U.N. Seeks U.S. Probe of Alleged Misuse of Afghan Aid

By Colum Lynch
Washington Post Staff Writer
Thursday, June 11, 2009; 10:47 AM

UNITED NATIONS, June 11 -- U.N. Secretary General Ban Ki-moon has asked the United States to conduct a criminal probe into allegations that a former senior U.N. official misappropriated nearly half a million dollars in aid money destined for Afghanistan, according to senior U.N. officials.

The move comes six months after a U.N. anti-corruption task force concluded that Gary K. Helseth, an American who managed more than $1 billion in international reconstruction funds, used some of the money to finance a lavish lifestyle, including a home renovation in Kabul, meals at expensive restaurants in Europe and the Middle East and first-class travel to Las Vegas. In requesting the criminal probe, Ban also waived Helseth's diplomatic immunity.

Helseth has denied wrongdoing through his attorney.

"We are disappointed with the U.N.'s decision," said the lawyer, Paul K. Charlton, noting that his client has not been informed of the decision to waive his diplomatic immunity. "Mr. Helseth maintains his innocence and will continue to work to clear his name."

Helseth's former employer, the U.N. Office of Project Services (UNOPS), said in a statement Thursday that it would cooperate with U.S. authorities.

"It is up to U.S. authorities to decide if any legal action should be taken in regard to the allegations," the Copenhagen-based agency said. "UNOPS will cooperate fully with U.S. authorities in any future investigations."

UNOPS said it had initiated the investigation into corruption in Afghanistan in 2006 and that the alleged misdeed, if proven, "would betray U.N. values and breach the organization's fiduciary obligations to its partners."

The case highlights a breakdown of the United Nations' financial controls over more than $2.7 billion in assistance, including hundreds of millions from the United States, that flowed into Afghanistan after U.S.-backed Afghan forces drove the radical Islamist Taliban movement from power in November 2001. It comes as the Obama administration presses the United Nations to play a central role in coordinating the delivery of aid in Afghanistan.

The allegations against Helseth, who directed UNOPS in Afghanistan from 2002 to 2006, were first reported by The Washington Post in March. Since then, the U.N. purchasing agency has come under fire from the inspector general of the U.S. Agency for International Development for poor oversight of $25 million in USAID-funded projects.

An internal investigation by the USAID watchdog that was posted on USA Today's Web site in April cited shoddy construction in multimillion-dollar "quick impact" projects.

The report also found that the U.N. Development Program (UNDP), which hired UNOPS to administer the Afghan projects, withdrew $1.7 million in USAID funds from a bank account after its contract with the U.S. agency expired and that officials from the U.N. agency refused to be interviewed by U.S. investigators or to supply relevant documents. The United Nations said the money was for previous services.

"The U.N. participated in a system in which millions of dollars were systematically transferred to and from USAID projects without the knowledge or consent of USAID," the report said. "Due to the refusal of the U.N. to cooperate with this investigation, questions remain unanswered."

Stephane Dujarric, UNDP's top spokesman, said the United Nations has been working closely with USAID to address its concerns and that a team of auditors is in Afghanistan to review U.S.-funded programs. "Any money that remains in dispute at the end of this process will be refunded," Dujarric said.

The U.S. attorney for the Southern District of New York initially reviewed the allegations against the United Nations but closed the probe in April 2008 at the request of USAID, according to the report. A spokeswoman for the prosecutor's office, Yusill Scribner, declined to comment on whether the case would be reopened. A USAID spokesman did not respond to a request for comment.

Ban's decision to waive Helseth's immunity came days after Rep. Mark Steven Kirk (R-Ill.) asked the U.N. chief what he intended to do in response to the allegations of corruption.

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