Does U.N. Anti-Poverty Cheerleader Have Conflict of Interest?

Economist Jeffrey Sachs, the director of Columbia University’s Earth Institute and special adviser on millennium development goals to United Nations Secretary General Ban Ki-moon, is one of the world’s most outspoken promoters of the U.N.’s anti-poverty agenda.

He has now become a high-profile supporter of the Occupy Wall Street movement, personally joining the throng of protesters earlier this month in lower Manhattan to excoriate “reckless billionaires” for “wrecking this planet” and demanding that President Obama “stop catering to the billionaires ... send [your advisers] back to Wall Street.”

Sachs is also a strident critic of Fox News, The Wall Street Journal, and of News Corporation, the parent company of both. Last week, the Harvard-trained economist led demonstrators in chants of “Wall Street Journal, Fox News! You’re wrecking this country with your lies!”

Click here to view Sach's Oration.

But when it comes to disclosing his own interests, especially those related to the United Nations, Sachs is more circumspect. And in at least one major instance he appears to have a financial conflict of interest.

One of the most high-profile projects that Sachs is involved in overseeing, the Millennium Villages Project, is a mammoth program aimed at eradicating extreme poverty in portions of Africa, in line with the U.N.’s Millennium Development Goals (MDGs).

Fox News has learned that Sachs’ Earth Institute was paid about $5 million toward the project between 2006 and 2010 by the United Nations Development Program (UNDP), the U.N.’s flagship anti-poverty agency, with $290,000 still in the pipeline.

UNDP also has been working as the “implementing partner” of Millennium Villages Project, meaning UNDP is in charge of the overall project management — under a separate budget raised by another not-for-profit institution co-founded by Sachs and the Earth Institute, known as the Millennium Promise Alliance.

As director of the Earth Institute, Sachs occupies an academic niche inside one of the world’s most important private universities: Columbia University.

The Earth Institute, according to its website, comprises more than 30 research institutes and upwards of 850 scientists, researchers and students, who “study and create solutions for problems in public health, poverty, energy, ecosystems, climate, natural hazards and urbanization.” Elsewhere, the Institute has described itself as “the world’s leading academic center for the integrated study of the Earth, its environment and society.”

“Earth Institute experts work hand-in-hand with academia, corporations, government agencies, nonprofits and individuals,” the Institute’s website says. “They advise national governments and the United Nations on issues related to sustainable development and the Millennium Development Goals.”

Sachs is also a key member of the U.N.’s MDG Advocacy Group, which will be helping to raise and direct donated resources to a variety of other U.N. branches, including UNDP, the U.N. Environmental Program (UNEP) and UNICEF, among others, for a wide variety of MDG work.

Click here for details of Sach's MDG advocacy role.

Sachs has also partnered closely with multibillionaire George Soros, and a host of other wealthy private donors, in the ambitious Millennium Villages Project, which aims to help 500,000 people in 10 countries meet all of the U.N.’s MDGs by 2015. These include halving the local extreme poverty rate, reducing child mortality by two-thirds, and ensuring universal primary education, among other things.

Soros has already given $50 million to the project, established in 2006, and promised another $27.4 million over the next five years, along with $20 million in business loans. Other partners in the Millennium Villages project include Soros’ Open Society Foundation, the U.N.’s World Food Program, the U.N. Population Fund, and UNAIDS — as well as the Earth Institute, described in a 2010 Villages report as a “core partner” along with UNDP.

Soros’ money, and many other donations, is funneled through the Millennium Promise Alliance, a nonprofit co-founded by Sachs and the Institute in 2005, and incorporated in Delaware, which calls the Villages effort its “flagship initiative,” and oversees a budget of more than $25 million a year dedicated largely to the Millennium Village project. Sachs is the Millennium Promise president, and a member of its board.

According to Alliance website, “at least 89 percent of these funds go directly to the Millennium Villages Project” -- or to “other programs designed to help communities escape extreme poverty.” The “implementing partner” of the Villages project is UNDP, which “has provided project management and operational support.” According to the Millennium Promise website, UNDP, “as the project’s implementing partner would also be key to ensuring the project’s success.”

Just as Sachs helps to send money toward U.N.-supported projects, and U.N. institutions that help carry them out, U.N. institutions have funneled money toward Sachs’ Earth Institute and on to the Millennium Villages project -- while Sachs, through the Millennium Promise Alliance, with the Earth Institute as a partner, is overseeing UNDP’s “implementation” of the Project.

A Fox News examination of U.N. procurement statistics for the years 2006 through 2010 (the most recent available) show that UNDP has made payments to the Earth Institute of $4,755,630 for the Millennium Villages project. The payments did not go directly to the Earth Institute, but were made out instead to the “Trustees of Columbia University,” which is a registered vendor with the U.N. Procurement Department.

The Institute itself is not a registered vendor. But the fragmentary project details published with the Trustee payouts -- evidently copied and pasted from other project documents -- make clear that the Institute, and the Village Project, are the intended beneficiaries.

Taken together, the details reference a series of sequential payouts to the “African MVs budget,” “MV Breaking the Bottleneck” (a reference to an anti-malarial effort within the Village health approach), “EI” and the Earth Institute. Virtually all of the payments are percentage payouts (or advances) on two overall sums of $2,340,530 and $2,915,100.

Click to view the UNDP payments made to the Earth Institute.

The source of the funds is listed in the procurement reports as UNDP, Sachs’ implementing partner in the Millennium Village Project, and a major manager of the project funded and overseen by the Millennium Promise Alliance.

In other words, the payouts seem to show that Sachs at various times, while serving as Ban Ki-moon’s special adviser on the MDGs, acts as the external fundraiser, overseer, and partner of various U.N. organizations including UNDP -- while the Earth Institute, where Sachs earns his salary as director, simultaneously receives money from UNDP for its own work on the Villages project.

Details of the two multimillion-dollar payouts were confirmed by UNDP’s director of communications, Satinder Bindra, in an email to Fox News. According to Bindra, the two contracts were approved in 2006 and 2008, respectively, with the second contract being an extension of the first.

They covered “the provision of technical advisory services” for the Millennium Villages Project, Bindra wrote, done by the Earth Institute “mainly in the field of agriculture, infrastructure, education, health, and monitoring and evaluation. They also included the implementation of one new MV project in northeast Kenya.”

He added that in 2006 another contract worth $500,000 was signed with Columbia University for “Earth Institute services including technical support to a specific malaria initiative.” The funding for this originally came from the United Nations Fund for International Partnerships, a U.N. “interface” that in turn gets money from the United Nations Foundation, originally established by billionaire Ted Turner.

Bindra said that all of the funding to the Earth Institute was related to phase one of the Millennium Village Project, and aimed to “standardize interventions and methods” across 12 Millennium villages in Africa. The project was subsequently “scaled up in size,” in a second phase. He emphasized that the Earth Institute “has not been hired or paid under MVP2 funding.”

On the contrary, the Earth Institute is a founding partner of the Millennium Promise Alliance, and Earth Institute director Sachs is the Alliance president. So while the Institute received funding from UNDP in phase one of the project, it and Sachs were linked to the handing out of the funding to UNDP, and supervision of UNDP “implementation” in phase two. In any case, UNDP’s payments to the Earth Institute were spread across 2006 to 2010, the entire life of the project to that point.

Binda did not answer email questions from Fox News about whether UNDP considered the complex issues of the relationship or discussed them with the Earth Institute or its director. He emphasized, however, that “both contracts were awarded based on UNDP’s rules and regulations.”

When Fox News questioned Sachs by email about the tangle of relationships, and whether they posed a conflict of interest, the Earth Institute’s director of communications, Erin Trowbridge -- formerly a UNDP communications officer working on the MDGs -- declared by return email that “the premise of your questions is incorrect.”

“Professor Sachs is an unpaid adviser to the U.N. Secretary General,” Trowbridge declared.

“He does not receive payment from the U.N. or Millennium Promise.” The funds from UNDP to the Earth Institute, she said, were a “pass-through” of funds originally donated by Japan’s Human Security Trust Fund. “No money from Millennium Promise to the UNDP comes to the Earth Institute.”

She added that Sachs holds a “purely advisory role at the U.N. -- both as an adviser to the U.N. Secretary-General and as a member of the MDG Advocates.” Sachs’ U.N. role “has no budget oversight nor does it carry any type of managerial responsibility.”

While rebutting any notion that Sachs benefited directly in any financial sense from the relationship, however, Trowbridge did not address the possibility of any other form of conflict of interest, including the Earth Institute’s benefits from the arrangement. Moreover, Trowbridge did not address an additional issue raised by Fox News: Sachs’ role as a facilitator in a more than $1 billion fundraising effort that will also send money to UNDP.

The skein of relationships in which Sachs plays such a variety of high profile and complementary roles, however, raises the question of whether Sachs, as the secretary-general’s special adviser, might be involved in the kind of broader conflict of interest situation that is proscribed in U.N. rules and regulations for regular staffers.

Under Rule 101.2, section (o), the U.N. declares that “A staff member who has occasion to deal in his or her official capacity with any matter involving a profit-making, business or other concern in which he or she holds a financial interest, directly or indirectly, shall disclose the measure of that interest to the Secretary-General and, except as otherwise authorized by the Secretary-General, either dispose of that financial interest or formally excuse himself or herself from participating with regard to any involvement in that matter which gives rise to the conflict of interest situation.”
A subsequent section declares that “The Secretary-General shall establish procedures for the filing and utilization of financial disclosure statements.”

Under a secretary-general’s bulletin published by the U.N. on April 10, 2006 -- the same year in which the Earth Institute began receiving money from UNDP, and while Sachs was in his first term as the secretary-general’s special adviser on the MDGs -- all staff members at the director level or above are “obliged” to file an annual financial disclosure statement with the U.N. Ethics Office, and $1 per year appointments -- like Sachs -- are obliged to file a declaration of interest statement. (On official U.N. protocol lists, Sachs is referred to as an Under Secretary General, a ranking higher than Director, as well as a special adviser.)

A footnote to the 2006 bulletin declares that “Staff members should also be aware of staff regulation 1.2(m) prohibiting staff members from active association in the management of a profit-making business or other concern where there is the possibility of a conflict of interest.”

This year, Secretary-General Ban added to his view of the staff regulations on conflict of interest in a report to the U.N. General Assembly, dated June 27, 2011. It notes that his rules include “provisions governing actual or potential conflicts of interest arising from financial interests, personal relationships between staff members and other stakeholders, the receipt of honors, decorations, favors, gifts or remuneration by third parties, as well as parameters addressing conflicting loyalties that may result from outside employment or occupation or other outside activities, including political activities.”

The report also says that “the experience of the Secretariat and that of some United Nations funds and programs, as well as of other public international organizations” has identified a number of situations as “commonly posing potential conflict of interest.” One of them is “leadership, policymaking or advisory role in external entities (e.g. a governmental or other political role, corporate or for-profit board, not-for-profit board, advisory committee, etc.).”

Click to view Ban's June 27 update.

Ban added another tweak to the conflict of interest issue in 2007. He added a section to the secretary-general’s website for the voluntary public disclosure of the financial and other interests of senior U.N. officials, including $1-a-year special advisers.

The reason, according to Ban, is that “public disclosure is considered to be an important voluntary initiative as it demonstrates that U.N. staff members understand the importance of the general public and UN Member States being assured that, in the discharge of their official duties and responsibilities, staff members will not be influenced by any consideration associated with his/her private interests.”

Sachs was one of several special advisers who is not listed on the section of Ban’s website devoted to the voluntary public disclosure of financial assets of U.N. officials and declarations of their private interests, although seven special advisers working on the same $1-a-year basis chose to disclose in 2010, the last year on record. Many of these, however, made use of a loophole Ban wrote into the disclosure deal that allowed them to publicly disclose the fact that they were not publicly disclosing anything.

Click to view the declarations.

For his part, Secretary General Ban had not replied before this article was published to questions asked by Fox News about the various activities of his special adviser.

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