15 April 2022 – Mukesh Kapila
Image by Oleg Mitiukhin
Previous articles in this series have sought to decrypt the fraud, corruption, misconduct and mismanagement at the top of the United Nations Office of Project Services (UNOPS). Because of the web of concealment and deceit spun by its Executive Director, Grete Faremo, her erstwhile deputy Vitaly Vanshelboim, and Senior Leadership Team, it is a complex affair.
But thanks to many people – current and past UNOPS staff – providing information and analysis – the pieces are coming together. Their courage is to be saluted, especially as UNOPS leadership tends to be nasty and vindictive towards those who speak out. Its ethics, complaints and investigation functions are well-known as farcical. Of course, there is much more to say about the misdeeds at UNOPS. Doubtless, these will emerge in due course. You can’t fool all the people, all the time!
A message for UNOPS personnel
Several donors and partners have indicated that they know there is no whistle-blower protection at UNOPS, and intimidation is in progress. They have asked me to pass on an open invitation UNOPS personnel worldwide, to approach donors’ whistleblower contact points (available usually from organisational websites). This applies especially to any current or former UNOPS staff or contractor who has witnessed abuse, misconduct, fraud and corruption in relation to any donor-funded project or UNOPS contract.
Some actions are underway
Furthermore, several donors have begun reviews of their UNOPS support portfolios. Some are suspending disbursements of agreed contributions, pending the completion of investigations and action on findings. The Government of Finland has announced suspension of its core funding of the UNOPS S3i Initiative Office in Helsinki, after Ms Faremo was obliged, thanks to recent publicity, to belatedly confess that they had problems.
Below, for the public record, are the texts of my recent letter to all donors, partners, and clients of UNOPS, and my 5th April message to the UN Secretary-General, Antonio Guterres. They follow my 4th April letter to the President of the UNOPS Executive Board.
These communications are self-explanatory, but a few key messages are worth reiterating:
- There is little confidence in the UN’s own self-investigation processes – whether at UNOPS or by OIOS. Credibility requires genuinely independent external inquiries – and there are many models for doing just that.
- Millions of dollars can’t have been misdirected at UNOPS by the so-called ‘misconduct’ of one person but required the active connivance of Ms Faremo and all her Senior Leadership Team, consisting of Honore Dainhi, Marianne de la Touche, Nick O’Regan James Provenzano, and Peter Browne. They relied, in turn, on their subordinates in critical compliance and clearance functions failing their duties: Hafida Lahiouel, Paul Lucas, Kelley Swift, and Kathryn Higgs. A couple have left but all of them must go, if confidence in UNOPS is to be restored. Turning Vitaly Vanshelboim – whatever charges are proved against him – into a scapegoat for the wrong doings of others is not an adequate rendering of accountabilities.
- Because of the systematic undermining and bypassing of UNOPS’s internal checks and controls by its own senior leadership, it can’t be assumed that UNOPS problems were limited to S3i (and previously WATO). Thus, all its operations are vulnerable to abuse and all funding to UNOPS is potentially unsafe. Donors, partners, and clients must protect themselves through clear actions – so that the dirt from UNOPS misbehaviours does not sully them.
- However, we need UNOPS to be trusted again so that it can return to making an effective contribution towards the many problems facing our world. It is urgent to take robust action to clean-up UNOPS and reform its business systems – to ensure it does not fall prey to corruption, fraud, and mismanagement again.
Text of letter to UNOPS donors, clients, partners
I am grateful for this opportunity to draw your attention to the attached copy of a self-explanatory letter dated 4th April to the President of the Executive Board of the United Nations Office for Project Services (UNOPS). It concerns serious mismanagement, fraud and corruption at the agency, and calls for urgent action from the UNOPS/UNDP/UNFPA Executive Board. The letter, contains within it, links to the details behind the concerns raised.
You may also want to share this message with your relevant colleagues dealing with your organisational control and compliance matters (legal, finance and audit, ethics, human resources policies). Please note that it cannot be assumed that the serious problem identified at UNOPS is limited to Sustainable Investments in Infrastructure and Innovation (S3I) initiative its “special purpose vehicle”. That is because of the pattern of systematic undermining of the UNOPS system of internal oversight and controls. That make all its operations vulnerable.
Remedial action is not just for the Board or the UN Secretary General who has also been approached (see below). The issue directly concerns all agencies that are UNOPS stakeholders for three main reasons:
- First, the corrupt, fraudulent use of aid funds with associated mismanagement in any agency leads to loss of public confidence and support in the wider international development system and thereby affects all of us. There is, therefore, a duty to seek speedy accountability and correction, so as to reduce wider reputation damage as well as to protect the interests of the ultimate beneficiaries for which our system exists.
- Second, the weaknesses at UNOPS were enabled by its rent-seeking and profiteering business model, tolerated through neglect or non-understanding by the development system. That allowed UNOPS to accumulate huge reserves it used to “gamble” on extremely shady business ventures (such as S3i and a predecessor WATO) with negative returns, and that also spawned fraud and corruption. In effect, this was ‘stealing’ your funds that should have gone towards achieving productive SDG outcomes. Accordingly, you may consider a duty to seek redress to protect and reduce losses related to your own funds.
- Third, as attested by its own personnel, there is the matter of UNOPS’s egregious abuses of good management practices such as no whistleblower protection, retaliation against those who spoke up, abuse of position by senior managers to intimidate subordinates and commit business malpractices, as well as the complete capture of ethical, legal, and financial checks and controls by the top of the organisation. This affects other agencies like yours because UNOPS has a nexus of contractual relations with them.
Several of you also contribute towards, benefit from, or have other stake in the so-called ‘hosted partnerships’ that UNOPS runs out of its Geneva office. Legally speaking, these are UNOPS projects and vulnerable to the same problems as any other project. Corruption cases have been identified therein.
The shady doings at UNOPS arise directly from the policies and operational practices developed and promoted by the Executive Director, Ms Grete Faremo and her personally-appointed Senior Leadership Team (SLT). Ms Faremo has been disingenuous in deliberately concealing – or lying – about what has been going on, and her assurances to the contrary are completely unreliable, and un-evidenced by revealed facts. While Ms Faremo is separating from UNOPS on 30 September, it is extremely unsafe to leave her – and her conspirators in the SLT – in their current decision-making roles. They are currently busy further intimidating staff, and tampering with the evidence needed for independent investigations.
The Executive Board and UN Secretary General have been urged to act speedily and decisively, with several suggestions outlined in the attached letter. Additionally, as a donor, client, or partner stakeholder in UNOPS, you may want to consider the following:
- Action 1: Examine with urgency your existing project portfolio with UNOPS to forensically audit their disbursements to satisfy yourself on their integrity, and to monitor performance to see if quantified targets are being delivered according to agreed objectives. Re-examine and seek justification for the overhead fees – of different types – that UNOPS is charging. If questionable transactions are identified, they need their own specific responses. Please note that UNOPS’s own self-certified audits and reports cannot be relied upon and you must endeavour to conduct your own independent diligence.
- Action 2: Suspend funding to UNOPS including making any new contributions, and withhold further tranches of existing allocations. To re-emphasise: all funding to UNOPS is unsafe until investigations have concluded, accountability obtained, and corrections made to the grave systemic weaknesses and vulnerabilities that allowed UNOPS to fall prey to fraud, corruption, and mismanagement.
- Action 3: Review together with other donors and partners, and jointly with the Executive Board, the underlying policies and strategies that allowed UNOPS to conduct itself in ways contrary to the letter and spirit of United Nations principles and good practices. Obviously, this is a medium-term task that should include the new Executive Director. But, in the meantime, as a minimum, the compromised S3i initiative needs to be frozen and, furthermore beyond S3i, the current Executive Director and SLT should also not be allowed to make any new decisions.
In the past few days, several key donors have already acted to review their funding and relations with UNOPS; that is welcomed. The Government of Finland has also suspended its core funding to S3i but it has special responsibility to investigate further because it hosts the S3i business. Also, of course, the Government of Denmark has overall duty to act because it hosts the headquarters of UNOPS and has granted them many immunities and privileges that UNOPS has misused.
It is important that you safeguard your own resources to control any damage to your own institutional interests and reputation through the above recommended and other actions that you think appropriate.
Meanwhile, none of us need reminding that we are at a critical moment where there are many crises raging around the world. These require the collective efforts of all agencies. UNOPS is also very much needed to make an effective contribution in that context. Hence, it is vital that decisive action is taken to restore trust to a reformed UNOPS, so that it can start functioning properly again under new leadership and senior management.
Please don’t hesitate to be in touch if required. With best regards,……
Text of letter to the UN Secretary General
Cc Deputy Secretary-General; ASG, UN OIOS; Director of Ethics; Controller; ACABQ.
Dear Mr Secretary General,
I have the honour to draw your attention to the attached copy of a self-explanatory letter dated 4th April, to the President of the Executive Board of the United Nations Office for Project Services (UNOPS). It concerns serious mismanagement, fraud and corruption at the agency, and calls for urgent action from the UNOPS/UNDP/UNFPA Executive Board.
However, action is not just for the Board, but also for you because UNOPS operates under the supervision of the Secretary-General who appoints its Executive Director. Furthermore, this is a matter of grave importance for the United Nations system because it bears not just on its effectiveness at a time of great global need, but also on its collective reputation.
This matter has arisen because of the egregious mismanagement, misconduct and misuse of authority by and under the UNOPS Executive Director, Undersecretary-General Grete Faremo and her Senior Leadership Team. Ms Faremo has systematically withheld the facts from and misled the Executive Board, as well as not heeded the concerns that had been raised previously by, for example, ACABQ.
Thousands of dedicated current and past personnel at UNOPS are deeply distressed by what has been happened and, even more, extremely frustrated because the organs of justice and accountability in both UNOPS and the UN Secretariat appear to be failing them, Meanwhile, evidence-tampering and staff intimidation are rife at UNOPS. That is why we believe that it is not safe for Ms Faremo and her Senior Leadership Team to remain in post, and suggest that they be put on administrative leave pending resolution of the underlying problem.
Current UNOPS efforts to dismiss this as a “political’ matter through the aggressive lobbying of stakeholders including States, are disingenuous and confuse or pervert elucidation of the facts. It is not a political issue at all and politicising it does not serve your – or Member States’ – interests. It is simply a non-political matter of wrong-doing that should never be tolerated in any UN agency.
However, the gravity of alleged crimes at UNOPS can’t be managed just through internal UN administrative procedures, as appears to be happening at the present time. Hence my letter to the UNOPS Board proposes full external and independent inquiry and law enforcement action, perhaps modelled on an adapted form of the Volcker Inquiry. This is possible to be done under the authority of the Secretary-General, and needs no UN Security Council resolution as was the case for the Iraq Oil-for-food inquiry.
Copies of my letter to the President of the UNOPS Executive Board have been transmitted to all Permanent Representatives of Member States at the United Nations in New York, with onward transmittal to all capitals. A web version of that letter can also be found here.
My contact details are in this mail, in case needed. In hoping for urgent action from you, please accept, Mr Secretary-General, the assurances of my highest consideration,…….