Second, there is a little bit of sound biting of this report, because the audit describes $300 million approximately around which it has questions. But those questions fall far short of fraud – they were about monies that were over budgeted, in other words, there was an assumption that the peacekeeping operation in Sudan would have more soldiers sooner than it did, and therefore would use more fuel. But the fact that all the fuel was not bought and used hasn’t cost the Organization a penny, because that money is still in the bank and will be used when it is needed.

Secondly, there was extrapolation from the two missions that were studied, saying, well, what if the same thing happened elsewhere. Again, a great jump.

And third there was weak compliance with rules and procedures which are rules and procedures that we know need to be reformed. So, while we know there is a problem, we think it has to be put in a much more appropriate scale.

I think the issue is what do we do about it. I’ve said we are investigating it, but more generally it comes to what will be said next week about the creation of a new field based organization. It is still an organization which is very much New York or Headquarters centric, and which doesn’t invest enough in the right management in the field or in the right kind of sufficient staff in the field; with the right conditions of service to keep them there, and really build up the human capital of our field operations. Nor are they supported by the right IT systems, or a modern controlled environment, which helps them do their job, rather than often hindering them from doing it. So a lot of our response to this audit is next week’s management reform.

Jean-Marie, would you like to add anything?

Jean-Marie Guehenno: Well, the key points made by Mark are exactly on target. We do need to address in a decisive manner any instance of wrongdoing, and I think in that sense this meeting today sends a strong message to any potential wrongdoer. It is a very useful meeting. I think it is also very important that it focuses the Member States on the transformation of this organization into a field based organization, and this meeting will serve a purpose if it makes freer the distinction between people who might have committed fraud and people who might have been technically in breach at some point of a regulation to make things happen. We want that distinction to be clear, because otherwise you would have a kind of culture of inaction that the President of the Council mentioned. And certainly it is very important that the peacekeepers, at a time when we have so much to deploy, that that culture of inaction not be there. I don’t think it’s ever been there in DPKO.

Lastly, I think, this meeting focused on an interaction between the Department of Management, which does the bulk of the procurement process, and Peacekeeping which defines the need. And certainly there I think it will be good to clarify the interaction between the two departments, so that the Department of Management in its capacity as the agent for procurement has all the tools that it needs, and we have the capacity to provide the right requests.

QUESTION: Are you discouraged a little bit that there seemed to be a shift of focus away from the actual issue of the audit and what needs to be done in peacekeeping, and this debate about who should discuss it, which for the average human being out in a place like the Congo or something like that is very difficult to grasp - why this is a GA issue; why this is a Security Council issue – especially when what happened today was just a discussion and no action was actually taken?

Mark Malloch Brown: I am not discouraged in the sense that every speaker made it clear that they thought that getting to the bottom of this, and if there had been fraud, dealing with it was key, so I don’t think there is any lack of seriousness about follow up to this report. But you are right, to the extent it spills over to a debate between the General Assembly and the Security Council about respective roles and competencies, it’s ugly timing, because it comes on the eve of the management reform report, which we look at as the real way to address these problems. We don’t want that to be introduced into a poisonous environment where there is a struggle for power between Member States, so we hope this debate will have cleared the air and been a little bit cathartic and make people recognize that management mustn’t be subjected to this kind of political tug of war.

QUESTION: A follow up to Nick’s question. Basically, in your summation, you also conceded that the Secretary-General has expressed hope that this doesn’t become a confrontation between states, and that is the bottom line. What, if any, steps is the Secretary-General going to take in the future in order to demarcate the lines between the Security Council and the UNGA. What is he going to do? Do you have any ideas?

Mark Malloch Brown: Well, it’s Member States business, how they sort out what goes before each Chamber. The fact is, for some global reasons, and some very local reasons, the tensions between the two around this kind of issue have rarely been as acute as they are now, and I think all the Secretary-General can do is plead for common sense and reason and to keep tempers calm and to not allow these issues to spill over in a way which damages the reception and subsequently we hope the support for his management reform proposals, because they are so vital to the overall wellbeing of an Organization which, whether you are a member of the Security Council or General Assembly, you have an equal commitment to.

QUESTION: To what extent do you feel, do you in the Secretariat feel, under siege now, and to what extent do you feel squeezed between the developed world and the developing world?

Mark Malloch Brown: It’s the life of a Secretariat official and of the Secretariat to need to often chart difficult tensions between the two groups. But this is the kind of issue that has a danger of becoming self-fulfilling. We hope Member States are going to come together around this issue today, of the strengthening of procurement, around the issue of management reform, and that something like today will have helped clear the air and get people moving in the same direction.

Jean-Marie Guehenno: On that point, I think it is very important that in the meeting actually no Member States challenged the importance of peacekeeping. And I personally strongly believe that peacekeeping is one of those activities of the United Nations where the whole membership can come together. You have troop contributing countries, mostly from the developing world; you have major financial contributors from the developed world; it is essential to protect that instrument from this kind of divide that can hurt the Organization.

QUESTION: One of the issues in Oil-for-Food was that the OIOS was squashed by people above it, more senior officials, and was discouraged from investigating senior officials in New York, and its audits were kept secret. Is that same thing going on today? Why is OIOS not briefing on its own audit, and why is OIOS not going to brief to the Fifth Committee as OIOS is meant to report directly to the General Assembly. Why are you stopping OIOS reporting on this?

Mark Malloch Brown: Good question, James. Let me try and answer its different parts. First, we have absolutely been seized by that same Volcker finding that you have, and if you look at my opening statement today I specifically referenced that finding that indeed Volcker says it was because of a kind of complacent business-as-usual reaction to audits during Oil-for-Food, that some of these problems weren’t stopped a lot sooner. I think our actions here on this audit show we have learned that lesson. It was a very unique and different and new way of proceeding, to immediately put eight colleagues on administrative leave, form a special investigation unit, bring in an outsider, DeLoitte and Touche, to do a forensic audit. This is not the kind of response that was described by Volcker, and so I think it is extremely important on that.

Secondly, on the issue of OIOS, they last week asked to brief the Fifth Committee, and at that time the Fifth Committee said they weren’t ready for them. So they did an open briefing to Member States last Friday on this audit, which was very well attended. I have now been asked to the Fifth Committee I think tomorrow, and no doubt OIOS will be asked too, either then or on another occasion. So there will be absolutely no effort to suppress. As to why they weren’t here this morning…

QUESTION: [inaudible]

Mark Malloch Brown: I am sure, but OIOS have had briefings in the past and I am sure at the right moment they will do it. Their sensitivity, which is a sensitivity for all of us who have had this debate now, is you know, we have to be very careful, under clear instructions from our Member States, not to share the intimate inside details of audits with you before we have shared it with Member States. I think that is something that every Member State would agree about, that they think we are sometimes a little too quick to reach out to you before we brief them. And we are going to be extremely sensitive to that. If I could just make a final point, because I know, as I was coming in this morning, there was a suggestion that DPKO, DM and OIOS had all been asked to brief this morning, and why therefore was it just me on behalf of those three departments, and you know, I made a joke that James only you and I understand, being large men, that we are sort of good for three people in one.

But the more serious point was that, precisely because the Security Council is not the management council of the UN, we felt that the policy level at which it should be looking at it, that the Secretary-General should choose one official who was best placed to represent the points of view of all three departments, which I think, I was on this, because there are, as we acknowledged, differences between DPKO and OIOS on these issues, and so it was felt that I could do the best synthesis brief, which also acknowledged where there were differences.

And a final point on that, you know, it is absolutely the prerogative of the Secretary-General to choose which official briefs, because, whoever does it – the head of OIOS, or DPKO, or myself, we are all doing it on behalf of the Secretary-General, and that is a sixty year prerogative. I don’t think this issue or this month or this Presidency was the right moment to change that.

If I don’t take Benny’s there will be…

QUESTION: That is a joke only you and I can answer.

One point that was made by the United States and Japan, who pay 27 percent and 20 percent respectively of the DPKO budget, is that it will be very difficult for them to justify to taxpayers continuing to pay this unless something is done. Yet in your remarks, you say reform will require more money. How do you juggle those two issues? On the one hand there is that image here we have a department that is under investigation and you ask for more money to fix the problem.

Mark Malloch Brown: I know it’s going to be a tough sell, but I know I can count on a sympathic press corps to help me promote that message of ‘invest more in the UN’. Look, we are extremely sympathetic to the US and Japan position on this. They have got a tough case to make to their legislatures and public opinion, and we have to help them make it, and we have to help them make it by showing that where there is corruption or management failures we are acting in a much more proactive, post-Volcker way, to address them.

And on the second issue of investment in these things, the GAO has just done a report that showed that if the US had done peacekeeping itself in Haiti, instead of having the UN do it, it would cost twice as much and would have difficulty being as effective. And the Rand studies show the same thing. We do peacekeeping and field operations generally on the cheap. They are a bargain and there is nobody else who can do them instead, because of our multilateral standing. But the issue we will make next week is maybe we have been a little too cut price. Maybe we need to invest a bit more in order to do it as effectively as Member States want us to do, to the levels of accountability and integrity everybody has a right to expect. Thank you.

QUESTION: The South African ambassador argued for the GA, obviously as we all heard. He said that the Security Council had been put in charge of Oil-for-Food, and it wasn’t a satisfactory experience, to use his own words. Are you sympathetic to his argument?

Mark Malloch Brown: Well, certainly the oversight of Oil-for-Food did not crown the Security Council in glory. Let’s say that, and you know, we certainly look to the General Assembly and the Fifth Committee as the primary forum for management and accountability, but we equally acknowledge that the Security Council, for the reason that Benny just mentioned, the presence on it of major donors, but also for its responsibility for peacekeeping operations, has an interest in these issues, because they do affect our ability to deliver effectively. So we, like good international civil servants, can see both sides of the argument.

QUESTION: Yesterday I had asked Mr. Bolton that one of the reasons the United Nations to be so critical about all these things is that it bears responsibility for 27 percent of the DPKO budget, and I asked ‘why don’t you ask the General Assembly to divide this amongst other Member States so they feel less pain, so that it eases the pressure off the United States? Is that a subject that can be worked out?

Mark Malloch Brown: You know, in a year where we are assessing assessments we could do with a few less of your good ideas! I am sure he did. And you know, there is going to be a discussion on assessments and I am sure everybody will be making the case for it, but I again know where I dare not tread, and I am not going to get into the assessments argument at this point, and I am sure Jean-Marie won’t want to either.

QUESTION: You made the point about getting the right people out there into the field, with insufficient pay and all the rest of it. Are you going to be looking for pay increases for UN officials in the field? Are you going to be looking for more facilities the UN in the field? Are you going to be looking at way to get families in the field? Are you going to be looking for changes to the US visa situation, for somebody who leaves here and then wants to come back, and perhaps might not want to abandon their life in the US in the meantime?

And, I don’t exactly understand where the money for this comes, because each UN peacekeeping operation is assessed, is dealt with in its own terms, so why can’t you address this at the level of asking for money for a peacekeeping operation, rather than the general management reform?

Mark Malloch Brown: Because it requires a change in the policy of conditions of service, although you are right, much of it would be funded through individual peacekeeping accounts, but the fact is there is a real disadvantage to serving in the field, for reasons that you have put your finger on. It may not be possible to have families in the same duty station because of security but it may be possible to have them in adjacent duty stations where there is a possibility of much more regular family visits. Secondly, there is the whole issue of contract status and benefits which we need to try and equalize, with UN funds and programmes, and draw closer in terms of security and opportunity to access jobs elsewhere in the UN to the privileges enjoyed by those of us who are staff here at headquarters. So there is a huge issue of investment in our field colleagues to give them a much better deal, which we want to lay out in front of Member States next week.

Jean-Marie Guehenno: This is a big challenge for us, because in peacekeeping we have too high a turnover. We recruit people, we get them to know the work, to get better and better, and then they are hired by other agencies, funds and programmes, or by NGOs, because they will get a better deal. And so our capacity to retain the best people is weakened because of that. So, looking at the conditions of service systemwide, it will be very important to have better management of the human resources.

QUESTION: Are you equal to, let’s say, the EU, as it brings up its own peacekeeping, or the OSCE, are you seeing a movement of staff from here to other multilateral institutions who are getting into this market?

Jean-Marie Guehenno: Well, we are seeing more movement of staff from UN peacekeeping operations to the World Food Programme or to UNDP or to one of the various agencies that do very good work in the field. But in a sensible management system, you would have people who would spent some time of their lives in peacekeeping, which is a particularly challenging environment, then they would move to a somewhat more settled environment, then they would move back to peacekeeping, they would go back and forth between Headquarters and the field. That is what is so difficult now because of the rules and regulations, and that is what the reform effort will try to address.

Mark Malloch Brown: We’ll give you one last number and then we are going to go. Headquarters vacancy rates are about four per cent; field vacancy rates are 30 per cent. I cited 50 percent for procurement, but overall they are 30 percent. Those two numbers illustrate the relative competition to serve at Headquarters versus the fact that we have huge understaffing in the field because the conditions are just not attractive enough, and that of course feeds into the quality of those operations.

Thank you all very much.