by shifting blame to the UNDP Executive Board and
falsely claiming that the report concluded that no "UNDP rules or
regulations were broken." The UNDP also implied that its leadership
took the lead in requiring North Korea to comply with its standard
international practice when in reality the Executive Board forced
No Protection for Whistleblower
Even more disturbing, however, is the vindictive treatment of
longtime U.N. and UNDP employee Artjon Shkurtaj, who blew the
whistle on the UNDP's activities in North Korea after trying
unsuccessfully to get the organization to change its practices
while working there from 2004 to 2006. Mr. Shkurtaj was abruptly
let go by the UNDP in March 2007 after 13 years of service to the
U.N. and excellent performance reviews. The UNDP acknowledged that
Mr. Shkurtaj worked on short-term contracts for the UNDP dating
back to the 1990s, but stated that the decision to not renew his
contract had nothing to do with revealing the irregular practices
of the UNDP in North Korea.
After reviewing Mr. Shkurtaj's case, the new U.N. Ethics Office
disagreed with the UNDP's position on his whistleblower status.
Former U.N. Secretary-General Kofi Annan established the Ethics
Office precisely because the U.N. lacked an effective means of
protecting whistleblowers from retaliation. The General Assembly
agreed to create the Ethics Office in the 2005 World Summit Outcome
Document. The Ethics Office was formally established and became
operational in January 2006. One of its first duties was to
establish an effective whistleblower policy for the U.N. to protect
staff "against retaliation for reporting misconduct and for
cooperating with duly authorized audits or investigations."
In reviewing Mr. Shkurtaj's case, the Ethics Office concluded
that "the information received by the Ethics Office would have
supported a determination that a prima facie case [of retaliation]
had been established in this case." But the UNDP's senior
leadership, consisting of Administrator Kemal Dervis and Associate
Administrator Ad Melkert, rejected the conclusion of the Ethics
Office and its jurisdiction to investigate the matter, and, through
a spokesman, instead announced that it would "arrange an additional
and complementary external review to take place under the auspices
of the UNDP's Executive Board." Considering the
obfuscation and resistance that has characterized the UNDP through
this entire process, there is little reason to have confidence that
the UNDP investigation will be unbiased.
In a letter to the Ethics Office, Ambassador Mark Wallace, in
reference to the UNDP response, said that it is "the epitome of
institutional impunity when a UN agency can outright reject the
role of the UN Ethics Office" and reasonably asked how "the very
same management that is the subject of your inquiry [can] credibly
commission its own investigation."
Failure of Leadership
In a serious abdication of his central role in promoting an
effective, accountable U.N. system, Secretary-General Ban Ki-Moon
appears to have sided with the UNDP rather than his own Ethics
Office. At an August 28 press conference, Mr. Ban stated:
It is crucially important for the United Nations system to
uphold the highest level of ethical standard and this ethical
standard should be implemented across the board, system-wide, in a
coherent manner. We have experienced these days some unfortunate
situations involving this whistle-blower case. Soon there will be
an announcement by the UNDP Board of Governors and chairman about
this issue including all the UNDP activities in North Korea, DPRK,
and the case of the whistle-blowers issue. They will be examined
and reviewed by a recognized, independent auditor. I remember that
there was a very important recommendation by world leaders in 2005.
There is an outcome document that an ethical code of conduct should
be applied system-wide in a coherent manner. At this time, the [UN]
Ethics office does not fully enjoy the jurisdiction of all funds
and programmes of the United Nations. I would hope that the General
Assembly looks at this issue again and gives clear guidelines so
that the Ethics Office can have a broader jurisdiction covering
funds and programmes, and other agencies.
This statement is disingenuous. When the General Assembly
approved the 2005 World Summit Outcome Document, it specifically
urged the Secretary-General to "scrupulously apply the existing
standards of conduct and develop a system-wide code of ethics for
all United Nations personnel." It continued, "In this regard, we
request the Secretary-General to submit details on an ethics office
with independent status…" Thus, the General Assembly
clearly envisioned that the ethics office apply the code of ethics
"system-wide," i.e., to all U.N. funds, programs and other
entities. The UNDP clearly falls within this group.
Indeed, the argument that the Ethics Office lacks jurisdiction
in the matter hangs on the tenuous thread that Mr. Annan did not
specifically state that the jurisdiction of the Ethics Office was
system-wide in his Bulletin. This is a simple matter to correct.
Mr. Ban should issue a new Bulletin clarifying that, based on the
urging of the General Assembly in the World Summit Outcome
Document, the jurisdiction of the Ethics Office applies to the
entire U.N. system, including the UNDP.
For years, the U.N. Secretariat has complained about
micromanagement and lack of empowerment of the Secretary-General by
the General Assembly to make decisions. But Mr. Ban appears to have
ceded some of the authorities of his office in his efforts to
protect Mssrs. Dervis and Melkert. In 2003, Mr. Annan issued a
Bulletin concerning sexual exploitation and abuse which covers all
U.N. staff globally. The 2003 Bulletin itself states that its
provisions were promulgated "in consultation with the Executive
Heads of separately administered organs and programmes of the
United Nations," and that the Bulletin "shall apply to all staff of
the United Nations, including staff of separately administered
organs and programmes of the United Nations." In simple language,
this means the policy applies to all U.N. staff, including UNDP
Sexual exploitation and abuse by U.N. staff and peacekeepers is
clearly an important matter, but Mr. Annan did not feel it
necessary to bring this particular policy to the UNDP Executive
Board back in 2003. Instead, the matter was coordinated with the
"Executive Heads" of all U.N. agencies. The UNDP's executive head
at the time was Mr. Mark Malloch Brown.
Based on the legal precedent of the 2003 Bulletin against sexual
exploitation and abuse, Mr. Ban should feel well within his
authority to simply coordinate the whistleblower matter with Mr.
Dervis. After all, Mr. Dervis is accountable to Mr. Ban, who of
course is the Chief Administrative Officer of the United Nations.
So why does Mr. Annan's successor feel compelled to defer the
question of Ethics Office jurisdiction to the UNDP Executive
Mr. Ban needs to show leadership and managerial skills to
resolve this issue. It is clear that until he does, the U.N.'s
"flagship development agency" (which has received more than a
billion dollars from U.S. taxpayers over the past decade) will
continue to operate with impunity and without accountability. The
head of the U.N. Ethics Office showed courage by even accepting Mr.
Shkurtaj's complaint. He should be encouraged to examine each and
every complaint from UNDP staffers. In recent days, more UNDP staff
have come forward.
What Must Be Done
Just last week, the Senate passed an amendment to the Department
of State, Foreign Operations, and Related Programs Appropriations
bill prohibiting disbursement of U.S. funds to the UNDP until in
adopts and implements a whistleblower protection policy. The
evident flaws of UNDP in the North Korean scandal make this action
prudent. However, Congress and the Administration should
simultaneously demand that Secretary-General Ban implement a
consistent, system-wide code of ethics subject to investigation by
the Ethics Office as called for in the World Summit Outcome
Schaefer is Jay Kingham Fellow in International Regulatory
Affairs in the Margaret Thatcher Center for Freedom, a division of
the Kathryn and Shelby Cullom Davis Institute for International
Studies, at The Heritage Foundation.
from Ambassador Mark D. Wallace, United States Representative for
United Nations Management and Reform, to Ad Melkert, Associate
Administrator, United Nations Development Program, January 16,
2007, at www.opinionjournal.com/editorial/011907letter.pdf.
Melanie Kirkpatrick, "North Korea Tech Transfer: Why was the U.N.
Helping Pyongyang Obtain Militarily Useful Computers and GPS
Systems?" Wall Street Journal, July 20, 2007; and
Editorial, "Kim's U.N. Buddy,"
Wall Street Journal, June 22, 2007, p. A10.
Warren Hoge, "U.N. Development Agency Suspends Its Work in North
Korea," The New York Times, March 6, 2007.
Associated Press, "U.N. Ex-employee in N Korea Seeks Whistleblower
Protection Amid Finances Probe," International Herald Tribune, July
Secretary-General's Bulletin, "Ethics Office: Establishment and
Terms of Reference," United Nations Document ST/SGB/2005/22,
December 30, 2005, p. 10, at www.un.org/reform/ethics/index.shtml.