UN Official: ‘We were being used completely as an ATM machine for the regime.’

Since it looks like we’re about to unfreeze a few million  in North Korean funds from  Banco Delta Asia, it’s worth remembering that another easy source of cash, representing  about as many millions in annual income, has just been abruptly terminated. 

The United Nations Development Programme office in Pyongyang, North Korea, sits in a Soviet-style compound. Like clockwork, a North Korean official wearing a standard-issue dark windbreaker and slacks would come to the door each business day.

He would take a manila envelope stuffed with cash–a healthy portion of the UN’s disbursements for aid projects in the country–and leave without ever providing receipts.

According to sources at the UN, this went on for years, resulting in the transfer of up to $150 million in hard foreign currency to the Kim Jong Il government at a time when the United States was trying to keep North Korea from receiving hard currency as part of its sanctions against the Kim regime.

“At the end, we were being used completely as an ATM machine for the regime,” said one UN official with extensive knowledge of the program. “We were completely a cash cow, the only cash cow in town. The money was going to the regime whenever they wanted it.”  [Chicago Tribune]

Failing to end this would have meant that the UNDP was itself in violation of the spirit of  U.N. Security Council Resolution 1718.  That resolution has a humanitarian exception, but that exception is pretty hard to apply to cash when you have no idea where the money goes.  For example, in the year 2005, one of the years for which audits were made available to U.S. officials, UNDP officials never visited 10 of the 11 “monitorable” projects they funded.  Let’s hope this wasn’t the eleventh:

[UNDP’s non-North Korean personnel]  were not allowed to go outside Pyongyang without receiving special permission from the military at least a week in advance. They were not allowed to set foot in a bank. And under no circumstances were they allowed to make unrestricted visits to the projects they were supposed to be funding.
….

One of the UNDP projects, sources said, involved the purchase of 300 computers for Kim Il Sung University. The computers supposedly arrived in Pyongyang, but the international staff was not allowed to see the equipment it had donated.

Finally, after a month and a half of pressuring their North Korean handlers, staffers were led to a room in which two computers sat. They were told the others were packed in boxes, which they were not allowed to open.

Anyone see broader implications for arms control?  Or for the millions in WFP food aid that goes God-only-knows-where?   Note that the UNDP administered every other UN aid program in North Korea. 

UN officials privately describe a vivid scene playing out at the agency’s compound each day.

A driver in a UN-issued Toyota Corolla would pull out of the compound’s gate, taking UN checks to the bank. A short time later the driver, a North Korean employed by UNDP, would return with manila envelopes stuffed with tens of thousands of dollars in hard currency.

Then the windbreaker-clad North Korean official would show up and take the cash away.

If you were hoping that this would be the first opportunity Ban Ki Moon would seize to improve U.N. transparency, things are not looking good.  First, the audit depends on the review of documents that are stored inside North Korea, and that means the auditors will have to get North Korean visas, and be permitted to move the documents to a secure location.  Second, the audit is being done by an internal U.N. audit  agency with a rather checkered past of its own.  Third, the audit is off to a slow start.  Finally, the audit is expected to wrap up by mid-April. 

“I don’t think this is an audit you can whip through in 30 days; this may take some time,” John Bolton, the U.S. ambassador to the UN until the end of last year and a staunch critic of the world body, said when contacted by the Tribune for a reaction to the newspaper’s reporting of the cash payments. “But I think for the reputation and integrity of the UN system, it’s critical that it proceed without delay.”