EU Freezes Cash for U.N.'s Afghan Police Fund

DION NISSENBAUM
Sunday, 03-June-2012

 

KABUL :The European Union is blocking the release of 30 million ($37 million) to a United Nations-run fund that finances Afghanistan's police force amid an investigation into alleged mismanagement and corruption at the U.N. program, Western officials in Kabul said.
The EU had previously put the funds on hold pending a determination that the Afghan police force had made certain improvements, the officials said.
European leaders, adding a new condition, decided to keep the funds frozen until they are also satisfied that the U.N. has addressed allegations, reported by The Wall Street Journal on May 10, that officials running the program haven't ensured proper oversight.
"We and all the other donors have a very strong interest in making sure it gets cleaned up and people feel as though they're confident that you put your money in there and it's not going to be stolen," said a Western official.
The EU, U.S. and Japan are the main donors to the program, called the Law and Order Trust Fund for Afghanistan, or Lotfa. The EU has pledged to spend about $175 million on the program for its current phase, from January 2011 to March 2013, a period with a budget of $1.4 billion.
U.N. officials said on Friday that they hadn't been informed of the new EU condition for release of the 30 million, and that they were taking the allegations seriously.
Lofta staff have told Western officials and a monitoring committee of Afghan and international officials that U.N. officials had abused the fund's $2.2 million procurement budget, paid salaries to thousands of nonexistent police officers and created high-paying positions for people with close ties to Afghan leaders, according to Western officials. Officials at the U.N. Development Program, which administers Lofta, have denied allegations of mismanagement and corruption at the fund.
The fund was seen as a way for donor governments to finance the 150,000-member police force—a central element of the U.S. exit strategy in Afghanistan—while reducing the potential of Afghan government corruption.
"Lotfa is, in some ways, the only vehicle that's out there to channel contributions, so it's got to work," said the Western official. "And if it's being poorly managed, it's got to get fixed fast."
U.N. investigators have seized computers and cellphones of several UNDP officials involved with Lofta, Western officials said. The investigative team has expanded in size and scope as the investigation unfolds, officials said.
Western officials also said they had been told by U.N. employees that Lofta staff had attempted to destroy documents the day before investigators arrived. "The attempt at a coverup not only spurred the investigation, but really lit a fire under the international community," said the official. "So now you have a lot of concern by us and the other donors about how UNDP has actually managed this fund."
UNDP said it is looking into the reports of destruction of evidence, but couldn't comment on the investigation until it is complete. "At this stage it is not possible to state whether these allegations have any factual basis. Should evidence show that allegations of fraud are true, appropriate action will be taken." the UNDP said.
U.N. officials in Kabul said at the time the Journal first reported the allegations last month that a recently conducted financial audit of the fund had found no financial irregularities.
The EU, U.S. and other major donors sent a letter to the U.N. after the Journal article was published calling for a full investigation of the allegations. The letter urged the U.N. to ensure that evidence wasn't destroyed and to brief donors on the outcome of the investigation, the Western official said.
Western officials said that they were encouraged by the U.N. response to their concerns.
U.N. documents viewed by the Journal show that U.N. employees had reported concerns about mismanagement and potential fraud at Lofta before the allegations were made public last month.
An email by an employee sent in January, seen by the Journal, raised alarms about potential "no-show" workers at Afghanistan's Interior Ministry who were being paid on contract by the U.N. fund.
In a response to the Journal's initial report last month, UNDP said it was aware of the risk of "ghost" employees, but had established a process to verify attendance. —Nathan Hodge contributed to this article.
Write to Dion Nissenbaum at dion.nissenbaum@wsj.com

 

 

 

 

 

 

 

 

 

    

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