Lawmaker warns U.N. agency after N. Korea troubles
January 23, 2008
Reuters
Original Source: http://www.reuters.com/article/politicsNews/idUSN2426537820080124?pageNumber=2&virtualBrandChannel=0

WASHINGTON (Reuters) - A U.S. Senator warned the U.N. Development Program on Thursday that Congress could rethink funding without changes to a well-intentioned culture of laxity that allowed North Korea to abuse the aid program.
Sen. Norm Coleman told a Senate subcommittee hearing that a new report detailing North Korean financial misdeeds with UNDP programs would make it difficult to ask for money from U.S. taxpayers without better accountability.
The report issued on Wednesday by the U.S. Senate Permanent Subcommittee on Investigations found that North Korea used UNDP bank accounts for deceptive cash transfers without the U.N. agency's knowledge, amid a litany of shady actions.
The UNDP was effectively cleared of U.S. allegations that it had transferred tens of millions of dollars to North Korea, helped fund Pyongyang's missile and nuclear programs and had let that government embezzle loads of cash.
But the Senate investigation found that UNDP officials in North Korea -- under pressure from Pyongyang -- had broken UN rules in areas ranging from hiring local staff to using foreign currency. The report also faulted the UNDP for denying or limiting donor countries' access to its internal audits.
The UNDP's aims of keeping worthy projects going are certainly noble goals, but I fear that UNDP's good intentions led to a well-intentioned culture of laxity, he said.
The U.S. should seek assurances from UNDP that its name, offices and resources are not being used by outlaw or corrupt states to facilitate heir financial shenanigans, said the top Republican on the Senate subcommittee.
North Korea in 2002 used a bank account intended to be used solely for UNDP activities to transfer $2.72 million of its own funds from Pyongyang to North Korean diplomatic missions abroad, the subcommittee revealed on Thursday.
Coleman said he met with UNDP Administrator Kemal Davis and came away confident that the agency would be more forthcoming with audits and related information.
If UNDP fails to make a substantial change in policy, however, Congress should seriously consider changing the way we donate American tax-dollars to the UNDP and any other U.N. agencies that do not share their audits with donors and member states, he told the hearing.
U.S. contributions to the UNDP were more than $240 million in 2005, subcommittee chairman Carl Levin told the hearing.
The UNDP pulled out of North Korea last March -- ending a nearly 30-year presence there -- after Pyongyang refused to accept changes ordered by the U.N. agency's board of directors to address irregularities identified by auditors.
(Reporting by Paul Eckert; Editing by Cynthia Osterman)