The Joseph J. Sisco Memorial Forum on United Nations reform Moderator Panel Two: UN Management and Accountability Roderick Hills William H. Luers A. Peter Burleigh Thomas R. Pickering: The first panel was stimulating and I think you'll find the second panel equally stimulating because it talks about a set of issues that people have been deeply concerned about in this town for quite a period of time. I'm going to introduce the panelists in the order of their presentation to you. Rod Hills is the founder and partner of Hills and Stern, Attorneys at Law, and Chairman of Hills Enterprises Ltd. From 1975 to 1977 he was Chairman of the Securities and Exchange Commission. In 1975 he was Counsel to the President of the United States. From 1985 to '87 he was a distinguished faculty fellow and lecturer at Yale University School of Organization and Management, and he recently served as a member of the congressionally mandated task force on the United Nations reform. Rod, before you go, let me take the opportunity to introduce the other there so that we can move right across the stage when we do the presentations. Secondly, Bill Luers who is currently Chairman and President of the United Nations Association of the United States of America. Prior to that Bill Luers was the distinguished leader -- Bill, was it President, Director, Administrator -- President of the Metropolitan Museum of Art in New York, and he had as well a very distinguished 31 year career in the foreign service of the United States serving among other things as Ambassador to Czechoslovakia and to Venezuela and was Deputy Assistant Secretary of State for European and for Inter-American Affairs and is also a member of the Academy. And Peter Burleigh, served as Ambassador and Deputy Permanent Representative of the United States to the UN from August of 1997 to December 1999 and was Charge of the US Mission to the United Nations from 1998 to 1999. Prior to that Peter served as Ambassador to Sri Lanka and to the Republic of the Maldives, was Principal Deputy Assistant Secretary of State for Personnel, coordinator of the Office of Counter-Terrorism with the rank of Ambassador, Principle Deputy Assistant Secretary of State for Intelligence and Research, and Deputy Assistant Secretary of State for Near Eastern and South Asian Affairs, and he recently participated with a number of us in a report by Georgetown University's Institute for the Study of Diplomacy on America's Interests in the United Nations, and he is also an Academy member. So without further ado, let me turn it over to you, Rod. Thank you. Roderick Hills: As you may have known and can see from the books we have out there about the report from USIP, there were five task forces -- genocide, peacekeeping, development. The least exciting of all of them was ours. [Laughter]. The architecture, or some people would call it the plumbing of the United Nations. To report to Congress on what could we do to improve the accountability, the integrity, the transparency and the effectiveness of the United Nations. The good news about our effort is the fact that every single person that we talked to, and there were a large number, were anxious to talk to us, were candid in talking to us. The bad news is they were almost uniformly negative about all of those aspects. The feeling of reform is enormous. The sense of somewhat almost despair. The grim accounts of poor management came every place. The uniform view that we formed, and I think we could say that almost everybody we talked to had the same view, is that the management, the structures of oversight, accountability, management, agenda setting, resource allocation and human resources management were all in dire need of significant reform. And that reform was hampered by persistent disagreements among the member states as to what organizations should be reformed, what priorities would exist. Budget allocation in particular was an enormous issue. Let me quickly identify the specific problems we saw and quickly talk about the specific remedies. Oversight. The United Nations, as perhaps all of you know, has two basic forms of oversight. They have an external auditor -- not Price Waterhouse -- but the Auditors General of three different countries who serve six year terms, rotating every two years. Now it's the French, the South Africans and the Philippines. They basically perform an external audit and for the most part that probably was the most effective thing we found. They did a good job. They're competent people. If there were any restrictions it's the fact that they too had to seek their budget from the General Assembly, which was normally generous in the sense that they don't complain a lot, but the fact is they would not act as a normal general auditor would be. Price Waterhouse would say either give me more money or we quit. We won't give an opinion. The diplomacy there has never caused them to go to that degree. The OIOS is an internal auditor. It was created largely because of the pressure of the United States in 1994. It has all the attributes of an internal auditor but it has a couple of problems. It has no independent basis whatsoever. It competes for its money with all the other aspects of the Secretariat. While it does have the technical right to write a letter to the General Assembly saying we'd like more money, the fact of the matter is that the General Assembly looks at the overall budget and the OIOS gets what is given it. The other problem is that structurally it is in part of the Secretariat, so it has some jobs to do for the Secretariat, but it basically is examining its bosses with no independent protection from the bosses, and more importantly, they have no authority and no budget to investigate anything other than the Secretariat itself. So when you have Oil for Food or any voluntary program by the United Nations, the only way they can investigate is call them up and say can you give us some money? We think you might be corrupt and we'd like to find out. [Laughter]. That happened in the Oil for Food program, and predictably, they didn't get any money. There is something called the Joint Investigative Unit but it's not a terribly effective thing and it's not something we should talk about very long. The management system itself. There really isn't one. There is no Chief Operating Officer. There is literally no one responsible for anybody else. They're mostly advisors. Yes, the Secretary-General can say you're really doing a lousy job and maybe you can embarrass them to get them out of there, but there is no management structure. The Secretary-General is the General Administrative Officer. He's not a Chief Executive Officer. As I said, there is no Chief Operating Officer. Budgeting and programming is highly politicized. There are 191 nations. The top ten nations provide 78 percent of the budget. The smallest of the ten, Mexico, produces 1.9 percent of the budget. Of the 191 nations, 121 nations produce less than one percent of the budget. So Mexico alone produces more of the budget than -- twice as much as another 121 countries -- and yet budgeting is by consensus. It couldn't be by vote, of course, because the top ten would have no choice. So they developed something called a consensus, which sort of means that anybody that's important can veto anything. Therefore the budget acts this way. The United States or somebody else won't let more money be spent, although more recently when the dollar lost out with the euro they allowed some more money to come in, but it's frozen. The smaller states don't like what we want to do, and the bigger states don't like what they want to do, and so it's a constant fight. There is no capacity to sunset something. Once a program is adopted, once a request is made, it goes on forever. There is a rule, I think it's 5.6, which says that each area should identify those things that are least important, I think it's 15 percent rule, but nobody pays an awful lot of attention to that. There is something called the Fifth Committee that you all may know about. The Fifth Committee consists of all 191 nations. They have to approve the budget. They have something called the ACABQ which is something like our say Comptroller General and for the most part they do a pretty good job. They try to give advice to the General Assembly and for the most part they're ignored. The people that got to the Fifth Committee are not the ambassadors, they are people. So the 191 nations send people and for the most part they aren't very skilled, they aren't very informed, and so it really disintegrates quite easily. The personnel system. 37,000 employees. The best we could find was that at least 30 percent of the people in the personnel office, nobody thought they should be there. They were just kind of left there over time and they had nothing much to do and that's probably to everybody's benefit. [Laughter]. There's no one to get them to do anything. They're just there. There's nothing that we would call a management system. There's no effort to rate people, not even managers, so they keep score. They say we'll have the managers rate their people and if the managers rate their people that's all there is to it. They don't care whether they're rated well or not. So the Secretary-General has no advice as to the skills or capacity or relative capacity of his managers. If there are 15 too many people in the OIOS, and 15 too few people say in Personnel, forget it. You can't move them. They're stuck. There's no way you can move one to the other. I think they got authority at one time to move 30 people in the entire United Nations, and I think the Secretary-General was so surprised by that he hadn't done anything about it. But literally, he had the right to move 30 people without the approval of the General Assembly. So what do we propose? I would say this, that nothing else is going to work and I include the other five task forces unless two things happen. Effective oversight and effective management. For oversight we thought we would try to bring Sarbanes/Oxley to the United Nations. By that we said we wanted to create an independent oversight board that has the effective control over the budget and the assignments of the OIOS and of the external board of auditors. So that they would be like a Price Waterhouse would be in this country, overseen by an audit committee which basically can tell management you've got to do this whether you like it or not. Constructing the IOB is a little difficult. For that we suggested, after long discussion, by the way with the Board of External Auditors, let's get three other Auditors General from three different countries on six year rotating terms. Why? Because the Auditor General, the Controller General, whatever you want to call him, is likely to be the most independent person of their own government. They're used to criticizing their own government and so therefore we have reason to believe they would be as good as the Board of External Auditors is, and then we would supplement that with some retired finance ministers of Central Bank ministers, so a body of maximum of seven people. With respect to -- We would also say that the United Nations cannot undertake anything, United Nations personnel cannot do anything unless provision is made for the OIOS to monitor it. If they can't get the money, then they can't do it. With respect to management it was pretty simple. A senior officer, that is the Chief Operating Officer, that has all the ostensible and real authority that a Chief Operating Officer normally has. It would take an amendment of the Charter to change the title of the Secretary-General. So instead of doing that we strongly recommended that every single senior person reporting to the Secretary-General is subject to instant discharge by the Secretary-General if that is so deemed. In a sense giving him the authority of a Chief Executive Officer. You might have to have some severance pay and that sort of thing, but the fact that the Secretary-General can't fire the people that work for him really makes the General Assembly terribly ineffective. In that connection we would say, as the Secretary-General has from time to time said, that there should be a sunsetting provision with respect to every action authorized by the General Assembly. At some certain time it can't continue unless it's reauthorized. The question of how you deal with the budget is almost impossible. If you had weighted voting you would disenfranchise 121 nations. So they won't play. So all we could say is we thought the United States should work with the other large contributors to try to find out a way to give more authority without disenfranchising. Now whether there's a veto that can be overturned or something, we thought that was an important thing to get on with. Personnel. Pretty simple to say we would like the personnel office to have the capacities and technologies of a typical modern personnel office. Rate people, move people, provide promotion. I should have mentioned that you can't really promote in the United Nations. If you have a unit of say 100 people and you have a vacancy, that vacancy is open for bidding for the whole bloody organization, so there's no way for you to train people to move them up to their own jobs. The internal justice system which I didn't mention, I should have, sometimes it can take five years to fire somebody. The ultimate judicial body is made up of people that are decidedly not judicial, they're not even lawyers. And so to reform that was terribly important to us. Whistleblower protection is needed, a standard of personal ethics is needed. I guess the final major recommendations we made is that rethinking what should be in the Secretary itself. For example, there are a lot of things that probably could be better supported by voluntary contributions and those things could be like the UNDP with separate oversight and a separate budget. We thought in particular the peacekeeping operation, the DPKO as it's called, would be better served by having its own separate staff and not having the personnel office of the United Nations Secretariat be the personnel office for the army, if you will. The procurement office of the United Nations which buys pencils and paper is not the best place to buy military armament. I don't know that that's controversial. We saw some support for that proposition. Probably the hardest thing is the reform of the General Assembly. The Fifth Committee is impossible, and there are a number of other committees that are impossible. We made some general observations and suggested that diplomacy of the United Nations, working carefully with people in the General Assembly in a wide range of nations are prepared to deal with that, but it's going to take a long time. I would say overall we were surprised at the intensity of the desire for reform and the ability of people there to try to work together. The head of the ACBAQ, a marvelous Russian, Vladmir Kasnitzov, is as much in support of the IOB as we were. The Board of External Auditors were as much in support of it as we were. And I'm particularly pleased to say that everybody agreed upon what we said in our task force. Thomas R. Pickering: Thank you, Rod. Bill? William H. Luers: Thank you. Thank you, Rod. Let me welcome Tom to the head of our Academy and we're pleased that he has taken this over and thank the Academy for organizing this important meeting and so many of you for coming. I thought I'd just make five points and I'll do them briefly. The first is the UN may be broke but the world is broke worse. I guess what I'd say that's most important about this whole discussion of UN reform is that it comes at a time when at least the United States and maybe a great part of the world after the Iraq War, has come to realize that we don't have a way to think about a community of nations trying to manage the multiple problems we're facing in the world. How to allocate resources, how to devise coherent policies, and the United States has really never had a coherent discussion about a strategy of how it approaches the world. It seems to me that this UN reform effort that has gotten a good deal of publicity in this country and a good deal of attention in this city, has been a very healthy process of having to think through many issues about US foreign policy that maybe have not been thought through for many years, certainly since the Cold War. So I would be one who would welcome the fact that there is so much attention, and in fact to come to Washington and hear so much good information about the UN is quite surprising. A city which historically has had very little interest in what happens in New York. The high-level panel in its report before all these others happened, and I think Ivo outlined fairly clearly what the succession of developments were on the discussion of reform, the high-level panel begins with a discussion of the new nature of collective security and how, when the UN was formed, it was formed on the basis of a collective security that was defined on the basis of concern about war among nations. And that today the threat to security and human security around the world comes from so many different other sources and probably one of the least likely sources of instability is war among nations. I think the way that high-level panel framed its discussion presented for me the way I think Americans should think about how we're addressing the UN. The UN can't pretend to do it all, nor should it. But of the umbrella organizations that is functioning as a partner for us and the rest of the nations to try to solve some of our problems, this is by far the most important. You couldn't recreate it. And so the best thing is to try to correct it. That's the first point. The second point is UN members and staff know now is the time to fix it and there's major fixing that's needed. Rod just got through outlining a rather detailed and extremely realistic expression of the realities of the inside plumbing of that organization. And you talk to UN people, including the Secretary-General, and certainly Mark Malloch Brown who never realized how bad it was until he got into the position he's in now, and it's become a sort of daily source of frustration and enthusiasm in the UN that maybe at this moment we can fix it. I think the whole range of issues, and I talked to the Secretary-General just last evening on this set of issues after he'd met with the Secretary of State, and they'd spent a lot of time together going over in great detail these issues. The good news is that the Secretary of State is extremely well informed and has taken a great deal of time to learn not only from the report that USIP did but from the Secretary-General's own report and what she's had from her team, she is the major point person on UN reform now and she's working with the Secretary-General and his staff and I'm encouraged that the United States will be taking a constructive and positive role. So they're ready. they've learned a lot from the Oil for Food program and I think because of all that's happened, and I don't need to go over the recent history, the time is right to make changes in an organization that are more fundamental than probably since its founding and more important because of the increasing role of the UN in practically everything that is of interest to the United States. The third point is changing attitudes and habits is likely to be more difficult than changing structure. And as Rod pointed out, there are so many serious shortcomings within the organization, how it identifies good people, how it promotes them, how it trains them, how it prepares the organization for more effective oversight. All of these are really new. There's no way by the way that Sarbanes/Oxley can be applied to what is essentially a quasi-governmental organization. I still don't know who the Chief Operating Officer of the United States government is. But -- Voice: At least he can fire them. [Laughter]. William H. Luers: So how you find a Chief Operating Officer to function is difficult for me to figure out. You can't think of the UN as a corporation with a CEO and COO and that structure, but something like that certainly has to happen and there has to be a way in which the Secretary-General is given much more authority over the personnel and I'm persuaded that they're on the right track. I think even the external oversight, independent oversight group that has been suggested by the panel, the task force, is probably going to be acceptable at some level. It would have been hard for me to believe that three months ago. And many of the recommendations that came out of the intensive work that's been done even before the panel, the task force of USIP's task force, many of those recommendations are on the table today and they weren't a few months ago. So the dynamic of the US government and other states becoming involved in the change process and the willingness, and even anxiousness of the people who are in office now to change the way habits have been formed over years, is very important. But the fact is there are 191 nations involved. Most of these nations don't have anywhere near the culture we have on management and personnel structure and meritocracies in terms of promotions, and to change that is not going to be soon. They can change what it's like on books, they can get more responsible people in key positions, but it's not likely to happen soon. I guess the fourth point is, well I made the fourth point, that structural reforms will be probably easier to come by since they're so political than the internal reforms which are going to be, that have been habitual. I guess it's important to point out, however, that some things are already happening. Jan Eglund, many of you may have met him. He's spoken down here, we've brought him down here a couple of times, who is the head of OCHA which manages humanitarian affairs within the UN, and who is in charge of the tsunami relief program has gotten an agreement with Price Waterhouse Coopers to audit on an ongoing basis all of the money that is being contributed for tsunami relief. And on the UN web site you can track the flow of money. This is an effort to get accountability and transparency in real time, and there is controversy within the UN about his decision to try to do this and it may not be perfect, but it's an effort to say that the UN is prepared to change completely the way it deals with resources from the member states and contributions from the private sector, and to track how it's performing in its work in relief, and that is a breath of fresh air and Jan is particularly leading that charge. Now the last point I guess I'd make is that this is time for carrots, not sticks. The idea -- this is time for diplomacy and not punishment. The idea proposed by the Hyde Bill that this is the moment in which the United States should withhold its assessed contributions depending on every one of these reforms being made would undercut everything the Secretary of State and the President are trying to achieve at this moment. If any of you have any influence on the Congress of the United States, or particularly on the Senate at this stage, that Hyde bill should go nowhere. I think that the President and the Secretary are quite concerned that a bill would be passed right at this critical moment in reform in the UN, an organization that's of great importance to United States interests, that this reform is about to take place, the United States is about to play a very constructive and influential role in it, and the Congress may decide to say for its own reasons that they will determine whether or not enough reforms are being made and if they are unsatisfied they will withhold dues. Now that is the wrong way to go and I hope that the sensible heads in this city will avoid that catastrophic action, at a moment in which the US probably has a better opportunity than in modern history to achieve many of the goals we'd like to see in making the UN a better organization. Thank you. Thomas R. Pickering: Thank you, Bill. Peter? A. Peter Burleigh: Let me pick up on that. I have a much more pedestrian kind of presentation. I wanted to talk about the process of how you go about influencing the 191 members of the UN to agree to change. It may seem obvious, but believe me, those of us who have been on the front lines up there during periods when we were pressing reforms, when the US and others were pressing reforms, have seen how complex and difficult that is. I would only point out -- I was amused and sort of depressed in the Chapter 3 that we're talking about of the task force report, that there was no mention made -- the task force made some important points about how to get reform agreed to in the UN, and they pointed to some work that had been done when Tom Pickering was there in the '91-'92 period, and then they say the following in Chapter 3: "The US needs to know what essential points it wishes to achieve and on which other issues it is prepared to negotiate formulas to induce others to accept US positions." Which I agree with completely, but it amused me that Speaker Gingrich who was one of the co-chairs of this apparently in the committee, I guess, the commission, decided not to mention the attempts we had made by way of congressional pressures on the UN by withholding our dues from the '94 to 2000 period which is when I had the experience at the UN. We were playing this game that is embedded in the Hyde Bill, I think, and we basically fell on our face trying to press reforms on the member states. I'm not talking here about the UN Secretariat, but to get the other member states to agree to move on issues that we thought were important with a couple of exceptions, but by and large we failed. We lost our seat on the ACABQ which is this very important budget and personnel committee that you heard a bit about earlier, and we essentially lost what clout we had in the Fifth Committee which is the committee of the whole 191 members who vote on the budget. And in amazing detail and might attempt to and do manage the United Nations. So here's my recipe, a simple minded one but not easy to do, but I think how we do it is not that difficult. I'm really glad to hear what we heard from Bill about the Secretary of State because what I had been hearing from New York up to about a month ago was that they were not seeing the engagement from the US in regard to the reform, with regard to the diplomacy of getting the 191 members to agree to change. First of all the US needs to decide what's important for it amongst all these reform -- There are the most wide-ranging sets of proposals for reforms and changes and modifications and how the UN does its business. We have to be very clear ourselves what is important to us and where we will be prepared to go to the mat, both in terms of trying to influence other countries and also being willing to pay for whatever it is we're talking about. We also need to see -- there are probably several of the reform proposals where we may be agnostic about it or where we will find that we don't have too much interest in a particular area but other countries do. This, for an audience like you all who have been involved in diplomacy your whole careers, this may seem obvious, but the give and take in the UN context in terms of negotiating over these complex changes often isn't there. In fact the way the US has presented itself frequently is here's what we want to have done, we're not really interested in the other subjects, and if you don't agree with us we won't pay our dues. Any US effort to press, and I believe any UN reform requires a very important US lead here, has to involve from time to time the President, the Secretary of State, possibly some congressional leaders and of course our representatives in our mission to the UN, but it is a very serious mistake to think that all these important issues are going to be settled in New York. They are not. They are settled in capitals when the issues are raised as important national security issues or policy issues that engage the attention of the Secretary of State and I would argue of the President at least from time to time, at least to cut final deals where we're having problems. So we have to put together a coalition, and there's sort of a natural one and then there's an unnatural one which I'll get to but which is also essential. The natural one picking up particularly on what Rod was talking about, would be to have a coalition with the European Union and Japan and probably a few other countries who would have similar orientations to how to run a modern organization and would have similar concerns about the budgeting, how money is spent, what accountability is there, transparency issues. We have to be in lockstep with them. So the first diplomatic effort is to create that coalition. If we can involve Russia in that that would be good too. That grouping would be the majority of the donors to the UN. But those majority of donors, let's say there are 15 major donors, I think it's actually less than that as we just heard, out of 191. So you have to put together a coalition that is not just the wealthy industrialized countries, and that means you have to break up the G77. Now you all had experience with the G77, the group of 77 in the '60s and '70s and may think it doesn't exist any more. I am telling you it exists in New York. It is the one last place where the group of 77 exists, except that it's now a group of 140 but they call themselves the group of 77. So on any vote in the General Assembly, the Fifth Committee, any of these institutions where all member states have a vote, the G77 can do what it wishes, essentially. So to get reform -- and the G77, in my experience anyway, was extremely conservative and resistant to change for a variety of historical reasons and personality reasons at the time. So here's my proposal. We have to try to break the G77 unity on the question of reform and we have to then engage with major second tier countries, I don't know what you want to call them but I'm talking about Brazil, Chile, South Africa, Nigeria, India, Indonesia. We have to get a group of important countries who are members of the G77 to agree with the thrust of the reforms that the industrialized countries are proposing. Failing that, it won't work. It won't happen. The Secretary-General has some authorities and he can do some reforms within the organization where he doesn't need a vote of the General Assembly or the Fifth Committee, but by and large almost all these changes you've heard talked about today have to get the approval of the 191, of a majority of the 191 members. So you may have noticed the countries I mentioned are the ones that struck me as being important to try to -- who may be amenable to approaches on reform. Most of them are also the countries that are trying to get new permanent seats on the Security Council. So I would not be at all surprised if there isn't some kind of linkage in their diplomacy with regard to their willingness to go along with other reforms having to do with the management, personnel, budget and so on of the UN with the US and the European Union and Japan's position on Security Council expansion and specifically which countries would be included in the expansion and how permanent these new kinds of seats would be. I think they've all given up on the veto, by the way, any of the new permanent members. and we have a public position at least, as I understand it, now of only supporting Japan's having that kind of permanent new position, a change from the Clinton Administration where it was Japan and Germany and possibly some others. So I think I'll end with that. I just wanted to underscore, and there are several people here, Don Hayes is one who has bloodied battles on these fronts. Tom Pickering, and many of us here have been through different historical phases of US attempts to reform some aspect or another of the UN and I cannot underscore enough how sclerotic and resistant to change the member states are. Forget about the Secretariat. They have their own problems and we've heard them described, but it is astonishing to experience firsthand how resistant most countries are to these discussions about reform. And if the mood is different in New York, including the member states. I'm again not talking about the Secretary-General or his senior staff who I think are vividly aware because they have to try to deal with this institution and organization on a daily basis. They've been ready for reform for quite some time but the problem is the member states. Thomas R. Pickering: Thank you, Peter, very much for an exercise in creative sclerosis. [Laughter]. Thank you all, the panel members, for you presentations. Now we'd like to move right away to questions. I saw a hand shoot up back there, so why don't we go ahead and start with Tom Boyett. Question: Tom Boyett. Thank you. I'd like to congratulate my former boss, Rod Hills, for his perceptive and thorough and amusing explanation of the management problems at the United Nations, and Peter for linking the political realities with the management adjustments. And this brings me to Bill Luers. William H. Luers: Oops. [Laughter]. It always comes down to me, doesn't it? [Laughter]. Question: You need to know, in terms of truth in advertising, while Bill was Ambassador in Venezuela I was Ambassador in Colombia, and those two countries have a disputed border that they've been fussing over for 200 years. And as a result, we had two Ambassadors that were taking pot-shots at each other over the border issues for two to three years, and I came down here fully prepared to unload on Bill's explanations. [Laughter]. But I can't do that because I find myself in agreement with him, at least on four and a half of his five points. But I do want to make one point and ask for the views of the panelists on that point. My point is this, and I speak as somebody who's bid on a contract at the United Nations. That brings up the issue of punishment. You cannot have a situation in which high level people are taking bribes and low level people are pushing contractors on the basis of nationality or other issues and not do something about it. I sense that that process has already begun with, I believe it was Mr. Stefanides who lost his position at the UN for supporting a company and winning a contract. That kind of thing has to be followed up. There have to be penalties when people do miss the straight and narrow and something has to be done about that. If it's not, it's going to continue. So I would appreciate your commenting on that. William H. Luers: I think there evidently were problems in the Oil for Food program. As Jim Dobbins pointed out, any money that was stolen was Iraqi money. It wasn't any UN money or anybody else's. Now to the point of culture of corruption I know this is a point that is made often by Mr. Gingrich and indeed he says it quite often and many people do say that. I don't see a culture of corruption in the UN, and maybe I'm wrong. There's not that much money available to be corrupted with. This is a rather poor organization. The Oil for Food program offered opportunities to some people and I think Paul Volker is concerned about a number of things that happened including what will come out in his final report, is a concern that many of the agencies who were, such as UNICEF and World Food Program and UNDP, who had to depend on Iraqis on the ground to carry out the work of those agencies, that there were situations that arose in which there was a great deal of small side deals and corruption and I think he's not going to have much evidence of it but he just senses that that might have happened because that was a very corrupt country. But I -- to the point of a culture of corruption -- even Stefanides and Sovan, although they may have gotten some money out of this deal, both of them did it for odd reasons, and it wasn't really for money. Stefanides was fired because he made an arrangement that he thought was in the best interest of the UN even though it was illegal. And I don't want to defend him, and I think there probably will be more, but they haven't found many smoking guns. And I really know enough of these people to believe that there's not a valid description of calling it a culture of corruption. On the punishment side, there's no question. I think the Secretary-General has been very clear that if there are people who are found guilty of being corrupt or fraud, they should be punished and their immunity should be lifted. Did you find a culture of corruption? Roderick Hills: There are certainly a lot of corrupting influences. If there's no accountability you have a corrupted place. If you're not responsible for doing what you're supposed to do, if there's -- let's take the reforms. The Secretary-General has offered a whole lot of reforms. There's no process to decide whether or not the reforms were carried out, so that the lack of accountability means that there is no way to cause people to do what they are charged to do. William H. Luers: That's different from corruption. Roderick Hills: I think the process is corrupted because of the lack of accountability. If you have an organization with a mission, the issue, whether you're stealing money, or not doing your job, or causing the job to be done in a way that it's not supposed to be done, I think you have to assume people are going to take advantage of that system. And I have no reason to doubt that there is, as you would find anywhere -- in a corporation that has no internal audit you'll find a whole lot of money stolen. If you don't have any internal audit function, if there's no accountability, there's no way to know the answer to the question. Whether Tom is right calling it a culture of corruption, I would say that it's a culture that has no accountability. When I talk about Sarbanes-Oxley it's because Sarbanes-Oxley to me empowered the audit committees of corporate America. So to empower accountability, to give somebody the responsibility of saying it's happening or not happening, and to give somebody the authority to deal with somebody who does not fulfill their responsibility will bring a culture of compliance. The Secretary-General can't fire most of these people. The internal justice system gives them three years for certain and five years logical if they want to appeal. So if you can't fire people you cannot enforce any kind of discipline. So maybe the term corrupt culture is a strong one because it suggests illegality, I would say to you that the lack of accountability is the single most significant problem of the United Nations. A. Peter Burleigh: Let me just add one thing to this. Paul Volker has been more deeply involved in at least one aspect of UN operations of anybody I know in many many years, if ever. I think that he would agree with you, Rod, more or less on the issue of accountability. But I still don't think he's found anybody who stole a lot of money. And I think he thinks there may be problems there, and thankfully the 70 investigators he has are all people who have the habit not of looking into structural change, but looking into personnel fraud, personal fraud. Paul wants solutions to a structural problem. They all want to give him the names of people who were fraudulent. So he's had a real opportunity with those 70 people to come up with some hot information on individual fraud. And he hasn't found much. I don't know that he's found any. So I would agree with the general proposition I guess that where there's no accountability a lot of US corporations who have ostensibly lost of accountability have stolen big money, and I just don't think there's been much big money stolen, but I don't know that. Question: I think you're wrong. Just recently the Chief Acquisition Officer of the United Nations had his office closed and sealed and I think he resigned abruptly. You have to remember that Volker had no subpoena power and he can't charge anybody with anything. He has no enforcement power. But I think it's just beginning, not ending, and I think there will be cases pursued by the [inaudible] A. Peter Burleigh: Maybe so, Tom. I don't know. Thomas R. Pickering: Let's go to another question. Volker's final report comes out on the 28th of July and let's hope that Volker's final report is the final report that can put to rest at least controversies of fact that are now in dispute across the table here. Question: Ann Florini from Brookings. A comment and a question. The comment on this last point, I just want to underline what Rod was saying about the importance of having an accountability structure that makes some sense. Because what we found in the task force was that people treat the UN as an ink blot test. If you assume that it is a corrupt, horrible place you will see anecdotes that will lead you to reinforce your opinion. If you go in with the assumption that it's full of people with goodwill with some bad apples, that's what you'll see. The fact is that there is no way to know what the pervasive culture is because there has been no system in place of ongoing systemic accountability. So I think the single most important recommendation in the task force's report is for a significant overhaul of that system, and this is one that the Secretary-General and the high-level officials in the Secretariat seem to support very strongly. Which leads to the second point which is the question following up with Ambassador Burleigh's point about the sclerosis in New York among the member states. What we found was that it wasn't the member states as a whole. It had an awful lot to do with the second secretaries on the Fifth Committee in particular. That there are a huge number of people who are in positions where they are not really supervised even by their own ambassadors, much less their own capitals. That people are cutting their own deals, doing their own things within the framework of the Fifth Committee which seems to be a very large part of the problem. Is that something that the United States is actually in a position to do anything about? As we are pursuing our diplomacy, how do we deal with that kind of a structural problem? A. Peter Burleigh: I think it has to be addressed, and exactly how that is done would, I'm not sure I'm in a position to say that except the Fifth Committee has to have higher level attention, consistently higher level attention from the missions who wish to have reform. And so it has to be sustained and we have to get it out of those representatives of the member states that you describe. Don Hays has actually more hands-on experience than I do about that specifically, but I had a lot of experience with the ACABQ, and I think it's the case that the chair of the ACABQ had been in the chair for 18-20 years by way of the late '90s. He has now been replaced finally. And his wife was the secretary of the ACABQ. [Laughter]. He had a position of power because he was able to sustain support. It was an elected position, ACABQ membership is elected by secret ballot. He was able to keep getting reelected because he was able to, one was told, and there seemed to be enough evidence of it, to cut deals with other governments. This is a G77 group operation essentially. And the reform-minded countries had representatives but were the minority for sure on the ACABQ, and were then swamped in the Fifth Committee with the 191 members. This is why I was making the point earlier that if we can't break the lock of the G77 on the ground, because that's by and large the group we're talking about cutting the deals, I think on the Fifth Committee as well, then most of this won't happen because they will find ways, through at least the inherited historical procedures, to get around the reforms and/or to block them in practice or not to fund them sufficiently if they require funding. It just needs constant attention, at a high level I think. I'm personally of the view that it could be changed but not without that kind of constant attention which by and large hasn't been given by the reform-minded countries. Question: I just wanted to ask if anyone on the panel or in the audience has a feeling about what the reaction has been on the Hill to the task force. We've had, Senator Mitchell and Congressman Gingrich have had extensive briefings now of several committees, and I just wonder what the atmosphere is. Will this influence the Senate's treatment of the Hyde Bill for instance? Roderick Hills: I think it's fair to predict that the threat to withhold dues will not be in the Senate Bill if Senator Lugar has anything to say about it. I think there's no stomach to put that in. There's a lot of the Hyde Bill that's not bad. There's a lot of -- It's the thrust of the way they're put forward that's the problem. So I would be surprised from the senators I've spoken to, and the congressman has talked to other senators, who say that the Senate Bill, I would hope, would be very much like the task force. Without the punitive. A. Peter Burleigh: But they're trying to put the Hyde Bill past into the Senate without going to Lugar. That's the problem. And they're trying to put it into an appropriations bill. That could be a serious problem, because they actually know that Lugar won't let a bill out which has the withholding in it. So right now it could come up very soon, this issue. Question: This is a question for Rod Hills. My name is Sunil Chaco. Congratulations for putting this recommendation in the task force report on the Independent Oversight Board to supervise the internal auditors and the external auditors. Do you foresee each of the specialized agencies also adopting this structure? That's the first question. Do you foresee a role for people like yourself and others to try to influence for instance the individual members of the G77 in cases where diplomats have failed? Finally, did you see a need to enhance financial literacy among the managers in the UN system? Roderick Hills: On the first question, as you know, our responsibility was not for the other agencies, but the Board of External Auditors has fairly extensive authority over some of those agencies. And so that it makes sense for the Independent Oversight Board to be co-extensive with the Board of External Auditors, and the Board of External Auditors -- I might say, the Board of External Auditors feels that under current, I should say fairly new international auditing standards, they won't be able to give an opinion unless there is an effective Independent Oversight Board. I mean there's a little bit of this doesn't have to be made in America. There is a notion among them that they need that in order to do their job. The second question is interesting. We appeared before Frank Wolf I guess it was last week, and on behalf of his committee with the ranking minority as well. They specifically asked Senator Mitchell and Speaker Gingrich, that they would make the members or the task force available. So far we've been asked, our own task force has been asked to come to the United Nations and meet with the new Deputy Secretary General for Management. We've also had a request from some members of the General Assembly. The Chairman of the ACBAQ has asked that we arrange a couple of [lunches]. I think Speaker Gingrich and Senator Mitchell, both quite properly said to Chairman Wolf that we wouldn't feel it proper to do that unless in response to a request from Frank Wolf, the Secretary of State approved it. We don't want to be running around asking for things to happen that our Secretary of State doesn't want to happen. So presumably the Secretary of State may endorse that and if so I think all the members of the task force would be more than pleased to emulate the 9/11 Commission. A. Peter Burleigh: Let me say, the new Under Secretary for Management is an American, Chris Burnham, who was in the State Department. He was Under Secretary for Management in the State Department. He's very knowledgeable. He worked for PIMCO. He's had a great deal of experience in the private sector. Question: Two sort of related questions about how you get it done. I was delighted that the problem with the G77 writ large was laid out quite frankly here. Way back in the '70s when we were trying to combat the G77, we felt in IO that you only could do it in capitals because of the Mafia that you described in the Fifth Committee and elsewhere in the Assembly. When you go out to capitals and try and get them to give different kind of instructions to the perm reps about issues of the kind we're discussing here, in the first place they don't know anything about them; second place, they're not interested; third place, they'll do it if you give them something. They want an exchange. So it seems to me our success in moving the General Assembly really relates to our general diplomatic posture around the world on many other issues that we haven't been talking about this afternoon. I think it would be interesting to hear a comment about that. But secondly, how much does this all depend on some hard bargaining over the Security Council enlargement schemes? If you're to get enough of a consensus among the big powers to then have some success in working collectively on the smaller G77 members. Most of the missions in New York are winging it. Certainly over 100 of those 191 and probably -- So their representatives in New York can make the decisions on behalf of their government. Can and do regularly. Most of them don't even report home about such and such a decision was made because it's not something that impacts on, the perception of the leadership, anyway, of the country in question, is that these are completely uninteresting questions, these internal arrangements of the UN and who's reporting to whom and whether there's a personnel evaluation process or whether there's transparency and accountability, which they probably don't have in their own government either. It doesn't resonate. And anyway, the communication is very weak between the mission and home capitals. So if we're serious on those issues where we have strong views, we have to raise it at that level and probably high levels in the capitals. And then secondly, of course we're going to hear about what their priorities are. And yes, in the normal multilateral diplomacy there are going to be expectations of tradeoffs and one of those is, I would be astonished if the Security Council expansion isn't linked by those countries that both want to get on the Security Council and their arch enemies who want to keep them off at all costs. This will be very complicated. All of those leading countries I mentioned have very active opposition within their own region. There is no free -- This expansion of the Security Council which seems so obvious to some people, when you start getting down to specific countries, what will Pakistan do if India is going to -- and what will the stops be that they will pull out to keep India off a permanent seat on the Security Council? What will the other Latin Americans do to keep Brazil off? Within the African countries there's intense competition between let's say Nigeria, South Africa, Kenya, maybe Egypt, as to who gets in. You can see what it's like once you get down to the nitty gritty of specific countries. I think frankly because of that the whole question of expansion is in my mind highly problematic, let's put it that way. William H. Luers: Let me add to this, Sam. Several things. First, there is a statement that has been prepared by the President of the General Assembly which is the document that is going to sort of sum up all of the reforms, and it's the negotiated document that is being discussed by all 191 member states. It's not there yet by a long shot, but that will be the basis under which the Chiefs of State when they come in September will vote for or against the reforms. Now it could be too general to be meaningful. I suspect it's going to be more than that. The big issue on deal-making is the .7 percent of GDP for our contribution to development, developmental assistance. At the G8 meeting next week it seems very clear that the Europeans will put a lot of pressure on the United States to talk about approaching that number. I gather there is still some softness on US policy on that. We'll not agree to .7, but my sense is that the President is going to announce something on malaria soon and I think there will be a package that will demonstrate a willingness to do much more in terms of developmental assistance. There are other specific issues that will be of interest to the Group of 77, but that's a big one. The third is the Security Council and my understanding is up until very recently our position has been we agree to maybe two or so new permanent members to the Security Council. But I gather that is moving. The closer you get to the deal, the more you realize that there probably will have to be some way to engage India and some of the -- not Japan so much or Germany so much, but India and possibly Brazil, in your efforts to make these big deals. But even at the most optimistic, the most that can probably be expected from the US and from others is an agreement on a framework for enlargement, which would be an agreement to maybe move to 24 states has been proposed, and then decide whether the permanent should be semi-permanent or permanent, which is a tradeoff, the new permanent. And then leave to later the decision of who goes in what slot, and that puts off maybe indefinitely that decision. But at least it gets through the issue of enlargement, is the big question. Thomas R. Pickering: Sam, you had the last question. Sorry to have to cut it off here but we have other things that are now lined up. For those invited to lunch, you go out and take the elevator to the rotunda on the 8th floor. Thank you all very much for being here. [Applause].
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