8 June 2022 – Mukesh Kapila
My previous article described the UNOPS Executive Board briefing on 16th May. It also referenced strong criticisms made by many Member-States who have belatedly recognised the mismanagement, misconduct, and potential fraud at UNOPS.
Finland was particularly outraged because it was conned into hosting the office of S3i – the ill-judged UNOPS venture at the centre of the scandal that lost around US $60 million. My article also quoted Finland’s key questions to which UNOPS’s Acting Executive Director Jens Wandel responded on 2nd June, to Ms Titta Maja, Director General for Development Policy at the Finnish Ministry for Foreign Affairs.
“When were UNOPS senior leadership informed about the wrong-doings and misconduct? Could you share the records of the UNOPS senior leadership and Engagement Acceptance Committee and other documents?”
Mr Wendel did not answer the fundamental Finnish government question on when the “UNOPS senior leadership” were informed. He side-stepped by saying that UNOPS’s Internal Audit and Investigations Group (IAIG) were notified in March 2019 by the UN’s Office of Internal Oversight Services (OIOS) of “a brief anonymous complaint without any evidence”.
Mr Wandel is being misinformed by his own team, or he is lying. UNOPS received its first complaint regarding WATO in 2017, the second complaint regarding Worldwide Renewable Energy (WWRE) in 2018 and the third one regarding Sustainable Housing Solutions (SHS) in 2019. As no action was taken by the UNOPS IAIG (directed then by Paul Lucas who is now at the World Bank), the whistleblower went to OIOS in 2019. OIOS staff took the complaint more seriously, undertook an initial assessment, and recommended a full investigation. However, their boss, Assistant Secretary-General Ben Swanson, decided to shut down the investigation and “refer the matter back to UNOPS” i.e., the very people who had failed their duty to examine the original complaints.
Meanwhile, the UNOPS senior leadership ignored this and proceeded with S3i investments via its oddly-designed ‘special purpose vehicles’. Thus, it is abundantly evident that UNOPS top management were aware of substantial concerns raised several years earlier than what Mr Wandel now claims.
The Finnish government also requested UNOPS to share its records around S3i decision-making, but this is ignored by Mr Wandel in his response. What – potentially incriminating – evidence is hidden in these documents?
Mr Wandel also claims in his letter that the IAIG is “an independent function”. This is disingenuous. UNOPS’s internal compliance functions do not meet recognised international standards, as Mr Wandel has himself admitted when the Board quizzed him. Furthermore, it has been long recognised that the IAIG function is appointed by, reports to, and controlled by the Executive Director.
Finland may also note that the same UN OIOS that initially refused to investigate and then limited its report only to Mr Vanshelboim is now being invited to Copenhagen to examine UNOPS’s audit and accountability systems. How ‘independent’ and credible will they be? The same concern applies to the UN’s Office of Legal Affairs charged with the task of recovering the lost money.
“Which date did UNOPS internal audit initiate its investigation on the matter? How does the investigation timeline correspond with the negotiations with Finland? Were the wrong-doings already known by the UNOPS leadership while negotiating with the Finnish government related to the funding to the S3i Helsinki office?
Mr Wandel responds that an IAIG audit was proposed in 2020 “to more substantively evaluate S3i investments.” He explains that “complaints into WATO/Oceans Generation and Worldwide Renewable Energy/Myra SHS Renewable Energy Srl (an entity owned by the same person as Sustainable Housing Solutions”) led to formal IAIG investigations. In December 2020, the scope of this work widened to include an external forensic audit of SHS affordable housing projects, and a subsequent wider IAIG investigation into all SHS activities commenced in March 2021”.
Mr Wandel doesn’t explain why UNOPS commenced the audit exercise only in June 2020 when the alarm was raised much earlier? He also does not explain why the UNOPS leadership continued to enter commitments with S3i partners that it had started investigating.
Furthermore, Mr Wandel does not say why its audit report has not been published in line with its own information disclosure policy that requires all audit reports to be available on the UNOPS website. Also, why had the vendors under investigation not been referred to its Vendor Sanctions Committee?
What was the reason why Finland was not informed about these matters and investigations until April this year  despite the obligation to do so in our co-operation agreements?
Mr Wandel acknowledges that the agreement with Finland was signed by UNOPS in May 2020 i.e., before the start of the June 2020 audit exercise. But UNOPS continued to hide pertinent information from Finland (and other governments) until the potential fraud became widescale media and public knowledge this year. Mr Wandel could hardly deny such obvious facts and apologises ”for the lack of proactive, timely and transparent information”.
The person responsible for negotiating with the Finnish government included UNOPS Chief Legal Counsel, James Provenzano, and the person responsible for communicating was Kelley Swift. Both are still employed by UNOPS. Then why does Mr Wandel lie when he says that “as the persons responsible for negotiating and informing the Government of Finland of relevant matters are not available to UNOPS, it would be inappropriate to speculate as to the reasons for them not having shared the information with you.”
His response makes no sense when, in the same breath, Mr Wandel also admits that the “previous Executive Office were fully aware of ongoing processes detailed above.” The Executive Office includes the Senior Leadership Team who regularly met with then Executive Director, Grete Faremo. (See my 16th May article detailing all SLT meetings between August 2019 and April 2022). It is fully evident that the SLT were well-informed on all S3i matters and appear to have deliberately conspired with hiding decision-shaping information from the Finnish government.
To repeat: Why does Mr Wandel say that “responsible persons are not available” when the SLT members who had their own formal decision/ approval roles are still there: Honore Dainhi, Marianne de la Touche, Nick O’Regan, James Provenzano, Peter Browne? They are individually and collectively culpable not just for enabling the original mismanagement and fraud around S3i, but also about hiding information around it.
Were the decisions taken by the former Executive Director regarding the WATO initiative based on the advice and recommendations of the senior management team and engagement acceptance committee?
Mr Wandel’s letter ignores this question. Why? Perhaps to protect the SLT members who are still in position, and now part of his own cabinet? Meanwhile, Finland will recall that today is World Oceans Day, on which occasion exactly five years ago, the previous UNOPS Executive Director Grete Faremo sang an expensively-made WATO song to an empty UN General Assembly chamber in New York.
The Finnish government’s letter goes on to say that “we emphasise the need to ensure that all involved in the decisions carry their responsibility and are held accountable.” The Finland representative (speaking also on behalf of Sweden, Norway, Denmark) reiterated this at the Board’s 6th June session. This was also echoed in powerful statements from others, especially by the United States who spoke for 25 other countries as well as Kenya and several others.
Mr Wandel’s 2nd June letter is, therefore, deeply insulting to Finland that had asked reasonable questions but got prevarications and untruths in response. The matter will not rest there as public and politicians demand full answers, thanks to some fine investigative reporting by Finnish media with English translation here.
How Mr Wandel is handling the UNOPS crisis is baffling. He was initially projected as UNOPS’s saviour thanks to his reputation for personal integrity and expertise in UN reform. He is also refreshingly blunt-spoken and, certainly, he has said the right things at Board meetings. For example, at the Board’s 6th June session. Mr Wandel promised several fundamental changes to rectify the most egregious abuses that accumulated under his predecessor, such as profiteering and excessive reserves, transparency lack, non-independent compliance and oversight arrangements, and full whistle-blower protection. On the face of it, if Mr Wandel is sincere, he deserves to succeed.
But the exchange with Finland shows that how Mr Wandel is going about his business is troubling. His most serious vulnerability comes from the flip side of his strengths. He is, at the core, an UN insider – a pillar of the establishment and embedded in its practices and rituals. He appears to be a stranger to boldness. Instead, ingrained in him is the impulse to do the minimum he is pressurised to do, while doing everything to protect the system where he has himself prospered. And that may mean hiding the truth or even lying if that would better serve the wider institutional interest. Of course, he is wrong if he does that and, in that sense, Mr Wandel’s values and ethics raise serious concerns.
This is demonstrated in the way he basks in the company of his compromised team – even at Executive Board meetings. He is constantly accompanied there by Chief Legal Counsel James Provenzano who co-designed and gave legal blessing to the original S3i and then approved the dodgy contracts issued under it.
This is not just bad optics but a serious indictment of the sincerity of Mr Wandel. That is because Mr Provenzano is now in charge of implementing the recommendations that he had rejected earlier while when he created his own laws and regulations that derailed UNOPS in such spectacular fashion. As Mr Provenzano says jauntily in an internal email yesterday: “Hi all… Jens has asked me to help in accelerating the implementation of all oversight recommendations – UNBOA, IAIG, ACABQ and JIU…. I am looking for a solid analyst who could be available through the summer into the early fall to assist [me]. If you have someone… please let me know. Thanks and best, Jim”.
it appears that Mr Wandel is depending unquestioningly on the same senior UNOPS Senior Leadership Team that brought the agency down. Some of them like Mr Provenzano are his very close associates from before That is a potential conflict-of-interest and risk to Mr Wandel’s personal integrity. He needs to jettison them by sending all the SLT on administrative leave while getting independent advisors to support him. Otherwise, he is already being dragged down by the coterie who failed in the first place.
UNOPS has already lost its biggest donors and its reputation among partners is at rock bottom. Its misbehaviours have tainted the whole of the UN system as graphically indicated by Finland suspending all funding to all UN agencies. Ultimately it is the world’s poor that pay the cost of the misdeeds of the UNOPS SLT.
Mr Wandel must understand that there is no recovery for the agency without all itsSenior Leadership Team being held accountable. Mr Wandel must stop pandering to them and get his reform agenda hijacked by them. It remains to be seen whether Mr Wandel will clean-up or cover-up at UNOPS as he struggles to nurse this sick organisation.