UN probe accuses procurement official of steering contracts to India-controlled company

UNITED NATIONS: An internal U.N. investigation concluded that a U.N. official steered millions of dollars in contracts to a company owned by the government of his native India, in exchange for favors that included low-rent apartments.

The investigation claimed that Sanjaya Bahel, himself an official in the Indian government when he was working for the U.N. under contract, used his relationship with a wealthy Indian businessman and his son to steer the deals to the company they represented, Telecommunications Consultants India Ltd.

According to the report Bahel also ignored evidence that TCIL wrongly withheld money from employees sent to U.N. peacekeeping missions in places such as Liberia, Congo and Kosovo to do communications work.

While the workers claimed they were only getting a pittance - sometimes as little as US$5 for daily expenses - the money enriched another company associated with the Indian businessman and his son.

The confidential report detailing the investigation's findings was shown to The Associated Press. Bahel vehemently denied the claims and said the U.N. only notified him of them earlier Thursday.

"All I can say to you is to me the allegations are not correct," Bahel told The Associated Press. "I have good reasoning and valid reasoning to counter those."

Bahel was chief of commodity procurement from 1998-2003. From 1999 to 2004 TCIL received more than US$100 million in U.N. contracts, the report said.

Details of the investigation were first reported in the Friday editions of the Italian business daily Il Sole 24 Ore. They are the latest in a string of claims of fraud in the procurement department, which is responsible for awarding millions of dollars in contracts to do business with the U.N. worldwide.

After learning that the details of Bahel's case were about to be made public by Il Sole 24 Ore, the United Nations quietly issued a statement through spokesman Stephane Dujarric on Thursday that it had suspended an unidentified male staffer and charged him with misconduct. Bahel confirmed to The AP late Thursday that he was that staffer.

Dujarric said the staffer "is now being given an opportunity to respond, which is an essential element in the U.N.'s system of internal justice. Evidence in this case has also been shared with the prosecutorial authorities of the host country."

A U.N. diplomat speaking on condition of anonymity confirmed that it was the U.S. Attorney for the Southern District of New York, which has been investigating allegations of fraud in the procurement office for several months. Bahel could face charges including wire fraud, conspiracy, and aiding and abetting.

The report was compiled by the Procurement Task Force, formed in January to pursue allegations of fraud in the procurement department. Many of the claims arose in the wake of the U.N. Oil for Food scandal, and one U.N. employee has pleaded guilty to wire fraud and money laundering during his time in the Procurement Service.

TCIL could not immediately be reached for comment. In the report, it acknowledged "some responsibility for the severe problems" in contracts with the U.N. and blamed the Indian businessmen Bahel had contact with, Nanak Kohli, and his son Nishan Kohli. Neither man could immediately be reached for comment, and they refused to speak with the task force.

According to the report, Bahel had a longtime relationship with the Kohlis, who were on the guest list for his son's 2002 wedding. In 2003, Bahel rented two side-by-side New York apartments from them at rates well below the market and later bought the apartments, where he now lives, at a favorable price, it said.

If true, the case against him could have damaging implications for India, which is seeking a permanent seat on the U.N. Security Council and has nominated one of its own nationals, U.N. Undersecretary-General Shashi Tharoor, to replace Kofi Annan when he retires at the end of the year.

It would also raise questions about a program known as "secondement," under which a government official takes work at the U.N. One of the staff rules that the report accuses Bahel of violating "prohibits staff members from accepting any instructions from any government."

India was also heavily implicated in the oil-for food scandal. Earlier this month, its ruling Congress party suspended the country's former foreign minister, Natwar Singh, over his alleged involvement in fraud, under which Saddam Hussein gave lucrative oil contracts to favored buyers.

The oil-for-food program ran from 1996-2003 and allowed Iraq to sell limited, then unlimited quantities of oil provided most of the money went to buy humanitarian goods such as food and medicine.

Bahel was one of eight U.N. staff members asked to take leave in January while the procurement investigation continued. In the statement, Dujarric said that of the other seven, two staff had been exonerated; two more had been asked to respond to allegations of mismanagement; and three others were still under investigation.

New York, Friday, AP