The Magazine

Crying Wolfowitz

. . . while the United Nations bankrolls dictators.

May 28, 2007, Vol. 12, No. 35 • By CLAUDIA ROSETT
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For two of Paul Wolfowitz's most prominent critics, Mark Malloch Brown and Ad Melkert, the war over the World Bank presidency could not have come at a better time. Whatever else the ousting of Wolfowitz has achieved, it has done plenty to distract from the North Korea Cash-for-Kim scandal that just four months ago was threatening to engulf the United Nations agency piloted for the past eight years first by Malloch Brown and now largely by Melkert.

That agency is the U.N. Development Program, or UNDP, and especially in light of the U.N. system's sudden interest in ethics, it deserves a lot more attention. Run by Malloch Brown from 1999-2005, the UNDP is now home to Melkert--previously head of the ethics committee at the World Bank--who has worked since early 2006 as its hands-on manager and number two man to the often-traveling administrator, Kemal Dervis.

Despite its generic name, the UNDP is not just any old U.N. agency (or "programme," in U.N. parlance). It is the alpha in the U.N. alphabet soup, the U.N.'s flagship in the developing world. Its administrator is the third-highest-ranking official in the U.N. system, and the UNDP is angling to serve as top boss of all other U.N. agencies in the field. For years, the UNDP has enjoyed an image as the model of a modern, more efficient U.N.--product of the "reforms" and vast expansion of both its budget and braggadocio under Malloch Brown.

The reality is a lot less wholesome. Operating with even less transparency than the opaque U.N. Secretariat, and now channeling more than $5 billion per year worldwide in the name of development (at least $245 million of that contributed by U.S. taxpayers), the UNDP has made a practice of bunking with dictators from Algeria to Zimbabwe. It has done this while maintaining internal oversight controls lax enough to embarrass Enron in some cases. This January, in the Cash-for-Kim scandal, the UNDP got caught playing sugar daddy to North Korea's nuclear extortionist regime of Kim Jong Il. It further emerged that while forking over hard currency to Kim, UNDP officials in Pyongyang had been storing counterfeit U.S. banknotes in their own office safe.

What has not been disclosed until now is that the UNDP in Pyongyang was also busy shepherding and bankrolling "study tours" of the U.K. and Europe for North Korean arms experts, stocking Kim Jong Il's research libraries with specialized publications on global security matters, and dispensing funds on behalf of other U.N. agencies for such ventures as sending North Korean officials to a three-week conference on "statistics" in Iran. This went on even after North Korea's U.N.-denounced missile and nuclear bomb tests last year.

And though the U.N. has treated Cash for Kim as an anomaly (recently suspending UNDP operations in Pyongyang, but nowhere else), the program's odd activities hardly begin and end with North Korea. The UNDP is also supporting such endeavors as an upgrade for the state-owned national airline of Syria, a mullah-approved official youth group in Iran, and a network of women's groups in Burma that were recently accused of shaking down impoverished villagers for forced membership fees. In Zimbabwe, the UNDP is embroiled in unproven allegations that its vehicles have been used for smuggling from a diamond mining venture it has been supporting--which raises the question of why the UNDP is involved in diamond mining at all.

In defense of such dubious activities, plus many more (such as the time it got caught in 2005 bankrolling anti-Israel propaganda in Gaza), the UNDP has issued a stream of denials and prevarications--including the notion that one has to break a few eggs to make an omelette.

Such outrages are the natural result of the UNDP's ever expanding mission to plan every developing economy on the planet. UNDP programs are crammed with new-age U.N. jargon about "capacity building," "national partners," and "millennium development goals." What they're really talking about is old-style, top-down central planning, done by UNDP-ocrats in cahoots with their high-level counterparts in client governments. What the Soviet Union called five-year plans, the UNDP calls "Multi-Year Funding Frameworks."