16 May 2022 – Mukesh Kapila
As often happens in such matters, Grete Faremo’s end as the Executive Director of the United Nations Office for Project Services (UNOPS) was brutal and sudden.
Antonio Guterres had given her far too much rope for far too long. As the evidence for Ms Faremo’s misdeeds gained worldwide notoriety, there was serious risk that the UN Secretary General would himself get caught in the noose. So, he cut the rope.
Of course that is not that. As she retreats to her native Norway with a generous pension and other huge separation emoluments, will there be personal accountability for Ms Faremo? This is doubtful as the UN does not normally pursue wrong-doers after they leave. Further, an embarrassed Norwegian establishment is busy circling the wagons around her.
A tissue of lies
Meanwhile, sensing the writing on the wall, Ms Faremo had tried to secure her legacy through spinning an elaborate web of lies. There were three principal elements of misinformation she propagated. We know this in detail from the lengthy 29th March townhall meeting of all UNOPS personnel.
First, she trumpeted that she had fixed the UN Office of Internal Oversight Services (OIOS) investigation (not yet released, and may never be) by limiting it to her erstwhile deputy Vitaly Vanshelboim, so that she and her immediate cronies in the UNOPS Senior Leadership Team (SLT) could go scot free.
Second, she disingenuously claimed that she did not have any knowledge of misdoings at the Sustainable Investments in Infrastructure and Innovation (S3i) or, in her later words, she had “no overview”. This was despite co-habiting with Mr Vanshelboim for many years in the same, not especially large, office, and signing off personally on all major decisions around S3i.
Third, she asserted that S3i was separate from UNOPS, and the SLT which looked after the rest of UNOPS could not be culpable as Vitaly ran S3i all by himself and was solely responsible for all its problems.
To substantiate her claims, Ms Faremo’s should have made available the records of the Senior Leadership Team. Needless to say, they are not openly available – as UNOPS communication policy is to withhold as much information as possible. It is a necessary policy if you have many questionable things to hide.
How the UNOPS internal coup was mounted
However, I managed to get the SLT minutes for the period 19th August 2019 till 11th April 2022. Before examining them, we must first understand the genesis of the Senior Leadership Team.
Its terms of reference, approved by Ms Faremo on 24 September 2019 defines the SLT as its “highest level corporate structure”. Its stated purpose is to ensure “an effective and efficient translation of executive intent”, and to support the “effective prioritisation of corporate and strategic initiatives”.
The TORs define the SLT’s scope to “role model” and “provide strategic leadership in business and organisational culture”. It’s principal duty is the “creation of an enabling environment for prompt and consistent implementation” of strategic initiatives. These were quite explicit signals that S3i was close to her heart as the highest strategic priority.
The SLT has ten specific functions with oversight over everything at UNOPS: direction, thought leadership, organisational structures, legislative framework, monitoring key initiatives, risk management, planning and governance. it is thus the thought police and the enforcer, all rolled into it. George Orwell who wrote the dystopian masterpieces ‘1984’ and ‘Animal Farm’ would have been impressed.
The TORs state that the SLT incorporates/over-rides all other key committees: “the Engagement Acceptance Committee (EAC), the ICT Strategic Advisory Board (SAB), the Legislative Framework Committee (LFC), and the Learning Advisory Board (LAB)”.
Thus, it is clear from the language and tone of the SLT’s founding charter that it was intended as nothing less than the instrument to carry out Grete Faremo’s supreme will. She began by centralising all authorities previously spread around the agency including via its broader Corporate Operations Group (COG) that included other central and regional directors with their diverse wisdom.
All internal control functions such as Ethics & Compliance, Internal Grievances, and Internal Audit & Investigations were already under her thumb. This was contrary to every single rule of sound corporate management, as pointed out by UN oversight bodies who were simply ignored. Furthermore, she proudly ensured that “more than 1200 pages of rules went into the trash”. This was convenient not for reducing excessive bureaucracy but for replacing it with her own rules and regulations.
The next task was to accumulate significant resources for her schemes, knowing that risky ventures need deep pockets. A war chest of US$285 million was accumulated from profiteering and rentier behaviour over many years.
In short, that is how UNOPS’s “internal coup” was engineered. Judging from the pattern of preceding events, it was planned from 2018, and probably earlier still. Of course, any coup needs its junta. Ms Faremo chose hers on the simple criteria that they would do her bidding. Several UN recruitment rules were bent to hire or promote the people she wanted. That was despite the fact that some did not have the minimum necessary qualifications or were ranked low by selection panels. And some had decidedly shady pasts including suspected involvement in fraud, corruption, and other misdemeanours.
But that did not matter as Ms Faremo was on the roll with an outsized sense of impunity. The SLT junta duly came together, composed of the Executive Director, the Deputy Executive Director/Chief Executive of S3i, General Counsel, Chief Finance Officer & Director of Administration, Director of Regional Portfolios, Director of Implementation Practices & Standards, and Director of Communications.
The UNOPS junta sets to work
The Senior Leadership Team held frequent meetings and generated many pages of records that throw up stark evidence that Ms Faremo and her SLT have lied and tried to cover up their complicity with misdoings around S3i. In chronological order:
SLT’s 4th meeting on 30 September 2019 noted imminent consideration of “the Pakistan S3i opportunity”.
SLT’s 6th meeting on 28 October 2019 “endorsed the TOR for the SLT for approval by the Executive Director”
SLT’s 9th meeting on 9 December 2019 received a report on the Kenyan launch of S3i’s housing project, and an update on the Finnish government support for the S3i hub in Helsinki. A diligence update on the Pakistan project was discussed, implying problems there. Interestingly, the SLT also discussed “sending S3i shipments in the name of UNOPS to avoid paying customs duties”. If they did that, it was a gross abuse of UN privileges apart from having robbed their partner countries of their just dues.
SLT’s 10th meeting on 20 January 2020 discussed the opening of the S3i Helsinki hub on 1 March and put this on the agenda of the SLT’s retreat on 28 January.
SLT’s 11th meeting on 3 February 2020 received the draft S3i Management and Process Framework” and ”Due Diligence procedures” from General Counsel James Provenzano.
SLT’s 12th meeting on 17 February 2020 benefitted from a further update from Mr Provenzano on development of the S3i documentation and negotiations with the Finnish government on the S3i hub in Helsinki.
SLT’s 13th meeting on 2 March 2020 was very busy with S3i business. It endorsed three key S3i documents: “S3i Management and Process Framework”, “Due Diligence Procedures”, and “S3i Office Partnership Policy”. It also agreed the ToRs of S3i Chief Executive Vitaly Vanshelboim. These have not been published.
The SLT went on to consider 8 potential investment cases: two housing investments in India and Guinea and six energy investments in Mexico and India. It also considered expansion of the housing project in Antigua and Barbuda.
Most revealingly, SLT “noted the challenges regarding achieving satisfactory ‘Due Diligence’ outcomes… and agreed a specific discussion at a future SLT retreat”. This appears to be the precursor of Ms Faremo’s new executive procedure to ignore red flags thrown up by UNOPS’s own control and compliance mechanisms.
SLT’s 14th meeting on 16 March 2020 continued to focus on S3i. It noted the strong investment pipeline and sought additional information. It was pleased with the Finnish Contribution Agreement and planned expanding the Helsinki hub, and approved associated vacancy announcements.
Most importantly, it registered that the Executive Director would herself make the final decision on all investments after diligence and review by SLT.
There was lengthy discussion on diligence aspects with concerns over diversification noting that the “housing initiative calls for strong attention with our limited track record”. Despite diligence concerns and worrying about “risks vs benefits”, it nevertheless endorsed proceeding “for the remaining 7” investments. It also recognised reputation risks which “must be addressed and mitigated”.
There is, therefore, clear demonstration here that the SLT was aware of S3i diligence problems, discussed them fully, and decided to continue with major new investments, regardless.
SLT’s 15th meeting on 30 March 2020 agreed to hold specific separate meetings on S3i investments, in addition to SLT meetings.
SLT’s 16th meeting on 27 April 2020 referred the draft EOD on S3i investments “for further review at working level SLT discussions”.
SLT’s 18th meeting on 8 June 2020 discussed S3i governance. It received an update from Ms Grete’s adviser Mr Bart le Blanc who explained “the concept of investment vs effective spending, the recognition that investment of our own capital includes political as well as financial capital, and the intricacies of partnering with the private sector”. SLT endorsed “the approach taken so far”.
SLT’s 21st meeting on 17 August 2020 received an African update from Honoré Dainhi who noted S3i’s energy and housing focus and observed “the need to improve the ability of senior personnel across the region to… speak more authoritatively regarding S3i and developing synergies” with “regular UNOPS activities”.
This was a clear signal that S3i was being mainstreamed into UNOPS – and not the reverse as claimed by Ms Faremo. SLT also noted its own one-year anniversary to be celebrated in a special SLT review meeting on 8 September.
SLT’s 23rd meeting on 14 September 2020 received extensive updates on all aspects of S3i including, in particular, funding and execution modalities as well as a possible “housing infrastructure bond”. It also noted that the Legal Group under Mr Provenzano was suffering capacity issues due partly to the S3i initiative and a Deputy Legal Counsel was to be recruited; Hafida Lahiouel was duly appointed and became a principal ally of Mr Provenzano’s legalistic perversions.
SLT’s 26th meeting on 26October 2020 included Ms Faremo’s adviser Bart le Blanc who applauded SLT members for engagement in developing S3i documentation. Both he and Ms Faremo emphasised “the importance of ensuring collective ownership of the S3i initiative”. Further discussion centered on incorporating “private sector best practices”. SLT endorsed the “Guidelines for S3i Operations to take effect on 1st November. (Not publicly available).
It also tasked the S3i Chief Executive Vitaly Vanshelboim to finalise the TORs for its Advisory Committee and find a chair. It tasked CFO Marianne de la Touche to develop “reporting formats and standards” and “criteria and formula for allocation of resources [from reserves] for S3i”. It tasked General Counsel James Provenzano to finalise an Executive Office Directive and incorporate all S3i policy and guidance documents into a legal framework.
It is thus abundantly clear that the range of SLT members were fully involved in shaping S3i development and operations.
SLT’s 31st meeting on 1 February 2021 reflected on the “recent onboarding” sessions for the newly recruited S3i team in Helsinki” and on identifying the S3i Advisory Group on Investments (AGI).
SLT’s 35th meeting on 12 April 2021 focused extensively on S3i investments. This started with rebranding S3i, thanks to the UNOPS Communications Group under Peter Browne who was asked to polish its graphics.
It also noted the incorporation of UNOPS’s global innovation centres into the S3i Innovation portfolio and asked future S3i Innovation submissions to go to S3i AGI.
Most significantly, SLT noted the Executive Director’s decision to appoint her former adviser Bart le Blanc as the chair of the S3i Advisory Group on Investments, after endorsing its TORs. No one questioned the propriety or potential conflict-of-interest of appointing the man who designed it to then become its head.
SLT’s 37th meeting on 10 May 2021 endorsed “the creation of the S3i Reserve subject to approval by the Executive Board”.
SLT’s 42nd meeting on 30 August 2021 registered the “support to UOPS S3i including the granting of an exception to use Microsoft Office, investigating the use of oUCollect by S3i, and while granting a time-limited exception to use ‘Write’ for tasks management, noted that S3i requirements must be included in all planning for the [UNOPS] digital transformation initiative”.
It is clear that S3i systems and technologies were fully integrated into that of UNOPS which was continuing to provide backroom services to S3i.
The SLT also noted that S3i CEO Vitaly Vanshelboim and CFO Marianne de la Touche had gone to the Executive Board session in New York City.
SLT’s 43rd meting on 13 September 2021 was somewhat more agitated after the Executive Board on 1st September, because of the EB’s “growing focus on S3i” and its requirement for “full transparency and co-operation”. The EB had also asked for S3i to be “fully considered and incorporated in all general UNOPS processes and procedures” There was also the post-Board need “to revisit the decision for establishment of the S3i reserve at the regular Board session in January 2022”.
The first draft of the new S3i Action Plan was also presented by Vitaly Vanshelboim to the SLT along with his plea that “the S3i team… requires as much or more support than any other unit in the organisation”. He also said that the “S3i team are using all [UNOPS] corporate tools and seeking to improve communications” with all units under SLT leadership.
The SLT agreed that the S3i Action Plan will be “established and monitored by the SLT Secretariat”.
Therefore, there was no vestige of doubt from the Executive Board and throughout the UNOPS leadership that S3i was an integral part and parcel of UNOPS that had total responsibility and accountability for it. Hence the later assertions of a separation between S3i and UNOPS by Ms Faremo and SLT members, are plain lies.
SLT’s 44th meeting on 27 September 2021 repeated the above mantra. It emphasised that “S3i considerations must be integrated into all regular UNOPS corporate processes and protocols” and the S3i team must “fully engage with all relevant corporate units and groups accordingly and vice versa”.
SLT also noted feedback from the recent S3i team retreat and that its action plan could be grouped into three themes: “KPIs, targets, and performance metrics; enhanced reporting and dashboards; and fund creation”. It also noted the first S3i Portfolio review meeting of the Advisory Group on Investments on 23rd September. Also that S3i chief Executive Vitaly Vanshelboim would brief the UN’s Principals group of the Interagency Taskforce (IATF) on 27th September.
SLT concluded by tasking its own Secretariat to “work closely with the relevant S3i team members to ensure effective coordination of the action plan activities with broader corporate operations”.
SLT’s 46th meeting on 25 October 2021 noted “the ongoing review of the S3i related policy and other documents, in conjunction with the Helsinki team” . It also welcomed S3i’s invitation to provided feedback on a paper on a “Sustainable Infrastructure Fund for developing countries” and notes to “UN Resident Coordinators where S3i activities are developing”. SLT asked its Secretariat to develop a clear process for review of “relevant S3i documents/developments”.
SLT’s 47th meeting on 22 November 2021 decided to add S3i “as a recurring agenda item at future SLT meetings. (However, this was already the case in practice).
The SLT also considered the ongoing development of the S3i policy framework including an “assets valuation policy”, and guidance to S3i Innovation Centres. It reiterated concerns around “increasing communications”. It also observed that the S3i action plan “should be restructured … to more clearly identify corporate priorities and clarify which actions corporate units have responsibility to lead, and which actions the S3i team has responsibility to lead”.
Ii is increasingly apparent from the SLT minutes that tussle for control was going on between them and the S3i leadership. Interestingly, an extraordinary SLT had been held on S3i matters earlier on 8th November.
SLT’s 48th meeting on 7 December 2021 conveyed Vitaly Vanshelboim’s apologies. (He disappears from subsequent SLT records as he had been put on administrative leave in early December). S3i discussion was deferred.
SLT’s 49th meeting on 17 December 2021 welcomed Nan Li Collins, director of partnerships for S3i and now CEO a.i. It also noted the discussions of yet another extraordinary SLT meeting on 8th December regarding S3i leadership. Mr Vanshelboim’s removal was coyly labelled as an “incident” and the SLT “agreed to initiate a post-incident review”.
An attempt at business-as-usual was evident: there were updates on S3i action plans and status reports on ongoing projects. However, there was also much anxiety about reassuring UNOPS stakeholders, especially the Finnish Ministry of Foreign Affairs (as they fund the Helsinki hub).
Most revealing was the agreement to “define the scope for an internal mid-term assessment of the S3i proof of concept period in Q1/Q2 2022”.
SLT’s 50th meeting on 17 January 2022 received usual updates from the S3i Chief Executive a.i., referenced Ms Faremo’s next-day visit to Helsinki to see the Finnish Minister for Development Cooperation and Foreign Trade, and increasingly frantic outreach efforts, particularly preparations for the Executive Board’s informal session on S3i on 19th January.
Importantly, SLT noted “the ongoing engagement with SHS [S3i’s special purpose vehicle selected without competition and after bypassing many red flags] regarding the affordable housing portfolio”.
SLT’s 51st meeting on 31 January 2022 noted “the continued dialogue with SHS regarding the status of repayments of the loans for the energy portfolio, as well as on the status of the housing portfolio projects”. It also noted the meeting with SHS Ghana on 21st January to discuss the housing initiative there and “options for restructuring future partnerships”. Updates on the innovation portfolio were also discussed.
It appears that S3i was in trouble everywhere with its investments. Wisely, SLT decided not to pursue a proposal from Ukraine’s Energy Ministry because “the necessary experience and capacity is not yet in place”. However discussions, presumably financial, continued with FMO and Blackrock, as did administrative work in many areas.
The record indicates a distinct sense of SLT panic along with trying to pursue business as usual, akin to Emperor Nero’s supposed fiddling while Rome burnt.
SLT’s 52nd meeting on 21 February 2022 received extensive updates from Ms Nan Li Collins. Noteworthy was “progress on the self-assessment of the S3i proof of concept period, supported by the UNOPS Head of Corporate Strategy, and ongoing damage-limiting interactions with Finland.
Update on the S3i portfolio recorded regular meetings with its Special Purpose Vehicle (SPV) partners including its local SPV in India [ SHS Projects India Private Limited] on “engaging in a new large project”. This appears to be despite zero success with previous housing projects in India and a donor prohibition in the Board to make more investments.
SLT’s 53rd meeting on 14 March 2022 “noted that UNOPS continues to engage through a law firm with SHS to recover outstanding repayments”.
SLT’s 54th meeting on 28 March 2022 noted that the UNOPS Executive Director will join monthly S3i team meetings herself. Meanwhile, it continued its “legal actions and engagements with a law firm to recover outstanding payments”.
A Chief Investment Officer for S3i was also under recruitment, as well as a revised Investment Strategy.
SLT’s 55th Meeting on 11th April 2022 “discussed and endorsed the midterm self-assessment of the S3i proof-of-concept period [from Thomas Lundum Head of Corporate Strategy] noting 12 forward-looking recommendations related to a) focusing the business strategy, b) sharpening the governance and policy to enable implementation, and c) gearing the S3i functions and resourcing”.
The SLT went on to note the first draft of the S3i Action Plan “that builds on the recommendations in the midterm self-assessment recommendations, the Post-Incident [Vitaly departure] Report, and S3i 90-day plan.” The Action Plan was “primarily focusing on managing the current and legacy portfolio”.
Of course, the key reports referenced above are hidden away which does nothing to reassure internal and external stakeholders. It also appears that UNOPS and S3i had entered full crisis mode and this was about to get worse as Grete Faremo struggled for her own survival at UNOPS.
Countering the coup
As we know, Ms Faremo lost her own organisational survival struggle on 8th May as unsavoury internal facts could not be kept hidden, despite her most dedicated efforts. But the rest of the SLT junta, bar Mr Vanshelboim, are still there. Bruce McKerrow, the latest in a line of S3i chief executives a.i. clings on till the end of June. He would be advised to go now.
This analysis of 184 pages of SLT minutes indicate that the full junta was centrally engaged in all S3i business – design, implementation, monitoring, cover-up. They discussed S3i matters regularly and fully in at least 30 of 55 SLT meetings over some 33 months from 2019 till now. This is in addition to special or extraordinary SLT meetings and retreats, and other ad hoc mattings involving the same people.
As is amply evident here, each SLT member is culpable, individually and collectively, by intent and design, for enabling and promoting the misdemeanours at UNOPS that led directly and indirectly to tens of millions of dollars of likely losses through mismanagement, and likely fraud and corruption. Not a single SLT member stood up to protest at the obvious wrong doings and gross violations of control, compliance, and ethics practices. Furthermore, they actively opposed and victimised several subordinates who tried to do their duty – and proactively obstructed investigation and accountability via OIOS.
This outrageous pattern has all the features of a malign conspiracy at SLT level. For example, General Counsel James Provenzano created and codified the highly questionable legal and policy cover, and undermined those who raised expert objections. CFO and Administration Director Marianne de la Touche performed wizardry with what should be prudent audit and finance policies, apart from overseeing general maladministration. Regional Portfolios Director Honoré Dainhi had even greater culpability as he often acted as Executive Director when Grete Faremo was on sick leave. He also actively conspired over dishonest behaviours in his home patch of Africa while rebuffing queries and concerns from some other regional directors. Implementation Practices and Standards Director Nick O’Regan was anything but that; at best he was asleep on the job. Communications Director Peter Browne polished the misinformation and falsehoods for internal and external consumption, a proactive accessory after the fact.
For these members to stay on at SLT risks further institutional damage – perhaps permanent. An organisation cannot be run on the basis of deceit promulgated by its own leaders and managers. No one should be under any illusion that this is nothing less than an existentialist crisis for UNOPS.