Ban wants new probe on North Korea's alleged money diversion

Jun 11, 2007, 19:43 GMT

New York - Faced with fresh allegations that North Korea diverted UN development funds to weapons production, UN Secretary General Ban Ki-moon on Monday said he may call for a fresh investigation and send auditors to the country.

Ban's reaction was based on news reports this past weekend that the United States had received new information that Pyongyang used up to 3 million dollars of UN funding on defence.

'I am deeply committed to probing this issue,' Ban told reporters.

He said he plans to ask a UN committee responsible for administrative and budgetary issues to continue an investigation that began in January over the possibility that money provided by the UN Development Programme (UNDP) had been misused.

Ban acknowledged last week that the investigation had already found that Pyongyang had diverted some money, but he did not say how much.

UNDP, the UN Children's Fund and World Food Programme spent nearly 90 million dollars in North Korea from 2001 to 2005 to implement development and humanitarian programmes.

US Ambassador Zalmay Khalilzad said the US mission to the UN in New York had received allegations about money diversion and he was pleased that UNDP cooperated in the investigation. Khalilzad provided no further details.

But a spokesman for UNDP, speaking on background, said the new allegations could not be substantiated.

'We cannot prove something that has not happened,' the spokesman said, adding that UNDP had been audited three times in eight years in North Korea.

'At no time have the audits given rise to concern along the line of the (new) allegations,' he said. 'We take the allegations seriously. There is something going that we don't know about.'

UNDP, which has since terminated its activities in North Korea, said back in January that it spent about 3 million dollars a year in the country.

The spokesman cited several allegations purporting that North Korea received 7 million dollars and 2.8 million dollars on two separate occasions between 2001 to 2005 from UNDP. But he said UNDP records showed only a transfer of 175,000 dollars for an agricultural workshop in North Korea.

'UNDP records and the new allegations don't seem to add up,' the spokesman said.

The Pyongyang government has denied charges that it used foreign currencies provided by UN agencies in its nuclear and weapons programmes.