Cash for Cambodians

September 25, 2007
The Wall Street Journal
Original Source: http://online.wsj.com/article/SB119066875979037826.html

The United Nations Development Program is already under scrutiny for gross irregularities in its programs in North Korea, from which it was forced to pull out earlier this year. Now there's another scandal to add to the list: UNDP's lack of oversight of the Khmer Rouge war-crimes tribunal, for which it oversees a significant share of the funding.
The complete details of an audit examining hiring practices haven't fully come to light yet, thanks to the UNDP's refusal to make the audit public or even share it with donors. But we've seen an early draft, and can start to fill in the outline of what's going on. It isn't pretty.
The Khmer Rouge war-crimes tribunal is split into halves: an international section overseen and funded by a U.N. trust fund, and a Cambodian-run section, the lion's share of whose funds are under UNDP oversight. The local section is called the Extraordinary Chambers in the Courts of Cambodia (ECCC) and it appoints all local staff and Cambodian judges, among other things. Last October, the New York-based Open Society Justice Initiative, which has been monitoring the trials, raised questions about hiring practices on the Cambodian side.
The UNDP isn't administering small change, so allegations of misconduct with its public funds must be taken seriously. Of the $13.3 million budgeted for the Cambodian side of the tribunal for its three-year duration, the UNDP oversees $5 million from a 29-country donation and one million euros ($1.4 million) from the European Commission. The rest is provided by the Cambodian government, or pledged directly to the Cambodian government by individual countries, which to date have delivered only $1 million.
To its credit, UNDP swiftly hired a small Malaysian consulting company, Candide Consulting, to investigate the allegations. Candide conducted its work from January 29-February 8 and returned again in March, when it was joined by auditors from the U.N. Office of Audit and Performance Review. As U.S. law professor John Hall reported on our op-ed page on Friday, the initial findings were stark.
The auditors discovered inflated salaries and significantly increased staffing levels to the tune of $357,000 over the ECCC's original budget projections in 2004. The ECCC couldn't justify the extra hires and UNDP's overseers weren't even aware of the increase. The auditors also unearthed a raft of unqualified workers appointed without competitive hiring practices. It was refused access to the personnel files of 28 staffers appointed directly by the Cambodian government.
Even worse, the auditors uncovered a fundamental conflict of interest at the oversight board that is supposed to monitor the ECCC's activities. The 12-member Project Board is composed of personnel from UNDP, ECCC, the European Commission, and the U.N. Department of Economic and Social Affairs. According to the draft audit report -- and confirmed to us by UNDP -- the board overseeing the ECCC is currently chaired by the ECCC itself. How convenient.
The transgressions were so egregious that the auditors said this: If the Cambodian side does not agree to the essential measures that are... necessary to ensure the integrity and success of the project, then serious considerations should be given to withdrawing from participation in the project altogether. And: All the recruitments of staff made by ECCC to-date [sic] should be nullified and a new recruitment exercise launched.
Translation: The ECCC's hiring practices, overseen by the UNDP, are so flawed that the UNDP should consider starting from scratch. That's a strong finding, given that it took a decade to put the war-crimes tribunal together in the first place -- and that this same court is the one that's supposed to administer justice for the more than one million Cambodians slaughtered by the Khmer Rouge in the late 1970s.
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There could be more to come. In February, the Open Society Justice Initiative called for an investigation into allegations of kickbacks paid by Cambodian judges and court officials to their superiors. If true, that goes to the heart of the court's credibility since Cambodian judges form a majority on all of the judging panels of the war-crimes tribunal. The draft audit did not address these charges.
So what exactly did the final audit say? Only the UNDP -- and the Cambodian government -- know. The Project Board issued a press release saying it discussed the findings at its first meeting in June. But even the board was not allowed to see the final audit report. The internal audit is not shared except between UNDP and the member state, a UNDP official in Phnom Penh who prefers to remain anonymous tells us in response to a question about whether the board saw the report. So much for the UNDP's responsibility to the European and U.S. taxpayers putting up the money.
ECCC spokeswoman Helen Jarvis says that the Cambodian side of the tribunal has accepted all of the recommendations of the audit and has even revised the personnel handbook. The main goal is spelling out in advance what procedures will be followed in the court and in the administration, she says. It's puzzling that this wasn't done from the start.
We're told that the Project Board plans to issue a statement today that will outline the steps the UNDP is taking in response to the audit report. That's a good first step. But if the UNDP really wants to clear its name, it would release the audit to the public -- who's paying for all of this, anyway.