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"Financial Transparency In The United Nations" by Anne Jelliff

Financial Transparency In The United Nations

by Anne Jelliff


The United Nations (UN) was established in 1945, and was seen by many in the international arena as the fulfillment of a long-standing ambition foran organization whose goal was "to promote international cooperation and to achieve peace and security." History of the United Nations, UNITED NATIONS, http://www.un.org/en/aboutun/history/, last visited Mar. 3, 2013. These goals are undeniably noble, and many individuals who work within the organization are honorable people who do their best to help achieve this international peace. However, over the course of its nearly seventy-year history, the UN has grown ever larger, more bureaucratic, and less transparent.

The unnecessary complexity, and often redundancy, of the UN internal system has frequently caused frustration for those trying to make a difference in world conditions. See Matthew Saltmarsch, A Bloated U.N. Bureaucracy Causes Bewilderment, N.Y. TIMES, Jan. 5, 2011, http://www.nytimes.com/2011/01/06/world/europe/06iht-nations06.html?pagewanted=all; see also George Russell, U.S. Diplomats Growing Frustrated at United Nations' Budget Games, FOXNEWS.COM, Oct. 7, 2011, http://www.foxnews.com/world/2011/10/07/us-diplomats-blow-whistle-on-united-nations-budget-games/. Furthermore, it has all-too-often resulted in needlessly duplicative work product, and has often led to unintended consequences with frequently ludicrous or even tragic results. See, e.g., Stefan Halper, A Miasma of Corruption: The United Nations at 50, CATO POLICY ANALYSIS, Apr. 30, 1996, http://www.cato.org/pubs/pas/pa-253.html; Elizabeth Rosenthal, Profits of Carbon Credits Drive Output of a Harmful Gas, NY TIMES, Aug. 8, 2012, http://www.nytimes.com/2012/08/09/world/asia/incentive-to-slow-climate-change-drives-output-of-harmful-gases.html?pagewanted=all (noting that protective environmental measures enacted by the UN actually encouraged manufacturers in several locations to increase production of harmful gases), see also Charles Anthony Smith, Human Trafficking: The Unintended Effects of United Nations Intervention, 32 INT'L POL. SCI. REV. 125 (2011); The United Nation's Role in Haiti Cholera Outbreak, HAITIAN-TRUTH.ORG, Nov. 20, 2012, http://www.haitian-truth.org/the-united-nations-role-in-haiti-cholera-outbreak/.

This article provides a brief overview of the financial transparency problems in the UN and the pressing need for reform. Part I looks at some concerns raised by the UN's recurring budget troubles. Part II synopsizes the disquieting financial blunders associated with the UN's recent peacekeeping missions. Part III addresses a likely reason these problems have,so far, been tolerated by members of the international community, and explains why this reason can no longer be accepted. Part IV notes the pressing nature of the call for a solution to this issue. This paper then concludes with a brief reminder of the valuable role the UN is capable of playing in international affairs, and urges that much-needed changes be implemented so that the organization's tremendous potential for advancing humanitarian causes will not be lost to the combined effects of mismanagement and dishonesty.

I. United Nations Financial Concerns

Increasingly over the last few years, the UN has shown itself hopelessly inept at managing its own finances. In 2012, for example, the UN announced that it would go over its $1.9 billion budget by about 4% (or roughly $80 million) in the renovation of its headquarters in New York City. Brett D. Schaefer, The Costly United Nations, NATIONAL REVIEW ONLINE, Mar. 13, 2012, http://www.nationalreview.com/articles/293261/costly-united-nations-brett-d-schaefer; see also Anita Snow, UN Complex in New York Gets $2 Billion Facelift, THE SEATTLE TIMES, Mar. 4, 2012, http://seattletimes.com/html/nationworld/2017668136_apunun2billionfacelift.html. As Senator Dirksen allegedly once quipped, "a billion here, a billion there, pretty soon you're talking real money." See Senator Everett McKinley Dirkson Dies, UNITED STATES SENATE, Sept. 7, 1969, http://www.senate.gov/artandhistory/history/minute/Senator_Everett_Mckinley_Dirksen_Dies.htm. But the truth is even more frustrating than it seems at first glance.

The $1.9 billion budget was a very large increase from the original estimate put out by the Government Accountability Office (or the U.S. General Accounting Office, as it was known then), which anticipated that the project would cost between $875 million and $1.2 billion. US GOV'T ACCOUNTABILITY OFFICE, GAO-01-788, PLANNING FOR HEADQUARTERS RENOVATION IS REASONABLE; UNITED STATES NEEDS TO DECIDE WHETHER TO SUPPORT WORK 7 (2001). Needless to say, the project grew a bit as new aspects were added. Yet, in spite of the fact that the new numbers are approximately double the amount originally discussed, it appears that even this new estimate may be an understatement of the fact.

According to Michael Adlerstein, the architect in charge of the renovation project, cost overrun may likely be closer to $265 million, which is nearly a 14% increase (rather than the officially published 4%) from the approved (increased) budget. Thalif Deen, Renovation Money Shortage, WEBPUBLICA PRESS, Mar. 29, 2012, http://webpublicapress.net/?p=10172. And the numbers for the second part of this project look equally ominous. The UN proposes to renovate the Geneva headquarters once the work on those in New York City is complete. UNITED NATIONS GENERAL ASSEMBLY, A/66/279, STRATEGIC HERITAGE PLAN OF THE UNITED NATIONS OFFICE AT GENEVA, 2 (2011). The current estimate for that job is about $600 million. ID. But there are, again, no safeguards to ensure that the organization will adhere to that number either.

If this were the full extent of the financial problem, no reasonable person would likely raise too strong an objection, since the renovation of the New York facility, which was built in 1952, is unquestionably long overdue. Associated Press, UN Renovation Cost Jumps $400M, CBSNEWS (Feb. 11, 2009, 6:59 PM), http://www.cbsnews.com/2100-202_162-1055381.html. However, the UN's cavalier treatment of finances extends to all areas of the organization's management, including (and most notoriously) its peacekeeping missions.

II. Peacekeeping Expenditures

Over the last several years, progressively more reports have been released noting the financial waste, and sometimes outright financial abuse, that exists within the UN peacekeeping missions. The mission to East Timor, for instance, saw an almost $9 million overcharge on a single transaction for air transportation. Colum Lynch, UN: Waste and Fraud Found in Peacekeeping Work, CORPWATCH, Jan. 24, 2006, http://www.corpwatch.org/article.php?id=13162. The expense records for the mission to the Congo show a quantity of wastewhich includes $2.4 million spent on just one unnecessary purchase. And between the Sudan and Haiti missions, the UN spent a total of $65 million on unneeded fuel alone. Id.

But this is only a brief glimpse of the money spent extraneously. It does not even touch on the number of contracts the UN struck with outside companies under questionable circumstances. See, e.g. , Colum Lynch, Two Accused of Taking Bribes in UN Contract Deal with U.S. Company, WASH. POST, Mar. 18, 2010, available at http://www.washingtonpost.com/wp-dyn/content/article/2010/03/17/AR2010031703747.html (reporting on investigations of UN workers who allegedly arranged for a contract to go to a company which promised cash payments to specific participants in return); see also Associated Press, U.N. Cuts Back on Investigating Its Own Fraud, FOXNEWS.COM, Jan. 12, 2010, http://www.foxnews.com/story/0,2933,582876,00.html (noting that during an investigation conducted between 2006 and 2009, approximately twenty schemes were uncovered which touched on over $1 billion in UN aid and contracts); Colum Lynch, Audit of U.N.'s Sudan Mission Finds Tens of Millions in Waste, WASH. POST, Feb. 10, 2008, http://articles.washingtonpost.com/2008-02-10/world/36903637_1_government-and-southern-rebels-sudan-s-islamic-internal-audits (telling of the more-than half-million dollar contract a UN official steered toward a company that in return helped the UN official's wife to obtain a visa).

Nor are these isolated incidents. An audit of just the peacekeeping mission to Sudan, for example, showed several millions of dollars in waste, and raised further questions of possible mismanagement or even fraud regarding a number of contracts that amounted to almost $300 million. Colum Lynch, Audit of U.N.'s Sudan Mission Finds Tens of Millions in Waste, WASH. POST, Feb. 10, 2008, http://articles.washingtonpost.com/2008-02-10/world/36903637_1_government-and-southern-rebels-sudan-s-islamic-internal-audits. Even allowing for the UN's explanation that the staff members responsible for these problems were not guilty of deliberate wrongs, but were in fact simply "in over their heads," the sheer number of unwise decisions made in the course of this mission should put UN management on notice that its staff is in need of greater oversight, and that its processes need to be reexamined for efficiency.

III. A Reason For The Continued Lack Of Restraint

An argument is made by some that these excesses and inefficiencies, bad though they may be, are an acceptable price to pay for the overall achievements in UN peacekeeping missions--even if the ratio of successes to failures is not very reassuring. This argument can sometimes go unchallenged for the simple reason that it is rooted in a measure of truth. A number of UN missions have been successful, and in the end, the current UN peacekeeping structure may not be very popular, but can be seen as a relatively inexpensive way to at least keep some of the worst effects of struggling nations' internal conflicts from affecting innocent neighboring peoples. See, e.g., Not Much Danger, Success Or Cash, STRATEGY PAGE, Feb. 8, 2013, http://www.strategypage.com/htmw/htun/articles/20130208.aspx.

However, the fact remains that many UN missions are unsuccessful. When it comes to settling actual conflicts (the image most often conjured by the term "peacekeeping"), the UN doesn't seem to be a good choice for the job. Those who doubt this conclusion are respectfully referred to the horrific results of the 1993 Somalia mission, the 1994 Rwanda mission, the 1995 Bosnia mission, and, of course, the still-ongoing mission to the Democratic Republic of Congo,among others. See, e.g., Alexandra R. Harrington, Victims of Peace: Current Abuse Allegations Against U.N. Peacekeepers and the Role of Law in Preventing Them in the Future, 12 ILSA J. INT'L & COMP. L. 125 (2005) (discussing the heinous acts that have been perpetrated against war refugees by UN Peacekeepers in the Congo, among other places). (It has been fairly noted that many of the UN's worst failures can be attributed to the combination of a lack of adequate resources, and the severely restrictive rules under which the peacekeeping forces are expected to operate. See, e.g., Who's Peacekeeping in Africa?, WORLD DISASTER REPORT Oct. 19, 2012, http://www.wdrep.com/_wp/war/whos-peacekeeping-in-africa

As has been noted by several scholars, the UN's greatest successes are primarily confined to the fostering of governance functions after conflict has already been resolved--such as ensuring a free election, or assisting a smooth diplomatic process. See, e.g., Thomas W. Jacobson, U.N. Peacekeeping: Few Successes, Many Failures, Inherent Flaws, INT'L DIPL. & PUB. POL'Y CENTER 1 (Apr. 2012), http://www.idppcenter.com/UN_Peacekeeping_Failures.pdf. So, while the UN does do some things very well, the areas of its greatest achievements do not coincide with the areas of its greatest financial abuses.

When viewed in light of these facts, the various financial embarrassments that have plagued the UN recently no longer seem like a minor wrinkle in an otherwise smooth process. The money wasted or lost in various ways may be dismissed as "water under the bridge," since no amount of money can come close the worth of a human life. And it is true that any lives saved by UN efforts would be worth the price if the monies involved were a one-time loss, or if they had gone toward the accomplishment of a humanitarian goal.

But the instances of wide-scale fiscal abuse seem to crop up most in some of the very missions that have become notorious as the UN's greatest failures. See, e.g., Colum Lynch, UN: Waste and Fraud Found in Peacekeeping Work, CORPWATCH, Jan. 24, 2006, http://www.corpwatch.org/article.php?id=13162; see also Colum Lynch, Audit of U.N.'s Sudan Mission Finds Tens of Millions in Waste, WASH. POST, Feb. 10, 2008, http://articles.washingtonpost.com/2008-02-10/world/36903637_1_government-and-southern-rebels-sudan-s-islamic-internal-audits. This disturbing truth robs the proffered excuse of its believability, and has the unfortunate effect of making the UN appear rather like a charlatan who demands large payments up-front while, in reproachful tones, warning all who look for accountability in the UN that they must "pay no attention to that man behind the curtain."

IV. Urgent Need For Change

The UN's careless treatment of the financial irresponsibility of its own officials is merely one symptom of an organization that has few incentives to live within its means, and there seems to be little hope that this will change. Even where the UN takes official measures to audit its own systems and procedures, these investigations are often "seriously compromised" from the beginning by ties between the investigators and the management staff subject to the audits. See George Russell, UN Investigators 'Seriously Compromised' by Relationship to Management Bosses, Report Charges, FOX NEWS.COM, May 23, 2012, http://www.foxnews.com/world/2012/05/23/un-investigators-seriously-compromised-by-relationship-to-management-bosses/. Because of this, they predictably produce few results, and are, ironically, nothing more than an additional expense on the budget. Id.

The UN is very comfortable going over budget, primarily because it is never made to feel the pinch of its own excesses. Any overage is simply forwarded to its membership (of which the United States is the highest paying member), and the membership is expected to pick up the balance. See George Russell, U.S. Diplomats Growing Frustrated at United Nations' Budget Games, FoxNews.com, Oct. 7, 2011, http://www.foxnews.com/world/2011/10/07/us-diplomats-blow-whistle-on-united-nations-budget-games/.

This arrangement is unrealistic, to say the least. Shakespeare once observed that "madness in great ones must not unwatched go." UN member states should insist that the UN increase its transparency by establishing a legitimate investigation process to audit each function of the UN. They should also demand that the organization abide by parameters that will force it to live within its allotted means.


The UN is an entity uniquely positioned to address many of the most pressing issues in the international community, such as equal rights for marginalized peoples, or protection and relief for victims of human rights violations. The UN is also extraordinarily blessed with nearly limitless resources. Member states have shown a remarkably long-suffering willingness to support the organization, and some of the world's brightest minds are eager to join its ranks, all because the UN still represents a cause in which the civilized world believes: the promotion of peace and prosperity for all peoples around the world.

However, a global body comprised of states with differing world views, and often opposing value systems must, of necessity, trade on both the continued good will of its membership and on its own prestige--the appearance of integrity and the "moral authority" that comes with it. The UN has imperiled its position by its own lack of transparency, and risks losing it altogether if the member states do not act now to make some much-needed changes to the organization's internal system.

The appalling debacles that have resulted from the UN peacekeeping missions of the 1990s, and the years following, have caused significant damage the organization's reputation, and when details of the infamous oil-for-food outrage began to surface, the UN lost still more esteem in the eyes of the world. Sadly, the organization has done little to redeem itself from these scandals, and as more fiscal indiscretions are discovered, its global standing becomes correspondingly less authoritative.

The financial problems within the UN are no small matter, and fixing them will take both time and determined effort. But the member states that once banded together to "maintain international peace and security," and to "promot[e] . . . economic and social advancement of all peoples," must now join ranks again to save the UN from itself.

Anne Jelliff is a 3L at Albany Law School, and holds a degree in Voice Performance from Bob Jones University. Among other things, she serves as the Executive Editor for the Albany Government Law Review and Vice-President of Albany Law School's chapter of the National Academy of Elder Law Attorneys. Her article about the jurisprudence of Justice Anthony Kennedy and its ties to his Catholic faith was just published in Vol. 76 of the Albany Law Review. She wishes to thank Professor Alexandra Harrington for her advice and guidance during the drafting of this article.

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This page contains a single entry from the blog posted on May 10, 2013 5:23 PM.

The previous post in this blog was "A Guardianship On Christmas Eve? Evaluating The Case Of Aunt Matilda" by Benjamin Pomerance.

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