UNOPS reaction to likely fraud is too little, too late, too phoney

22 April 2022 – Mukesh Kapila

If there was a competition for the least trustworthy communications from a development agency, the United Nations Office for Project Services would be the undoubted champion. Scrolling its website is a singularly uninformative experience. UNOPS has never been transparent about the ups and downs that are normal for any enterprise operating in the real world.  Instead, its strategy is simply to burnish its own image – and especially that of its Executive Director, Grete Faremo

That means taking liberties with facts, hiding those that are inconvenient, and spinning the rest into a smokescreen to blind us.  These talents were evident when Ms. Faremo met with the President and Bureau of its Executive Board, earlier this week. It was embarrassing to observe how she fumbled her way to answering the basic but pointed questions addressed to her.  

The obfuscation practiced routinely by Ms. Faremo and her Senior Leadership Team reflects the contempt with which they hold  their stakeholders – staff, governing board, clients, partners, donors, beneficiaries, public.  Also their sense of impunity against accountability.

That has meant many months of silence from UNOPS followed by occasional random, reactions  that are downright misleading. These are supplemented by lies to its staff and Executive Board. They concern the misplacement and wider institutional implications of  dispensing over US$ 60 million via its pet child, the Sustainable Investments in Infrastructure and Innovation (S3i) initiative.  Misconduct, mismanagement, fraud and corruption are strongly suspected.

The latest UNOPS statement hides more than it reveals

The UNOPS communications approach is not just dishonest but also incompetent. It  appears to be reaching its limits. This is evident from the piqued, dismissive tone of its latest Statement of 17 April.  However, it appears that the public airing of its misdoings through previous articles in this series and via this Devex article, has obliged the UNOPS leadership to descend from their lofty heights.

They are finally realising that pertinent questions will never go away without full and truthful answers. Many governments and donors have now started questioning their support for UNOPS.  Anything that touches its bottom-line is most likely to awaken UNOPS leaders, the most financially avaricious in the UN system.  Meanwhile, the UNOPS Statement is disingenuous in several ways.

Why has it taken UNOPS so long to admit wrong-doing?

The UNOPS Statement indicates that it took till December 2021 to acts on misdeeds in relation to S3i, by suspending its chief executive, Vitaly Vanshelboim, with whom Ms. Faremo was literally sharing her office for many  years. 

The Statement obscures the fact that misdeeds were suspected as early as 2017 when US$5 million was gifted by UNOPS to a strange entity “We are the Oceans (WATO)” which Ms. Faremo has subsequently admitted publicly that it did not deliver. And yet, several of the  key directors involved in WATO were the same that UNOPS/S3i  subsequently  favoured in its new partner Sustainable Housing Solutions (SHS).  Let’s recall that WATO/SHS were chosen at a New York cocktail party instead of going through a procurement process. If compliance issues were pointed out as far back as 2017, why did UNOPS investigators (Paul Lucas and Kelley Swift) disregard them?

Subsequently,  further internal objection was raised in 2018 in relation to the Mexico renewable energy project. This was also brushed aside. With internal UNOPS ethics, audit and complaints functions – all reporting personally and directly to Executive Director Grete Faremo – they were unwilling to act.  The UN’s Office of Internal Oversight Services (OIOS) was approached in 2019 but also without effect. 

The UNOPS Statement claims it started its own internal investigations in 2020.  Why so late? Meanwhile, money continued to flow to UNOPS/S3i partners against which concerns had been expressed. Why did Ms. Feremo and her top associates continue to sign off on “eight investments worth $63 million”, despite claiming to be conducting internal investigations at the same time?   The UNOPS Statement glosses over such inconvenient truths.

UNOPS cant be trusted to do its own S3i evaluation

UNOPS has now been forced to acknowledge  that it has “significant challenges” that need immediate attention through an “accelerated independent comprehensive evaluation of S3i”. This is a complete reversal of its previous assertion to wait till the end of 2023.  

The Bureau of the Executive Board of UNOPS are to be commended that, at this week’s meeting,  they demanded  the hapless Ms Faremo to produce forthwith all the diligence and related documents.  Will she comply in a speedy manner or is she currently busy fabricating the necessary documents or cleaning-up the inconvenient evidence that she actually ignored at different times over several years?

Meanwhile, the EB must ensure that it does not leave the conduct of the evaluation to the scheming of the Executive Director and her Senior Leadership Team (SLT). Under the current climate, UNOPS evaluations cannot be trusted for their independence and integrity.

The EB must, therefore, take full charge of the evaluation process and ensure that its scope and terms of reference are truly comprehensive i.e not just limited  to examining the S3i business model. It must also examine how and why the UNOPS leadership made it most critical decisions when creating S3i and  allocating funding through it.

Evaluation questions to ask include, for example:  how and why were UNOPS’s own rules for grants, procurement and contracts used, abused, or bypassed? How were its own systems and procedures, including its project scrutiny and appraisal committees, involved or ignored?  Why and how was  SHS selected without a competitive process?

What diligence was conducted by whom, and considered or over-ruled by senior UNOPS decision makers i.e. SLT, and ultimately, Ms. Faremo herself, before her decision to hand over tens-of-millions to SHS?  What risks were identified and mitigations put in place, noting that SHS does not appear to have had a significant and relevant business track record? For example, what financial guarantees were sought or precautions taken to protect UNOPS/S3i funds?  Why were these funds given  in advance? 

Who designed S3i including which internal staff and external consultants  and advisors were involved? What was the peer review quality control process, and how did this comply with or differ from UNOPS statutory quality assessment processes that routinely apply to all its projects?  What metrics of results and impacts were devised for the S3i initiative and what social impact sector studies and benchmarking were done  by comparison with other comparable social impact ventures? 

How was the subsidiary advisory committee of S3i selected and what statements of conflicts of interest obtained from them? Have S3i committee members  disclosed any pre-existing relationships with UNOPS, for example, any association with Ms. Faremo or other past or present senior staff, and have any emoluments or benefits been received by them from this or other UNOPS programmes?  What role has the S3i advisory committee played in appraising and endorsing its policies, strategies, and operations?

The EB should ensure that it has the final say in deciding on the selection of the evaluators who must be truly independent i.e. they must not have held previous contracts from UNOPS nor enjoyed personal association with Ms. Faremo and SLT members. Needless to say, they must also have the financial, auditing, forensic analysis and other necessary skills. 

The evaluators should have free, unhindered access to all internal UNOPS documents and communications. It will be prudent for them to operate from independent premises with their own fire-walled IT systems. That is because UNOPS has advanced penetration (“hacking”) capabilities and its staff report that their communications are routinely monitored. 

S3i is not separate from UNOPS

The UNOPS Statement compounds its mendacity  by claiming that S3i is a separate initiative, thereby implying that its misdoings are somehow separate from that of UNOPS.   However, it was UNOPS funds that went into S3i, allocated through UNOPS procedures and by decision of UNOPS leadership. The S3i former Chief Executive, Vitaly Vanshelboim, is an UN Assistant Secretary-General and Deputy Executive Director of UNOPS. 

S3i was presented to and approved by the UNOPS Board. Ms. Faremo has used S3i to exemplify her brilliant and innovative business leadership of UNOPS. And in trying to attract additional investment, S3i has been leveraging its UN and UNOPS name and connections.

Thus, if S3i was conceived, birthed and nurtured by UNOPS , and is still being weaned there, then what is it if not a full-fledged part of UNOPS?  Its UNOPS parents cannot avoid their accountability for what has happened there, by trying to offload that as a separate S3i matter that has nothing to do with them.

UNOPS losses are significant and inevitable

The Statement indicates that “S3i funds are at risk but to date, no funds have been lost”.  This is accounting double-speak when,  in the words of one of its principal donors, the United States on 1 February 2022, UNOPS had already made a “bad debt allowance which represents 40% of all funds invested through the S3i initiative as of December 31, 2020”. How can Ms. Faremo, a self-proclaimed business  wizard, justify decisions that expect to lose  so much?  Perhaps she might be luckier at the roulette wheel? 

The US went on to call for a halt on any “further transfers to the S3i reserve without explicit Executive Board approval. And we expect any such requests to be supported by detailed justifications including project specific proposals”. UNOPS has, in the past, never shared such documents with its own oversight body.  Why not? What has it hidden away?

UNOPS is now incurring substantial legal and other expenses trying to recoup what it can of the questionable advances made to SHS. The prospects for recovery are unknown as UNOPS does not offer any transparency over what efforts it is making and the jurisdictions under which it is pursuing the debtors.

Why does UNOPS have to lie about the true financial implications of its highly-questionable decisions?

Lack of compliance with UN oversight guidance

The Statement claims that it has always “co-operated and complied” with UN oversight authorities such as its Board of Auditors,  Legal Affairs, Ethics Office,  and Internal Oversight Services (OIOS), as well as its own Executive Board.

That is a highly debatable assertion.  The UN OIOS under Asst Secretary-General Ben Swanson originally avoided looking into UNOPS on grounds of lack of jurisdiction (which can obviously be disputed). Delving into the reports of UNOPS accounts, audits, and comments from the UN’s ACABQ, several areas of concern appear to have been either ignored or finessed by UNOPS in its usual manipulation of form over substance.

Ms. Faremo suggests that the Executive Board has approved all she has done; that is classic CYA strategy on her part. Examining the available Board papers of the past few years, it is clear that Board has never been fully and transparently informed on S3i strategies, decision pathways, risks and mitigations.

If UNOPS wishes to run itself in a business-oriented manner, it should adopt the practices of well-governed corporate entities. Instead, it seems that UNOPS is more akin to a private family company whose owners feel that they can behave like a mom-and dad shop. Ms. Faremo and her SLT seem to think that they own UNOPS as their private property, rather than working with the ethos of servants of the public good.  

One cannot help wondering if an informed, engaged governance would allow the chief executive of a company to risk tens of millions of dollars in the cavalier way that UNOPS appears to have done?

However, any failure of UNOPS governance is not entirely its fault. It was set up a long time ago as part of the same governance that also oversees UNDP and UNFPA.  How much it can truly focus on UNOPS is not clear. Also, if it is still like in the days when I was part of such governance,  it is largely composed of diplomats and administrators from member states who may not have all the skills needed to oversee today’s multi-billion UN agencies.

In conclusion, UNOPS is massively‘under-governed and, while this suits the authoritarian personality of Grete Faremo who see herself as supreme arbiter of all that happens at UNOPS, it does the global public a grave dis-service. Professionalisation and reform of UNOPS governance is long overdue. 

Fakeor disguised social media accounts? 

The Statement claims that there are fake social media accounts commenting on UNOPS matters. If so, it should provide more information on which accounts it considers to be “fake” so that they can be sanctioned and removed.

It is much more likely that these so-called “fake accounts” are instead, ‘disguised’  legitimate accounts who have been frustrated in their desperate attempts to get heard. Far too many of UNOPS personnel – past and present – are afraid  to speak up openly because those who do  so are intimidated, penalised, silenced,  and sacked from the organisation. Also, there is no whistleblower protection at UNOPS.

UNOPS leadership would be better advised to focus less on victimising those expressing genuine concerns,  and more on tackling the issues and complaints they have raised.

All UNOPS funding is unsafe

The Statement seeks to reassure donors by arguing that only S3i funding is at stake  and, therefore,  the rest of the organisation is safe to receive funds to continue business as usual.

This is manifestly absurd. It is the current UNOPS practices and leadership (aka ‘business as usual’) that have landed the agency in the soup and lost tens of millions of dollars.  The same people continue to lead the rest of its US$3.4 billion business. Any prudent donor will know that all funding to UNOPS is currently unsafe.

That is why several donors and partners are currently re-examining their relations with UNOPS, and are suspending funding. Others should do the same until Grete Faremo leaves along with her discredited SLT cabal of James Provenzano, Honore Dainhi, Marianne De La Touche, Nick O’Regan and Peter Browne.   Also, their Special Conspirators: Kelley Swift and Hafida Lahiouel, must exit with them.

The sooner that happens, the better for corrective reforms to be instituted at UNOPS. Only then will the world regain trust in its important works.

Published by Mukesh Kapila

See http://www.mukeshkapila.org

24 thoughts on “UNOPS reaction to likely fraud is too little, too late, too phoney

  1. If you want to find $58 million Find David Kendrick and Bernard Sumner along with Myra SHS in Dubai. You will then find the money that has disappeared!!

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  2. OIOS seems to avoid taking up any report of wrongdoing by UNOPS personnel. William Axelsson and Sarah O’Neill were also reported to OIOS, but they decided it was under UNOPS purview to investigate them like UNOPS internal investigations can be trusted at this point.

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    1. OIOS routinely does this, sending matters back to the agency. The relationship OIOS has to the agencies is sometimes frankly bizarre – they are an outsourced service for which the agency themselves has to pay.

      And what happens when the amount of service rendered exceeds the agreement? Cases get sent back.

      This happened in one of my agencies. There were too many cases to process so they were sent back to the agency. Nothing like HR investigating itself for abuses, after OIOS told it they were not funded to handle such a volume.

      Not much faith in such a system. As Michael Soussain put it, expecting accountability of the UN system is like expecting a blind dog to catch a frisbee.

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      1. It’s disgusting. OIOS made a record of the above-mentioned individuals but sending them back to UNOPS to investigate (aka cover up). Didn’t we read somewhere William got this job because of nepotism thanks to his Daddy anyway? Not surprised now he is using his own “daddy” power over a young woman half his age.

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  3. Can someone list the donors email addresses where can I provide information pertaining mismanagement of UNOPS projects?

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    1. Yes! And mainly on those who are friend of Grete, like Ingar Falk, who gets crazy high fees under a retainer contract

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  4. A good article Mukesh, reckon many hard working colleagues in UNOPS agree, the sooner the house will be cleaned out the better it is and a fresh start is possible.

    Unfortunately, it is not only about the top echelon of ED, DED and SLT, the system itself has turned. It is not the UNOPS some 20 years ago, just fresh out of UNDP like an infant, full with enthusiastic colleagues, ready to run 100s hours of overtime to get the young agency up and running.

    The slogan “Helping People in Need” has somehow been perverted. Nowadays it is all about making money, increasing profit and “doing more with less.”

    Look how our annual budgets and work-plans are negotiated and developed:

    1. HQ has the standing opinion that “next” year, we need to increase our delivery and profit numbers by 10% because life is hard in Copenhagen. That message is send to the Regional Directors.

    2. The Regional Directors will add a “few” $$ because their kingdoms need to prosper and a few staff-retreats need to be financed too (most likely not in Congo or Afghanistan), the RD needs a new duty car, or a new leather couch for the office.

    3. The Hub and Country offices receive the order from the King’s fodge. And don’t be mistaken, there is no room for negotiations, no talk about a challenging financial year, a change in politics and a change in donor priorities.
    The message is clear, deliver what we demand or your head is on the chopping-block, faster as you can imagine.

    And as a result some see no other way out but to cut corners, here and there and that is dangerous. Some are more willing to look the other way or close one eye to please a difficult Government partner and for what, just to fill the coffers in HQ and the ROs.

    UNOPS is not reasonable anymore, we have become an organization that is greedy, has no scruples and is selling morality on the altar of $$.

    Just firing Grete and the SLT and maybe the RDs will not do the trick. We need to bring a change of culture into the organization where everyone can speak openly. We need to get rid of this culture of fear and become a real UN
    Agency again and not a profit chasing consultancy company.

    Sempre Fi

    J

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  5. The culture of impunity at UNOPS is enabled by PCG and Ethics Office. These two entities have no credibility and staff have lost confidence in them. They lack basic proffesionalism skills.

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    1. @Tanja
      it is not that easy just to blame PCG and Ethics. They are in the same position as we all are, regardless of FTA or ICA. You stand up against top management, you get axed.
      Colleagues in PCG and the Ethics office are controlled by the same fear, to get into the black book and to get fired.

      Not so easy to switch from one UN Agency to another and I am not talking about going into the private sector, especially when you come from UNOPS.

      So I don’t blame PCG and the Ethics office, they live just like all of us under the sword and are afraid it could make a swift cut.

      Most of us remember Nasser S. who worked with us for more than 8 years and was Director of Management Support,
      D1, he opened his mouth just once too much, an issue Grete did not like and swoosh he was history. Luckily he got a job with UNDP here in Copenhagen, otherwise he would have been left out in the cold.

      That’s how UNOPS treats its “Assets”.

      UNOPS is governed by a group of “Untouchables”, ruling with impunity and power, disregarding all UN values, and the rest of us, keeping quiet, it could cost the job if you open your mouth.

      We all hope a professional and honest ED will arrive soon and clean out the Stables of King Augeas (UNOPS)

      Sempre Fi

      J

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  6. I am disgusted but not surprised. Reading that Honore is also part of UNOPS management. If you follow his footprints, you will see a trail of mismanagement and corruption. Check with his former bosses and Shell in Ghana.

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  7. If you follow the owner of WATO ~ Daisy Kendrick, the beneficial owner of SHS her father David Kendrick and of BAU and Myra SHS along with their supposed FD ~ Bernard Sumner then will see where the millions have gone. Filtered into their private accounts under Daiken. You will see the numerous shell companies that have received millions but never paid tax and then folded

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  8. When the top is rotten, what is expected, from the others – little wonders nothing has been done to the Slave Masters and Racists at KEMC, one year on and they are still sitting strong and doing what they know to do best – “They frustrate your work efforts, force you into resignation or fire you. The ones in there are afraid to speak up because one may end up losing a job”, the source wrote.”

    UNOPS KEMC EXPOSE by CNYAKUNDI KENYA in 2021
    POST 1 – https://www.cnyakundi.com/slavery-racism-in-kenya-at-the-united-nations-office-at-nairobi-unon/

    POST 2 – https://www.cnyakundi.com/un-to-investigate-systemic-racism-discrimination-and-other-vices-after-cyprian-nyakundi-expose/amp/

    POST 3 – https://www.cnyakundi.com/un-staffers-demand-those-mentioned-step-aside-as-body-admits-racism-has-been-institutionalized-in-the-organization/amp/

    POST 4 – https://www.cnyakundi.com/united-nations-kenya-head-of-programme-hop-resigns-following-cyprian-nyakundi-exposes/amp/

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  9. If there is something I learnt from reading these blogs is that UNOPS leadership is corrupt to the core and the incoming ED will have some serious cleaning up to do.

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  10. During last week Townhall meeting, the RD for Africa downplayed all genuine concerns from the Ghana Hub. He told personnel not to pay attention to the blogs as nothing will change about how UNOPS operates. His arrogance is unimaginable.

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  11. I worked for UNOPS for 3 years and was forced into resignation. More than 4 Head of Programs and 4 Head of Support Services resigned in less than one year from UNOPS hubs in Africa.

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  12. UNOPS working environment is very toxic. I could not even last for 6 months . I am not regretting my decision to leave.

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  13. Some donors have realised that UNOPS so called infrastructure experience is a hoax. World Bank has started funding other UN agencies to implement infrastracture projects. EU is also reconsidering its relationship with UNOPS.
    Thanks Mukesh for exposing UNOPS corrupt deals.

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  14. @Pierre
    could not agree more.
    You are a substandard organization managing NGO-style projects, then you hire a few engineers and suddenly you are a renowned and experienced infrastructure expert, that’s just laughable….. and dangerous.

    Maybe some colleagues from Africa or from Asia will remember the bridges built under UNOPS supervision and management, the bridges that collapsed days after inauguration. All that was brushed under the rug, a few project managers fired and off we went to the next bridge, airport or school.

    The list is long.

    There is only one engineer with brain here in Copenhagen and that is Jim C. but one swallow doesn’t make a summer. And as you guessed right, he is also an ICA, so, doomed to keep his mouth shut or risking his job.

    It is the same like with the S3I, poking the nose into business we have no clue about.

    Click to access IAIG-5002-IAR-2015_EN.pdf

    Sempre Fi

    J

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  15. Plans are underway to send a certain staff in LG home. According to the grapevine, one of the SLT members is not happy with the ongoing investigations which can implicate him.

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  16. Today is 1st May. We were told that the outcome of the investigations of possible fraud at UNOPS will be made public by end of April. We are still waiting

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