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Reconstruction funds channeled through the United Nations for the reconstruction of tsunami-devastated Indonesia are being systematically pilfered and skimmed to the tune of $500 million dollars because the world body has failed to implement its own anti-fraud measures, the U.N.’s former deputy director of investigations has charged.
Frank Montil, a former Australian Security Intelligence Organization officer, worked for a decade investigating fraud and corruption within the U.N.
Montil told the Sydney Morning Herald he had been sent to the region ravaged by the Dec. 26, 2004, tsunami as a senior U.N. investigator to identify the risk of fraud and mismanagement that could be expected when the monies, raised by appeals to the public and allocated by the U.N., would begin flowing into the area.
“When you have a disaster zone, you have all sorts of drifters and conmen walking in. It is the equivalent to the old gold rushes,” Montil said.
Based on his research, Montil reported an automatic 10 percent skim on every project to pay bribes “to a variety of parties who may have an influence on whether or not a project will go ahead.”
Collusion between winning contractors and government officials was identified in large infrastructure and building projects. Where public officials were out of the loop, collusion among large contractors to rig bids was documented.
According to the report Montil delivered to the U.N., colluding companies would all submit inflated bids, with the low bidder then subcontracting portions of the project to unsuccessful “competitors.”
Government bodies applying for U.N. aid, Montil warned, were “duplicating, tripling and even quadrupling” their applications to various agencies for the same equipment.
“As such there is a risk for fraud, in that a government body could secure excess office space, and twice, three times or even four times its equipment requirement – including motor vehicles,” he wrote.
Montil’s report went unheeded, sitting on former Secretary-General Kofi Annan’s desk for eight months.
“My estimations of fraud were that at the bare minimum in Banda Aceh alone there would be at least $80 or $90 million disappearing in fraud and corruption. That’s only in emergency funds,” he said.
“That doesn’t include the half a billion that will be lost to fraud and corruption in reconstruction funds.”
The U.N.’s handling of the disaster has come under attack from other quarters.
WND reported comments made by the U.N.’s “humanitarian czar,” Jan Egeland, that Western nations were being “stingy” in providing relief. General Secretary Annan reportedly refused to leave his ski vacation in Jackson Hole, Wyoming, for three days after the disaster struck to take hands-on leadership in the tsunami relief effort.
Additionally, the U.N. agency charged with monitoring seismic activity around the globe sent all of its 310 employees on vacation the week of the massive earthquake and tsunami in South Asia, preventing any possibility of warning to the 227,000 victims.
In response to an inquiry by the Herald about Montil’s report, tabled last December, a U.N. spokesman said: “The Deputy Secretary-General indicated that a number of funds and programs had expressed the view that their tsunami activities had already been extensively audited and that a further consolidated report would be superfluous.”
Montil characterized the response as “willful abdication of the U.N.’s obligations.”
“The oil-for-food scandal taught them nothing,” he told the Herald.