23 July 2022 – Mukesh Kapila
A criminal complaint against the United Nations Office for Project Services (UNOPS) has reached the Danish Police’s special unit that investigates organised economic crimes. The Danes have jurisdiction because UNOPS is headquartered there, and its Copenhagen office is de facto the crime scene where offences of a potentially corrupt and fraudulent nature appear to have occurred.
This is encouraging as I have argued for some time that the public interest requires the Danish authorities to act because the United Nations cannot be trusted to conduct a proper investigation into its own people and bring them to account. That is because the UN, including UNOPS, does not have the leadership, will, integrity, transparency, and capacity to do so.
Shall we see accountability?
Will the Danes be diligent in pursuing the UNOPS case? Perhaps, it may be less embarrassment and headache for them to finesse it away? What actually happens remains to be seen. Hopefully, the Nordic media will keep up the pressure.
Some of the sordid details around UNOPS are in my previous pieces and, over recent weeks, dozens of media articles around the world have informed the public and member states on wrong-doings and cover-ups there.
Whether or not we get full accountability, restitution, and reform within UNOPS is another open question. Informed opinion is pessimistic. Mr Jens Wandel, a long-standing, ambitious UN insider who has previously tried to become the UNOPS Executive Director (he is said to have competed against Grete Faremo), is now its acting chief. His embedded instinct is to do the minimum in the hope that these inconveniences will go away, sooner or later when we all get bored.
Meanwhile, the search for the substantive Executive Director appears to be postponed perhaps on the reasoning that Mr Wandel should first clean up the crime scene. As that will take a long time, Mr Wandel is to be congratulated for having achieved his ambition to lead UNOPS.
He is also a willing prisoner of the senior leadership team that presided over and connived with the greatest scandal that UNOPS has known. Its authors are still there, subsumed in a wider global team. Many of them are Mr Wandel’s best friends over decades of joint working in the UN system. They don’t necessarily like or trust each other (as evident in top-level backstabbing that emerges from internal leaks). But their personal inter-dependence goes deep because of skeletons shared in the same closet.
Hence the rectification ordered by UNOPS’s Executive Board in June 2022 faces serious obstacles. The process has zero credibility as the wider United Nations under the leadership of Secretary-General Antonio Guterres closes ranks behind its privileges and immunities although these protections are not supposed to excuse individuals who commit or connive with behaviour considered criminal in member states.
Much of the attention has, so far, focused on S3i. A better understanding of how UNOPS committed its misdeeds remains vital because transparency is crucial for accountability – whenever that comes. Hence, the focus of this article is on its Geneva office – a key enabler of organisational rot at UNOPS. It is from Geneva that millions of dollars of profit were generated, allowing the top leadership in Copenhagen to create its dodgy enterprises.
Geneva is the hub of a US$ 650 million UNOPS business empire that spans its Regional Office for Europe and Central Asia as well as a “hosted partnerships” centre. Its webpage is sparse and out-of-date, perhaps deliberately, to hide what it does. The information and analysis presented here come from UNOPS Geneva personnel – past and present.
UNOPS’s foggy finances mean that there is no independently audited statement publicly available that disaggregates its Geneva operations. But piecing together leaked individual records suggest that it probably contributes as much as US$ 30 million annually in direct and indirect profits to the overall UNOPS bottom line.
Profiteering, scamming, cheating
The profits come from the profiteering and rent-seeking practices of UNOPS Geneva that robs the poor and vulnerable on the planet, and cheats donors who provide funds in good faith. Such windfall profits made a significant contribution to the unauthorised US$ 260 million reserves that UNOPS accumulated over several years, and which allowed its leaders to punt on the failed – and potentially corrupt and fraudulent – S3i venture.
How does UNOPS Geneva make such huge profits? Apparently, from management fees and direct and indirect cost recovery levies it foists on its projects around Europe and Central Asia, and on the ten or so “hosted programmes” in Geneva. The latter are obliged to pay a special premium to shelter under the UN flag and enjoy the privileges this brings. This is tantamount to UNOPS renting out the UN name and logo. Calculations on selected activities and programmes indicate that accumulated overhead charges can amount to more than 30% of the value of some goods or services provided by some projects. This is profiteering from donor aid funds on a grand scale.
Why do substantive UN agencies allow UNOPS Geneva to host major programmes that fall within their own mandates? For example, for tackling major diseases such as malaria and tuberculosis, when there is already the World Health Organization and the Global Programme of AIDS, Tuberculosis and Malaria, also in Geneva. It has simply created costly fragmentation and competition within global health, from which only UNOPS benefits.
This is additional to another UNOPS-sponsored industry to bypass the UN’s own staff procedures and protections via its invention of an “individual contractor modality” (ICA) that allows the system to reduce its employment costs through staffing that can be hired and fired with ease. These people – often but not only from the poorer parts of the world – do the same jobs as regular UN staff – but receive less remuneration, fewer allowances, and diminished social protection.
Such a sophisticated form of labour exploitation has been dubbed by the Staff Union as an “Uberisation of the UN” or the UN’s “Bermuda Triangle”. Hailed originally as the innovate and “agile” way to handle human resources, it was created at UNOPS by bending existing UN rules or making up new ones. The UN is exempt from ordinary national labour laws – in this case, Swiss Labour Laws – and so can ignore or dilute basic employee rights and protections. Therefore, UNOPS Geneva’s ICA modality is not illegal in formal terms, but arguably immoral. Some have even drawn colourful comparisons between UNOPS Geneva’s sharp employment practices and human trafficking: Geneva is a well-known magnet for low-paid labour from all over the world as there are plenty of jobs going as cleaners and nannies for wealthy expatriates (and in the thriving sex industry).
UNOPS holds the contracts of some 1250 personnel including staff and ‘contractors’ hired not just by itself but also on behalf of several agencies such as WHO, the UN Environment Program, UN High Commissioner for Refugees, UN’s Geneva headquarters at the Palais des Nations, International Trade Center, and others. UNOPS charges hefty fees to recruit and administer such personnel contracts and provide payroll and administrative services for them. One contract holder called this – somewhat colourfully – a form of pimping by UNOPS Geneva.
As UNOPS contract staff (ICA) do not have the status of regular UN staff, they are not exempt from Swiss income tax and social charges (health and unemployment insurance). However, UNOPS Geneva has fudged this issue for many years by misadvising this category of personnel. Geneva management has relied on the fact that there is little information exchange between Swiss Federal authorities (responsible for issuing residence permits to foreigners including UN employees) and Geneva Cantonal authorities (responsible for taxation of those who reside in its territory).
Thus, the Swiss authorities have, over many years, been cheated by UNOPS Geneva of millions of francs of taxation revenue. More recently, the over-relaxed Swiss woke up and started chasing UNOPS ICA personnel (that they could trace from their incomplete records) for unpaid past taxes, often running into tens of thousands of francs. Mass panic ensued in the Geneva office: many affected ICA personnel fled the country, sometimes overnight. The response of UNOPS management appears to have included re-working earlier contracts to indicate that affected personnel dwelt elsewhere e.g., across the border in Ferney-Voltaire, France or (in at least one case) at the other end of the world in Vancouver, Canada.
For so much of what it does, UNOPS Geneva does not have a clear or consistent formula for its fees. Its computations require many unjustified factors and weights, or arbitrary adjustments that defy logic or fairness. Even Mr Wandel is said to have difficulty getting his head around Geneva’s ‘black box’ calculations.
Other scams come on top. An inside expert explained that the commonest is cross-charging the same UNOPS administration and support costs to multiple clients at the same time. The estimate made was that this practice could net UNOPS Geneva $3 for every $1 it actually expended.
Another scam is via reverse-engineering. First, decide what profit you wish to make or can extract from a project or hosted client. Then retrofit the factors and calculations needed to get to the magic number. That way, the paper trail will show that everything is in accord with the rules and formulae.
Scams build on scams. So, for example, a hosted programme newly coming under the wing of UNOPS Geneva may be offered a cut-price charging schedule for support services. Once the programme is settled-in, service charges are racked-up by significant periodic increments. The hosted entity has no choice but to swallow these because by then its staff are fully ensnared and find it impossible to get out as huge penalties may be incurred for doing that. This is akin to the practice of bonded slavery seen in some ruthless private sector enterprises. In any case, UNOPS-hosted programmes find it hugely difficult to go elsewhere because UNOPS Geneva spreads malicious lies about them through its network with sister UN agencies. That is how UNOPS Geneva manipulates the “hosting market” which other agencies including (but not only) the United Nations Development Programme (UNDP) and the United Nations Institute for Training and Research (UNITAR) are also interested to gain from.
Of course, where there is scam, fraud and corruption are not far behind. An illustration comes from the human resources arena at UNOPS Geneva. Case A concerned a Sudanese national keen to get Swiss citizenship but was unfortunately short of the requisite residence qualification having lost their job in another UN system agency. Personal friendship with the UNOPS Geneva directorate produced a nominal contract of just a few days but scattered over a whole year. The trusting Swiss were, of course, not fully informed of all the facts, and issued a residence permit that covered the whole year at the end of which Case A was able to get their Swiss passport. There are other examples on how UNOPS Geneva has gamed the Swiss.
UNOPS’s Executive Board has not been briefed on such machinations because they are kept secret by UNOPS management. But the S3i expose has opened the Board’s eyes that it cannot shelter behind its ignorance of the many deceits practiced by management. This has obliged the Board to demand greater transparency and a review of the underlying UNOPS business model. But will this get anywhere considering its complexity and hidden characteristics? It may be easier and quicker to junk the old model and make a simple new one that is consistent with the service-providing values of the UN and not the profit-maximising greed pioneered by the departed Executive Director (Ms Grete Faremo) and implemented enthusiastically by her cronies who remain in office.
How does such a brazenly rapacious enterprise prosper in the bosom of Geneva, the UN’s second capital in the land of the upright Swiss? For that, we must try to understand its principal leader: Mr Moin Karim, a career UN administrator. His point man was his previous deputy Mr William Axelsson, a protege of Ms Faremo, who is now posted at UNOPS New York in a special role to bamboozle the Board.
Mr Karim has not, to the best of our knowledge, been involved in designing or executing the S3i scam. But, as outlined above, he does bear responsibility for enabling it to flourish through presiding over the Geneva centre that brought-in such massive resources.
The UNOPS melt-down over S3i is thought to be a good opportunity for Mr Karim whenever the dust settles. He is very pleased that his old friend Jens Wandel is now the Acting Executive Director. He has been heard to boast that he got Mr Wandel the position and his peers (none of whom trust him further than their nose, according to their own testimony) are sure that he is actively scheming to become his Assistant Secretary-General (successor to the disgraced Vitaly Vanshelboim). Mr Karim has often alluded to his closeness to the UN Deputy Secretary-General Ms Amina Mohammed and would, no doubt, instrumentalise that association to get promoted.
But who is Mr Karim? Of Indo-Pakistani origin, Mr Karim has Saudi nationality inherited from his deceased father who was a respected physician to a grateful Royal family that bestowed the citizenship. He is an alumnus of elite private British schools and prominent UK and US universities.
Mr Karim is said to be a wealthy man with properties in Dubai, London, Geneva, and the luxury Swiss lakeside resort of Montreux, a favourite haunt of vacationers from the Gulf. His staff complain that he is hardly seen nowadays in his rather un-prepossessing office besides a busy Geneva highway. The Covid-19 pandemic’s working-from-home indulgence is not responsible for this.
However, it is not unusual for senior UN officials to accumulate considerable wealth from life-long tax-free remuneration, to invest in real estate. There is nothing illegal here unless income from non-UN sources, such as rental from multiple properties, is not fully declared for local taxation. This also applies to residents of Switzerland including UN officials with diplomatic status, as Mr Karim must be aware.
Mr Karim is a cultured man with a tendency, according to some of his close friends, towards “flamboyance” and a liking for opportunities to attend fashion, film, and music events with celebrities in attendance. Again, there is nothing wrong in that. Unfortunately for him, some countries including his country of nationality frown upon or criminalise certain lifestyles and personal choices that are taken for granted in Western countries.
For UN staff in Geneva caught in cultural-behavioural binds, seeking permanent settlement in liberal Switzerland is possible once they retire. However, they must satisfy certain criteria, including a track record of law-abiding conduct. In fact, according to the Swiss authorities, they must be squeaky clean. As Mr Karim will know, that means UN staff protected by immunities and privileges should not have abused them when they were in positions of UN authority if, one day, they wish to be permanent beneficiaries of Swiss hospitality.
An Overseas Citizenship of India is also possible for a person with an Indian parent like Karim, and eligible people can’t be faulted for wanting that, especially if they are also Bollywood fans. Besides, despite its other problems, India is much more socially tolerant than either Pakistan or Saudi Arabia in relevant areas. Unfortunately, the Indian government makes it very difficult, if not impossible, for anyone with a Pakistani connection to get a visa.
Doubly unfortunate is that the UNOPS Directorate in Geneva does not cover India and there is no reason for them to go there for official reasons. As a knowledgeable UN official, Mr Karim is aware that using an United Nations laissez-passer to request an official visa for private travel is tantamount to a serious infringement of the UN staff code of conduct. It is one of the reasons why countries like the US and Mr Karim’s own Saudi Arabia do not issue visas on UN travel documents. Other nations are considering the same – as such abuse has become quite rampant.
UN agencies – especially UNOPS Geneva – should make sure that their staff – at any level – are not abusing this privilege. All violations should be investigated with offending staff duly penalised. Meanwhile, countries, including India, do not like being hoodwinked into issuing official visas by senior UN staff misrepresenting the purpose of their visit. The Indian Government is aware of recent abuse by UNOPS in Geneva in that regard and if it decided to pursue that, it will bring considerable embarrassment.
Meanwhile, it is the top leaders that inspire, exemplify, or shape what happens in their set-up. The Geneva office is reputedly one of the unhappiest among all of UNOPS’s worldwide presences. Those who knew Mr Karim at a younger age and in different phases of his career comment revealingly on his personality traits that shape the culture that drives UNOPS Geneva.
What is that office culture in Geneva? Past and current personnel at UNOPS Geneva paint the picture of a cut-throat atmosphere where trust has long since fled. People at the top are feared because of their abuse of office and advanced manipulation skills and constant scheming in the competitive struggle for personal survival and business maximisation.
Informants use phrases such as “toxic”, “sociopathic”, “intimidatory” around UNOPS office interactions, centered on a “ruthlessly transactional approach” accompanied by the “malignant narcissism” tendency of a leadership adept at “creating its own reality”. If that means a certain flexibility with the truth, even to the point of misrepresentation (i.e., lying), the means justify the ends.
Such a dog-eat-dog and favour-begets-favour management ethos puts unbearable pressure on juniors to bend organisational rules when required. Examples related around the skewing of fair recruitment rules to recruit personnel favoured by senior management. These recruits are inevitably dependent on their ‘manager-sponsor’ and prey to their further demands. Thus, Geneva management has built up a cadre of vulnerable personal pets who are kept insecure (including perhaps hiding from the Swiss tax authorities!) and, therefore, amenable to do the malpractices bid by their bosses. For example, to inflate costs and fees for client projects, an aspect of the organised scam that appears to be the UNOPS Geneva business model.
And so UNOPS Geneva rakes in the dollars, hand over fist. Strictly speaking, this is not all illegal (although some aspects such as systematised cheating of the Swiss authorities must be so), especially if donors and other UN agencies are aware of the common law doctrine of caveat emptor and don’t mind being lied-to and fooled. Geneva is a small town and much of this has been talked about in diplomatic receptions and bars around the place.
The greater human tragedy is around the human spirits corrupted or broken among those who got ensnared in UNOPS Geneva – described by some as the “reptilian school of management”. Few have graduated from it without being stung and traumatised, sickened, degraded, or humiliated.
One distressed interlocutor called the UNOPS Geneva way of making business as “living off immoral earnings”. This phrase is usually used for other types of intimate business which, incidentally, is legal in Switzerland. However, the Swiss Civil Code makes it illegal to live off immoral earnings. The UNOPS Geneva model of profiteering, rent-seeking, and racketeering to manipulate the market which it has itself created and rigged could easily be considered a type of ‘immoral earning’.
UNOPS will not be able to right itself unless it goes beyond the checklist of bureaucratic reforms Mr Wandel is said to be conducting. It needs a form of ‘moral re-armament’ to correct the moral deficits in its structures, systems, and leadership.
And above all, UNOPS should rid itself of those who have lived off ‘immoral earnings’ for far too long.
Personal declaration: The writer has funded UNOPS when he was a donor in the UK government, employed UNOPS when he was in another UN agency, and has worked briefly as chief executive of a ‘hosted programme’ in UNOPS Geneva.