As President-elect Barack Obama assembles his economic team to cope with the worsening financial markets, another problem looms for team members. The new White House may find itself footing the bill for the multibillion-dollar renovation of U.N. headquarters in Manhattan and an expansion of the U.N.'s security force.
Under its agreement with the U.N. as host country, the United States bears the ultimate responsibility for the safety and security of the world organization inside its borders.
Newsmax has learned that the United Nations has been experiencing accelerating budget problems despite Secretary-General Ban Ki-moon's efforts to stem the growing red ink.
Ban recently told reporters that he ordered all departments to cut their budgets by 2 percent as a response to the growing credit squeeze. The U.N. rank and file hastened to respond that the secretary-general does not have the power to cut budgets arbitrarily, as that falls under the prview of several General Assembly committees. They have yet to act. Strong resistance is expected, especially within the U.N. staff .
U.N. Renovation Costs Balloon
Meanwhile, the six-year renovation project began with much fanfare in May.
Originally projected to cost $1.8 billion, play now is more than $200 million beyond its expected costs, and the overruns are likely to get much worse.
Recently, the U.N. was hit with an unanticipated bill "exceeding $10 million," says one U.N. veteran.
The contractor, Skanska USA, was forced to install fireproof doors temporarily throughout U.N. headquarters during renovation work. The New York Fire Department reportedly insisted on the measure as a precaution during the reconstruction.
The U.N. thought the bill would be no more than $2 million, but the final tab was more than five times greater, a U.N. official said.
Although it is likely that New York Mayor Michael Bloomberg and Gov. David Patterson would fight any attempt to shoulder financing for the U.N.'s spending plans, a new President Obama may not have that luxury.
Says a senior U.N. official, "It's a mess and I don't know how a President Obama is going to handle it."
A partially completed or stalled renovation could be considered as a safety and/or health violation to the neighborhood, which technically would fall to the U.S. to solve, U.N. observers say. That could force Washington to come up with the cash to finish the project, they say.
Obama's White House could see itself hit with a U.N. tab close to $2 billion. That would be in addition to the fact that the U.S. already pays the largest share of the U.N.'s general budget and peacekeeping operations.
Adding to the cost overruns is a recently discovered landfill under the U.N.'s North Lawn.
The huge garbage dump had been thought to have been removed when the U.N. headquarters was built in the late 1940s. It wasn't. Now, Skanska needs to figure how the 60-year-old mass of muck should be removed, and who should do it.
The U.N. will need to enter the credit markets to continue financing the renovation project. Should credit not be forthcoming, New York City and the Federal government may be forced to aid the U.N. under the U.S. agreement with the world body.
Security Needs Overhaul
While the U.N. rebuilds its headquarters, it also is trying to rebuild its security force.
The U.N. Safety and Security force has been the target of two independent investigations following the bombings its headquarters in Baghdad (2003) and Algiers (2007). More than 45 people were killed and hundreds wounded.
The investigations four security dysfunctional and needing an overhaul.
U.N. Security Director David Veness, a Scotland Yard vet, tendered his resignation last summer, and Ban accepted it. The U.N. has yet to find a replacement, so Veness remains in office.
Meanwhile, the U.N., which has yet to implement any security reforms, has gone on a major expansion drive. In 2004, the U.N.'s security force numbered about 175 officers in New York. It now has 300 and has a target of 400 officers who will work out of headquarters.
The expansion has centered on recruiting more Third-World nationals, leaving experienced American and West Europeans out in the cold, insiders say.
U.N. Security veterans tell Newsmax of a wide discrepancy in background and competence among the new recruits.
"I have never seen it this bad," said a security staffer who asked that his name not be released.
The result has been repeated breakdowns in communications between U.N. Security and various U.S. law enforcement organizations.
The new recruits will average more than $50,000 yearly, plus a generous benefits package. Those who remain with the organization for five or more years easily could see their incomes top six figures according to information provided to Newsmax.
Although a significant number of those hired eventually may serve overseas, the expansion of the security force is being undertaken largely in New York instead of the U.N.'s major operations in Geneva and Vienna.
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