Politics & Policy

No Free Parking

It's daylight at the U.N. inside a federal district courtroom.

New York – The United Nations keeps promising transparency. But for a real window on the U.N., skip the pronouncements of Turtle Bay. The better place to look right now is the federal courtroom in lower Manhattan where the first trial linked to the U.N. Oil-for-Food scandal is underway: the case of a South Korean businessman named Tongsun Park.

In the latest U.N.-related bombshell, the jury heard on Monday that Park around the year 2000 was allegedly paying the private-office expenses in New York of former U.N. eminence Maurice Strong. At the time, Strong held the U.N.’s third-highest rank of under-secretary-general, and was serving as a special adviser to Secretary-General Kofi Annan.

Park is charged by federal prosecutors in the Southern District of New York with having acted as an unregistered agent of the government of Iraq under Saddam Hussein. Park’s lawyer says he is “absolutely not guilty,” and nothing here is meant to suggest otherwise. But in the matter of U.N. transparency — or lack of it — Park per se is not the issue. What has been coming to light, as the jury has heard one government witness after another detailing the alleged business deals of the 71-year-old Tongsun Park, is the extent of the financial ties over the past decade between Park and Maurice Strong. There is no sign that anyone at the U.N. even inquired into these matters at the time, let alone disclosed any of this to the public.

This is not even remotely meant to suggest that there was anything illegal in the ties between Park and Strong. The point here is disclosure. When it comes to the private business deals of officials holding high positions of public trust — a description that presumably applies to U.N. under-secretaries — secrecy is a very bad idea. Public disclosure serves as a vital safeguard against potential conflicts of interest. What much of the testimony in the Park case has so far underscored is that no such standards apply at the United Nations — which preaches transparency and modern good governance, but practices secrecy and patronage more in keeping with the Dark Ages.

This has become an increasingly disturbing setup as the U.N. in recent years has greatly expanded its roster of special advisers, personal envoys, goodwill ambassadors, $1-per-year under-secretary-generals, and the like, all wielding the clout of the U.N. logo and many of its perquisites. Annan in particular has been handing out high U.N.-rank hither and yon, creating new bureaucratic programs, anointing personal emissaries, and recruiting “public-private” U.N. partners, with no corresponding requirements that these folks tell the public how their U.N. perches might mesh with their private business dealings.

Strong, for example, served in a public capacity in 1996 as a top adviser to former U.N. Secretary-General Boutros Boutros-Ghali, then from 1997-2005 as a special adviser to Secretary-General Kofi Annan. With the rank of under-secretary-general, Strong orchestrated Annan’s 1997 reorganization of the U.N. Secretariat, stayed on as a top adviser, and from 2003-2005 became Annan’s personal envoy to the nuclear hotspot of the Korean peninsula. Thanks not to any routine U.N. disclosure, but to an extraordinary mix of investigations, admissions, and sworn testimony accompanying the Oil-for-Food scandal, we have only over the past year or so begun hearing , that while Strong wore these high U.N. hats, from 1996-2005, Strong and Park were both involved in lobbying efforts to sell Canadian nuclear reactors to the Korean peninsula; were both involved in a million-dollar oil-company deal; and that Park advised Strong on issues relating to Strong’s role as Annan’s envoy to North Korea.

Now a jury has been hearing allegations under oath that Park in the middle of this same period was paying Strong’s private office rent in New York. The witness testifying Monday at the Park trial about this connection was a Washington businessman, C. Wyatt Dickerson. A longtime business associate of Park, Dickerson testified that Park during “probably 2000, 2001, 2002,” was paying the expenses of a private office maintained in midtown Manhattan by Strong, staffed by Strong’s stepdaughter, Kristina Mayo (who at least in early 2005 was also working as Strong’s U.N. office assistant). Dickerson testified that he himself became involved with this private-office arrangement on three occasions, when Mayo contacted him to say the rent was past due, and she was looking for Park: “She said there was money to be paid.” Dickerson said that he had personally fronted the money Mayo asked for, with the understanding that “Tongsun Park either reimbursed me or was going to reimburse me.”

Prosecutors introduced as evidence a copy of a handwritten fax from Mayo to Dickerson, dated June 16, 2000, asking for payment into Strong’s account at “The Chase Manhattan Bank, United Nations,” complete with account number. They also showed documentation of a bank transfer three days later, on June 19, 2000, of $6,000 from Dickerson’s account to Maurice Strong’s — apparently some of the money for which Dickerson said he had expected Park to reimburse him. Strong, whose Toronto office says he is currently in Beijing, did not respond to queries e-mailed yesterday about Dickerson’s testimony.

This testimony follows the disclosure last fall by Paul Volcker’s U.N.-authorized inquiry into Oil-for-Food that in 1997 Park invested almost $1 million in a Strong family oil company, Cordex, which soon after went bankrupt. Witnesses at Park’s trial these past two weeks have amplified details of this story, involving two large checks made out to “M. Strong.” If we refer back to Paul Volcker’s investigation, these checks were allegedly bankrolled by cash that Park picked up in U.N.-sanctioned Baghdad in 1997. This cash was transformed at a Jordanian bank into checks to a variety of parties connected with Park, including one check made out to Strong on July 30, 1997, for $988,885, and another check on Sept. 14, 1997, for $30,000. Strong told the Volcker committee that the $988,885 check went to pay for a normal business investment by Park in Cordex (the destiny of the $30,000 check remains to be more fully explained), and that he did not know where Park got the money. Through this deal, Park effectively relieved Strong of a guarantee Strong had made to buy back roughly $1 million worth of Cordex equity from another investor, Theodore Kheel, who testified Monday at the Park trial.

Volcker, in recounting some of this tale in his report last year, said “there are circumstances that would indicate that Mr. Strong was in a position to know or suspect the source of Mr. Park’s funds,” but concluded he could find no “direct evidence” that Strong had done anything wrong. Volcker did go on, however, to dryly recommend that the U.N. “address the need for a more rigorous disclosure process for conflicts of interest.”

Top U.N. officials keep promising to clean up their murky system — when not busy claiming they have fixed it already. Annan this January set up a U.N. ethics office, which is supposed to vet newly introduced financial disclosure forms now required of senior U.N. officials. The catch — somehow, with U.N. reform, there is always a catch — is that these “disclosure” forms will not entail any actual release of information to the public. They will be kept in-house So whatever material turns up will be assessed and dealt with (or not) by the same U.N. bureaucracy which has just failed to cooperate fully with an investigation into its own audit department; the same bureaucracy that assured us last year that a “zero tolerance” policy had put an end to U.N. peacekeeper rape of minors in Africa (not exactly); and which solemnly assured us two years ago that the 1996-2003 Oil-for-Food program had been one of the most thoroughly audited U.N. ventures ever.

The particular beauty of the U.N. system is that Kofi Annan has not even deigned to disclose whether he himself has filed one of the U.N.’s new “disclosure” forms. These are supposed to include information about financial interests of immediate family members. Rumor at the U.N. has it that while the deadline for filing was May 31, Annan hasn’t turned anything in.

Since June 19, I have been asking Annan’s spokesman’s office whether the secretary-general has complied, at least internally, with his own promise of transparency. Has he filed a disclosure form? And if so, who is in charge of reviewing it, or addressing any irregularities? First I was told, “Someone will get back to you.” Then, “I am awaiting answers to give you.” Three weeks passed, and this Monday I was told, “I just haven’t gotten a response.”

Daylight may not fix everything in a deeply troubled institution, but it is one of the cheapest and healthiest ways to start. It seems a costly choice that the U.N. prefers a system in which what ought to be routine disclosures are eked out only on the fringes of scandals in the headlines, multimillion-dollar investigations, and now, testimony in a U.S. federal court.

Claudia Rosett is a journalist-in-residence with the Foundation for the Defense of Democracies. Rosett is blogging the Park trial daily at rosett.nationalreview.com.

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