North Korea accuses U.S. of dirty politics on U.N. fund

Thursday, January 25, 2007; 7:50 AM

SEOUL (Reuters) - North Korea accused the United States on Thursday of a "smear campaign" after Washington said U.N. Development Fund (UNDP) money may have been diverted to the North's leaders who used the cash to build nuclear weapons.

"The United States is kicking up another anti-DPRK North Korea meet its dirty political aims," its KCNA news agency quoted an unnamed Foreign Ministry spokesman as saying.

Mark Wallace, the U.S. envoy for U.N. financial management, accused the UNDP in a letter last week of violating rules by hiring North Korean government officials and by paying salaries in cash through the government.

The United States said North Korea's demands on the program, including payments in hard currency and hiring of local officials, may have led to millions of dollars being used to benefit North Korean leader Kim Jong-il, according to a letter obtained by Reuters.

"As the UNDP has denied, the U.S. assertions...are a sheer fiction," the North Korean spokesman said.

U.N. Secretary-General Ban Ki-moon on Monday called for external audits of some U.N. programs to see if they were free of government interference.

The UNDP has said there was no reason to believe that programs were subverted in North Korea. The UNDP has some 20 projects in North Korea on economic, social, the environment and food management.

Ad Melkert, the UNDP associate administrator, said last week the agency would by March 1 start paying North Korean staff in won, the local currency. He said only a small part of the program was administered by North Korea.

UNDP spends some $2 million to $3 million a year in North Korea, including $100,000 for local salaries. It has some 16 North Koreans and four international staff. The agency said North Korea handled just $337,000 in UNDP funds over two years.

North Korea regularly charges the United States with plotting to bring down its leaders.

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