Editor's Note (January 7, 2013): In response to IDB reaction to this blog post, the text of this blog has been edited slightly. For GAP's full reaction to the IDB reaction, click here.

On October 31, 2012, the Inter-American Development Bank (IDB) announced the release of a revised whistleblower protection policy and Code of Ethics and Professional Conduct. Although the IDB claims that its new whistleblower policy maintains “alignment with international best practices,” in reality the policy violates all best practice cornerstones, as detailed in GAP’s review.

In December 2011, President Obama signed into law the U.S. 2012 Consolidated Appropriations Act. According to this law, the U.S. Treasury Department must certify that the IDB is “making substantial progress” toward “implementing best practices for the protection of whistleblowers from retaliation, including best practices for legal burdens of proof, access to independent adjudicative bodies, results that eliminate the effects of retaliation, and statutes of limitation for reporting retaliation,” before the Congress will disburse funds to the IDB for its General Capital Increase.

Unfortunately, despite some minor advances, the revised policy does not fully meet any of these standards. According to GAP Legal Director Tom Devine, “this policy cleanly flunks all relevant criteria for a lawful appropriation to the Bank.” The IDB’s policy also fails to adopt several recommendations made by Global Compliance, the company that the IDB hired to review its ethics system.

Key shortcomings include:

• Flawed burden of proof: Although the burden of proof initially appears to meet best practice standards, it is severely undermined by loopholes, including those in sections 2.4.2 and 2.4.5.

Interviews Reveal Serious Systemic Problems

Photo courtesy of Wikimedia CommonsToday, the Government Accountability Project (GAP) is releasing a report that analyzes the impact of the United Nations internal justice system on accountability practices in the UN peacekeeping missions. The GAP report, “Tipping the Scales: Is the United Nations Justice System Promoting Accountability in the Peacekeeping Missions or Undermining It?” is based on a review of two years of UN Dispute Tribunal (UNDT) and UN Appeals Tribunal (UNAT) judgments, and 36 interviews with key UN personnel, external attorneys and whistleblowers from eight different peacekeeping missions.

"Virtually every person in a UN peacekeeping mission whom we spoke with raised disturbing concerns about fundamental shortcomings in the UN’s accountability mechanisms," said GAP International Officer Shelley Walden, one of the report's authors. "Most stated that they were afraid to speak-up about misconduct, and whistleblowers who did told us that they were subjected to intense retaliation as a result.”

A copy of the report's Executive summary can be downloaded here.

A copy of the full report and annexes can be downloaded here.

The report details both positive and negative findings related to the judgments of the two-tiered Tribunal system, which is a UN staff member’s only legal recourse in an employment dispute. Encouraging data and evidence illustrated that the new system appears to better protect the due process rights of staff members. Negative findings, however, included numerous shortcomings in the new justice system, the UN’s procedures for protecting whistleblowers in peacekeeping missions, and prevailing practices for addressing disciplinary issues.

في نهاية هذا التقرير تجد ترجمة له باللغة العربية

On September 13, 2012, Egypt’s Administrative Court ruled that the selling of nearly 96% of the stake of Assiut Cement to a foreign investor (CEMEX, a global building materials firm based in Mexico accused of violating environmental laws in the United States) was illegal, and therefore invalid. The Court order that Assiut be returned to the people of Egypt.

In November 1999, the Mubarak regime sold Assiut Cement to CEMEX for 1.38 billion Egyptian Pounds (LE). At the time however, the book value of Assiut was LE 2.3 billion and its market value was nearly ten times as much: a staggering LE 13 billion. The court found that the procedures followed in this transaction were unlawful and resulted in the gross depletion of Egypt’s national wealth. Two former employees of Assiut filed the case; they had been forced, along with others, to apply for early retirement. In protest, workers staged multiple strikes at the factory during 2012.

The court has now instructed Assiut to rehire all of the 2,545 workers (out of 3,777) whose employment contracts were terminated as a result of the fraudulent deal.

So, the Mubarak regime sold a valuable state-owned asset to a foreign investor for a fraction of its true value, costing Egypt billions and leaving thousands of its citizens without jobs. Does this pattern sound familiar? If not, it should ­– we have seen the same pattern in questionable privatization transactions executed not long after Assiut Cement was privatized. This all too familiar development is indicative of a longstanding practice in the country which was accelerated in part by the subject of GAP's own investigation into privatization fraud in Egypt: the former Minister of Investment, Mahmoud Mohieldin.

We began this investigation with the sale of the state-owned department chain in the country, Omar Effendi (OE). The Bank Information Center produced an in-depth report on that transaction. The sale of Omar Effendi was also annulled in May 2011 by the Administrative Court (our investigation into the OE affair and other dubious transactions involving Mohieldin can be found here, here, and here). Mohieldin himself remains free from scrutiny; he is a Managing Director at the World Bank, which refuses to release his financial disclosures – despite our repeated attempts to secure them.

Today, GAP is releasing nearly 2,000 pages of documents obtained through a Freedom of Information Act (FOIA) request filed with the United States Agency for International Development (USAID). The request sought specific records related to the KEK Network and Supply Project in Kosovo and the work of the Kosovo Energy Corporation JSC.

In submitting this FOIA request, GAP sought to identify the rationale behind the commitment of U.S. government funds (including USAID financing) to the Kosovar Energy Corporation. The Corporation fails to provide uninterrupted electrical supply to its consumers and independent surveys show the Kosovar public regards it  as corrupt. Through this FOIA request, GAP also obtained information about a controversial coal power plant in Kosovo (known as Kosovo C) that various environmental groups, including the Sierra Club, oppose. The Sierra Club argues that opportunities exist in Kosovo to provide cleaner power, which do not put communities or the environment at risk. In contrast, the U.S. government and the World Bank support Kosovo C.

The documents obtained through GAP’s FOIA request include:

• PA Government Services Contract with USAID 
• An Attachment to the Technical Proposal, Approval Memo, Statement of Work, Incremental Funding Certification and Assistance Checklist Supplement 
• The USAID KEK 2007, 2008, 2009 and 2010 Annual Reports
• PA Quarterly Reports for 2007 (1st, 2nd, 3rd and 4th quarter), 2008 (1st, 2nd, 3rd and 4th quarter), 2009 (1st, 2nd, 3rd and 4th quarter), 2010 (1st, 2nd, 3rd and 4th quarter) and 2011 (1st, 2nd and 3rd)
• KEK Work Plans for 2007, 2008-9, 2010 (with an attachment) and 2011
• A Kosovo “B” Feasibility Study (part 1, part 2)
• An amendment to the KEK Initial Environmental Examination 

It has come to GAP's attention that lawyers from the United Nations have questioned statistics that we compiled regarding the record of the UN Ethics Office, which is charged with reviewing retaliation complaints and safeguarding the interests of UN whistleblowers. Specifically, in the Respondent’s Reply in UN Dispute Tribunal case GVA/2011/090, the UN claimed that GAP’s statistic was “entirely incorrect and unfounded.”

GAP takes such accusations seriously. As soon as we became aware of the UN’s critique, we double-checked our numbers and issued an official response, which first appeared on the UNJustice website and can be read below. We hope that these clarifications will help whistleblowers who currently have cases pending before the UN internal justice system.

Dear UN Justice,

Thank you for contacting the Government Accountability Project (GAP) and for giving us a chance to reply to the statement made by the UN’s lawyers regarding the record of the UN Ethics Office (in paragraphs 20-23 of the Respondent’s Reply in Walter Gehr v. Secretary-General of the United Nations). We appreciate the opportunity to double check our numbers and clarify the discrepancies.

Let me explain how GAP arrived at these statistics and where the discrepancies between our numbers and the UN lawyers’ lie. In our initial blog on this issue (which has since been revised) we stated that “According to Ethics Office reports to the Secretary-General, from August 1, 2007 to July 31, 2010, a prima facie case of retaliation was found in 1.5% of the requests for protection from retaliation received by the Office (2 of 134 cases).” This was before we located the 2006, 2007 or 2011 Ethics Office reports, so it only uses statistics from the 2008, 2009 and 2010 reports. Our analysis was limited to those reports because they were the only ones that we were able to locate at that time (we’ve since located all of them and have started quoting a new statistic incorporating every annual report).

Last week, a United Nations Dispute Tribunal (UNDT) judge issued another extraordinary decision that demonstrates the Tribunal’s respect for whistleblowers. Like last month’s Wasserstrom decision, this judgment shows that UNDT - the court of first instance of the two-tier internal justice system through which UN employees contest violations of their rights – is committed to ensuring that UN whistleblowers are protected.

In Dzuverovic v. Secretary-General of the United Nations, the applicant, a former United Nations Human Settlements Programme (UN-HABITAT) employee, contested the Office of Internal Oversight Services’ (OIOS) refusal to investigate her disclosure of recruitment and procurement irregularities in UN-HABITAT. OIOS failed to inform the applicant of this decision until 2010, fifteen years after she made her initial disclosure. In the meantime, she was subjected to retaliation, including decisions that “proved to be to the detriment of her career,” (para. 72) and ultimately separated from service.

Unfortunately, Judge Nkemdilim Izuako was compelled to find that the case was inadmissible at the Tribunal, as Dzuverovic missed the UN’s ridiculously short 60-day statute of limitations for contesting an administrative decision. But, although the Judge dismissed the case, she took the extraordinary step of “RECOMMEND[ing] it to the Secretary-General for sympathetic review with a view to bringing substantive justice and closure to it” and pleaded for him to take “a compassionate view.” (Paragraphs 74 and 61,original emphasis) This appears to be the first time that a UNDT judge has made such a recommendation in a whistleblower case, and the fact that it is emphasized in the text of the ruling suggests that the judge expects this recommendation to be taken seriously. The judge also wrote that:

This recommendation is made bearing in mind the special measures that have been put in place with regards to the protection of whistleblowers who risk their jobs, professional lives and livelihoods by courageously seeking to expose wrong-doings within the Organization. The United Nations, being the foremost international Organization for setting standards for governments and other organizations, needs to review the case of this Applicant as this will serve not only the ends of justice but also to reassure whistleblowers that they are indeed protected. (paragraphs 75 and 76).

Amen!

*Este blog está en español debajo de la versión ingles.
Nota: El artículo ofrece hipervínculos para visión y descarga de documentos.

On July 12th, the occasion of the swearing into office of the High Commissioner for Marca España (“Brand Spain”), Spain’s President Mariano Rajoy underlined his determination to strengthen Spain’s image abroad. The international reputation of the Spanish government has been damaged by a scandal over the corruption affecting the Spanish Trust Funds at the Inter-American Development Bank (IDB). The continuing scandal, which first broke in October 2011, raises questions about the passive stance of the current Spanish Government (particularly the Ministry of Economy). The ministry has yet to hold those at fault accountable and restore transparency, efficacy and accountability to the $695 million Funds.

In previous postings here, we’ve covered the dubious dealings associated with these funds (first reported by Spanish whistleblowers at IDB in October 2011), particularly the close association between the last ruling party in Spain and IDB management of the funds. It was a convenient arrangement – the Partido Socialista Obrero Espanol  (PSOE) contributed hundreds of millions of Euros to the IDB, where national oversight bodies could hardly reach, and PSOE representatives abroad managed the money, doling it out to themselves and their friends as they saw fit. But then this cozy relationship suffered a setback: the PSOE lost the election in Spain last November.

The allegations of mismanagement of Spanish Trust Funds at IDB are so well founded and documented that the Spanish Tribunal de Cuentas (the equivalent of the US Government Accountability Office) decided last February to investigate and audit Trust Fund activities from 2008 onwards, especially those of the $50-million Spanish General Trust Fund (FGE) at the IDB.

Luis Alberto Moreno, IDB President, courting Jose Luis Rodriguez Zapatero ,Spain’s President, at La Moncloa in October 2009 Nonetheless, on July 6, 2012, the IDB formally transferred its European office from Paris to Madrid. It seemed a counterintuitive maneuver – typically the rat swims away from the sinking ship, and Spain is apparently still sinking in the face of an unprecedented economic and banking crisis. The country has figured prominently in the financial news most days this month, and probably will continue to do so for a while, as the Rajoy government struggles with the legacy of an enormous deficit and national debt. 

However, on closer inspection, the IDB’s office transfer from Paris to Madrid makes sense when you realize that, despite Spain’s deepening economic problems, the government in Madrid has been generously funding the IDB, as well as the United Nations Development Program, since 2008.

Over the past weekend, the New York Times broke the story about electronic surveillance of Food and Drug Administration (FDA) whistleblowers by the agency itself. The Washington Post followed up today with the news that FDA lawyers approved the surveillance, which included:

…confidential letters to at least a half-dozen Congressional offices and oversight committees, drafts of legal filings and grievances, and personal e-mails…

At GAP, we’ve been defending John Kim, a World Bank whistleblower who exposed the details of debates internal to the Bank about weakening anti-corruption measures to be put in place. As part of their pursuit of Kim, World Bank investigators hacked his personal email account and read hundreds of non-Bank messages, including those  between Kim and his family’s attorney that were written five years before the incident  purportedly under investigation. In any credible legal environment, these communications are protected by attorney client privilege … but that did not stop the World Bank’s “Vice Presidency for Institutional Integrity” (INT). 

Kim’s attorney repeatedly requested the internal authorizations INT claimed to have secured from senior management to launch such invasive surveillance, but investigators never produced them. GAP could not determine whether the authorizations even existed, never mind whether they were at all limited in time and scope. The depth of the privacy invasion strongly suggested they were not.

The process was simple. INT deployed an off-the-shelf program – Encase – that costs a couple of hundred dollars and overrides passwords.

So, while “investigating” a 2008 leak, INT found that Kim had also leaked the information about the Bank’s anti-corruption measures during the period when the press focused on Paul Wolfowitz’s delinquent behavior as World Bank president. At the time, hundreds of Bank employees were leaking information about the Bank’s internal debates to blogs, press, and GAP. Because the investigation didn’t establish that Kim was the source of the 2008 leak, the Bank fired him in 2009 for whistleblowing about Wolfowitz years before.

World Bank headquarters in Washington, DCIn response to Richard Behar’s article in Forbes, "The Fate of a World Bank Whistleblower,” the World Bank claimed that GAP client John Kim, the subject of the piece, was not, in fact, a whistleblower. We at the Government Accountability Project (GAP) want to set the record straight.  For 34 years, we’ve represented whistleblowers – thousands of them now – and we know one when we see one. John Kim was a whistleblower, and the World Bank fired him in order to punish him for telling the truth.

The World Bank makes much of the fact that a whistleblower protection policy is in place there.  But it is a weak policy, riddled with loopholes. Kim’s attorney therefore argued that Kim should be reinstated because he was a whistleblower and because, as a consequence of his whistleblowing, Bank management violated his rights as a staff member. The Administrative Tribunal ruled that the Bank violated Kim’s rights, but the whistleblower policy failed to protect him. The ruling the Tribunal issued is thus silent on why Bank management picked John Kim, out of over 10,000 employees, to spy on, hack, marginalize and fire.  The Tribunal simply ruled that this was what happened. At GAP we know that it happened because  Kim made a public interest disclosure to the press about anti-corruption debates at the Bank.  There was no other reason. The Bank did not present an alternative explanation and the Tribunal didn’t ask for one.

To our knowledge – and we keep close track – since 2008, when the whistleblower protection policy was put in place at the World Bank, not a single whistleblower has been able to protect him or herself from retaliation using that policy in arguments before the Tribunal. 

Bea Edwards is Executive Director of the Government Accountability Project, the nation's leading whistleblower protection and advocacy organization.

GAP's Shelley Walden spoke with Al-Jazeera about a very positive decision from the UN Dispute Tribunal.In a major victory for employees at the United Nations, the UN Dispute Tribunal (UNDT) has found that the office charged with reviewing retaliation complaints and safeguarding the interests of UN whistleblowers failed to conduct a proper review of a whistleblower case.

In a June 21 judgment by UNDT – the court of first instance of the two-tier internal justice system through which UN employees contest violations of their rights – Judge Goolam Meeran sided with whistleblower James Wasserstrom, a former employee of the UN Interim Administration Mission in Kosovo (UNMIK). Wasserstrom was allegedly retaliated against after reporting to UN investigators a possible kickback scheme involving local politicians and senior UNMIK officials related to a controversial new power plant and mine known as Kosovo C. (Incidentally, this decision is a good read for those who are interested in this multibillion euro project supported by the World Bank, as it details potential kickbacks and corruption, and states that at one point the World Bank “tried to walk away from the project.”)

When it reviewed Wasserstrom’s retaliation complaint, the UN Ethics Office found that there was a prima facie case of retaliation, meaning that the case passed its initial burden of proof hurdle and proceeded to the next stage. In accordance with the UN Secretariat’s whistleblower protection policy, an investigation was then conducted by the Office of Internal Oversight Services (OIOS). The Ethics Office, based solely on the body of the OIOS report (it didn’t bother to read the Annexes), subsequently decided that Wasserstrom was not retaliated against.