U.N. Orders Leave for Eight in Fraud Probe 
By the Associated Press
January 16, 2006
The New York Times
Original Source: http://www.nytimes.com/aponline/national/AP-UN-Procurement.html

UNITED NATIONS (AP) -- The United Nations on Monday ordered eight staff members to take paid leave as part of its expanding investigation of fraud and mismanagement in U.N. purchasing for the world body's far-flung peacekeeping operations.
One company, which was not identified, has also been suspended from doing business with the United Nations, U.N. spokesman Stephane Dujarric said.
Dujarric said the administrative leave was ordered as a result of an internal audit of the U.N. peacekeeping department's management and purchasing practices.
''It is not at all a disciplinary action, as this audit is not yet been finalized,'' he said.
The United Nations did not identify the staff members, but two U.N. officials said they included Assistant Secretary-General Andrew Toh, who headed the division responsible for procurement.
Undersecretary-General for Management Christopher Burnham said the action was ''an indication that we have a vigorous and ongoing and expanding investigation.''
He said Secretary-General Kofi Annan has ordered the U.N. internal watchdog to cooperate with an ongoing criminal investigation by the U.S. attorney's office. That cooperation has already led to a guilty plea by one U.N. procurement officer, Alexander Yakovlev, who admitted to wire fraud and money laundering in federal court. A probe of the U.N. oil-for-food program had also implicated Yakovlev in corruption in the Iraq operation.
A senior U.N. official, speaking on condition of anonymity because of the sensitivity of the issue, said the internal procurement audit outlined mismanagement and potential cases of fraud.
Last month, an independent review by Deloitte & Touche said the U.N. Procurement Service is poorly managed -- to the point where staff do not know even the basic rules governing their work.
The United Nations recently hired Deloitte Consulting to undertake an additional audit of U.N. procurement, including the last five years of purchases for U.N. peacekeeping missions.
In 2005, the Procurement Department handled almost $2 billion in purchasing for peacekeeping operations, U.N. officials said.
In an interview, Burnham said Annan expects the eight staff members on leave to cooperate ''with any and all aspects of the investigation.''
After Yakovlev pleaded guilty, Annan transferred authority from Toh. The chief of procurement, Christian Saunders, was also switched to a different job.
Both Saunders and Toh insisted that the Deloitte findings were not news to them and they had been trying to fix the problems.
The two U.N. officials said Saunders also was among those placed on paid leave -- as well as several of their subordinates. Neither Toh nor Saunders returned calls seeking comment.