U.N. ethics guru has mysterious ethics lapse in his past

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Published March 01, 2012

| FoxNews.com

EXCLUSIVE: Bernardo Kliksberg is one of the most famed anti-poverty intellectuals in Latin America and a tireless cheerleader for government-led anti-poverty efforts. He has been a consultant for a wide variety of United Nations agencies. His more than 40 books circulate widely; several have been published by UNESCO and the U.N. itself. They include such titles as "Toward an Economy with a Human Face"; "More Ethics, More Development"; "Latin America’s Pending Ethical Agenda"; and "Ethical Values and Daily Life."

It also appears that Kliksberg, 71, has had some ethical issues of his own with one of Latin America’s biggest anti-poverty institutions, the Washington-based Inter-American Development Bank, or IDB, according to documents obtained by Fox News.

In a letter dated October 24, 2007, and sent to government officials in Canada and Norway, the Washington-based IDB declared that it would reimburse $109,000 to a special Social Capital, Ethics and Development Fund that the two countries had financed, because “the former Technical Advisor for the Fund violated certain provisions of the Bank’s Code of Ethics.” The violation: he had “used employees hired with Fund resources to perform work in furtherance of his personal endeavors.”

The technical adviser was Kliksberg.

The $109,000 represented about 50 percent of the money the two countries gave to the fund in 2006 for use by its secretariat, the IDB letter said. It was the estimated amount of paid time that the adviser and his assistants devoted to his non-Bank activities. In addition, the letter said, “based on these conclusions, the Bank did not renew [the adviser’s contract] and his employment with the Bank has, therefore, ended.”

“We deeply regret the events that occurred,” the letter states, “and have taken the necessary steps to rectify the situation and to prevent something similar from happening again.”

A copy of the letter was provided to Fox News last month [February] by Norway’s foreign ministry. Kliksberg himself, in response to queries from Fox News, confirmed his role at the Social Capital, Ethics and Development Fund, even as he denied ever having heard of most of the charges in the IDB letter, or that any ethics decision had been taken against him at the bank.

Click here for the bank's letter.

“I was not dismissed, nor was my contract terminated, by the Inter-American Development Bank,” he declared -- a statement that did not contradict anything the bank said about his employment in the letter to Norway and Canada.

“I left the Bank to take a position at the United Nations in New York, where I could be closer to my children,” he told Fox News.

As for the bank’s $109,000 reimbursement, Kliksberg told Fox News, “This is the first time I am hearing this claim. Neither I, nor anyone I have contacted regarding this matter, has communicated that the IDB refunded any money to the fund.”

As it happens, the new job that Kliksberg took after leaving the IDB made him much more than an advocate for more “ethical” social and economic development. It also made him a major international figure in helping to ladle out U.N. development cash.

From 2007 to 2010, Kliksberg, a native of Argentina, was director for UNDP of an important trust fund financed by the government of Spain, which gave more than $700 million to the U.N. development agency during Kliksberg’s tenure. Kliksberg’s portion of the Spanish largesse was worth some $63.9 million, and was devoted to Latin American development projects.

At the same time that he served as the Latin American fund’s director, he also was a consultant to UNDP’s regional bureau for Latin America and the Caribbean. Kliksberg still works as a part-time consultant for UNDP’s bureau for development policy.

Figuring out what exactly transpired at the IDB before Kliksberg took up his bigger UNDP responsibilities is something of a mystery, entwined in denials, conflicting statements, and a stonewalling culture of institutional secrecy about disciplinary proceedings at one of the Western Hemisphere’s most important anti-poverty institutions.

Like the United Nations, the Washington-based IDB is protected by a curtain of diplomatic immunity and confidentiality that make its inner workings unknown to outsiders and off-limits to outside investigators, unless the IDB wants them to know. The bank has its own internal justice system, which is also immune to external systems of law.

In response to queries from Fox News, the IDB declared that “administrative proceedings concerning our employees are confidential and we do not comment on individual cases.”
At the same time, a bank spokesperson added, “We can assure you that the Bank has a well-developed systems for considering and addressing allegations of employee misconduct.”

The mystery of the alleged abuses of the Social Capital and Ethics trust fund surfaced in another way last summer, in an obscure whistleblower case brought by a former IDB employee, Ada Piazze, who had worked at the Social Capital and Ethics fund under Kliksberg.

According to a published decision by the IDB’s internal Administrative Tribunal, in 2006 Piazze brought evidence to the bank’s attention that her boss, the fund’s “General Coordinator,” --described in the Tribunal’s judgment only as “a person well known and respected in the field of developmental ethics”-- was “engaged in fraud and misconduct” by using not only trust funds, but money from the bank itself, “for his own personal benefit.”

Piazze’s claim was that she had been promised continued employment at the bank before she brought additional evidence against the “General Coordinator” to light under the bank’s whistleblower protection rules. When Piazze was subsequently let go by the bank, she eventually appealed to the Tribunal, and was awarded $300,000 in damages.

Piazze declined to comment to Fox News regarding the case.

Until queried about the Administrative Tribunal judgment by Fox News, Kliksberg said, he knew nothing about it, and had never seen the decision that granted his former subordinate $300,000 in damages.

Click here for the tribunal judgment. 

Kliksberg said that only after being approached by Fox News did he investigate, and could confirm he was the person mentioned in the decision. He added that he considered the accusations mentioned in the decision to be overblown.

“The allegations in the Piazze case were grossly exaggerated by Ms. Piazze and her attorney in their pursuit of financial gain,” he told Fox News. From his own investigations, he said, he had learned that “I was accused of allowing members of our team to voluntarily participate, in their free time, in Ethics and Development initiatives (in which I was a consultant) that were not in the scope of their duties at the IDB. I was also accused of using my office computer and other equipment for Ethics and Development-related projects outside of my assignment at the IDB. As for the ‘misuse [of] funds,’ as a part-time consultant, I was not able to directly authorize the use of funds.”

Kliksberg subsequently added that “I can confirm that the Bank conducted a thorough investigation and made a decision on this issue: to take no action, other than ask that the IDB Human Resource Department be consulted in the event that I applied or was considered for a future engagement at the IDB.”

Kliksberg’s reconstruction of events differs considerably from the way the issue was discussed in the Inter-American Development Bank’s letter to Canada and Norway. It also raises additional questions of its own. How “allowing” employees to use their free time in any voluntary fashion would be the basis of an ethics charge by an employer such as IDB is something of a puzzle. Why the IDB would conceivably pay $109,000, as the Bank’s 2007 letter indicates, for such a difficult-to-imagine infraction is even more of a brain-twister.

Moreover, the notion that the IDB could conduct a “thorough investigation,” as Kliksberg describes, and come to a “decision” without informing him, appears to be a huge contradiction of the 2006 procedures for the IDB Ethics Committee that were in effect when the alleged infraction occurred -- and also of a new set of procedures that went into effect in December 2007, two months after the Bank wrote its $109,000 apology to Norway and Canada.

According to the 2006 procedures, once the Ethics Committee decides that a violation of the bank’s Ethics Code has occurred, it must “promptly notify” the accused employee both of the substance of the charge, the fact that the Committee is taking jurisdiction, and the steps it intends to take to investigate. Even if those actions are delayed to safeguard an investigation, they must take place a minimum of 30 days before the Committee holds a hearing on the issue.

Moreover, if an investigation by the bank’s watchdog Office of Institutional Integrity (OII) takes place the accused employee must be given a copy of OII’s final report, as well as all supporting evidence, prior to any hearing and Ethics Committee decision, no more than five days after the Committee gets the report. The IDB’s letter to Norway and Canada states categorically that both an OII investigation and an Ethics Committee decision took place.

The bank’s safeguards also apply to the hearing itself, where accused employees can be represented by legal counsel, present opposing evidence and offer the testimony of witnesses.
The right to such a hearing, however, can be waived by the accused -- which would be tantamount to deciding not to contest the results of any investigation.

Significantly, however, according to the Bank’s procedures, any decision made by the Ethics Committee that concludes an ethics violation has taken place, is sent in the bank’s Human Resources Department files, and is also subject to appeal “to the Bank’s internal grievance system” -- which has at its apex the same Administrative Tribunal that heard the Social Capital and Ethics Fund whistleblower case.

In other words, Kliksberg was supposed to be informed of any action involving the Ethics Committee that was negative toward him, to protect his right of appeal.

In responses to questions from Fox News, the IDB declared that Kliksberg’s contract “expired prior to conclusions regarding any allegations concerning his conduct as an employee.”

But nothing in the bank’s ethics procedures suggests that the right to appeal -- and the right to be informed of any actions taken as a result of investigation -- lapses if the employee leaves the bank. Indeed, the terms of jurisdiction of the bank’s Administrative Tribunal are explicitly extended to former employees.

Whatever the circumstances, by the time the Bank made its admission to Canada and Norway about the misuse of their donated funds, Kliksberg was well-established as director of UNDP’s vastly more valuable Spanish-financed trust fund, effective January 2, 2007, a UNDP spokesman confirmed.

There is one small wrinkle: a copy of the IDB’s letter of agreement with Kliksberg regarding his last one-year contract extension, which was examined by Fox News, says that his IDB assignment would last until January 8, 2007.

According to a UNDP spokesman, Kliksberg “has informed UNDP he was an [IDB] consultant from April 2002 to December 31, 2006.” Kliksberg also told Fox News that his employment at the bank ended in December 2006.

George Russell is executive editor of Fox News and can be found on Twitter@GeorgeRussell

Click here for more stories by George Russell.

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