In July 1993, U.N. security guards escorted seven U.N. procurement officers from their desks at agency headquarters, sealing their files as investigators probed allegations that they had rigged bids to favor Canadian transport company SkyLink Aviation Inc.
The corruption allegations were never substantiated, and the employees returned to their jobs. But two former U.N. officials linked to the SkyLink affair have recently been accused again of misconduct, including a Russian procurement officer who pleaded guilty this month to federal charges of money laundering and wire fraud.
The two cases underscore the limits of several U.N. attempts over the past decade to root out procurement abuses, and show how U.N. officials who once faced suspicion of wrongdoing had been allowed to remain in their posts. But U.N. officials noted that the agency's leadership had no legal basis to prevent these officials, who were cleared of wrongdoing, from returning to their jobs.
Still, the case has increased criticism of Secretary General Kofi Annan's record of reform as he is pressing for administrative changes aimed at stamping out corruption in the U.N. bureaucracy at a summit in New York next month.
"These people should have been put under a watch list; to let them creep back into procurement is the height of irresponsibility," said Edward Luck, a U.N. expert at Columbia University. "Reform, in the end, is really a question of people and you can put in all the rules and regulations you want, but clever determined people who know the system well will find a way of getting around the rules."
Alexander Yakovlev, 52, a Russian national, was accused last month of soliciting bribes from a Swiss company seeking business through the $64 billion U.N. oil-for-food program and of receiving nearly $1 million in kickbacks since 2000 from other U.N. programs. A Russian diplomat, Vladimir Kuznetsov, pleaded not guilty Friday to federal charges that he laundered hundreds of thousands of dollars from a Yakovlev-controlled firm.
The other official, Allan B. Robertson of Zambia, was accused last February of "manipulating" U.N. competitive bidding rules on behalf of a Dutch company that was hired to monitor Iraqi oil exports.
Robertson, who has not been accused of soliciting a bribe in the recent case, denies wrongdoing. Yakovlev's lawyer, Arkady Bukh, said his client "just doesn't want to talk about it."
Congressional critics say the recent abuses reflect an institutional failure to impose the checks required to detect and deter abuses before they occur.
"This absence of basic oversight has allowed individual corruption to flourish system-wide," said Rep. Christopher Shays, (R-Conn.), who is overseeing a House probe into abuses of the oil-for-food program.
John R. Bolton, the U.S. ambassador to the United Nations, declined to comment for this article. But he told reporters Aug. 11 that the agency's management czar, Christopher Burnham, "is committed to sweeping U.N. reform, as are we."
Burnham said in an interview before Yakovlev's plea that he is trying to impose new "accounting standards, internal controls and an outside audit advisory board" with the goal of making the United Nations "an institution that has unquestionable integrity." But Burnham, a former State Department top financial officer and a Republican fundraiser, is facing resistance to the proposals from U.N. members who see him as serving U.S. interests.
The 1993 SkyLink inquiry was launched by Mohamed Aly Niazi, an Egyptian auditor who was picked by former secretary general Boutros Boutros-Ghali to investigate procurement abuses in response to congressional critics who alleged the United Nations was incapable of rooting out corruption.
SkyLink had emerged as the United Nations' favored airlift contractor as peacekeeping duties were expanding with missions in Cambodia, Somalia and Bosnia. Niazi concluded in a confidential June 1993 report that the U.N. officials had engaged in "outright bid rigging" in promoting SkyLink's case, according to the Washington Post. Boutros-Ghali, meanwhile, ordered the four most senior procurement officers, including Robertson, reassigned to jobs outside the purchasing department.
But the charges, which were triggered by a complaint from a U.S. competitor, did not stick. A U.N. administrative appeals tribunal, which traditionally sides with U.N. employees, cleared the officials and ordered their reinstatement.
Yakovlev, then a mid-level official, returned to his old job as a procurement official. Robertson, who was reassigned to a job taking inventories of U.N. property, returned to his procurement post in May 1996. "We were exonerated," Robertson said. "Boutros-Ghali had no choice, the secretary general cannot overrule the [U.N.] tribunal."
Still, the SkyLink episode drew attention to troubles in the procurement department and triggered a series of initiatives aimed at preventing abuses in an office that spends more than $1 billion each year equipping the U.N.'s far-flung humanitarian and peacekeeping operations.
Annan has recently taken steps to revise the agency's buying practices. In one recent attempt, the United Nations' procurement director, Andrew Toh, called a news conference in February to outline changes in bidding practices, including greater public disclosure of bids on a U.N. Web site, aimed at fixing the problem.
Yet one week after federal prosecutors in Manhattan charged Yakovlev, Annan announced yet a new set of changes, including the appointment of an outside consultant to review the world body's buying practices. He temporarily relieved Toh of authority over procurement. The U.N. Office of Internal Oversight, which found evidence that Yakovlev received bribes, is still investigating.
The Yakovlev investigation comes nearly six months after a U.N. inquiry into corruption in the $64 billion oil-for-food program portrayed the Russian official as a champion of propriety in the agency's procurement department.
Former U.S. Federal Reserve chairman Paul A. Volcker, who heads the U.N. Independent Inquiry Committee, relied on Yakovlev's statements and notes in making his case that two other U.N. officials, including Robertson, improperly bypassed the agency's procedures in selecting a Dutch company, Saybolt Eastern Hemisphere BV, to monitor Iraq's oil exports, and that they had not been lowest bidder on the contract.
Dismissing Robertson's attacks on Yakovlev's credibility as "unconvincing," Volcker said that Yakovlev had been right to assert that U.N. rules required the contract to go to the lowest bidder, Societe Generale de Surveillance S.A. (SGS) of Switzerland. At the time, Volcker's investigators were unaware that Yakovlev had been soliciting bribes from SGS, but Volcker has stood by his panel's initial findings. Robertson maintains that Volcker was duped.