Solons Suspect Coverup In North Korea Scandal

By BENNY AVNI, Staff Reporter of the Sun
January 25, 2008

UNITED NATIONS — Republican lawmakers yesterday expressed suspicions that as part of the Bush administration's attempts at diplomacy with North Korea, the State Department may have tried to cover up some Senate findings about the misuse of U.N. development funds by the communist regime of Kim Jong Il.

A Senate investigation, which detailed the North Korean government's manipulations of the U.N. Development Program and the use of its facilities as a backdoor channel for moving funds around the globe, also led some lawmakers to question America's contribution for the flagship development arm of the United Nations.

During a hearing yesterday of the Permanent Subcommittee on Investigations, Senator Coburn, a Republican of Oklahoma, aired a suspicion that the State Department had tried to cover up some damning findings in the subcommittee's UNDP report in order to preserve the diplomatic process with Pyongyang, known as the six-party talks.

Although the Treasury Department had no problem releasing all parts of the Senate report to the public, Mr. Coburn said, the State Department's point man on the North Korean diplomacy, Christopher Hill, "wanted to keep classified" some of the report's findings. "Is there any other reason why the State Department authorized Ambassador Hill to censor the information, other than to protect the reputation of the six-party talks?" Mr. Coburn asked. "I'm not aware of any political reasons for doing that, senator," America's ambassador to the United Nations, Zalmay Khalilzad, said.

The UNDP suspended its activities in North Korea last March after American diplomats raised suspicions about several irregularities and violations of the agency's own rules in its activities in North Korea. But yesterday, Senator Coleman, a Republican of Minnesota, asked Mr. Khalilzad if he knew of any offer, as part of the six-party talks, to renew the UNDP activities or use the agency to increase assistance to North Korea. Mr. Khalilzad said he was "unaware" of such ideas.

The subcommittee's report was based in part on what its chairman, Senator Levin, Democrat of Michigan, described as "frankly, a surprisingly open exchange" between Senate staffers and North Korean officials in Pyongyang's U.N. mission in New York.

It documented how Kim Jong Il's regime used "deceptive financial transactions by moving $2.72 million of its own funds from Pyongyang" around the world "through a bank account intended to be used solely for UNDP activities, and by referencing UNDP in the wire transfer documents." It also accused the UNDP of "inappropriate staffing, questionable use of foreign currency instead of local currency, and insufficient administrative and fiscal controls," as well as preventing access to its own audits, and retaliating against a whistleblower.

America contributed $247 million to UNDP's various programs in 2005, including 12% of its core budget. "Without concerted action of responsible nations to link contributions to performance and accountability, there will be little incentive to change the leadership at UNDP or the morally bankrupt way in which it does business," Rep. Ileana Ros-Lehtinen, a Republican of Florida, said yesterday.

UNDP officials say all the agency's activities in North Korea were approved by its board, on which America is represented. In North Korea "we did our best to achieve development goals in a very restrictive environment," a UNDP spokesman, David Morrison, said. "Where operational deficiencies have been identified, UNDP is committed to applying lessons learned to other countries where we face similarly difficult environments."