This record is a partial extract of the original cable. The full text of the original cable is not available.

161543Z Dec 05

C O N F I D E N T I A L SECTION 01 OF 02 PARIS 008509 
 
SIPDIS 
 
CORRECTION - ADDITIONAL TAGS 
 
E.O. 12958: DECL: 12/16/15 
TAGS: UNESCO FR BR PK SZ JO
SUBJECT:  USUNECO:  INTERNAL OVERSIGHT FINDS SERIOUS 
PROBLEMS IN BRASILIA OFFICE, POTENTIAL PROBLEMS IN 
ISLAMABAD, BUT NONE IN AMMAN. 
 
 
¶1.  After receiving a series of e-mails from the UNESCO 
Iraq office based in Amman alleging mismanagement and 
corruption, the DCM met December 13 with John Parsons 
(strictly protect), a UK national who heads UNESCO's 
office of internal oversight.  (Note:  Parsons spent a 
year in Washington on secondment to the GAO and is very 
complimentary of US oversight methods.)   Parsons 
assured the DCM that they have inspected the UNESCO 
Amman office and found no serious irregularities.  He 
did say that they are concerned about possible problems 
in the Islamabad office, but didn't elaborate.  What 
was of greatest concern to Parsons was the situation in 
the UNESCO Brasilia office from where he had just 
returned.  Parsons repeated some of the less sensitive 
information at a Geneva group meeting on December 15. 
 
¶2. Allegations of misconduct and mismanagement at the 
UNESCO Brasilia office have been floating around UNESCO 
for a number of months.  In September, Director General 
Matsuura forced the early retirement of the office's 
director, Jorge Wertheim, an Argentine national married 
to a Brazilian.  Parsons confirmed that he has been 
under pressure from the Deputy Director General Macio 
Barbosa, a Brazilian national, not to investigate too 
closely. 
 
¶3.  What Parsons found during his inspection was that 
the Government of Brazil was essentially using the 
Brasilia UNESCO office as a "front" to deliver services 
and get around its own cap on the hiring of civil 
servants.  The GOB was providing USD 120 million per 
year, while UNESCO's contribution was USD 300,000.  The 
whole Brazil operation had over 3,000 employees.  Of 
the GOB's contribution, 53% was going to the Ministry 
of Health to pay for programs such as the training of 
nurses and doctors-an area, Parsons pointed out, that 
is totally outside of UNESCO's mandate.   (The UNESCO 
Brasilia office is no longer working with the Ministry 
of Health.)  The UNESCO Brasilia office was charging 
overhead on the GOB funds that amounted to USD 5-6 
million per year and that could be spent at Wertheim's 
discretion.   (Note:  In September, before Wertheim was 
fired, there was an elaborate exhibit at UNESCO 
headquarters on the work of the Brasilia office; 
Parsons confirmed that it was funded from the overhead 
charges and cost USD 85,000.) 
 
¶4. Parsons asserted that Brazilian labor laws do not 
permit the type of hiring that was being done, but that 
UNESCO and UNDP were hiding behind diplomatic immunity 
to violate those laws and avoid paying social charges. 
In the Dec. 15 Geneva Group meeting, Parsons added that 
both Wertheim and UNESCO face legal action.  He said 
that UNESCO faces potential financial liabilities for 
these unpaid charges and that individuals in Brazil are 
taking UNESCO to court over unpaid charges.  At this 
point UNESCO is seeking protection through its own 
immunity.  Parsons also noted that the external auditor 
may not be able to certify the organization's finances 
because of potential liabilities 
 
¶5.  The UNESCO office has now been significantly 
downsized and will be engaging in smaller, meaningful 
technical cooperation, not projects that go on year 
after year. 
 
¶6. Meanwhile, Wertheim is now involved with a new 
development agency run by the Ibero-American states 
(note:  Parsons said this is a new organization but 
didn't have details) and is offering his new 
organization's services to the GOB.  This position also 
gives Wertheim diplomatic immunity.   Parsons says that 
if Brazilian prosecutors bring charges against 
Wertheim, DG Matsuura may retroactively lift Wertheim's 
immunity. 
 
¶7. The Brasilia office is now being run by a Canadian 
while the position of director is being competed. 
Parsons passed on one more piece of disturbing news. 
He said that Deputy Director General Barbosa has stated 
that no Amcit should be hired as a field office 
director in Latin America.  (Comment:  If true, this is 
totally unacceptable.  We are also concerned because we 
are aware of at least two qualified Amcits who have 
applied for the Brasilia job.) 
 
¶8. Parsons also discussed efforts to implement Volcker 
Commission reforms that he expanded upon at the Geneva 
Group meeting.  He said he had been stymied in his 
attempts to implement a hot line because senior 
secretariat officials, such as Francoise Riviere, the 
 
SIPDIS 
DG's chef de cabinet, felt that this was culturally 
inappropriate in France.  He mentioned that he was also 
working with human resources on ethics training and 
financial disclosure.  He also seeks to establish an 
ethics office at UNESCO and said that there will be 
zero tolerance for irregularities. 
 
¶9.  Other items Parsons mentioned during the Geneva 
Group meeting include: 
--by the end of this year all field offices will have 
been audited 
--he is concerned about extra-budgetary funds, donors 
need assurance their projects will be well managed 
-- risk areas at headquarters include the building 
renovation and unliquidated obligations of USD 57 
million. 
-- after field audits two days are spent training staff 
on management controls 
-- that a UN code of conduct will be issued with 
examples 
-- his team is evenly divided between auditors and 
program evaluators 
 
¶10.  At his meeting with the DCM, Parsons repeated a 
request he made earlier this year for TDY assistance 
from the GAO. 
OLIVER