Tuesday, January 08, 2008

A million dollars embezzled from Kabul hospital construction project?

1,000,000 USD is unaccounted for in UN, Intersos, Ahyaye Mojadad Char Dehi (an Afghan construction company) joint humanitarian aid effort

Note: Afghan journalist in exile, Kamran mir Hazar, prepared this report, including evidence, two years ago when he was head of the News Department at Kabul’s Radio Kleed. Unfortunately, the Attorney General’s Office of Afghanistan has not acted to arrest or question the accused people, even after being contacted repeatedly and provided with documents and other evidence.

This report indicates the level of difficulty working in a developing country. Much of the U.S. leadership contends that infrastructure cannot proceed without a military "victory," however, as this article reveals, often the greater enemies of advancement are large bureaucracies with dishonest or lax oversight that cost millions of dollars and sow great mistrust for authority. This is one small example.

Mr. Gary K. Helseth, former General Director of the 600 million USD-a-year United Nations Office of Project Services-Afghanistan(UNOPS) who had worked in Afghanistan for over 20 years, left the country two months after this report was first published. His U.N. e-mail addresses are not functional, and so far, we have been unable to contact him for additional information.

The Project
In 2002, the Ministry of Public Health of Afghanistan asked UNOPS to add 50 more beds to the 52 bed Khairkhana Hospital. UNOPS accepted the project. The Italian Government Foreign Office then committed funding up to 2,200,000 USD for the project.

After the funds were delivered to UNOPS- Afghanistan, they were released to the global Italian aid organization, Intersos-- less 270,000 USD of the original amount, which apparently was taken by UNOPS for internal expenses. Intersos is a corporation operating as an NGO in Afghanistan and has an office in Shahr-e-Now, Kabul. It was organized primarily by the Italian Trade Union Confederation in 1992, and its current annual budget is approximately 30,000,000 USD.

Afghan Government Investigation

Intersos oversaw the project, but what was the result, and how much of the 2,200,000 USD was actually spent on the project? Mr. Samadi, Director of Criminal Investigation Department of Attorney General Office responds:

The Intersos Corporation did not work on the project but signed a contract with another Afghan Corporation, Ahyaye Mojadad Char Dehi, led by Engineer Amin for 920,000 USD. Where did the balance of 1,010,000 USD go?

Mr. Samadi adds, "we asked the hospital personnel and the employees of the Afghan Corporation who worked on the project with the Intersos organization, and eventually found that Ahyaye Mojadad Char Dehi had some secret arrangements with Intersos. Based on our evaluation and inventory, they did not spend more than 250,000 to 300,000 USD on the project."

The Attorney General’s Office claims that they have concrete evidence and documents regarding the project. They are looking for Engineer Amin who they suspect may have embezzled some funds, but he cannot be found. Mr. Samadi says that Engineer Amin once phoned the Attorney General’s Office and threatened them, if they investigated this case.

Mr. Samadi, further stated that Intersos allocated 80,000 USD for the demolition of just two old rooms at the hospital’s main gate. When I asked why he did not summon and investigate the foreign people involved in the project, he answered:

“The Legal and Consulting Board of the Office of President sent us a letter in which it indicated that it is within our jurisdiction to make a claim against Intersos in an Afghan court. We then contacted the Italian Embassy and said that if they refused to assist us with this case, we would take it to the World Court in The Hague through our Ministry of Foreign Affairs and the UN. This is too large an amount of money for poor Afghanistan to just let go missing, and possibly embezzled.”

No Prosecution

The question remains: Do the foreign people involved in this project deserve political immunity from prosecution? It is clear that the Attorney General can prosecute foreigners based on domestic laws. Only Ambassadors, Diplomats and C and D grade foreign officials of the UN have political immunity, so all of the Intersos people involved in this project may be legally prosecuted.

While the Attorney General’s office did not know Intersos’ Kabul address, I found it in Shar-e -Now (New City) Kabul. I visited the office and found a Mr. Marco Rotelli, who did not answer my simple questions but referred me to UNOPS. I tried to contact the responsible persons at UNOPS in Afghanistan. Eventually, I made an appointment with the spokesperson and the Director of UNFPA, Mr. Gary K. Helseth.

Interview with Gary K. Helseth
Mr. Helseth firmly rejected the possibility for any kind of embezzlement in this project. He said that the project was very successful and they were satisfied with its completion. He added that they had employed an Afghan Engineer and a foreign engineer for this project and all the contracts had been already signed in New York.

Regarding the amount of 2,200,000 USD, he said that Intersos Corporation received 2,000,000 for the project, and 200,000 USD was spent on travel expenses and salaries of experts and employees. He added that the Intersos Corporation had been introduced to UNOPS by the Italian Government.

When I asked Mr. Helseth why Intersos did not do the project itself but instead signed a contract with Ahyaye Mojadad Char Dehi, he answered, "It is not true!" He added that Intersos signed a contract with a different corporation, and the money was spent by that corporation. He said they have documents that show this project was completed properly.

Regarding the term of the warranty for the completed building, Mr. Helseth said that theproject was guaranteed for one year . “A few years ago we could not guarantee a project for a year. Most projects in Afghanistan are guaranteed for just three or four months.” He agreed that the amount of 80,000 USD was too much for the demolition of two old rooms in the hospital and said he would check the documents.

"Mr. Helseth, please count and check this project penny by penny and kindly give me the documents to see when ready," I said and he agreed to do so.

A few days later, I received a call from Mr. Helseth. He happily said he had some ten kilos of documents on the project showing that it had been completed successfully, and added I could pick them up at his office. When I arrived, he was photocopying them, and we agreed that he would send them to my office in Radio Kaleed.

After they arrived, I sought out several experts to review these documents.

Experts Disagree With UNOPS Accounting
The experts who accepted my request did want me to reveal their names. One of them still works with the USAID and has completed many projects with that organization. He determined that the total cost of this project was 646,900 USD. Compared to the budget of 2,200,000USD, this leaves about 1,550,100 USD is unaccounted for. This expert emphasized that the budget was written in 2002 and current costs were higher.

Another expert who also wished to remain anonymous estimated the project cost to be 776,280 USD, leaving 1,423,720 USD unaccounted for. He explained that for 776,280 USD “we can build a hospital of about 2,587 square meter (20,000 sq. ft.) to a global standard.” This was the size of the Intersos and UNOPS Khairkhana Hospital project. He added that “even if we ignore the real amount spent, the maximum amount shown in the project reports is still 1,035,000 USD which shows the possibility of embezzlement of more than 1,000,000 USD on this single project.”

Now we should ask Mr. Gary Helseth, former Director of UNOPS in Afghanistan how he defends his organization and Intersos in this project.

Claims of Shoddy Construction at Khairkhana Hospital
While making this report, I went to Khairkhana Hospital and met some of the staff. Asked if the hospital met global standards, Mr. Mohibullah Nejat, the Director, said; "The main problem with the new building is its plumbing system, which was to some extent repaired by the coalition forces about four months ago, and is a bit better now.”

“The building built by Intersos does not have proper ventilation or medical waste systems, which are required for a medical complex. Medical complexes need special engineers, who know about these things,” he added.

Unfortunately when carefully evaluating other completed projects in Afghanistan, we discover even greater numbers of possible embezzlement. It is the responsibility of the government to oversee the operations of the NGOs and corporations. The Attorney General’s Office also has a legal duty and responsibility to prosecute the people who steal from society.


Anonymous said...

This is only one of the many many many cases. UNOPS is a mafia type of organization run mostly by Australians, New Zelanders and some Canadians under the holy name of UN. How much US tax Payers $$ do you think they stole from Afghanistan Elections?? LOts of bags of American Cash!

Anonymous said...

nuff respect for your work; greetings from Zurich - Switzerland, jonas

Anonymous said...

The fact that the project has been completed for a sum less than the original estimate is not a sign of embezzlement. The journalist in this case is obviously not familiar with the workings of donor/implementing partners and how funds are allocated or reallocated. He is aiming to make a case that may well be without foundation.

In this case there are a dozen possible answers, none considered by the writer largely because he does not know.

I think this is a great injustice given that it is purely ill informed conjecture.

The audit process would ensure that the funds are kept on track. All contracts of this size are generally subject to multiple quotations that undergoes an independent assessment by a panel for their reliability.

The journalist may run his organization that way he describes but it is not one that would get through the UN system.

Anonymous said...

I sent the excerpted following to the Afghan journalist - while we had many successes and many dificulties in the afghan programmes - as we do in all post conflicts - the story here is without basis in fact - and the issues of how to maintain a hispital and keep it working - which shouold have been the focus even three years ago was typicially turned into a smear and what was done - much easier...

response to story....

may 13, 2008

It was not a pleasant surprise to see your story on the Kabul Hospital and UNOPS. It was especially disturbing to see you continue to misrepresent the facts.

First of all as you know – that project was not done by our office in Kabul – but directly by NY in early 2002 – BEFORE I had even set up the Kabul office. They used an Italian Engineer and worked through Italian NGO. So as you know I did not sign documents nor make payments. So that was the facts on my role.

When you asked my office for documents I went to InterSos and New York UNOPS office and retrieved documents and showed them to you.

Clearly they showed the million dollars in contracts and the substantial work that was done. UNOPS stood by that work and I relayed that to you.

So first of all the work was done and second of all if you continue to question it – why do you question me when you know that this work was not done by my office?

I noticed when we first met that you preferred your own “facts” rather than the truth – it is a shame as a professional journalist that you continue this.

Gary Helseth
May 13, 2008

Robert Maier said...

I would love to do a follow-up interview to offer Mr. Helseth's story. Please reply with your contact information, and we will attempt to clear things up based on your new information and the documents we have in hand.

intersosrome said...

If you want to know how things have really gone, go to Intersos website or contact the organization.
We are at disposal for clarifying any doubts on our work either in Afghanistan or in other countries of the world.
Intersos has noticed the Guardian and has started legal proceedings to claim for damages.