Two subcommittees of the House Foreign Affairs Committee yesterday called joint hearings to look into reports that United Nations organizations keep $1.4 billion of surplus funds in bank accounts often paying little or no interest.
At the same time, the United Nations and State Department attacked the reports that appeared in The Washington Post, in separate press conferences held in New York and Washington.
The United Nations, speaking only for itself and not the other organizations in the U.N. system, said it has no "bonanza waiting to be spent" and has been "teetering every day on the verge of bankruptcy."
U.N. officials suggested privately, however, that some U.N. affiliates named in the stories were ripe for investigation.
The State Department called the report on the financial position of the U.N. system "misleading" and said organizations with separate budgets should not be lumped together to come up with a combined surplus figure.
Rep. Don Bonker (D-Wash.), chariman of the House Foreign Affairs' international organizations subcommittee, scheduled hearings to open June 28 to focus on what he called "distressing" disclosures that U.N. organizations run a surplus of as much as $350 million a year.
"I'm primarly concerned about our own contributions and the reasons for those surpluses, and how they're invested," Bonker said.
The U.S. contributed $600 million to U.N. organizations in 1977, or $4.60 for each taxpayer.
"What we need to look at more closely is the accounting practices, whether we are contributing more money than is necessary, and the administrative costs," he said.
The hearings will be held jointly with the Foreign Affairs international operations subcommittee. They are expected to include testimony from State Department officials.
A congressional aide said the United Nations "prohibits" its employes from testifying before a member country's legislative committees.
In New York, George F. Davidson, the U.N. undersecretary general for administration, criticized the published reports for grouping U.N. organizations when they are separate entities.
He also said bills owed by the United Nations should have been deducted fromthe total on hand before reporting on U.N. bank balances. "To ignore accounts payable is an exercise in fiscal irresponsibility," he said.
While the United Nations had some $69 million in bank accounts at the end of 1977, Davidson said, only $36 million of that was in its general fund. The balance was in accounts with restrictions, he said.
Davidson said the United Nations needs extra money at the end of the year because no contributions come in during the first two months of the year. He later acknowledged that some contributions are made at that time. According to the State Department, the U.S. government makes a quarter of its annual contribution in January.
Davidson said apparently low interest rates of 5 percent earned by the United Nations on its savings accounts at the end of 1977 were those prevailing at the time.
He also said he would allow examination U.N. files on particular contract awards but had never been asked. Clayton C. Timbrell, the U.N. official in charge of contracts, previously refused to allow such an inspection.
Davidson said the contract to clean the U.N. headquarters building was competitively bid in 1971. The company that won the contract at that time still has the contract, he said.
In Washington, Charles W. Maynes Jr., Assistant Secretary of State for international organizations, said any totaling of cash of U.N. organizations is "not a useful figure" because the money cannot be transferred back and forth.
He said the United Nations itself has a $152 million defict rather than the $69 million surplus that was reported. Maynes previously has defined this "deficit" as money that some countries have refused to pay to the organization. Accountants have questioned that definition.
"Clearly, the United Nations was on the verge of bankruptcy, not flush with cash as [The Post] article suggests," Maynes said.
In reporting on the $116 million held in bank accounts by the Food and Argriculture Organization of the Unted Nations, Maynes said, the State Department's explanations that most of the money was in trust funds, funds set aside for particular purposes, or funds to cover regular agency expenses was "ignored."
"The assertion that the funds were sufficient to run the organization for two-thirds of a year was misleading," Maynes said.
The Post story said that if this portion of the bank deposits was excluded, there was still enough in the bank to run the FAO for nearly half year.
"Are you saying the [Post] story is inaccurate?" a reporter asked near the end of the State Department briefing.
"The figures in the story are correct figures," Maynes said. "The understanding of he U.N. system is very flawed, and the analogies advanced simply wrong."
Also contributing to this story was Special Correspondent Michael Berlin.