Mukesh Kapila shined the spotlight on a discreet United Nations agency which was recently denounced by several media for possible corruption, based on the Kapila explosive blog posts which began at the beginning of March on the UN entity.
Kapila, a former senior UN official and Emeritus Professor at the University of Manchester, detailed the scandalous dealings of the management team of the United Nations Office for Project Services (Unop), since March 4. Executive Director Grete Faremo resigned on May 8, following mainstream media reports of allegations of corruption within the agency, starting with Devex and followed by The New York Times. But the changes Kapila demanded of the UN agency via his blog will not end with Faremo, he said.
Kapila, a British citizen, has held senior UN positions in public health and humanitarian affairs since the mid-1980s. Until he began sharing well-documented accounts of wrongdoing at Copenhagen-based Unops two months ago, the agency went largely under the public radar, as did Kapila’s blog. Starting from a low double-digit figure in 2020, unique visits to his site soared to over 100,000 in March, once he started posting about Unops issues.
The agency was established in 1973 to provide infrastructure, procurement and project management services to UN agencies, countries and other partners, its website says. To finance itself, the agency charges project and management fees, although its mandate is to achieve zero net income, apart from an operating reserve, equivalent to four months of management fees.
The nefarious actions detailed by Kapila echo the wrongdoings documented in the minutes of the Unops board of directors and in the reports of the agency’s internal and external oversight bodies. Kapila’s allegations include fraud, accumulation of excess reserves, opaque budgeting and pricing structures, failed deals and multimillion-dollar sole-source contracts signed by Faremo, who was the undersecretary general of the UN until his resignation as head of UNOPS.
Following initial reports of wrongdoing at UNOPS, Finland announcement a pause in agency funding on April 14. Three days later, Unops published a statement admitting significant challenges with its sustainable investments in infrastructure and innovation (S3i) – or “impact investing” arm – and acknowledged two other ongoing internal investigations. A spokesperson for the Finnish government, which hosts and funds S3i’s headquarters in Helsinki, told PassBlue that Finland was made aware of the additional investigations by the Unops statement.
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Kapila said in a May 2 interview with PassBlue that other donors, including European Civil Protection and Humanitarian Aid Operations and the Global Fund to Fight AIDS, Tuberculosis and Malaria, have confirmed to him that they had also suspended the financing of Unops, until the results. surveys are known.
The S3i issues were reported by Devex on April 16. The New York Times published an article on May 7, with an update confirming Faremo’s immediate resignation. His resignation follows that of a United Nations Office of Internal Oversight Services (BSCI) investigation into questionable seed funding loans granted by Unops to a Singapore-based entity, Sustainable housing solutions, an organization with no experience in carrying out projects of the proposed scope. The Times detailed the contracts signed by Faremo and confirmed many of the allegations raised by Kapila, prompting the BSCI investigation.
Kapila’s blog on UNOPS tenders began with a blog post titled, “Something is rotten in the state of Denmark.” According to Kapila, the problems were caused by a management team that operated outside standard UN accountability systems. UNOPS internal auditors, known as the Internal Audit and Investigations Group (IAIG), have been appointed by the Faremoformer Norwegian minister and lawyer.
The management team has also been handpicked by Faremo. Vitaly VanshelboimUkrainian and former Deputy Secretary General of Unops, shared an office with her at the Copenhagen headquarters before her March 2020 appointment by Secretary General António Guterres as Managing Director of S3i.
Despite a stated goal of zero net income, under Faremo, Unops amassed a reserve that reached $286 million by the end of 2020 on revenue of $2.2 billion. The Board of Auditors expects it to reach $345 million by the end of the 2021-2023 biennium.
Faremo established a growth and innovation reserve in 2015. This was set at 50% of the “excess” operating reserve.
Kapila called the accumulation of reserve funds a “profit”. Describing the reserves as surplus arising from the overcharging of management fees, the United Nations Advisory Committee on Administrative and Budgetary Questions (ACABQ), which manages the budgets and whose members are elected by the General Assembly, called Unops in July 2021 to provide budget estimates and transparent pricing structures and to reimburse partners for incremental costs. Currently, the UN Secretariat is the only partner to be reimbursed annually by UNOPS.
The new Growth and Innovation Reserve provided funds for UNOPS “impact investments” in housing, energy and health. Under Vanshelboim, S3i was created to channel investments while generating financial returns. ACABQ reported that S3i invested $58.8 million in 2020 in seven projects while anticipating, surprisingly, investment losses of $22 million.
With no ground breaking for infrastructure investments, bad debts piling up and no return in sight, Vanshelboim was placed on unpaid administrative leave in December 2021, pending an investigation by the Office of Oversight Services. internal to the United Nations.
Kapila said her goal of blogging about UNOPS was to strengthen its accountability and governance.
“There is a bond of vulnerability upon which all of this wrongdoing is based,” he told PassBlue. He said the agency’s board is overburdened, as it also oversees the UN Population Fund and the UN Development Programme. The Board requires that internal audit reports be made public and available on the UNOPS audit disclosure website. The link leads to a broken page.
In a April 4 letter Kapila wrote to Yoka Brandt, chairman of the board and Dutch envoy to the UN in New York, he encouraged the board to “seize the opportunity of the current crisis to review and revise the comprehensive policies and strategies that led to these vulnerabilities. ”
Another letter he wrote and posted on his website, to Ed Mountfield, a vice president of the World Bank, begins: “Any funding to UNOPS is currently dangerous: all donors should beware.
Beyond ongoing UN investigations – which deputy UN spokesman Farhan Haq said this week would not be made public – Kapila also flagged serious problems with a Mexican deal . announcement by Faremo in July 2020.
Attempting to expose corruption in the Mexican supply chain, the Mexican government has signed a contract with the United Nations agency for the purchase of medicines and medical supplies, starting in 2021, as part of an agreement who The New York Sun valued at $6 billion, with Unop receiving $109 million in fees.
The agency did not deliver. One April 2022 Internal Audit states that “50% of procurement processes for medicines and 46% for medical supplies were unsuccessful, posing reputational risks to UNOPS”.
Appointed UN resident and humanitarian coordinator for Sudan in 2003, where he worked for about a year, Kapila, 67, is said to have alerted the world to the atrocities committed in Darfur by the Sudanese government. He told PassBlue he was alarmed and frustrated by then-Secretary-General Kofi Annan’s silence in response to Kapila’s increasingly urgent calls for UN action against the genocide in Darfur.
It went public with a BBC interview on March 19, 2004, calling for more aid and international intervention to establish a ceasefire in Darfur. He left Sudan soon after, amid death threats that continued for years.
With the departure of Faremo from Unops and the appointment of an interim executive director, Hans Wandel, Kapila is hardly satisfied. In a May 11 blog, he called the remaining management team “discredited” and wrote that a thorough and independent investigation must be conducted into how Unops could get so far with so little scrutiny. .
However, donors are not ruling out future support for a revamped Unops. Asked about the possible results of the UN investigations, Satu Lassila, spokesperson for the Finnish Foreign Ministry, said: “Once all the facts are known, Member States . . . review the different options. . . . “