Indian held for favours in UN procurement contract

UNITED NATIONS—A U.N. procurement official has been referred to U.S. prosecutors over allegations he steered U.N. contracts to an Indian government firm, the United Nations and diplomatic sources said on Friday.
The U.N. official, Sanjay Bahel, an Indian national, was first named by the Italian newspaper Il Sole. The daily said a U.N. audit report had accused Bahel of working through Indian businessman Nishan Kohli, who rented him apartments at below market price in return for steering contracts to Indian firms.
The government company, is Telecommunications Consultants of India, or TCIL, part of the Telecommunications Department, U.N. diplomats said. The company is said to have been awarded some $100 million in U.N. contracts around the world. It has denied the allegations as has Kohli.
The United Nations has been investigating the procurement department for several years but only last January placed eight officials on leave.
U.N. spokesman Stephane Dujarric, reacting to news reports, said two of the eight had been exonerated and were back at work, two others were reinstated but have been asked to respond to allegations of mismanagement and three remained on leave pending completion of the investigation.
The eighth person, identified by U.N. diplomats as Bahel, had been suspended "without pay due to the serious nature of the charges" and has "been given an opportunity to respond."
"Evidence of the case has also been shared with U.S. prosecutorial authorities," Dujarric said.
The authorities are the U.S. Attorney's office for the Southern District of New York, which has previously investigated procurement fraud, including the case of Alexander Yakovlev of Russia. He pleaded guilty in U.S. federal court a year ago to wire fraud and money laundering.
A man answering the phone at Bahel's New York residence said he was unavailable for comment.
An official from TCIL told the Press Trust of India, "We deny everything that has been said about TCIL in the report about someone steering huge contracts to the company."
An official of the Indian mission to the United Nations, who asked not to be identified, said that once the investigation was completed, his government would cooperate with the United Nations and its findings.
Bahel and Yakovlev had both been questioned by the independent inquiry panel investigating the oil-for-food scandal at the United Nations but were not accused of wrongdoing in managing contracts for Iraq.
Both men were involved in awarding an inspection contract to the Swiss firm Cotecna, which employed Secretary-General Kofi Annan's son, Kojo Annan.
Among procurement officials still under investigation is Andrew Toh, the Singaporean head of U.N. support services including procurement, who has been on leave with pay since January, U.N. sources said.
Toh told Reuters earlier in the year he was mystified about why he had been suspended since he had no direct involvement in U.N. peacekeeping contracts.
Bahel, seconded to the United Nations from the Indian government's military auditing service, first came under scrutiny in September 2004 when a U.N. internal audit investigated whether he steered several contracts to TCIL without proper bidding.
But no action was taken until last year when allegations in procurement were investigated again.
Christopher Burnham, the American head of the U.N. management department, said in January that U.N. audits showed potential abuse could go into the tens of millions of dollars in the purchase of goods for peacekeeping missions.—Agencies