593 July 9, 1987 THE UNITED NATIONS CONTINUES TO DUCK NEEDED REFORMS Last year the United States withheld $130 million of its assessed contribution to the United Nations. The aim of this was to spur long overdue reform of U.N budget procedures. In response, the U.N. has adopted some preliminary procedural and budget reforms to improve efficiency and give the organization ' s major contributors a bigger voice in the budget process. In assessing these steps, Assistant Secretary of State for International Organizations Alan Keyes told a House of Representatives subcommittee this February Of course, the real proof of [U.N refor m will be in the implementation.

Just as we pledged last year to do our utmost to achieve necessary reform, we pledge now to continue our efforts to assure that they will be carried out the real proof of reform will be in the implementation. That will requ ire good faith efforts on the part of the Secretariat and other member states1 As Spendthrift as Ever. So far, however, there is scant evidence of such "good faith efforts Though the U.N. may be pinching costs a little here and there, the organization is a s spendthrift as ever. It is, for example, according to U.N documents, spending:2 over a two-year period 123,000 to rent a limousine for the President of the General Assembly 1. Testimony before the House Foreign Affairs Committee, Subcommittee on Human R i ghts and International Organizations, February 25, 1987 2. Proposed Budget for the Biennium 1986-1987 200,000 for a shooting range in the U.N. garage I 83,000 a year for an assistant to the Secretary General whose primary responsibility is to keep track o f the. General Assembly's speakers list. The Senate Select Committee on Intelligence last year charged that the aide, Vladimir Kolesnikov, is a Soviet KGB agent 447,200 for Russian .language training in the Soviet Union 709,000 for educational materials fo r the U.N. Council on Namibia including buttons and posters of the leader of the terrorist South West Africa People's Organization SWAPO 48,000,000 in budget "add-ons" during the closing days I of the a 1986 I I General Assembly A $91,204,800 slush fund of "Common services not distributed to programs at] Headquarters."

Until expenditures such as these are eliminated from the U.N; System's bloated 4 billion-a-year budget, of which U.S. taxpayers supply one-quarter, Congress and the Reagan Administration woul d be violating their own sensible guidelines were they to restore the full assessed U.S. contribution. The U.N.3 only hope of surviving its crisis of confidence and of budget is to demonstrate that it is capable of reform and of spending restraint. So far , it has not done so U.S. taxpayers always have borne the lion's share of the U.N.3 assessed and voluntary contributions, pouring more than $15 billion into the organization since the first General Assembly m 19

46. Then, the U.N. staff numbered 1,500; last year it was over 11,0

00. Meanwhile, the budget of the entire U.N. system has grown five times faster than the inflation rate.

There seems to be a near consensus within the U.N. that management has not kept pace with this dizzying growth. Throughout al most every level of the U.N financial, adminstrative, and personnel controls have been either nonexistent or broken. Committees have proliferated, many with overlapping and duplicatiye responsibilities of the so-called "Group of 77" or G-77, composed of o ver 120 developing countries.

G-77 has voted as a bloc to control budget appropriations even though G-77 nations provide less than 9 percent of the total U.N. System budget. In effect, major contributors are powerless to prevent the G-77 from voting budget s that automatically cost the major contributors more money. To make matters worse, the G-77 votes money for such known terrorist organizations as the Palestine Liberation Organization, the Irish Republican Army, and the South West Africa People's Organiz a tion Funding Terrorists. Much of the U.N.3 growth was fueled by the emergence 2I Against this background, the U.S. began to curtail and even eliminate contributions to voluntary U.N. programs such as the U.N. Educational, Scientific and Cultural Organizat i on UNESCO And Senator Nancy Kassebaum, the Kansas Republican, in 1985 introduced an amendment to the State Department Funding Bill, P.L 99-93, which limited U.S. contributions to international organizations to 20 ercent of the organization's budget. This included the U.N. whose budget was K nded 25 percent by the U.S. Citing fiscal constraints in the U.S., Kassebaum proclaimed The United Nations is no longer a sacred cow The Kassebaum Amendment passed overwhelmingly, 71-13.

This shook the U.N. Secretariat. In late 1985, U.N. Secretary-General Javier Perez de Cuellar appointed an 18-member panel. Officially called the Group of High-Level Intergovernmental Experts to Review the Efficiency of the Administrative and Financial Functioning of the United Nations, the panel was to make recommendations for reform Known as G-18, the group issued its report last August, indicting the U.N. for being top-heavy, junket addicted, and paper crazy.

Financial controls and the personnel qualification process were found to be sorely deficient Bitter Pill from a Friend. Meanwhile, revelations by the U.S. General Accounting Office and intelligence agencies prompted additional congressional a~tion The House of Representatives passed an amendment in July 1986 offered by Pat Swinda l l, the Georgia Republican, which subtracted $17.6 million of the $423 million earmarked for international organizations 7.57 million of this was to be taken from the U.S. contribution to the U.N. Department of Public Information DPI), which the GAO had fo u nd to be a font of anti4J.S. propagandaP Also during the summer of 1986, the United Nations Association (UNA), a group normally sympathetic to U.N. management, convened an "International Panel on U.N. Management and Decision-Making The UNA'S carefully wor d ed report was a bitter pill.7 It found Over the years too many of the Secretary-General's top appointments have reflected political considerations as much management ability 4 3 4. Report of the Group of High-Level Inter overnmental Experts to Review the EGuency of the Supplement No. 49 (A/41/49 5. See "United Nations Analysis of Selected Media Products Shows Half Oppose Key U.S. Interests,"

GAO/NSIAD-86-98, April 1986, and "More Can Be Done to Strengthen the U.N. Joint Inspection Unit," GAO/NSIAD-86-141, June 1986 6. In October 1986, the Senate rejected a roposal, 46-53, by John Heinz, the Pennsylvania Republican to withhold all U.S. U.N. contributions undthe President imdemented a Drogram to eliminate Soviet January 4, 1986, p 33 Admhstrative and Financi a l Functioning of t f e United Nations, General Assembly, Forty-Flrst Session, spying and salary kickbacks there 7 Leadership at the United Nations: The Roles of the Secretary-General the United Nations Association of the United States of America, December and the Member States 1986 3or loyalty to the Secreta.ry-General.'I8 Concluded the UNA the U.N.'s credibility is sagging in nearly every region of the ~orld Other friends of the U.N also began suggesting changes at the organization.

Mohamed Sahnoun, Alger ia's ambassador to the U.N. from 1982 to 1985, and now its envoy to the U.S., unveiled a reform package at a Heritage Foundation conference.lO His recommendations include 1) Working harder toward amsensus management and incorporating it into the rules of procedure.

Instituting cooling off periods" before proposals are voted on Reviewing negotiating procedures and devices Reducing dramatically the General Assembly's agenda Reducing drastically the number of resolutions Reducing the volume of conference docu ments and improving their quality Banning the creation of new committees and subcommittees that need P Limiting the duration of the General Assembly's regular session.

Speaking at the same conference, Singapore's Ambassador to1 the U.S lTommy Koh, who re resented his country at the U.N. for 13 years, said the U.N. budget percent higher than those paid U.S. civil servants--be cut and that the U.N. "stop, or at least redu c e substantially, the junkets and needless conferences the U.N. has become addicted to Koh also said that the U.N. needs to discourage formation of new committees, noting that, "Very often, when a delegation runs out of ideas on an item it has inscribed on the agenda, it resorts to the expedient of proposing a committee to examine the question. The U.N. literally has hundreds of such committees, many of which have overlapping jurisdictions has "a lot o P fat in it that can be cut out Koh suggested that U.N. salaries-20 THE U.N. RESPONDS .I With the calls for U.N. reform mountin , Secretary-General Perez de Cuellar responded last October. He did so through f ormer Undersecretary-General Patricio Ruedas of Spain, who spent two days in October 1986 answering qu e stions about 8. Ihid, p. 7 9. Ihid, p. 4 10. Remarks made at The Heritage Foundation, June 1986 4the G-18 report. To many of G-18's substantive recommendations, Ruedas offered merely a flurry of lame denials.ll oups and individuals before it, that the G-1 8 had determined as had other U.N.'s lax enforcement of personnel quali f cation standards had created staff and organizational performance problems. Not true, said Ruedas. This response was a cover up, ignoring the mounds of evidence of the serious proble m s at the U.N. A U.N. auditor's report in October 1986 points out that UNICEF acquired several buildings and a computer system, although these acquisitions were never mentioned in the budget Tours of U.N. Headquarters in New York, originally designed to ge n erate income, lost $785,000 in 1986 U.N. employees received fraudulent payments, education grants dependency allowances, and income tax reimbursements U.N. employees repeatedly violated U.N. rules regarding competitive bidding Serious lapses in internal [ financial] control mechanisms" occurred at the U.N. and U.N. agenaes Evidence existed of "gross mismanagement and/or possible fraud in headquarters catering and gift shop operations.

A key G-18 recommendation is that the U.N. trim its payroll by cutting re gular budget posts by 15 percent and cut slots for under and assistant secretaries general by 25 percent. Replying to this recommendation, Ruedas told the Fifth Committee, which is responsible for U.N. administrative and budgetary matters The Secretary-Ge n eral, of course, would aim at achievin these reductions I I. 'I to the maximum extent possible through the full utilization o B the attrition mechanism Protecting the PayrolL- By the end of May 1987, the latest period for which figures are available, the n umbers confirmed the Secretary-General's reluctance to reduce significantly the size of the U.N. payroll. Overall U.N. employment excluding the U.N. Development Programme and UNICEF, had been reduced a scant 1.8 percent worldwide. At the Manhattan Headqua rters, the workforce had shrunk just 2.4 percent. On the executive level, only the number of assistant secretaries-general showed any si nificant reduction, down to 22 from 28 in December 19

86. The number o B undersecretaries-general remained unchanged at 27 11. Statement by Undersecretary-General Patricio Ruedas to the Fifth Committee, October 24 and 27, 19

86. A I 12. Qiphmic WQIldhku November 10-17, 1986, p. #2 5 R The minor attempts by Perez de Cuellar to cut costs often ran aground.

Typical was the squall created by the attempt to save $100,000 per year at Headquarters by removing drinking water pitchers from 13 conference rooms. The entire Fifth Committee last December spent three hours debating this seemingy modest proposal. The New YmkIixnw 13 re p orted that U.N. controller J. Richard Foran said it is easy to underestimate the amount of work involved in such an enterprise the jugs not only had to be distributed to each room, but also had to be filled twice a day and removed at night The task, he sa i d, required the services of five U.N. staffers Drinldng Water &bate. As the drinking water debate dragged on, Fifth Committee Chairman Even Fontaine-Ortiz felt compelled to remind delegates that the overtime pay for the translators and guards to service t his critical debate could cost as much as the discontinued water service. Another delegate reminded the assembly that water fountains were conveniently located in the halls, while still others discussed the symbolic importance of water.

Typical too of the U.N.'s stubborn resistance to refo& was the res onse to the G-18 suggestion that the Secretary-General would get more reliable Lcial data if the U.N.3 Internal Audit Dimion, now a part of the Division of Administration and Management, were made an indepen d ent unit. To this sensible recommendation, Undersecretary-General Ruedas, speaking for the Secretary-'General on October 24, 1986, said, "that it is indeed theoretically possible for the Internal Audit Service to report directly to the Secretary-General. T he advisability of this move would have to be seen in relation to other factors, such as whether the already heavy schedule of the Secretary-General should be burdened by further direct supervisory re~ponsibilities Given the Secretary-General's tepid endo r sement of reform, it is not surprising that, during the closing days of the 1986 session, the General Assembly voted to append $48 million worth of "add-ons" to the budget including increases oklS 5,070,900, almost 20 percent of its total budget, for the C ommittee on Political Affairs, Trusteeship and Decolonization 9,142,800, almost 15 percent of its total budget, for the controversial United Nations Conference on Trade and Development (UNCTAD 2,722,700, over 25 percent of its budget, for the Internationa l Trade Center (ITC 16,789,500 for administration and management 21,939,900 for conference and library services 13. The New YQCUUXES December 8, 1986, p. Al 14. Statement to the Fifth Committee 15. Revised Budget Appropriations for the Biennium, 1986-1987, pp. 493-495 6While making these add-ons, the General Assembly did cut other program budgets. However, the net result was over 48 million in new spending, irrefutable proof of the U.N.'s inability to operate within its already ample budget THE RECORD OF U. N. MISMANAGEMENT A number of G-18 recommendations highlight the U.N.'s continuing disregard for cost-effective management. Among them:.

Fii Sale Rents G-18 recommended that "Member States and other users.occupying space on United Nations premises should pa y [the U.N.] rent based on the current commercial rate The U.N. Secretariat has been doing a poor job of ensuring that the U.N. gets full value from U.N. tenants. Example: The Food and Agrihlture.9 Organization, the International Atomic Energy Agency, the International Monetary Fund, and the World Health Organization pay approximately $24 per square foot for space in U.N. buildings in Manhattan, about half the goin rate: The Group of 77 Secretariat's Manhattan headquarters, an amount at most one-ninth mark et value.

Security Council members pay nothing for 972 square feet of additional office space also in the Secretariat building.

Travel developing countries, 111 1986, paid only $5.04 per square P oot for office space in the For many years the U.N. has spe nt millions for reimbursement of delegates travel expenses to and from the General Assembly. Under recent-rules each delegation was entitled to four coach and one first-class air fare. G-18 recommended that these reimbursements be limited to the 37 poores t countries producing a budget savings of $2.95 million. In the face of last year's withheld U.S contribubon, the U.N. finally adopted this long overdue reform. Beyond the matter of limiting travel reimbursements, it is questionable whether the U.N. should pay for any first class air travel, costly limousines, or education grants to the children of U.N. employees paper The G-18 made several recommendations designed to cut down the enormous volume of documentation. Until the agendas of .the committees and th e Gyneral Assembly are significantly reduced and the number of conferences trimmed very little can be done in this area. In 1985, the U.N. produced a staggering 825 million page "impressions total pages printed), roughly 44 million individual documents.

Ap pearing before the Fifth Committee last fall, then Undersecretary-General Ruedas claimed that the cost per page was less than one cent. This significant1 understates the true costs of the U.N. paper proliferation and pinpoints serious gaws in internal acc o unting procedures. Ruedas claimed that the cost per page l'is determined by dividing the total costs of internal printing by the total number of pages printed. Total costs include all staff costs incurred in the print shop 7maintenance and repairs, and su pplies and materials."16 He also alleged that distribution costs were 8.6 cents per document.

This contrasts sharply with the claim made by former U.S. U.N. Ambassador Joseph Reed, now U.N. Undersecretary-General for Political and General Assembly Afurs. R eed states that the U.N. improperly calculates its cost per page by excluding writing and translation costs and that the real cost of generating certain U.N. documents is much higher; Reed told the Second Committee (Economic and Social Issues) last fall t h at the cost of writing, translating, and producing a 25,000 page sampling of committee documents was an astronomical $650 per page or $16 miuion.17 1 CONCLUSION Any serious U.N. reforms must give major contributors a larger say in the U.N. budget process. The G-18 report has made a modest start on this. States the report We] remain convinced that [we] have only begun a reform process This process must now be carried further b the intergovernmental bodies and by the Secretary-General of the organization Y 8 withheld provides su F ficient incentive for reform to continue at an expedient pace It also must be carried further by the U.S. Congress and the Reagan Administration. Congress will soon consider legislation that would withhold a part of the U.S. U.N. co n tribution, pending certification from the President that U.N reforms are being executed faithfully. When considering this legislation, lawmakers should evaluate the rogress of U.N. reforms to determine if the amount to be Congress and the Administration s h ould insist that the Secretary-General become more involved in the U.N.3 financial management His aloofness thus far compounded by the various U.N. bodies' inability to take reform seriously, casts a pall over the promise of U.N. reform Maintainiag US. Pr e ssure. Until significant reforms are adopted and executed the U.S. must maintain its pressure on the U.N. The terms of the Kassebaum Amendment, for instance, were never fulfilled by the U.N This is to say nothing of the alleged fraud and widespread incomp e tence behind the pages of the U.N budget. Restoring the full U.S. contribution, therefore, would accomplish little but The United Nations can be saved only if it saves itself. The U.S. has given providing a disincentive for the desired reform I the U.N. t he impetus to do so. Now is no'time for Washington to relent.

Prepared for The Heritage Foundation by Mark Huber a Washington-based 'consultant 16. Statement before the Fifth Committee, October 24, 1986 17. The Honorable Joseph Reed, General Debate before the Second Committee, October 6, 1986 18. G-18 Report p. 3 8-