U.N. REVIEW CRITICIZES DIRECTOR OF ITS DRUG AND CRIME PROGRAM

UNITED NATIONS, June 11 - Investigations of the United Nations Office
of Drug Control and Crime Prevention in Vienna found today that poor
management was costing the office money and talent, leaving the staff
demoralized and often in the dark about decisions made at the top.

The program's executive director, Pino Arlacchi, a sociologist and
criminal expert from Italy, has been criticized by European countries
and American officials who say he did not adhere to United Nations
procedures and rarely consulted the staff. Accusations like those
were studied by the United Nations Office of Internal Oversight
Services.

At a news conference today, Dileep Nair, a former banker from
Singapore who is the inspector general, declined to comment on one of
his office's recent reports, on accusations that Mr. Arlacchi had
misused money to pay for a questionable project to send a yacht
around the world to publicize the war on drugs. The results of a
separate inquiry in that case have been sent to Secretary General
Kofi Annan. Mr. Arlacchi has said the project was a mistake, and
initial findings cleared him of deliberate wrongdoing.

But criticisms of his general administration were sharp. The
oversight office "made it clear that the management situation at the
office cannot be allowed to continue," Mr. Nair said, in a comment
that is highly likely to revive speculation about whether Mr.
Arlacchi will be appointed to a second term early next year. Some
countries, notably Britain, Germany and the Netherlands, have been
outspokenly opposed to his reappointment unless the problems can be
corrected.

Mr. Nair noted Mr. Arlacchi's self-critical response to the report
today, which he saw in advance. Mr. Nair also said that 14
recommendations for "drastic and immediate change" had been acted on
promptly but that "the effectiveness of these measures will only be
known when the tangible results become verifiable." He said a
follow-up review would be conducted at the end of the year.

Mr. Arlacchi, who had a major role in the campaign against the
Sicilian Mafia a decade ago, was among officials chosen by Mr. Annan
for their experience in the fields that they would direct. Mr.
Arlacchi said in interviews during the investigations that he was
under attack because he was not a bureaucrat and refused to be reined
in by what he saw as politically inspired pressures.

The issue is especially sensitive in crime control, because Mr.
Arlacchi has been aggressive in fighting narcotics, trafficking in
people and money laundering. Mr. Nair praised Mr. Arlacchi today for
his successes. "The major strengths" of Mr. Arlacchi's office "are
clear mandates, a high priority to intergovernmental policy agendas
and a broad range of expertise," Mr. Nair said. "Its main assets are
a committed, resourceful and talented staff, a very strong field
presence and the ability to work multilaterally in very sensitive
fields."