U.N. DRUG CONTROL OFFICE IN DISARRAY

NEW YORK -- Two U.N. bodies have conducted investigations into the
management practices of the U.N. drug czar, whom departing senior staffers
have accused of patronage, staff intimidation and secretive or capricious
decision-making.

The U.N. Office for Drug Control and Crime Prevention (ODCCP), based in
Vienna, Austria, is said to be in an administrative shambles under the
leadership of Executive Director Pino Arlacchi, a former Italian senator
and noted Mafia foe.

Six officials have left the ODCCP in the past year, lobbing accusations of
mismanagement that have shaken the confidence of donor nations contributing
90 percent of the ODCCP's budget.

The ODCCP is separate from the International Narcotics Control Board, on
which the United States lost its seat May 3, the same day it failed to win
re-election to the U.N. Human Rights Commission. Both drug agencies report
to the same parent agency in the world body. The disarray illustrates
concerns that have repeatedly prompted bipartisan dissatisfaction in the
U.S. Congress.

That dissatisfaction drove the vote in the House last week to withhold a
portion of next year's dues unless the United States wins back its seat on
the Human Rights Commission. Beyond the more immediate dissatisfaction with
recent U.N. votes that have gone badly for the United States lies
long-standing concern over what critics see as a cumbersome and inefficient
U.N. bureaucracy.

New manager

U.N. Secretary-General Kofi Annan -- who has publicly supported Mr.
Arlacchi and declined to comment in detail until the investigations are
complete -- recently requested funding from the General Assembly to create
a new deputy's position at the ODCCP, according to one diplomat who has
followed the matter closely. The deputy would handle day-to-day management
of the $100 million agency.

In a public resignation letter, the former ODCCP operations director
accused Mr. Arlacchi of nearly four dozen instances of bad management,
including threatening dissenting employees with termination or relocation,
consolidating all decision-making power behind his own often-closed office
door and wasting millions of dollars in donor money on drug-eradication
programs that were, from the start, of dubious value or far too ambitious.

"I see an organization that has increased its international visibility
while, at the same time, is crumbling under the weight of promises that it
is unable to meet under a management style that has demoralized,
intimidated and paralyzed its staff," Michael von der Schulenburg wrote in
December.

His 20-page resignation letter was immediately posted on the Web site of
Italy's Radical Party, which favors the legalization of soft drugs. "You
are also the worst manager I have come across."

That letter and others have triggered two investigations, one recently
concluded by the U.N. External Board of Auditors and the other nearly
completed by the U.N. Office of Internal Oversight Services.

The auditors looked into recruitment practices, spending patterns and
charges of "inappropriate use of (ODCCP) monies."

Cleared of impropriety

That report, completed on April 24 but not publicly released, absolves Mr.
Arlacchi of impropriety, said director David Woodward's cover letter, which
was obtained by The Washington Times.

But the review criticizes the office's tendency to "initiate a number of
projects before securing all the funds necessary to see them through."
Auditors also questioned the viability of a field office located less than
30 miles from headquarters, and urged the agency to double-check travel
expenses.

The U.N. Office of Internal Oversight Services (OIOS) has largely concluded
its own investigation of the criticisms leveled against Mr. Arlacchi, but
that may not be made public for some time.

It is standard practice for the initial findings to be reviewed and
"corrected" by their subjects, with those comments incorporated into the
version that is sent to the secretary-general and eventually released.

Mr. Arlacchi declined to discuss the complaints, as did his spokesman,
Sandro Tucci.

"Internal procedures advise Mr. Arlacchi . . . that until the OIOS report
comes out, he may not speak," Mr. Tucci said recently.

Months ago, the former Italian senator did defend himself against critics,
saying he had made powerful enemies by going after organized crime figures
and drug lords.

U.S. officials have publicly supported Mr. Arlacchi and ODCCP, and have not
threatened to withhold Washington's $20-million-a-year voluntary contribution.

"We give him high marks for having a strong vision," said one U.S.
official, who said Mr. Arlacchi's philosophy mirrors the American emphasis
on supply reduction more closely than that of most Europeans, who focus
more on reducing the harmful effects of drug use.

"But he is not a manager. His background is in sociology, criminology, the
fight against the Mafia," the American said. "There has been a lot of
unhappiness" in the ODCCP offices.

The U.N. drug-control program was founded in 1991 to fight drug production,
consumption and trafficking through a variety of means. It has a staff of
350 and an annual budget of roughly $100 million, which funds programs in
two dozen nations.

Disliked demeanor

Mr. Annan's appointment in September 1997 of Mr. Arlacchi was considered a
masterstroke at the time.

An eloquent professor-turned-politician and author with unimpeachable
credentials, Mr. Arlacchi was to invigorate the sluggish drug-control
office, generate media coverage and seduce donor nations into opening their
checkbooks.

To a large extent, he has. A 1998 special summit on drug-control issues,
for example, produced demand-reduction targets and novel ideas for making
drug profits harder to launder and conceal.

"He is, personally, unimpeachable," said one Secretariat staffer who has
known Mr. Arlacchi since 1997. "But he has the kind of demeanor that makes
people hate him. Especially those who work beneath him."

Mr. Arlacchi's increasingly erratic and secretive management style has
driven off top staff members, compromised the integrity of the agency's
recent World Drug Report and rattled the confidence of governments that
fund the program, say former staff members and diplomats.

"We have considered it prudent to freeze our contribution this year,
pending the outcome of the investigations," said Petrus Verbeek, a Dutch
envoy in New York, who added that his government had halted its $6 million
contribution this year. "There is not much disagreement in Vienna that the
accusations made against (ODCCP) are serious."

Informally disseminated correspondence obtained by The Times indicates
widespread alarm within the drug office and the Secretariat itself about
Mr. Arlacchi's increasingly consolidated management, in which midlevel
managers are forced to seek approval from Mr. Arlacchi or a handful of
advisers before making even minor decisions.

Employees have been summarily dismissed or exiled to Nigeria, and staff
have been told to abandon complex drug-eradication programs when the money
runs out.

But most of the criticism of Mr. Arlacchi concerns his management style,
not fraud or corruption.

Research coordinator Francisco Thoumi, assigned to coordinate the
production of the World Drug Report 2000 in April of that year, asked to
have his name removed from the finished product after a chapter on
synthetic drugs was removed.

"I also find it difficult to understand how a World Drug Report would not
have sections dealing with marijuana, drug legalization and the link
between illicit drugs and organized crime," he wrote in a September memo,
concluding that "there has been a monumental waste of resources" in the
preparation of the report.