In announcing bribery and tax fraud charges last week against former United Nations General Assembly President John Ashe, U.S. Attorney Preet Bharara said that “John Ashe, the 68th president of the U.N. General Assembly, sold himself and the global institution he led.” Moreover, the U.S. Attorney put the UN on notice that his investigation was not over. “We will be asking: Is bribery business-as-usual at the U.N.?” he said.
UN Secretary General spokesperson Stephane Dujarric took umbrage at the U.S. Attorney’s “business-as-usual” remark, telling reporters that “corruption is not business as usual at the U.N.” He also said that Secretary General Ban Ki-moon was “shocked and deeply troubled” by the allegations against Mr. Ashe. “The Secretary-General reaffirms that there will be no tolerance for any corruption at the United Nations or in the name of the United Nations,” Mr. Dujarric added.
In view of the pervasive pattern of past corruption at the UN, including most notably the oil-for-food scandal, procurement scandals and multiple allegations of sexual exploitation of civilians by UN peacekeepers assigned to protect them, the UN has been knee deep in wrongdoing for years. The current scandal fits the pattern. Indeed, the UN bureaucracy responded to the latest scandal with the same modus operandi it has used previously – first, to sweep it under the rug, then to pretend it is an isolated occurrence not involving the UN system and then belatedly to initiate an internal review.
The federal complaint announced by U.S. Attorney Preet Bharara last week was brought against six individuals including Mr. Ashe, who served as the UN ambassador from the country of Antigua and Barbuda before taking the post of UN General Assembly president during the 2013-2014 session. The complaint charged, among other things, that Mr. Ashe received over a million dollars of cash payments, some of which he used to pay for lavish “personal expenses,” from a Chinese real estate developer, Ng Lap Seng. Mr. Ng Seng’s company, the Sun Kian Ip Group, was allegedly looking for favors to help its real estate business in Macau China. In particular, according to the complaint, Mr. Ashe was tasked to facilitate obtaining official UN approval for the building of a permanent multibillion-dollar UN-sponsored conference center in Macau that would have benefited the Sun Kian Ip Group. In exchange for the alleged bribes he received, Mr. Ashe submitted an official UN document to the Secretary General claiming there was a purported need to build the expensive UN Macau Conference Center. Mr. Ng Seng allegedly used the letter to promote his proposed conference center, which could be used to host events focused on what is known in UN parlance as South-South cooperation. South-South cooperation is a buzzword used to describe programs among developing countries to share knowledge, skills, expertise and resources to meet their development goals through concerted efforts. The UN has made this a priority as part of the global effort to implement the 2030 Agenda for Sustainable Development adopted by world leaders at the United Nations Sustainable Development Summit on September 25, 2015. The 2030 Agenda for Sustainable Development includes a set of 17 Sustainable Development Goals (SDGs) and 169 targets aimed at supposedly ending poverty, fighting inequality and injustice, promoting sustainable consumption and production patterns, promoting good governance and tackling climate change by 2030.
At first, Mr. Dujarric, the UN spokesperson, tried to distance the UN system from the allegations against John Ashe, claiming that they involved a former president of the General Assembly who does not answer to the Secretary General. The UN Secretariat, he said, did not have the power or mandate “to investigate individuals or entities that weren’t considered staff or part of the official UN umbrella.” A day later, however, Mr. Dujarric announced a change in course. He told reporters that the Secretary General had decided to request that the UN’s Office of Internal Oversight Services (OIOS) launch an audit of the interaction between the United Nations and the Sun Kian Ip Group as well as with a foundation known as the Global Sustainability Foundation, whose leader was also charged with having alleged corrupt dealings with Mr. Ashe. But before anyone thinks the UN is taking this matter seriously, consider this distinction drawn by a deputy UN spokesperson a few days later: “It’s not really an inquiry. It’s an audit.”
The UN bureaucracy is continuing to hide behind a veil of secrecy rather than demonstrate the full transparency that it lectures everyone else about. A full-fledged investigation is overdue since Mr. Ng Seng’s company through his foundation has financial ties directly with the UN Secretariat. Mr. Ng Seng may have used Mr. Ashe to facilitate his business interests involving the UN and paid him for his services. But he also put his hooks into the UN Secretariat itself.
In fact, Mr. Ng Seng, who himself was arrested last month for lying about his plans for $4.5 million in cash he had brought into the U.S. over several years aboard private jets, had six months earlier signed a funding agreement with the Director of the UN Office for South-South Cooperation at the time, Mr. Yiping Zhou. Under the agreement, Mr. Ng Seng’s company (or the foundation bearing his company’s name) would contribute $5 million a year for three consecutive years to a UN multi-partner trust fund to be set up by the UN Office for South-South Cooperation. In August, just a month before his arrest, Mr. Ng Seng appeared along with Mr. Zhou, who called the Sun Kian Ip Group foundation “our partner,” and with Mr. Ashe, the foundation’s honorary co-chairman, at a co-branded High-level Multi-stakeholders Strategy Forum on South-South Cooperation for Sustainable Development held in Macau. The United Nations used $1.5 million contributed by the Sun Kian Ip Group to help pay for the conference.
The UN Office for South-South Cooperation is now trying to play damage control. According to an Associated Press report, the office is rejecting the remainder of the $15 million total offer from the Sun Kian Ip Group. The UN office also claimed it sent a team to Macau in April 2015, a month after it had signed the funding contribution agreement, to do due diligence on the foundation and found nothing unsuitable. However, this is very curious considering that the UN Global Compact, a self-declared voluntary initiative based on CEO commitments to implement universal sustainability principles and to take steps to support UN goals, had expelled the Sun Kian Ip Group in early April for failing to report its activities two years in a row.
The Sun Kian Ip Group foundation does not appear to have filed tax forms in the U.S., even though it has maintained a New York City address. At minimum, the UN Office for South-South Cooperation should have checked the public record to confirm whether appropriate tax forms were filed by a foundation maintaining a New York City address before agreeing to accept monies that might have been derived from illicit activities and conceivably contributed to the UN office at its New York City headquarters for the purpose of buying influence.
In contrast to the UN Office for South-South Cooperation’s minimal due diligence, the Las Vegas Sands Corporation had commissioned a background investigatory report on Mr. Ng Seng as far back as 2010. Sands was advised in the report to be wary of “red flags” regarding Mr. Ng Seng and to proceed with “extreme caution” in any dealings with him. As mentioned in the report, large donations he had reportedly made to President Bill Clinton’s team in the 1990’s were reportedly later returned. This may have been because of concerns raised in the media about the origin of the funds, which were said to have possibility been linked to criminal activities including the international slave prostitution trade, although Mr. Ng Seng did not have a past criminal record.
Now the law has caught up with the UN’s donor, Mr. Ng Seng, who was arrested last month in the United States on charges of bringing monies into the United States under false pretenses. Most disturbingly, the UN Office for South-South Cooperation appears to have done nothing to re-examine its relationship with Mr. Ng Seng’s company or foundation between the time that Mr. Ng Seng was arrested in September and when the criminal complaint against the former president of the UN General Assembly and his ties to Mr. Ng Seng were made public last week. The UN office was afforded an opportunity to explain this apparent lapse, which would have been included in this article, but it failed to do so despite multiple requests. It is reasonable to infer from the UN’s business-as-usual attitude that it was prepared to take the entire $15 million from the Sun Kian Ip Group and pretend nothing had happened until that stance was no longer tenable in light of the revelation of the criminal complaint linking Mr. Ng Seng to the former president of the UN General Assembly.
Jorge Chediek, the current Director of the UN Office for South-South Cooperation, did tell the Associated Press that his office is conducting an internal review of “all details of relationships” with the Sun Kian Ip Group foundation as well as with the Global Sustainability Foundation. According to the Associated Press report, “Chediek said the [Sun Kian Ip Group] foundation’s $15 million offer was ‘never operational’ beyond the $1.5 million his office used. He said all of the $1.5 million had been accounted for, with no evidence found of misuse.” Mr. Chediek added that “we are reviewing our whole partnership strategy.” That is little more than closing the gate after the horse has left the barn.
The UN’s “partnership strategy” to date has evidently been to take money for its causes from any source, no questions asked. A for-profit Las Vegas hotel-casino company had enough concerns to mount a background check on Mr. Ng Seng before entering into a potential business relationship with him five years ago. The investigation report raised “red flags” and advised “extreme caution.” Yet the UN Office for South-South Cooperation, which operates under the aegis of the Secretary General, blindly accepted contributions from Mr. Ng Seng’s foundation. In doing so, the UN system quite possibly helped him to disguise the source of monies that might have been derived from criminal activity if any, potentially evade taxes on business income and at the same time buy influence at the UN for his personal business benefit.
One of the UN’s targets in meeting its highly publicized Sustainable Development Goals is to “substantially reduce corruption and bribery in all their forms.” Another target is to “develop effective, accountable and transparent institutions at all levels.” The UN establishment would do well to lead by example. The latest corruption scandal indicates it is woefully unprepared to do so.