UNDP says U.S. North Korea charges still don't tally

By Patrick Worsnip

UNITED NATIONS (Reuters) - A U.N. agency accused by Washington of providing North Korea with hard currency under a program it ran there said on Friday the backup information given by U.S. officials was still inadequate and inaccurate.

U.S. Ambassador Zalmay Khalilzad responded that "a variety of sources" indicated there had been "potential abuses" by the United Nations Development Program in the communist state, but his country would be reassured if the charges proved wrong.

The exchanges were the latest round in a dispute that erupted last year when the United States charged that UNDP violated its own rules by hiring staff vetted by North Korea's government and paid salaries in hard currency through the government.

UNDP pulled out of North Korea in March after Pyongyang refused to accept changes ordered by its board of directors. A U.N. audit published on June 1 said rule breaches had occurred but did not find systematic major diversion of U.N. funding.

Further U.S. allegations have centered on specific sums Washington says were paid to North Korean entities. UNDP has contested the figures and asked for more proof.

UNDP spokesman David Morrison confirmed a New York Times report on Friday that a letter from the agency's deputy chief Ad Melkert rebutting the charges had been sent to Khalilzad.

The report quoted Melkert as saying the total $15 million allegedly paid from 2001 to 2005 exceeded all the funds the Pyongyang office had. Morrison said the letter was faxed on Thursday and hand-delivered on Friday, but U.S. mission spokesman Richard Grenell said late on Friday afternoon it had not been received.

TECHNICAL ISSUE

Morrison said the agency had taken the U.S. allegations very seriously and investigated them.

"The information supplied to UNDP by the U.S. mission meant to substantiate the allegations does not tally with UNDP's own financial records," he said.

"The information also contained inaccuracies, such as corporate system codes that UNDP did not use in the years in question. UNDP has asked for any additional information the U.S. might have so that it can complete its review."

Khalilzad told reporters: "I'm advised by our people that they have a variety of sources pointing in the same direction with regard to potential abuses in that program ... It's a technical issue, the experts need to deal with it."

"If they are proven to be valid charges, they need to be addressed. If not, well that will assure us that UNDP resources are being used or have been used appropriately."

A U.S. official told Reuters earlier this month Washington suspected about $3 million in UNDP funds had been diverted by North Korea's National Coordinating Committee to buy property in Britain, Canada and France.

UNDP's Morrison said at the time that roughly $175,000 was paid to the committee from 2000 to 2005, mainly for workshops to host agricultural experts on vegetable growing and seed processing in a country that has suffered chronic food shortages.