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Indian UN official held for fraud

india Updated: Nov 02, 2006 11:57 IST
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A UN procurement official was arrested on Wednesday on charges of steering more than $50 million in contracts to Indian firms in exchange for acquiring an apartment at below market rates, federal authorities and the United Nations announced.

The UN official, Sanjay Bahel, 55, had been chief of the UN commodity procurement section and was suspended by the United Nations on August 31 while investigations were under way.

Also arrested in Miami was Indian businessman Nishan Kohli, managing partner of Thunderbird Industries, LLC and an agent for the Telecommunications Consultants India Ltd, an Indian government enterprise.

UN spokesman Stephane Dujarric said the world body handed over information to the prosecutors in the office of the US Attorney for the Southern District of New York, who unsealed an indictment on Wednesday. UN Secretary-General Kofi Annan then waived Bahel's immunity, Dujarric added.

According to federal prosecutor Michael Garcia, who has charged both men with bribery, Bahel had granted "exceptional access" to Kohli with information on bidding.

On occasion, Bahel "even cancelled bids by competing companies and rebid contracts" to give Kohli's business interests a competitive advantage, Garcia said.

Consequently, Kohli secured a number of contracts for TCIL, including radio communications and computer equipment as well as information technology.

In return, the indictment charged that Kohli purchased an apartment at the Dag Hammarskjold Towers in Manhattan and provided it to Bahel and his family for two years at greatly reduced rent or no rent at all.

In May 2005, Kohli sold the apartment to Bahel at substantially below market value, drawing a protest from the building's condominium board, the prosecutor alleged.

Garcia, in a statement, said that "Sanjay Bahel allegedly sold his influence as a UN procurement official. He favoured Nishan Kohli's companies in obtaining and maintaining valuable UN contracts and he personally profited as a result."

Both men, charged with bribery, were scheduled to appear in federal courts on Thursday, Bahel in New York and Kohli in Miami. They could face up to 10 years in prison if convicted.

The United Nations has been investigating the procurement department for several years but only last January placed eight officials on leave. Two of the eight were exonerated, two others were reinstated but asked to respond to allegations of mismanagement and three remained on leave pending completion of the investigation.

Bahel, formerly of the Indian government's military auditing service, first came under scrutiny in September 2004 when a UN internal audit investigated contracts he handled.

In September, when the news first broke, Bahel denied all the allegations. An official of India's mission to the United Nations said at the time that once the investigation was complete, his government would cooperate with the United Nations and its findings.

The US Attorney's office and the FBI previously investigated UN procurement fraud, including the case of Alexander Yakovlev of Russia. He pleaded guilty in US federal court a year ago to wire fraud and money laundering.

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