U.S. Fights Off Bid to Punish UNESCO Official

By Colum Lynch
Washington Post Staff Writer
Sunday, May 6, 2007

UNITED NATIONS -- The United States and its key allies last week fended off a campaign by developing countries to discipline UNESCO's highest-ranking U.S. official, Peter Smith, a former Republican congressman from Vermont. Smith resigned in March after an audit found he granted "preferential treatment" to a Chicago-based consulting firm that received $2.15 million in contracts -- often without competitive bidding.

The move placed the United States -- which has long called for greater transparency and accountability at the United Nations -- in the awkward position of opposing an initiative to improve accountability and fiscal integrity in the global body. Louise Oliver, the U.S. representative to UNESCO, recently told foreign delegates it is time to put the matter to rest and implement reforms Smith put in place before he left the Paris-based U.N. Educational, Scientific and Cultural Organization.

Smith, the most senior American hired by UNESCO since the United States temporarily withdrew from the organization in 1984, had served as the organization's top education official since 2005. His appointment -- along with first lady Laura Bush's designation as honorary ambassador for the Decade of Literacy -- symbolized a new era of U.S. engagement with UNESCO, which it had once derided as hostile to free speech and trade.

France's court of auditors concluded in March that Smith, as UNESCO's assistant director general for education, had repeatedly skirted U.N. procedures requiring that all contracts for more than $100,000 be subject to competitive bidding. The audit, commissioned by UNESCO, said Smith bypassed the requirement on behalf of Chicago-based Navigant Consulting by carving a nearly $400,000 deal into four separate contracts, including two valued at $99,899.

Smith subsequently opened the bidding to a broader group of six companies, but the process appeared arranged to ensure that Navigant -- the only company that submitted a bid -- prevailed, the audit showed. The list "considerably reduced, de facto, the possibility of a candidate other than Navigant Consulting submitting a bid," the audit said. The bid resulted in three subsequent contracts totaling just less than $1.75 million.

Navigant was tasked with overseeing a reorganization of UNESCO's education sector to emphasize the body's regional education and literacy programs.

"The competitive bidding procedures were deliberately circumvented," Phillipe Seguin, the president of the auditing court, told UNESCO's board. "Nothing supports the notion that Navigant would be an obvious choice. . . . It had never worked with UNESCO and had no particular competence in the field of education."

Smith declined to comment, citing a confidentiality agreement that bars current and former officials from discussing their work at UNESCO. But Smith told auditors that he split up the initial contracts to ensure leverage over the contractor. He also noted that all Navigant's contracts were ultimately approved by UNESCO officials.

In a March 12 resignation letter, Smith alleged that he was the target of an anti-American upswell within UNESCO and that he had received death threats. "There is a small group who have worked steadily since the unveiling of the reform recommendations to kill the reforms by discrediting me, attacking you, and demonizing America," he wrote.

U.S. officials suspected the campaign to discipline Smith was aimed at derailing efforts to make the agency more cost-effective. The United States contributes 22 percent of UNESCO's $300 million budget.

Koïchiro Matsuura, UNESCO's director general, declined to investigate whether Smith profited from the arrangement.

India, Algeria and Benin circulated a draft resolution last month urging Matsuura to "take appropriate disciplinary action" against Smith and others who violated U.N. rules. They also called on Matsuura to reinstate employees whose jobs Smith had eliminated, including an administrative officer who was reassigned to Beirut after challenging Smith's actions.

"The audit has not gone far enough," said South Africa's representative, Brian Figaji, citing "unfair treatment dished out to those who chose to blow the whistle."

But the United States, Japan and some European nations resisted the effort, and UNESCO's board approved a compromise resolution expressing serious concern over irregularities in Smith's department and calling on Matsuura to strengthen UNESCO's procedures for preventing similar problems.

Smith first encountered Navigant through Letitia Chambers, a former executive director of the Commission on Higher Education who serves as Navigant's Washington director, Seguin said. Chambers did not respond to requests for comment.

Seguin sought repeatedly to examine e-mail exchanges between Smith and Navigant, but the company refused to furnish copies and UNESCO maintains that it deletes all e-mails after one month.

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