Head of UN agency resigns after questions arise over loans

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United Nations Secretary-General António Guterres called on a senior UN agency official to resign on Saturday, shortly after The New York Times published an article detailing how the agency had awarded $61 million. dollars in loans and grants to a single British family. , according to a senior UN official.

The United Nations Office for Project Services, a little-known agency for operational projects, has ventured into territory no other United Nations agency has entered: by partnering with the sector private for profit in 2015 by operating as an investment bank. Now he could lose up to $22 million in bad debt, according to UN auditors.

The scandal has rocked and embarrassed the UN, according to several diplomats and staff, at a time when it is appealing for millions of dollars in aid from donor countries for the war in Ukraine and other crises. An internal investigation into the transactions was completed on Thursday, but its findings have not been made public.

The United States, which sits on the UN agency’s board, said its leadership must respond to the allegations and be held accountable. In a series of tweets On Sunday, Chris Lu, the US ambassador to the UN for management and reform, called for a comprehensive review of the agency’s “business model, governance structure and personnel”.

“At a minimum, we believe UNOPS management missed clear warning signals, failed to provide necessary oversight and took unacceptable risks with funds,” Mr. Lu tweetedusing the acronym for Office for Project Services.

An official statement from Mr Guterres on Sunday said he had accepted the resignation of Grete Faremo, a former Norwegian minister and executive director of the agency, who personally approved the loans. Ms. Faremo had entrusted tens of millions of dollars to a British businessman, David Kendrick, after meeting him at a party in New York in 2015. Ms. Faremo’s agency also gave a grant of 3 million to a group led by 22-year-old Daisy to raise awareness of threats to the world’s oceans.

Ms. Faremo, in a letter sent to her staff early Sunday morning and obtained by The Times, offered a different account of her resignation. She said she tendered her resignation on Friday because “without knowing the whole story, it happened under my watch.”

“I acknowledge my responsibility and have decided to step down,” she said.

Ms Faremo appeared to blame her deputy, Vitaly Vanshelboim, who was placed on administrative leave in December as the UN investigated the deals. After mentioning the investigation and Mr Vanshelboim, Ms Faremo said “a shocking breach of trust hurts and has deeply shaken the organization”.

But the senior UN official, who asked not to be named because he was not authorized to speak officially, said Ms Faremo had been ordered to resign. Mr. Guterres, the official said, decided to act quickly after the publication of the Times article in a bid to restore the confidence of donor countries in the organization.

Lebanese Ambassador to the UN, Amal Mudallali, tweeted“Unbelievable!! Who is hiring these UN officials? Why there is no oversight!!,” with a link to the Times article.

In fact, Ms. Faremo and Mr. Vanshelboim were among the most senior officials in the UN and were appointed by Mr. Guterres.

In his statement, Mr. Guterres said he was grateful for Ms. Faremo’s commitment and dedication to the organization. His resignation is effective from Sunday. Mr Guterres has appointed an interim manager, Jens Wandel, while he searches for a replacement, the statement said.

Mr Wandel “has had a clear record of working on UN reform”, said Farhan Haq, the UN’s deputy spokesman. Mr. Wandel, a former UN official from Denmark, where the agency is headquartered, was most recently Mr. Guterres’ special adviser on reforms.

We still do not know if Mr. Wandel will have the mandate, in his temporary role, to initiate significant reforms. A senior UN official said any reform or restructuring of the agency would be at the discretion of its board, which is made up of a group of member states including the United States.

Mr Lu said on Sunday that the board had demanded a full briefing with the agency which would take place shortly.

A spokesman for the US mission to the UN said a board briefing was scheduled for May 16 ahead of Ms Faremo’s resignation on Sunday and the board was preparing for it pending further advice.

In a separate statement on Sunday, the UN agency said it did not have access to the internal UN investigation report and was eagerly awaiting its findings. It said it was “already implementing continuity plans to ensure Ms. Faremo’s departure will not affect regular project activities”.

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