GENEVA (AN) — A U.N. tribunal ordered a former U.N. project chief to repay US$58.8 million he lost to deal-making that showered him with gifts.
The United Nations Dispute Tribunal's three judges ruled there was clear and convincing evidence Vitaly Vanshelboim "caused massive financial losses" for the U.N. Office for Project Services, or UNOPS, which oversees a multibillion-dollar portfolio of projects around the world.
U.N. Secretary-General Antonio Guterres, who appointed Vanshelboim to the job, was "pleased by this judgment,” U.N. spokesman Stephane Dujarric said on Tuesday. The ruling was first reported by the New York Times.
In 2020, Guterres appointed Vanshelboim, of Ukraine, to serve as a U.N. assistant secretary-general and chief executive of UNOPS' Sustainable Investments in Infrastructure and Innovation, or S3i. Just two years later, Grete Faremo, an executive director of UNOP and former Norwegian minister of justice and public security, resigned after auditors and news outlets questioned tens of millions of dollars in agency spending on S3i.
She put Vanshelboim on leave after learning of an investigation into S3i by the U.N.'s Office of Internal Oversight Services that she said had still not shared its report or findings with Copenhagen-based UNOPS.
In 2022, UNOPS also acknowledged in response to news reports that there had been "significant challenges" with S3i and eight investments totaling US$63 million, but said it was "committed to a rigorous and comprehensive process to address any possible misconduct and maladministration claims and will hold all persons responsible to account."
Vanshelboim was fired in January 2023 after an internal investigation, and one month later UNOPS's executive board decided to phase out the impact-investing initiative – which was separate from UNOPS' regular project activities – due to what it called "a series of management failures."
Vanshelboim arranged deals on clean energy, housing and oceans between UNOPS and U.K. businessman David Kendrick that included undisclosed "direct financial and material benefits for himself and his family" worth at least US$3.1 million, including a Mercedes-Benz for his wife and interest-free loans, according to the ruling by the Geneva-based tribunal.
The ruling came on Vanshelboim’s appeal of the fine he was ordered to pay on his dismissal of 12 months of salary and an order for him to pay more than US$63.6 million in UNOP losses from the deals. It said he is responsible for UNOP's loss of US$58.8 million but he "may seek contribution elsewhere from any others deemed responsible as well."
Vanshelboim's job was to find potential partners for UNOPS, which would provide money to develop projects that would attract private investors. The tribunal, however, said he “committed fraud against the organization by leading it into multiple business partnerships with the Kendrick entities, with which he engaged in undisclosed and unauthorized outside activities.”
Vanshelboim did not disclose he was allowed to use Kendrick's credit cards and received an interest-free revolving loan facility, or that his wife was paid by Kendrick to help get an apartment in Ukraine’s capital, Kyiv, and Kendrick had a tennis sponsorship agreement for Vanshelboim's youngest son and paid for repairs and furnishings at a New York property.
Media reports on the case emerged from U.N. whistleblower Mukesh Kapila's blog posts on UNOPS' senior leadership. Kapila, a professor emeritus of global health and humanitarian affairs at U.K.'s University of Manchester, has extensive experience with international organizations.
He exposed problems with tens of millions of dollars in loans that UNOPS made to a main S3i contractor, Singapore-based Sustainable Housing Solutions Holdings, or SHS Holdings, meant for planning to build 1 million affordable homes in developing nations.
Vanshelboim oversaw UNOPS' lending to SHS Holdings. The eight investments were supposed to be used to build homes in the Caribbean, Ghana, Guinea, India, Nigeria and Pakistan.
