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Japan May Cut Funding to U.N.

Times Staff Writer

Japan said Wednesday that it might cut funding for peacekeeping if waste and fraud continue, as a U.N. official argued that the world body’s fastest-growing division needed more money to avoid future lapses.

The U.N. Security Council held a special session to discuss an internal investigation that found nearly $300 million was lost in waste and fraud in peacekeeping procurement. The special session was held as part of a U.S.-led effort to spur reform of U.N. management after another investigation revealed that a lack of oversight and rules had allowed corruption and subversion of the world body’s $64-billion oil-for-food program for Iraq.

Japanese Ambassador Kenzo Oshima said that though Japan contributes about 20% of the peacekeeping budget, his government would “find it very difficult” to keep underwriting such operations unless corruption, waste and sexual abuse by troops are halted.

U.S. Ambassador John R. Bolton, who as the current president of the Security Council convened the session, noted that the $300-million figure represented more than the United States’ 27% contribution to the annual peacekeeping budget.

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“It is in fact time for a whole-scale change in the culture of how many agencies and entities within the U.N. system operate. Whether it is a culture of inaction or a culture of impunity, we must see changes,” he said. “The problem of procurement fraud, waste and abuse is one that directly affects our tax dollars as the largest contributor to the U.N.”

Bolton said that he would not recommend a cut in funds but that Congress, which decides U.N. appropriations, might have second thoughts.

Mark Malloch Brown, chief of staff to U.N. Secretary-General Kofi Annan, told the Security Council that the loss cited by the ambassadors was off by at least two-thirds because it also reflected processing errors that are not the same as fraud.

But he also warned that management reforms Annan is expected to present to the General Assembly would require more money, in part to hire qualified personnel.

The internal investigation’s report, which will be formally presented to the Security Council on March 2, says the procurement department had a grievous lack of internal controls, and that rules were often flouted from 2000 to 2004. Supplying the U.N.'s 18 peacekeeping missions around the world costs about $5 billion, and the scale, diversity and immediacy of needs allows opportunity for waste, fraud and corruption, it said.

Eight U.N. staffers have been placed on paid leave while the investigation continues, and the U.S. Attorney’s Office for the Southern District of New York is questioning others. The U.S. investigation of the U.N. procurement system has already led to a guilty plea from one U.N. employee, Alexander Yakovlev, who admitted committing wire fraud and money laundering.

Peacekeeping officials said they merely defined their needs and the procurement division tendered the bulk of the major contracts. There were cases of over-budgeting caused by field officers who asked for more fuel or helicopters than were necessary, they said, but they paid only for what was used.

“That money is still in the bank,” said Jean-Marie Guehenno, head of peacekeeping. “I think it is very important that in the meeting actually no member-states challenged the importance of peacekeeping.”

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Bolton agreed that U.N. peacekeepers are needed. A congressional watchdog agency, the Government Accountability Office, recently concluded that the U.S. would have spent twice as much in Haiti if it had fielded troops by itself.

“I think there is very strong support for the concept of peacekeeping both by the administration and in Congress,” Bolton said. “But we should be entitled to have effective peacekeeping without waste.”


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