UN official held in laundering case

By Mark Turner 
Financial Times
September 3, 2005
http://news.ft.com/cms/s/ac99212e-1c18-11da-9342-00000e2511c8.html
Vladimir Kuznetsov, a Russian diplomat in charge of a powerful United Nations budgetary oversight committee, was arrested on Thursday night by US authorities on money laundering charges.
The arrest deals yet another blow to the UN ahead of September's summit of world leaders. The UN is already bracing itself for harsh criticism in next week's report by the UN-appointed investigation into corruption in the oil-for-food programme.
The budgetary committee chaired by Mr Kuznetsov, known as the ACABQ, recommends to the General Assembly how the UN should spend its money.
The US attorney's office in New York accused Mr Kuznetsov of conspiring with an unnamed UN procurement officer to facilitate the secret payment of bribes from foreign companies seeking UN contracts.
US federal officials recently arrested Alexander Yakovlev, a UN procurement officer, following revelations that he had received almost $1m in payments from companies that won UN contracts, wired to his Antigua bank account.
Court documents filed by the US district attorney's office said the UN procurement officer informed Mr Kuznetsov in early 2000 of his activities. Rather than report [this] conduct to law enforcement authorities or to the United Nations, Kuznetsov agreed with [the procurement officer] that [he] would transfer a share of the proceeds from this scheme to Kuznetsov for Kuznetsov's own benefit, the indictment said.
Mr Kuznetsov opened an account at Antigua Overseas Bank, the same bank where the procurement officer had an account, which received hundreds of thousands of dollars in criminal proceeds. The companies which paid the bribes were not named.
His arrest came a day after Kofi Annan, UN secretary-general, met Paul Volcker, the head of the UN investigation into the oil-for-food programme, ahead of a new report on Wednesday.
The corruption allegation in a key oversight committee adds new urgency to US demands for a total over-haul of UN management.
John Bolton, US ambassador to the UN, recently told fellow ambassadors it was essential that we have an organisation that is fully accountable, transparent, and efficient, with a workforce based on the highest standards of integrity and competency.
Mr Annan said the UN was instituting an ethics office to oversee compliance with our new financial disclosure requirements, and to ensure protection for whistleblowers. He also called for a new independent oversight committee.