9 March 2022 – Mukesh Kapila
‘The Big Catch’ is a video game that accompanied a song, ‘We are the Oceans’. They cost the United Nations Office for Project Services (UNOPS) a cool US$5 million. Both products – artistic merits being a matter of taste – sank rapidly into obscurity.
Most significantly, they presaged the rot of fraud and corruption that enveloped UNOPS, a multi-billion dollar agency of the United Nations system. UNOPS is charged with the awesome task to “help people build better lives and countries achieve peace and sustainable development”. How did UNOPS decide that a video game and song were the best use of its precious public funds received in good faith?
In September 2016, the 71st United Nations General Assembly met to debate the “Sustainable Development Goals: A Universal Push to Transform our World”. But Grete Faremo, the Executive Director of UNOPS, her deputy Vitaly Vanshelboim and General Counsel James Provenzano had more important business. They found time to meet with Paolo Zampolli. The colourful New York City resident is renowned for his Mafioso physique and vulgar charms, and his modelling and real estate businesses. Somehow he also became an ambassador of Dominica to the United Nations which brought privileged access to the movers-and shakers in the world body. But most of all he is famous for being a friend of the Trumps, having introduced his protégé Melania to The Donald.
The UNOPS top team was duly dazzled by Zampolli and open to the blandishments of another guest there: David Kendrick, a businessman of uncertain track record.
Some five months later, in January 2017, a grant of US$5 million was duly agreed by UNOPS for a company “We are The Oceans (WATO)” owned by David Kendrick’s daughter. Daisy Kendrick, then in her early twenties, had no relevant or established track record. She had, however, served as an intern in the Mission of Grenada to the United Nations, a Caribbean neighbour of Ambassador Zampolli’s Dominica.
The 11-month project agreed by UNOPS provided a generous million dollars in salaries for Daisy Kendrick and her collaborator Jude Ower, and handsome provision for marketing and promotion and travel, apart from technical project costs.
UNOPS prides itself on its excellence in project management. It has stringent administrative and financial rules to ensure value-for-money, integrity, and accountability of spending, and it follows rigorous diligence procedures. Its normal approval processes involve the convening of statutory committees such as an engagement committee, a project committee and a procurement committee, to conduct peer reviews to analyse the robustness of project design, ensure risk management, and assure compliance with organisational rules.
However, the Executive Director, supported or perhaps pushed by her Deputy, was in an extraordinary hurry. And so, UNOPS systems were put aside to enable Ms Faremo to decide by executive fiat. It also appears that senior managers such as its experienced and long-standing directors sniffed something strange, but stayed quiet. Why?
So it came to pass that Ms Faremo authorised the use of UNOPS’s operational reserves (normally ring-fenced for business continuity and as hedge in case of unforeseen organisational crises) for the grant to WATO. This was not just unprecedented but the selection of a single grantee without due competition and vetting drove a coach-and-horses through UNOPS’s checks-and-balances.
Furthermore, the first tranche of US$3 million was rapidly disbursed on signature of the contract, without any financial guarantees being required from an unknown company with no relevant track record, for some odd activities that were not in UNOPS’s usual portfolio of expertise.
The WATO song was duly performed by the Executive Director herself at the UN General Assembly on 8 June 2017. The chamber was virtually empty which is a pity because Ms Faremo has a fine voice. But, fortunately, privileged fans had already received a personal rendition the previous evening at the nearby luxurious Millennium Hotel. Perhaps the million-dollar PR budget at WATO (funded by UNOPS) came in handy there. Also, possibly for gushing articles that accompanied the launch. Clicking nowadays on the link to “We are the Oceans” contained in that article takes you to WatoOceans that describes itself as an elite international air freight forwarding company.
The project duly petered out over subsequent months. It’s development impact is not known. Was it cost effective in terms of its investment? Was its benefit sustained? How did it fit into UNOPS’s strategy for advancing humanity? Was the grant utilised according to agreed budget heads and were all the funds accounted for? Did audit find any discrepancies around ineligible expenditures? Were they refunded? Did WATO act as a conduit to trickle part of the UNOPS grant to secondary unauthorised beneficiaries elsewhere, including perhaps some people inside UNOPS who were so helpful in enabling this amazing project in record time? Why did UNOPS’s Internal Audit and Investigation Group (Paul Lucas and Kelley Swift) stay quiet for so many years despite concerns raised by several UNOPS staff ?
UNOPS is not known for its transparency on substantive matters, beyond promoting its own image. Thus, on its public website, there is no policy framework or programme document under which this project was justified and neither is there an end-of-project-report nor an independent evaluation. These are industry-standard good practices. However, the website hosts plenty of Grete Faremo’s press releases, speeches, and publicity materials that have created an impressive self-aggrandising personality cult around her. Heading UNOPS is also an onerous responsibility that necessitates a busy schedule of cocktail receptions and other glittering social events.
The trail does not end here. It appears that the WATO saga emboldened the UNOPS Executive Director to impose a subservient new senior leadership team structure at UNOPS, and assume special executive decision-making powers unto herself. An internal coup!
As subsequent events showed, the WATO experience was, perhaps, a trial run for a much larger sting that saw UNOPS lose at least US$ 22.19 million according to its official audit report and perhaps as much as US$60 million. This followed the creation of UNOPS’s new Sustainable Investments in Infrastructure and Innovation (S3i) initiative, whose Chief Executive was no other than Assistant Secretary-General Vitaly Vanshelboim, the erstwhile deputy of Under Secretary-General Grete Faremo.
As outlined in a previous article, UNOPS/S3i utilised more or less the exact dodgy procedures pioneered with WATO, to siphon US$58.8 million from its reserves via a private company, Sustainable Housing Solutions (SHS) Holdings. David Kendrick, the father of WATO’s Daisy Kendrick, appears linked to that. Nick Provenzano, the youthful progeny of UNOPS’s Legal Counsel, is CEO of Caribbean-based Custom Corals, an “United Nations Global Innovation Center Sustainable LLC”, and may have had a beneficial interest in decisions made around S3i, in which his father was involved.
That there is some fire behind the smoke was indicated by the sudden departure, in December 2021, of Mr Vanshelboim on administrative leave without pay. Other accountability for possible wrong-doings, perhaps of a criminal nature, are needed. They should include Executive Director Grete Faremo herself and her Senior Leadership Team of cronies, Honoré Dainhi, James Provenzano, Nick O’Regan, and Marianne de la Touche, for their directing and enabling role in what could be the gravest case of high-level corruption at the United Nations for several decades.