Another UN Moment: $700,000 in Mystery Money

The UN policy of “financial disclosure,” as pioneered by Kofi Annan, does not actually require UN officials to disclose anything whatsoever about their finances to the public. But federal prosecutions into UN-related fraud and money-laundering over the past few years have tipped out an array of documents which, at least in a few cases, have done some of the disclosing for them. Here’s one of the latest, with a lingering mystery attached (as in, where’s the money?):

This case involves a Russian career diplomat, Vladimir Kuznetsov, who served from 1999-2005 on the powerful committee that oversees the UN’s multi-billion-dollar-per-year budget. By 2004 he had become chairman of this budget committee, and the highest-ranking Russian official at the UN. In September, with the feds delving into allegations of UN-related graft, Kuznetsov was arrested and this March he was convicted of conspiring with another Russian UN official, Alexander Yakovlev (who pled guilty in August, 2005 to money-laundering and fraud), to launder more than $300,000 in criminal proceeds derived from what the U.S. Attorney’s Office in Manhattan has described as “illegal assistance to companies bidding on UN procurement contracts.” Last Friday, Kuznetsov was sentenced to pay a $73,000 fine and spend 51 months in prison. (Kuznetsov’s lawyer says he will appeal his conviction, and Russia’s Foreign Ministry has pronounced itself disappointed that he has been sentenced to prison, and may seek to have him returned to Russia).

But here’s the puzzle. Kuznetsov while working at the UN on the budget oversight committee quietly set up his own offshore company, called Nikal, and opened an account for Nikal at the Antigua Overseas Bank. Beyond the $310,727 transferred into that account by Yakovlev, which figured in Kuznetsov’s conviction, there was another series of transfers into Kuznetsov’s account, from 2000-2003, totaling more than $700,000 — including one whopping transfer in 2000 for $469,980. Here are government exhibits showing the bank advice slips for six of those transfers, released along with a June 4 sentencing letter.

According to federal prosecutors, in the sentencing letter linked above, “Kuznetsov has failed entirely to acknowledge his receipt of the $736,713 in his Antigua bank account.” Taking into account the additional $300,000-plus which Kuznetsov received into his offshore account from Yakovlev, the prosecutors further state that “Kuznetsov makes no attempt to explain how he disposed of more than one million dollars that he received in his offshore account.” Nor, as of his sentencing last Friday, had Kuznetsov provided any further enlightenment. Why did this former member of the UN budget oversight committee receive that additional $700,000-plus into his offshore account, and where did it all go? … Just one of the many mysteries floating up from Turtle Bay.