U.N. Procurement Official Found Guilty of Bribery, Fraud

UNITED NATIONS — While Secretary-General Ban expressed satisfaction about yesterday's criminal conviction of a former U.N. procurement officer, the head of the organization's internal investigative arm said the U.N. procurement system has way to go before it is immune to fraud and embezzlement.

The former procurement official, Sanjaya Bahel, was convicted on charges of bribery, wire fraud, and mail fraud yesterday by a jury in federal court in Manhattan. But a whistle-blower in the case, Jane Redfern, who fought the entire U.N. system to reverse an internal exoneration of Bahel, her former boss, must now contend with expensive legal bills, as the U.N. legal department refuses to pay legal fees she incurred during the trial.

In a statement yesterday, Mr. Ban said he was "satisfied that justice has been done," in the Bahel conviction, and praised the U.N. internal investigation mechanism for helping the U.S. Attorney for the Southern District of New York in developing the case.

Mr. Ban failed to mention Ms. Redfern's contribution; the U.N. undersecretary-general for management, Alicia Barcena, said Ms. Redfern's legal fees would not be paid by the United Nations. Such reimbursement can only be "based on the assumption that the interests of the organization are the same as the staff member's," Ms. Barcena told The New York Sun in a recent e-mail.

Yesterday's conviction could land Bahel, 57, in jail for as many as 30 years. A native of India, Bahel was a senior official at the U.N. department charged with procuring goods for U.N. operations, such as peacekeeping. The case against him involved awarding U.N. contracts valued at $100 million to companies owned by his friend, Nanak Kohli, and Mr. Kohli's sons, Nishan and Ranjit. Nishan Kohli pleaded guilty in the case and testified against Bahel.

In return for helping Kohli-owned companies inside the U.N., Bahel was said to receive such favors as cash, a laptop computer, expensive airplane tickets, and tickets to the U.S. Open tennis tournament. The Kohlis also leased and later sold to Mr. Bahel a luxurious 3-bedroom Manhattan apartment at prices that were below market value.

The conviction exposed corruption during the administration of Mr. Ban's predecessor, Kofi Annan, in a procurement department that last year dealt with contracts valued at $1.6 billion.

Even now, the procurement structure "is set up to deal only with honest vendors" and officers, according to the head of the internal U.N. watchdog, the Office of Internal Oversight Services, Inga-Britt Ahlenius. Urging a "major overhaul" to the procurement structure, she said it is still "not protected" from waste, fraud, and bribery.

Ms. Ahlenius's predecessor at OIOS, Dileep Nair of Singapore, had exonerated Bahel in 2004, after the first allegations regarding contracts awarded to two companies owned by the Kohlis, TCIL and Thunderbird.

During the trial that ended yesterday, Bahel's attorney, Richard Herman, referred to Ms. Redfern as a "trainee" in the procurement office. But she was the one who, soon after being transferred to the department, first alerted Bahel to irregularities in the TCIL and Thunderbird contracts.

Bahel did not only dismissed her concerns, according to trial testimony, but he also wrote disparaging remarks in her work evaluation.

Ms. Redfern then took her complaint up the bureaucratic ladder. But an investigation launched by OIOS, which was then headed by Mr. Nair, cleared Bahel of any wrongdoing. In apparent retaliation, Ms. Redfern was soon removed from the procurement department.

She did not give up, and went up the chain of command, complaining about the contracts — and her retaliatory removal — to the U.N. chief of staff at the time, Mark Malloch Brown. In a letter dated April 28, 2005, Mr. Malloch Brown dismissed Ms. Redfern's complaint that Bahel had retaliated against her.

In October 2005, Ms. Redfern turned to Ms. Barcena's predecessor at the management department, Christopher Burnham, who was known as a reformer. Working against Mr. Malloch Brown and bypassing the OIOS, Mr. Burnham established whistleblower protection status for Ms. Redfern. He then created a special new unit, the Procurement Task Force.

After an initial reinvestigation, several suspects who served as top procurement officers, including Bahel and his boss, Andrew Toh, were suspended. Some cases were transferred to various national law authorities, including the federal prosecutor in Manhattan. The current head of the task force, Robert Appleton, yesterday declined to identify cases that might end up in future trials.

Though Bahel's lawyer, Mr. Herman, referred to the task force as a "witch hunt" during the trial, Mr. Appleton said yesterday that the case his team had developed against Bahel was essentially the same case the Southern District prosecutors presented at the trial.

Mr. Appleton's team is currently investigating 140 cases involving allegations of wrongdoing or irregularities in the procurement department. 25 of these cases involve "larger contracts," he said yesterday, and add up to "many millions of dollars" of "loss and waste" — not to say possible criminality — in the current procurement department.