In a recent FCPA Blog post, the author asks troubling questions about why so many corruption cases are coming out of the United Nations. Graft at the UN is something I know about, first hand.
My UN story starts in 2006. Bob Appleton, who now heads the government enforcement and white collar practice group at CKR Law, was then chief of the United Nations Procurement Task Force.
He first saw my name during an investigation of a corrupt UN contract. The contract had nothing to do with me or my former employer. But as often happens with global anti-bribery scandals (Unaoil, for example), the intermediary is at the epicenter of an investigation. I had a defense contract for United Nations Peacekeeping forces with the same intermediary that Bob Appleton was investigating on the other matter.
Appleton sent me a fax saying he either wanted to talk with me or have his long list of questions answered. I ignored it. I didn’t know then that he had come to the United Nations after a thirteen-year career at the DOJ’s Criminal Division, where he had prosecuted high profile weapons trafficking, international money laundering, and terrorist financing cases.
When he had gathered enough evidence to implicate me, Appleton shared his findings with my then employer. He also made a law enforcement referral and turned the case over to the Justice Department.
It didn’t take long for Billy Jacobson, then the DOJ assistant chief of FCPA enforcement, to let me know I was the target of a criminal investigation for violating the FCPA. Jacobson said his evidence included the United Nations issue.
I learned later that Appleton’s Procurement Task Force at the UN was staffed with experienced investigators and prosecutors from more than 15 countries. Before it was defunded and disbanded in 2008, the team managed more than 300 investigations throughout the UN’s worldwide operations.
In the three years it operated, the UN Procurement Task Force identified 20 major corruption schemes, and more than $630 million in tainted UN contracts. Their investigations led to five criminal convictions by national authorities of individuals (myself included) and the debarment of 47 suppliers.
The most infamous case was the conviction and sentencing to eight-and-a-half years in prison, upheld on appeal, of Sanjaya Bahel. He had steered more than $100 million in contracts to preferred vendors and suppliers in India, including a huge telecommunications contract. Bahel was one of three procurement chiefs at the UN convicted as a result of cooperation between the Procurement Task Force and national authorities.
After the Procurement Task Force was disbanded in 2008, the UN Office of Internal Oversight Services continued to operate, as it does today. That group no doubt is a skilled and professional team. But is it set up to succeed? Does it have the right mandate? What about staffing and budget?
Given all the cases and prosecutions which cascaded from John Ashe’s indictment (the late former Permanent Representative of Antigua and Barbuda to the United Nations and 68th President of the UN General Assembly), where was the UN Office of Internal Oversight Services?
The Department of Justice often thanks its investigatory partners, including those outside the U.S. government, when issuing releases about enforcement actions. In the releases about the recent UN cases, I couldn’t find any reference to the UN or to its Office of Internal Oversight Services.
Public international organizations don’t have to be weak in compliance and enforcement. For example, the World Bank’s Integrity Vice Presidency has a team of experienced investigators from around the world, much like the UN Procurement Task Force did during Appleton’s tenure. Even without the power to subpoena witnesses and other evidence, those investigators can fly anywhere in the world to audit World Bank-funded programs, frequently resulting in debarment, which is reciprocated by other development agencies and banks.
We know corruption finds weak links in governance and oversight wherever they exist. When institutions have their procurement and audit processes marked by secrecy instead of transparency, it’s an invitation for trouble.
Meanwhile, the Justice Department is uncovering and prosecuting corruption at the UN. And perhaps one day we’ll see a return to DOJ prosecutors working shoulder to shoulder with their UN counterparts, making sure that diplomatic status isn’t ground cover for bribery and corruption.
Richard Bistrong is a contributing editor of the FCPA Blog and CEO of Front-Line Anti-Bribery LLC. In 2010 he pleaded guilty to a conspiracy to violate the FCPA and served fourteen and a half months at a U.S. federal prison camp. He was named to Compliance Week’s list of Top Minds in 2017 and was one of Ethisphere’s 100 Most Influential in Business Ethics in 2015. He was named by Thomson Reuters in 2018 as a Top 50 Social Influencer in Risk, Compliance and RegTech.
His popular real-life compliance training video, Behind the Bribe, produced in cooperation with Mastercard, was released in 2017. To request a demo of the full eleven-minute video or a licensing fee schedule, please click here.
The author wishes to thank Bob Appleton, who generously provided information and background on the work of the UN Procurement Task Force.