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U.S. Footing $100M Bill for U.N. Security Upgrade

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United Nations headquarters in New York.AP

Months after top New York City officials expressed intense behind-the-scenes frustration at the security vulnerabilities at the United Nations headquarters in Manhattan, the U.N. is now planning to spend $100 million -- donated by the U.S. -- on the upgrade.

That has created a new controversy: critics want to know why the U.S. is footing the entire bill, and why that money is not being credited against U.S. dues for the following year.

“If the U.S. overpays the U.N., those funds should be returned in full to the U.S. Treasury,” declared Ileana Ros-Lehtinen, R-Fla., who heads the House Foreign Affairs Committee. “To allow the U.N. to redirect those U.S. taxpayer dollars for unrelated projects is unjustifiable.” Moreover, she says, “by allowing the U.N. to reap the U.S. surplus as a slush fund for construction, the State Department wants to stick U.S. taxpayers with 100 percent of the cost, instead of the 22 percent that the U.S. would be responsible for under normal procedures.”

Ros-Lehtinen is leading a charge in the House of Representatives Wednesday, with a bill that demands the U.N. refund not only the $100 million but the entire $179 million overpayment collected from the U.S. for the United Nations Tax Equalization Fund (TEF), an obscure financial device used to reimburse U.S. citizens who work for the U.N. for U.S. income taxes they pay. (The U.S. is the only major country to levy income taxes on U.N. salaries.)

Ros-Lehtinen calls the refund demand “a small step toward restoring sanity to our U.N. policy and government spending.”

Few expected the bill, which required two-thirds approval, to pass — and it didn’t, failing 259-169. But it is an early salvo in House Majority Leader Eric Cantor’s online YouCut campaign to get public backing behind the Republican push to cut the mammoth U.S. deficit. Voters pushed the measure to the head of the queue in an online poll used to set YouCut’s weekly priorities.

There was at least one additional problem with the proposed measure: the $100 million in security money is no longer in the TEF, a senior State Department official told Fox News. It has already been moved by the U.N. into a separate security account. The remainder of the TEF balance will apparently be spent as U.N. financial rules say it should be, as a credit against U.S. dues for U.N. membership next year. According to the U.N., a previous U.S. overpayment was used exactly in this fashion, in 1997.

CLICK HERE FOR THE U.N. FINANCIAL RULE

While the battle over funding the U.N. grows heated, New York City officials are relieved that something is finally going to be done about some of the U.N.’s glaring vulnerabilities to terrorist attacks.

Among other things, the U.N. complex Conference Building, which houses the Security Council, hangs directly over the East Side’s Franklin Delano Roosevelt highway, while an exit ramp from the same thoroughfare curves around the south end of the complex, near the U.N. library. On the west side of the complex, U.N. buildings are only a few yards away from busy First Avenue.

Mayor Michael Bloomberg and New York Police Commissioner Ray Kelly have long been frustrated by the U.N.’s inaction at dealing with the security issues, even as the U.N. complex has been emptied of many occupants while it currently undergoes a $1.8 billion facelift.

As Fox News reported last September, Bloomberg personally wrote to Secretary of State Hillary Clinton about the issue, and other officials bluntly expressed similar concerns to the State Department, which is the official U.S. interlocutor with the U.N. But the behind-the-scenes dialogue about security improvements was apparently never-ending—with one big issue being who was going to pay for any changes.

The decision to use TEF money apparently solves that problem, at least from the U.N.’s point of view, and a senior State Department official made clear to Fox News that the U.S. government was willing to go along.

“In this case the United Nations notified the State Department that it intended to use [TEF funds] for security enhancement,” said U.S. Under Secretary of State for Management Patrick Kennedy. “Since the money was already in their hands, the U.S. had no objection to the use in the upgrade.”

So why is the U.S. picking up the entire tab, rather than the 22 percent share it is paying for the overall U.N. renovation?

“This is being done at the same time as the U.N. renovation, but it is a separate project,” Kennedy told Fox News. It is considered separate because there are “other ways to do the project” that would not involve the U.N. at all, such as closing major New York City thoroughfares. But that, Kennedy said, was “not feasible.”

For its part, the U.N. explained both the security upgrades and the bill-paying by carefully putting the ball back in the U.S. court. In response to questions from Fox News, a U.N. spokesman said that “the present discussion about additional security upgrades reflects heightened security concerns by the Host Country [the U.S.] and U.N. security authorities. The U.S., under its Host Country obligations, is funding these new security upgrades.”

What will the money be used for? State Department officials were understandably reluctant to provide much detail. In talking points provided to Fox News, one official said it would be used in part to “reinforce and reconfigure U.N. headquarters facilities.”

In a letter sent earlier this year to the House Foreign Affairs Committee, however, the State Department indicated that changes are planned for First Avenue and the Conference Building, with additional measures still under consideration.

CLICK HERE FOR THE LETTER.

While no-one is likely to object to the security changes, the U.S.-U.N. deal on the financing of the changes is unlikely to satisfy U.N. critics like House Foreign Affairs chairwoman Ros-Lehtinen.

“The U.N. and the [Obama] Administration are treating this overpayment like found money, but it’s not,“ she had already declared in a press release, pointing to the U.N. rule that says the money should be used as a payment against next year’s U.S. dues. “The $179 million extra that the U.S. paid into the UN Tax Equalization fund should be refunded to the American people immediately.”

Brett Schaefer, a U.N. expert at the conservative Heritage Foundation, agrees.

“The fact that the U.S. has failed to make such a simple request is a disservice to the American taxpayer.”

New York City officials, however, are likely to weigh that against a feeling that something finally is being done to end a bureaucratic impasse that threatens the city.

George Russell is executive editor of Fox News.