U.N. Workers Embezzled Funds, Investigation Finds

UNITED NATIONS —  More than 40 U.N. staff members have been dismissed in the past year or are under investigation in connection with bilking the United Nations out of thousands of dollars in education grants and other benefits, according to the spokesman for the secretary general.

All the fraud cases were unearthed by a 1985 in-house audit, which was reported on and debated last week by the General Assembly committee that deals with the U.N. budget.

Several delegations, including the Americans, Canadians and Japanese, demanded more information on the extent of the fraud charges. They and the U.N. staff union all were critical of Secretary General Javier Perez de Cuellar for overruling the U.N. disciplinary board and making one exception to the dismissals.

The exception was made for Ramaswamy Rani of India, the second-ranking officer of the U.N. economic division, who had been scheduled for promotion to the executive post of assistant secretary general. Instead of being fired, Rani was demoted one grade.

U.N. spokesman Francois Giuliani said Perez de Cuellar had “evaluated the case on its merits.”

Pays Costs for 2,000

The United Nations pays some school costs for 2,000 of its internationally recruited employees and their dependents. In 1985, auditors uncovered 10 cases of alleged fraud totaling $100,000. In 1986, one employee was fired for defrauding the United Nations of $13,000, and five other cases are pending, according to the U.N. personnel department.

In all, the audit turned up 36 discrepancies among the 2,000 children of employees covered by the U.N. educational allowance worldwide. At least 14 more cases of fraud were found involving other U.N. allowances, the report said.

One American official said the auditors’ finding of fraud was a symptom of institutional health, not sickness.

“This is just the normal small-time chipping away of fraud that exists in any large organization,” he said.