AP Exclusive: UN Africa corruption case buried amid broader decline in self-policing

AP Exclusive: UN Africa corruption case buried

ADDIS ABABA, Ethiopia — The United Nations compound of high-rise buildings, green lawns and white SUVs has been an engine of prosperity not only for Africa’s diplomatic capital but also for two senior managers, an internal U.N. report found.

A December 2008 report by the now-disbanded U.N. Procurement Task Force says former officials Ventzislav Stoykov and Edgar Casals each scammed hundreds of thousands of dollars and ran outside ventures at the U.N.’s Economic Commission for Africa.

The report obtained by The Associated Press says Stoykov manipulated bids and cut private deals with U.N. contractors he oversaw, while Casals forged birth certificates to get U.N. child support and used an American official to get U.S. visas for others — a potential security risk. Both men have denied the allegations.

As one of the last big investigations the anti-corruption task force completed before it was forced to shutter its operations at the end of 2008, the case illustrates the limits of the U.N.’s self-policing — which has seriously eroded in the past year and a half — and its secrecy and bureaucracy in handling major cases of fraud and corruption.

“Investigations have been hampered and significantly slowed by the lack of cooperation of some parties, including vendors external to the organization, certain counsel for staff and vendors, and staff members themselves,” the task force says in its 131-page report.

The task force recommended providing the ECA report to prosecutors in Ethiopia and the Philippines and to U.S. authorities to review visas Casals apparently obtained through Santiago “Sonny” Busa, a former U.S. consular chief in Addis Ababa. No one would confirm if that happened.

But the task force case did set off a confidential U.S. criminal probe.

“This case involves an ongoing U.S. law enforcement investigation and so we cannot comment on it,” one U.S. official told AP, speaking on condition of anonymity because of the sensitivity of the case. Busa couldn’t be reached for comment.

Few U.N. officials in the Ethiopian capital appeared to know of the ECA report. Some said they had no evidence of misconduct in their midst.

Paul Buades, head of the U.N.’s procurement division in New York, says “the organization was quick to act” on the task force’s findings by taking unspecified administrative actions against staff members, sanctioning U.N. vendors and re-soliciting bids for one project tainted by the report.

Stoykov’s job vacancy was posted a week after AP visited the U.N. compound, and Casals retired in October 2007.

Between 2002 and 2007, the U.N.’s investigation division received complaints of bid-rigging and other fraud at ECA, but nothing was done.

In 2008, the complaints were referred to the task force — created in 2006 to head off more scandals like the $1.8 billion bilked from the U.N.’s oil-for-food program in Iraq — and an investigation began.

Task force investigators seized documents from Stoykov’s office — a first in ECA’s 50-year history. Colleagues noticed his sudden, unexplained absence.

The task force’s report says Stoykov, a Bulgarian, hired two major U.N. contractors for side projects, including a four-story building put under his wife’s name. A board he sat on approved U.N. contracts for the firms — including a road, sewers, power, pipelines and a security wall — and he supervised that work while he hired them privately, the task force says.

Stoykov steered a $1.2 million U.N. contract to one firm to build guard booths, access roads, parking and a boundary wall around ECA’s office building, the task force says. The two firms told investigators they did nothing improper.

Stoykov couldn’t be reached for comment but told the task force in a 6-page letter he “committed no crime and have not knowingly broken any rule or regulation of the United Nations.”

Casals, ECA’s general services division chief, created fraudulent birth certificates for two children not his own to claim hundreds of thousands of dollars in bogus U.N. child benefits from 1971 to 2007, the task force says.

Its report includes divorce files from New Jersey, where Casals’ ex-wife lived, indicating the birth certificates were a fraud.

Casals put on immigration visa applications that he was the natural father of two children claimed as dependents — providing evidence, the task force says, he “knowingly falsified official documents and relied upon forged birth certificates in order to obtain United States visas for these two minors.”

It says Casals, a Filipino who headed the U.N. staff union in Ethiopia, used his job and contacts “to facilitate United States visa applications for his business partner, girlfriend, family, friends and other unidentified individuals seeking U.S. visas.”

One of Casals’ e-mails in the report says Busa was among his “tennis buddies” and their families met most weekends.

Casals declined to cooperate with the task force but told AP by e-mail: “It is so easy to accuse anybody who is no longer there to defend himself.”

He added: “I know Mr. Stoykov. He is the one you should go after.”

The ECA’s multimillion-dollar expansion drew scrutiny in the U.N.’s budget committee, whose minutes from the past two years reflect diplomats swapping concerns about project delays and “procurement irregularities.”

U.N. auditors looking into millions of dollars of recent European-funded projects also said ECA needs stronger financial controls.

The ECA investigation was one of more than 300 the task force completed, leading to millions of dollars in restitution, misconduct findings against nearly 20 U.N. officials and a ban against about 50 U.N. contractors.

But the task force was dissolved before it could examine four other economic commissions that double as regional U.N. arms. The U.N. General Assembly decided the task force’s capabilities and remaining caseload should be transferred to the permanent investigation division.

Since the start of 2009, however, the task force’s investigators have departed and 175 leftover cases were closed or left to languish, the AP reported in January. For more than two years, no one has been permanently appointed to head the investigation division.