This is a transcript of FOX News' interview with Mark Malloch Brown, U.N. Chief of Staff, that aired on Special Report with Brit Hume, September 28th, 2005. It has been edited for clarity.

JONATHAN HUNT, FOX NEWS CORRESPONDENT: The summit was a huge opportunity for the U.N. to seemingly pick itself up off the floor, to show that it's committed to reform on all levels; be it management, be it the Security Council, whatever. You totally wasted the opportunity. What happened?

MARK MALLOCH BROWN, U.N. CHIEF OF STAFF: I don't think we totally wasted the opportunity, I think we got some important things out of this summit. A major new endorsed effort to kind of get development going in the poorest countries. A big step forwards on the humanitarian side.

When Katrina happened here the U.S. could mobilize resources, but saw the cost of not being able to mobilize them as quickly as the U.S. would have wanted; well that gets replicated in famines and natural disasters around the world where it's the U.N. that has to kind of get in there quickly and promptly and we did some important things to make sure that happens even better in the future.

But on security too, not all bad: a common fund against terrorism, a peace-building commission for the failed states of the world. But a big disappointment is that we couldn't do more on weapons of mass destruction.

On human rights, key, we got this critical thing of a new human rights council agreed in principle, a doubling of the budget for the human rights commission. The so-called responsibility to protect; the ability, the obligation to try and stop Darfurs in the future. And, what perhaps for those of us who are mangers in the U.N. is almost most important of all, which was the the ok for widespread management reforms and change.

HUNT: But it's more than an OK that you need, isn't it? It's action that you need. Is an action really going to happen? I think people sort of look at the summit and again it's sort of seen by the outside world as another example of the U.N. not being able to take action. Who's fault is that?

BROWN: Well, you know, summits are summits. They're like meetings of a congress or parliament in their own way. They can legislate but they can't implement. Its the management, the executive branch which has to sort of follow up and deliver the results that the summiteers have asked of us. And they've said: creative effective oversight to make sure that no more 'Oil for Foods' happen, create a much more flexible personnel and financial management system so that managers can really put the people and the money where the global problems are rather than where they were thought to be 50 years ago.

And so while we're not all the way there it was a start people were looking for — the endorsement to allow us, the managers, to put in place some real change. And that's what we'll now do.

HUNT: Why did you need an endorsement? Surely it was so obvious to everybody that the U.N. desperately needed management reforms. Why has Kofi Annan not done it before, why is he hanging around waiting for an endorsement which he didn't need? He could've done a lot of these things, surely, without the endorsement of anybody.

BROWN: You know, you ask the President of the United States, or the Prime Minister of Britain about the problems they have with their parliaments and congresses. This is a typical division-of-powers issue between the legislature and the executive. And in the U.N. context, the congress or legislature has run wild and has trampled all over the freedom of management to manage, so that every single post, every single mini bit of the budget has to be approved by a vast governmental committee of 191 members. And we've got to push back against that.

And we have got to create something more similar, something that would be recognized by members of a U.S. government or congress, where everybody understands their role. Congress sets goals, approves overall budgets, but cabinet secretaries and the President manage towards those goals with the freedom to deploy the resources the way they would. This has been taken away from the Secretary General; he didn't give it up, it was taken away from him. And until we strip off these Gulliver-like, Lilliputian knots, which surround him and management, we're not going to be able to fix it and this let's us do that

HUNT: So Kofi Annan is not responsible in any way for the management problems at the U.N., is that what your saying?

BROWN: No, I mean I think we are where Volcker said, which is — there are management failings which go all the way up to Kofi Annan, and he has taken responsibility for that. There's no wrongdoing, which many have thought, including yourselves. There's no wrongdoing, but there are management failings. But they're overwritten by the fact that there are management structural weaknesses and that's what we, with this summit, are seeking to correct. To put in place the systems, the institutions which would allow a 21st century management.

HUNT: But a secretary general who had the confidence of all U.N. member states, had the confidence of the international community generally and people around the world, would have a far better chance of putting in place these reforms. Is Kofi Annan not actually doing the institution he loves, the U.N., a disservice by carrying on now? Wouldn't it be better if he just stepped aside? Is he a lame duck now?

BROWN: Well I think the confidence of the other 190 member states has never really been in question, the issue is the U.S. one.

Now let's remind ourselves George Bush has very publicly endorsed Kofi Annan. Secretary Rice went to The New York Times and said on the record this is 'my closest ally' and 'my closest relationship in terms of my foreign policy partners is probably Kofi Annan.' John Bolton has supported Kofi Annan. What is abundantly clear is that this administration has thrown its weight behind this Secretary General.

Now as to the issue would, by resigning, he help the cause of reform, I'm sure he's reflected deeply on that. And I think his conclusion is clear. Which is, if he was to step aside member states would love to shuffle off the problem and pretend it was the failings of one man. This is a systemic institutional failure. And precisely because he has the confidence of the membership, including the United States, he has a unique chance to fix these problems so they don't bedevil his successors to the office in the way they have bedeviled his.

HUNT: But we have Kofi Annan staying on to oversee in the very big sense, the reform of the U.N.. And then you have Louise Frechette, the Deputy Secretary General, also playing a major role in these reform processes and she, according to the Volcker Report, was one of the main problems with Oil For Food. She knew this was going on, she had oversight of it, and now you're putting the woman who was one of the most criticized in the Volcker Report in charge of reform? Where's the sense in that?

BROWN: The Secretary General has not yet declared himself as to how he's going to structure the internal leadership of this reform effort. I think Louise Frechette is his very trusted deputy, but exactly what role she will play versus other senior managers he hasn't announced. It's a hypothetical question.

HUNT: Isn't that part of the problem with Mr. Annan that led to Oil for Food, is he has these very trusted friends, the 'old boy network'. You know as well as I do that the lower level staff of the U.N. are very sick of what they've seen as an 'old boy network' for a long time. Louise Frechette, Iqbal Riza, Benon Sevan... All Kofi Annan's most trusted advisors. Iqbal Riza has been shredding documents. Benon Sevan we now know was taking bribes. These are Kofi Annan's trusted advisors, and now he's keeping a similar one in charge of reform. How can the world have any faith in this process given those kinds of actions by the Secretary General?

BROWN: Well I certainly think Louise Frechette would want me to qualify that as a Canadian woman she is not a part of an 'old boy network' in any strict sense of that term. She was a very distinguished Canadian civil servant who'd risen to the top of her own government's system. She'd at one time been Canada's ambassador to the U.N. She's no sort of member of an 'old boy network', and she's a woman of great capacity and distinction in her own right.

But I think Kofi Annan has made it clear where he needs to bring in new people he'll bring in new people. He brought in a very tough new head of management, Chris Burnham, who previously worked here in Washington. He's brought in new heads of High Commissioner for Human Rights, a new head of external oversight, a Swedish woman. None of these individuals have the kind of pre-existing relationship with Kofi Annan which would justify the description of 'old boy network'.

HUNT: So that's a lesson he's learned?

BROWN: I think certainly he recognizes that the U.N. must be managed by a team of all the world's talents. That he's got to reach way beyond personal friendships to find the cabinet he needs to lead this organization.

HUNT: How widespread is corruption and mismanagement within the U.N. still? We've seen the Oil For Food program, but how bad is it?

BROWN: Well we're trying to get to the bottom of it. If you take the procurement unit, where Fox News played a really vital role in uncovering corruption by an individual procurement officer, we then investigated it and we turned that individual over to the federal authorities. So that's a very good investigative partnership between Fox and the U.N. that some of your viewers may not have noticed. That has led to a fuller investigation in that area.

Our own internal investigative service put a whole team onto trying to establish whether there are any other failings in our procurement service. We brought in an outside accounting firm to do a forensic audit of procurement there, so we're taking every step we can to make sure there are no more problems and, if there are, to uncover them and prosecute them. As we have the ones we've discovered.

Having run myself a major part of the U.N. I've always had, frankly, quite a record of firing senior managers when corruption was discovered. I believe strongly that the way you fight corruption in an organization is through a combination of creating the right ethical incentives in the environment and culture, but also having the big stick behind that. A punitive approach which shows when you uncover corruption, nobody's left in doubt that people will be fired, heads will roll. And obviously we want to make sure that that same system of carrots and sticks is working across the U.N. as a whole. And I think probably it hasn't worked as well has it should have done, but let's again come back to the point: there is corruption in all organizations. The challenge to management is to make sure you have systems which catch it and punish it and minimize it, by creating an ethical culture in the workplace.

HUNT: And I'm sure, as John Bolton said, you're not trying to excuse the U.N.'s corruption by saying that there's corruption everywhere.

BROWN: I am certainly not. I'm just saying it's a problem in all organizations that has to be managed and rooted out.

I've said before, and let me say again, the U.N. should be held by a particularly ethical standard. It is an organization built on aspirations and values. So it falls from its pedestal when corruption is discovered. And that is why Benon Sevan, who was a friend of many of us, his fall — the uncovering of corruption by the Volcker inquiry — is a huge blow to all of us his friends and colleagues because the U.N. has to be held to the highest and best standards. The damage to us is much greater than it is in many other organizations where there is a similar corruption problem.

HUNT: Are you going to take Mr. Volcker's recommendation to install a chief operating officer at the U.N.?

BROWN: The Secretary General expressed spontaneous support for the idea, and it's something that the Gingrich-Mitchell look at the U.N. had also recommended. Both unfortunately did not recommend it in time to be part of the intergovernmental debate of the summit. But very much we'll be looking at it. It's not in the power of the Secretary General to do.

Volcker proposes that it be an appointment of the Security Council, endorsed by the General Assembly. Whether that's practical or not I don't know, but what is clearly the case is it's going to have intergovernmental agreement. And I think you will see the Secretary General strongly support the idea. Clearly the organization needs somebody to keep management in order and everything well and tightly managed while the Secretary General plays his critical external diplomatic role.

HUNT: Given that some say you're already effectively running the U.N., is that a role you fancy?

BROWN: I'm in my last year working for a Secretary General who will be leaving office at the end of next year.

HUNT: Do you plan to leave office with him?

BROWN: I do.

HUNT: How long do you think it will be before the U.N. regains it's credibility?

BROWN: There's some work ahead. I mean the fact is, our credibility in the U.S. is lower than it is in other countries. But the fact is that there is a problem more generally. We have to recognize that.

There's something of a crisis of confidence in international institutions generally going even wider than the U.N.. And the way back from that is to show results that affect the lives of ordinary people — Americans, but also citizens of the poor and small countries and everything in between. Until in terms of better health care, better education, and the other things the U.N. can help deliver. Better peace and stability and security in people's lives. And human rights and respect for it. Unless they see those tangible benefits, we won't win back support for the United Nations, nor should we.

You can watch Special Report with Brit Hume every night on FOX News at 6 p.m. EST

Content and Programming Copyright 2005 Fox News Network, L.L.C. ALL RIGHTS RESERVED. Transcription Copyright 2005 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing HoU.S.e, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the U.S.er of this material except for the U.S.er's personal or internal U.S.e and, in such case, only one copy may be printed, nor shall U.S.er U.S.e any material for commercial purposes or in any fashion that may infringe upon Fox News Network, L.L.C.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.