Corruption and international agencies: who goes to jail?

Philip Trewhitt, formerly an investigator on fraud and corruption at the United Nations, gives an insight into the nature of such work and what lessons can be drawn for dealing with future scandals.

Photo credit: Nelson De Witt / Flickr

One day in the summer of 2004, I was running into a bunker in Baghdad to avoid some mortar fire. A normal day at the office at that time. When my phone started ringing I, for obvious reasons, chose to ignore it. It rang again a few minutes later. It was Paul Volcker, the former chairman of the US Federal Reserve now in charge of the investigations into breaches of UN sanctions imposed against the regime of Saddam Hussein – what became known as the UN oil-for-food scandal. He asked me to head up the Baghdad end of it. And so, I became a corruption investigator. For the next 18 months I worked with the best-qualified and most-motivated team I have ever been part of, drawn from across the globe. We achieved almost nothing. A couple of minor jail sentences; a few fines. But the numerous politicians and so-called human rights champions proved to have benefitted from kickbacks? The many well-known international companies who knowingly paid them, directly or indirectly? Pretty much zilch.

Fresh from that mighty success, I was asked to join a UN corruption task force in New York, with over 300 cases of fraud and corruption sitting on the books. A number of the cases I worked on showed clear criminality and were proved well beyond the required level for referral to law enforcement, yet few such referrals were made. Later, I worked on investigations for a succession of UN and other international agencies, either as staff or as a consultant. Once again, we proved the cases. Once again, very little resulted from this.

I should point out that is not fair to compare lack of action in the oil-for-food investigations with the failure to follow up internal investigations carried out by the UN and other international agencies themselves. The power to take action on the oil-for-food sanctions breaches was primarily in the hands of national authorities, who for the most part, and for a variety of reasons, had no interest in progressing cases. The international agencies do, however, have the power to take action on cases involving their own staff and contractors. I do not suggest that this never happened while I was involved. There were successes, just not very big ones, relatively speaking. If action was taken, it was generally too little, too late, or simply the wrong action. In combatting corruption, the grand proclamations and the mountain of policies were matched by a lack of ambition and action which was truly stunning, especially when investigators were providing solid grounds for taking action.

Operating in the most difficult and dangerous parts of the world, where corruption is often endemic and local authorities may be part of the problem, is not easy. Those working for the internal investigations bodies – mostly good, bright, motivated people – may reasonably point to the increased number of allegations coming in to the internal investigations as proof of their success in persuading people to come forward with concerns; they will point to substantially increased staffing of those internal agencies as evidence of the concerns being taken seriously; and they will produce annual reports filled with pie charts on different types of investigations ‘substantiated’ or ‘unsubstantiated’. They may also emphasise the type of allegations they have investigated and mention companies being ‘sanctioned’ or ‘debarred’, in other words prevented from doing business with the agency. What they will probably not be able to show, because it so rarely happens, is evidence of bad people going to jail.

Why not? There is no simple answer. It is not that those at the top of these agencies are mad, bad, irresponsible, lazy, self-interested or have built a career on studiously avoiding controversy. The key factor is that there are systemic faultlines in the way investigation bodies are structured and allegations are dealt with. The overriding goal for management is not to hold the guilty to account but the avoidance of reputational harm. There is a tendency to revert to the least confrontational response possible, particularly if the case involves government officials. It is widely acknowledged among the UN staff that stopping funds flowing to 10 or so countries in the world unless they sort themselves out would reduce corruption hugely, but the political costs are too high. There are other problems as well. Investigation mandates are too wide, conflating sexual harassment with systematic looting of projects, which makes it difficult for investigators to build up specialist expertise. Investigators face, in reality, a requirement to go well beyond the required level of proof, with those accused being accorded full rights and protections, but without investigators having comparable powers. The internal legal staff do not always help – for every one that offers a way forward there is another who whispers about threats to UN sovereign immunity if investigators are allowed to testify, or worries about being sued for libel.

Senior managers in international agencies are able to point to their robust anti-corruption policies. There are a certainly a lot of them out there. Everyone has a whistleblower protection policy. That did not stop a senior management official saying to me: ‘we shouldn’t be protecting scum’. Everyone has a ‘zero tolerance’ policy in relation to fraud and corruption. That did not stop another senior management official saying to me – in public – that he would expect me to be arrested if I tried to conduct an investigation in one of the countries for which he was responsible and that he would ensure the agency ‘would not lift a finger’ to have me released. (He added that it was ‘nothing personal’).

I left the UN around a decade ago, but have no reason to believe that things have changed in recent years. My advice to the donors who fund such international agencies is this: if you want to know whether an agency is taking corruption seriously, do not ask about policies or  ‘governance issues’ or ‘financial mismanagement’. Ask who is going to jail.

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One comment on “Corruption and international agencies: who goes to jail?
  1. GRIGORY says:

    The very same story happened recently at UNDP with O’Brian whistleblower

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