A United Nations purchasing official pleaded not guilty on Thursday to buying two luxury Manhattan apartments at drastically cut prices in return for steering more than $50 million in contracts to Indian firms.
Updated at 3 pm
NEW YORK: A United Nations purchasing official pleaded not guilty on Thursday to buying two luxury Manhattan apartments at drastically cut prices in return for steering more than $50 million in contracts to Indian firms.
US Magistrate Judge Douglas Eaton in federal district court ordered the UN official, Sanjay Bahel, 55, freed on a $900,000 bond. But he required Bahel to put up the apartments as security along with $75,000 in cash and an Acura sport vehicle.
Bahel had been chief of the UN commodity procurement wing and was suspended without pay by the world body 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.
Kohli also pleaded not guilty and was released on $1 million bail in Miami.
According to federal prosecutor Michael Garcia, who charged both men with bribery, Bahel in 2000 or earlier granted exceptional access to Kohli, with information on bidding.
On occasion, Bahel even canceled 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, Kohli purchased the two condominium units at the Dag Hammarskjold Towers for $1.24 million in 2003 and provided them to Bahel and his family for two years at greatly reduced rent or no rent at all.
In 2005, Kohli sold the units to Bahel for less than $1.2 million, $700,000 below market value, drawing a protest from the building's condominium board, the indictment alleges.
Both men face up to 10 years in prison if convicted.
Bahel's lawyer, Raymond Levites, argued for $500,000 bail and said that his client had complied with a request by UN investigators to cut his trip to India short to return to the United States for more questioning.
Bahel was taken into custody on Wednesday on his way to pick up his son from John F Kennedy International Airport, only because authorities thought he was going to leave the country, Levites said.
“If he didn't want to face the charges he wouldn't have come back,” Levites said.
Assistant US Attorney Jacob Buchdahl argued for a $1 million bond and said he requested that amount because the deal for the condominiums, less than two blocks from the United Nations compound in Manhattan, was a million dollar fraud.
The United Nations said in a statement on Wednesday that Secretary-General Kofi Annan had received a request from prosecutors in the US Attorney's Office for the Southern District of New York to waive Bahel's immunity and did so.
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.
But no action was taken until earlier this year.
US Ambassador John Bolton gave credit to Christopher Burnham, the UN undersecretary-general for management, and the highest ranking American in the UN secretariat.
The work of the Federal Bureau of Investigation and the prosecutors was assisted by the procurement task force set up here in the secretariat largely at the behest of Chris Burnham, Bolton told reporters.
NEW DELHI: The State-owned telecom company TCIL denied involvement in the case.
"After gaining adequate experience in UN operations, Telecommunications Consultants India Ltd had set up its own office in New York to service UNPD's orders with its own senior officer posted there," a top TCIL official said.
The official said even when TCIL was executing orders through a consultancy firm Guru Trust Investments, the responsibilities of the two companies were clearly defined.
"The arrangement with GTI clearly provided the matrix of their responsibilities and that all legal requirements in India and the UN regulations were to be fully complied with without any default," TCIL said.
The TCIL official said the PSU was considered favourably for the orders from UNPD only because the company was both technically compliant and commercially competitive.
Since 2003 all orders from UNPD were executed directly without the association of GTI, TCIL said.
"Even in the case of on-going orders obtained with the association of GTI, the arrangement with them was being progressively terminated with the lapsing or full execution of the on-going orders," the TCIL official said.
TCIL had registered with the UN Procurement Division in November 1999 so as to be able to execute orders in the field of telecom and IT for the institution.
UN operations require very quick response to the UNPD's enquiries. Hence, the company had tied up with GTI with approval of TCIL's Board in December 1999, as GTI had their offices in Washington and New York for their consultancy services in UN Staffing and Procurement, the official said.
GTI's terms under the arrangement were progressively renegotiated to TCIL's advantage to take account of increased experience of TCIL in UN operations, he said, adding that since 2003 all orders were being executed directly by TCIL without any consultancy firm's involvement.
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