VZCZCXYZ0012
PP RUEHWEB

DE RUCNDT #1901/01 2761415
ZNR UUUUU ZZH
P 031415Z OCT 06
FM USMISSION USUN NEW YORK
TO SECSTATE WASHDC PRIORITY 0331

UNCLAS USUN NEW YORK 001901 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: AORC KUNR UNGA
SUBJECT: AMBASSADOR WALLACE MEETS WITH SECRETARIAT 
OFFICIALS ON UN CAPITAL MASTER PLAN, REFORM AND SCALE OF 
ASSESSMENTS 
 
¶1.  SUMMARY: Ambassador Wallace met with 
Deputy-Secretary-General Mark Malloch Brown, 
Under-Secretary-General for Management Chris Burnham, 
Assistant-Secretary-General and Controller Warren Sach and 
Officer-in-Charge of the Capital Master Plan John Clarkson on 
Monday, September 25th.  The Secretariat officials asked 
about the U.S. position on financing for the Capital Master 
Plan (CMP), in light of upcoming discussions in the Fifth 
Committee.  In addition, Ambassador Wallace raised UN reform 
and scale of assessment, noting that progress on reform and 
an acceptable agreement on scale of assessment would impact 
Congressional support for the CMP. END SUMMARY. 
 
 
UN CAPITAL MASTER PLAN 
 
 
¶2.  Malloch Brown noted that the Secretary-General would be 
seeking a decision on financing for the construction phase of 
the CMP this fall (beginning in late October) and inquired as 
to the U.S. position on the issue. 
 
¶3.  Ambassador Wallace noted that the U.S. strongly supports 
the project and has made strong statements to that effect. 
He also stated that the U.S. supports using direct 
assessments to finance the project and also clarified that 
the U.S. is not presently offering another loan.  Ambassador 
Wallace added that the U.S. understood that the project's 
cost estimates have increased since last fall and that this 
would cause some on Capitol Hill and within the USG to be 
upset, especially since the last estimates were understood to 
be stable and final.  Ambassador Wallace underscored the 
importance of adopting a firm CMP budget and for the 
Secretariat to stick to that budget. 
 
SIPDIS 
 
¶4.  Burnham said that, in response to calls from Capitol Hill 
for more transparency, the UN was working to increase the 
transparency with regard to contracts. (NOTE: CMP contract 
information can now be found on the UN procurement service 
website, www.un.org/depts/ptd/cmp.htm. END NOTE.)  Sach 
expected that Fifth Committee discussions on the letter of 
credit might be difficult; Burnham thought that the Fifth 
Committee may resist approving the letter of credit in order 
to highlight the fact that it might be needed due to late 
payments from the U.S.  Sach said that the Secretariat would 
aim to characterize the letter of credit as an administrative 
device vs. borrowing authority, to hopefully make it easier 
to get the Fifth Committee's approval. (COMMENT: USDel has 
learned that Japan may not be able to make its first payment 
until late 2007 at the earliest.  USDel also understands that 
many G77 Member States are questioning the need for the 
letter of credit, believing that it is only needed to assure 
U.S. companies of payment, while foreign firms may not need 
such a guarantee.  While this does not make a lot of sense, 
it is likely to lead to a greater push to hire non-U.S. firms 
to carry out the CMP. END COMMENT.) 
 
¶5.  Ambassador Wallace agreed with Sach that it would be 
helpful to charactize the letter of credit as an 
administrative device and also agreed with Sach that it would 
be helpful for Fifth Committee discussions if the ACABQ was 
also in agreement with the need for a letter of credit. 
Ambassador Wallace stated that he hoped that everyone could 
speak from the same page from now on with regard to the CMP, 
given the exchange during this meeting. 
 
 
UN REFORM AND UN SCALE OF ASSESSMENT 
 
 
¶6.  Ambassador Wallace also raised mandate review, management 
reform and the scale of assessments, noting that all were 
"combustible" issues on Capitol Hill and that progress on 
reform and an acceptable agreement on scale of assessment 
would be needed to ensure full Congressional support of the 
CMP. 
 
¶7.  With regard to mandate review, Ambassador Wallace noted 
that it would be important for further progress to be made 
this year and that lack of progress might impact U.S. 
contributions to the regular budget.  On management reform, 
Ambassador Wallace asked the Secretary-General to continue to 
push forward on implementing agreed upon reforms and urged 
him to do whatever else he could under his authority as Chief 
Administrative Officer, without coming to the GA for 
approval.  He also asked the Secretariat to help keep reform 
moving ahead, in parituclar in helping to assure that the 
Independent Audit Advisory Committee (IAAC) includes 
non-political experts that are not subject to geographic 
distribution. 
 
¶8.  Burnham noted that they were down to two finalists (an 
 
 
 
Australian and Canadian) to head the ethics office and that 
consultations continued with the staff union with regard to 
human resource proposals.  Burnham stated that he too hoped 
to finalize the IAAC this year and also agreed that it should 
have top-quality candidates without respect to a requirement 
for geographic distribution.  He commented that the Russians 
were a problem with regard to greater public access and 
transparency. 
 
¶9.  On the scale of assessment, Sach stated that if there was 
no decision by the end of the year, there would be no way for 
the UN to assess Member States and therefore there would be 
no cash.  Ambassador Wallace asked Sach to make this point 
clear to the Fifth Committee. 
BOLTON