U.N. Headquarters Renovation: No Accountability Without Transparency
June 20, 2006
Chairman Coburn held a hearing June 20th on the continuing lack of transparency for the massive U.N. renovation project in Turtle Bay, Manhattan. This is a follow up to last year's hearing, where the United Nations was called to account for wasted design money and a flawed and over-priced ($1.2 billion) plan. Now the plan's cost projection has sky-rocketed to $1.7 billion, millions more have been spent on new designs and an itemized cost projection is still not available. The lack of transparency is a case study in the larger lack of transparency, accountability, financial and ethical integrity at the international body. Although reforming the agency would be almost overwhelmingly difficult, the Chairman is asking for a small first step - transparency in the Capital Master Plan.
The U.N. renovation project, the Capital Master Plan, operates within the unaccountable and corrupt U.N. procurement system.
Not a single U.N. employee has been fired, indicted, or even censured for his or her involvement in the Oil-For-Food procurement scandal.
Despite recent reports of ongoing corruption in the peacekeeping procurement system and the indictments of low-level procurement officers, the U.N. continues to utilize contractors suspected of fraud, sustain tainted contracts, and employ individuals suspected of corruption.
GAO reports that weak internal controls result in corruption, and there is no comprehensive or independent U.N. audit or oversight capacity.
The U.N. refuses even the most basic forms of transparency with the Oil For Food documents, procurement contracts, financial disclosures of top U.N. employees, and itemized expenditures to date for the Capital Master Plan.
The U.N., with its $152 million obligated so far, has exceeded the industry standard for design and planning costs (6% of construction project). Of this amount, U.S. taxpayers have been billed $33.4 million. U.S. taxpayers have no way of knowing what these funds have bought.
Impact on Taxpayers:
The entire U.S. contribution to peacekeeping procurement recently audited was lost to corruption. U.N. auditors investigated $1 billion in peacekeeping procurement. They found that a third—which is equivalent to the entire U.S. contribution—was lost to waste, mismanagement, and corruption.
If the U.N. were to salvage two years of this lost procurement money, it would more than cover the U.S. portion of the Capital Master Plan.
The U.S. taxpayers have no assurance that the multiple billions they donate to the U.N. system are not lost to waste, fraud, and corruption when (1) the U.S. government fails to track their total contributions made to the U.N and (2) the State Department fails to conduct legitimate U.N. oversight and instead relies on the ineffective, U.N. internal auditing system.
Taxpayers are without redress when forced to subsidize bribery, graft, and conflicts of interest—true taxation without representation.
These Findings Demand a Response:
The U.S. should not support the Capital Master Plan until the project is fully transparent as defined by making available on a public website every contract, subcontract, itemized expenditure, details of bids and bidding results, guaranteed maximum price proposals and other similar information.
More broadly, the U.S. should withhold funds from the U.N. core budget until those funds are spent in a transparent, documented, and ethical way.
The U.N. should make the Office of Internal Oversight Services (OIOS) financially independent, so it can conduct legitimate audits free from conflicts of interest or required consent of investigated programs.
The U.S. government should stop writing blank checks to the U.N. until there are transparency and accountability within the entire U.N. system.
