Payoffs trigger independent UN procurement review

UN Secretary-General Kofi Annan ordered a broad independent review of UN procurement practices on Monday following the discovery that a senior UN purchasing official was shaking down contractors.
The United Nations, at Annan's insistence, would soon hire an outside consulting firm to carry out "a full financial and internal control review of the UN's procurement system," chief UN spokesman Stephane Dujarric said.
The firm has not yet been chosen but its review is expected to be completed by the end of next month and all its recommendations will be quickly put in place, along with any reforms identified by a separate internal purchasing review ordered earlier, Dujarric said.
In the meantime, UN controller Warren Sach has been ordered temporarily to assume "direct oversight" of the procurement service, now led by Assistant Secretary-General Andrew Toh of Singapore, Dujarric said.
Toh, the assistant secretary-general for central support services, is not being disciplined and will retain his post and other responsibilities including the management of computer systems, security and facilities, Dujarric said.
"This is a temporary and exceptional measure, pending the completion of the external review," the spokesman said.
A UN-established investigation last week accused senior procurement official Alexander Yakovlev of shaking down UN contractors for more than $950,000 in illegal payments.
The inquiry, led by former US Federal Reserve Chairman Paul Volcker, also accused Yakovlev, a Russian, of soliciting a bribe from a Swiss firm bidding for a UN contract under the scandal-ridden oil-for-food program for Iraq.
Within hours of the accusations, Yakovlev pleaded guilty to federal conspiracy, wire fraud and money laundering charges and was released on bail.
Investigators said the illicit payments to Yakovlev, which surfaced during their investigation of the $67-billion oil-for-food plan but were unrelated to that program, could mean that corruption at the United Nations was more widespread than previously thought.
The Yakovlev case "shows that whatever measures and safeguards that have been in place need to be looked at again and procedures need to be tightened," Dujarric said.