New bid to rein in outsize UN salaries: even UN agencies asking for relief

EXCLUSIVE: The tide may be turning in a long struggle to get the United Nations to cut back the fat compensation packages that it hands out to employees -- deals at least 30 percent richer than their supposedly comparable U.S. federal counterparts, according to U.S. calculations.

For the first time, even a small number of the U.N.'s sprawling network of agencies, funds and programs  have  begun to ask for relief from  the outsized salary bills on their  budgets -- which, unlike the so-called “regular” budget of the U.N. Secretariat -- come from voluntary donations by member countries rather than formal dues.

Those voluntary contributions have been shrinking, while the salaries and perks haven't -- a classic squeeze that even international bureaucrats must recognize, and that is growing more acute as the U.N. continues to operate as a constellation of more than three dozen U.N. bodies with different missions, budgets and degrees of donor enthusiasm.

The cries of pain from U.N. ranks have added new voices to the resistance to an ever-rising salary toll that has mostly been coming from the score or so of richer nations that pay most of the U.N.'s bills. Together, they are giving a boost to talk of either a slowdown or an outright cutback in the payouts as part of the U.N.'s current round of budget talks for 2014 and 2015.


“Receptiveness for change is at an all-time high,” says a Western diplomat at the U.N. “The issue is not going away for major contributors.”

The U.N. organizations vocally feeling the pinch include the Food and Agriculture Organization (FAO), the International Maritime Organization (IMO) the World Intellectual Property Organization (WIPO) and the Universal Postal Union (UPU), all relatively obscure technical organizations headquartered in Europe.

All of them in the past two months have  petitioned the International Civil Service Commission (ICSC), the U.N.-sponsored and ostensibly neutral body that is the arbiter of the world organization's salary and benefit levels, for what the IMO called “immediate action to relieve these budgetary pressures,” with specific reference to salaries.

In turn, U.N. staff associations have warned their members to be prepared to “mobilize” against any such austerity measures, according to a letter circulated on Nov. 25 by Barbara Tavora-Jainchill, head of the U.N. staff union in New York City.

Austerity of any kind, and especially on the salary front, is not something with which the bloated and inefficient U.N. bureaucracy is all that familiar, even though it gets talked about a lot. A notable exception is the World Health Organization, which slashed its budget by nearly $1 billion two years ago and cut 300 jobs at the U.N. agency's headquarters, because of financial constraints in donor countries.

In December 2012, by contrast, after U.N. Secretary-General Ban Ki-moon touted a roughly 3 percent cut in the U.N. Secretariat's $5.4 billion “regular” budget -- only a fraction of its actual spending -- the money was restored in a bout of late-night wheeling and dealing.

(The U.S. share of that total is 22 percent, or about $1.19 billion -- and that, in turn, is only a fraction of total spending on the U.N., which the Obama administration no longer discloses. Last January, U.S. Ambassador to the U.N. for management Joseph Torsella declared that  “the entire U.N. system is now a $36 billion enterprise, larger than the individual GDPs of half its member states.”)

In July 2012, heavy lobbying led by the U.S. resulted in a six-month freeze in what the U.N. calls its “post adjustment” -- a cost-of-living booster that helps to catapult U.N. salaries significantly higher than their U.S. equivalents, which are the supposed comparative basis of the U.N. salary system. But then the ICSC decreed a salary increase for U.N. employees for 2013 and made it retroactive to the previous August.

The now unfrozen post adjustment for U.N. staffers in New York City is a 68.7 percent add-on to paychecks that, according to a study last year by the U.S. Government Accountability Office, helps to make them 30 percent higher than U.S. civil service salaries -- which have been frozen for the past three years as an austerity gesture by the Obama administration. And atop that, U.N. salaries are tax-free.

According to the most recent report of the ICSC, however, the difference was more like 18 percent. But the GAO, after a year-long study of U.N. salary calculations that was published last June, declared that it still didn't understand how the U.N. went about its figuring, and declared that the ICSC “has not provided a comprehensive explanation to member states about its process.”

Another factor that makes this year's salary battle different is that even by the U.N.'s own generous interpretation of the salary difference from its U.S. counterparts, the world organization is now crossing one of its own red lines.

According to ICSC calculations, U.N. salaries are allowed to be anywhere from 10 percent to 20 percent higher than their U.S. equivalents, based largely on the assumption that U.N. bureaucrats are based away from their native countries, whereas U.S. civil servants mostly live at home. But the moving 5-year averages of those differences -- known in bland U.N. parlance as the “desirable mid-point”-- is supposed to be no higher than 15 percent.

Next year for the first time, the single-year difference is likely to be in excess of 22 percent, due to the ongoing U.S. wage freeze in Washington. And the five-year moving average as a result is moving  past the “desirable mid-point” this year to 15.7 percent, with more undesirable hikes coming in the future, especially if a U.S. federal wage freeze continues.

“By the U.N.'s own rules, something is wrong,” says a Western diplomat at the U.N. And with the process continuing to move in the wrong direction, more nations beyond the normal Daddy Warbucks countries of the U.N. are starting to agree -- especially if they sit on the supervisory boards of U.N. organizations that are already feeling the salary-induced pinch.

According to the U.S., the fastest and most efficient direction is to return to the issue of the U.N.'s cost of living “post adjustment,” which is recalculated annually in any event -- in other words, a rerun of a campaign that the U.S. already won, and then lost.

Another alternative would be a U.N. wage freeze, which would have the symbolic advantage of  putting U.N. pay back in an equivalent situation to its Washington counterpart -- although the freeze would take place at significantly higher levels.

That idea is being cited as the lesser evil by U.N. staff unions, in the event that push comes to shove over alternative methods of austerity.

Given the normal murky way that tough problems are dealt with at the U.N., however, the likelihood of that still amounts to a question mark.

The entire package of U.N. salary issues is supposed to get fully chewed over and decided by the General Assembly by mid-December. But the time when push truly comes to shove at the U.N. over budget matters is late on the evening of December 24, when few outsiders  are watching and the results of the deal-making -- all too often far more disappointing than reformers usually hope -- get lost in the Christmas Eve shuffle.

Moreover, those outcomes usually don't even see daylight until U.N. diplomats and bureaucrats return to work the following year.

George Russell is editor-at-large of Fox News and can be found on Twitter @GeorgeRussell