United Nations probes British father and daughter who received $61m for charitable projects – including house building in developing countries and producing a song Joss Stone sang– after diplomats met them at a New York party
Investigators at the United Nations are probing the organization’s dealings with a British father and daughter who received $61 million for charitable projects after diplomats met them at a party in New York.
The UN Office for Project Services (UNOPS) said internal investigators are reviewing its links to British businessman David Kendrick, 58, the founder of Sustainable Housing Solutions (SHS), after he was given $58.8 million for projects including building houses in developing countries.
The agency’s relationship with his daughter, Daisy Kendrick, 27, and her company We Are The Oceans (WATO) are also under investigation after she was given $3 million to produce a pop song performed by singer Joss Stone, who was not paid and has said she thought it was a fundraising project.
The UN agency also gave Ms Kendrick, who interned at the UN after graduating Northeastern University in Boston, the $3 million to create a video game and a website raising awareness about environmental threats to oceans, reports the New York Times.
To make matters worse for the UN, the organization’s auditors found that Mr Kendrick’s businesses have failed to pay back more than $22 million, money which is meant for aid, and the repayments are overdue.
Mr Kendrick and his daughter were introduced to UN officials at a party in the Upper East Side apartment of magazine editor Gloria Starr Kins in 2015 by Paulo Zampolli, an Italian-born businessman who claims he introduced former US President Donald Trump to his third wife Melanie. Pictured: Grete Faremo, Vitaly Vanshelboim and Paolo Zampolli attend an event in 2016 in New York City
Mr Kendrick and his daughter were introduced to UN officials at a party in the Upper East Side apartment of magazine editor Gloria Starr Kins in 2015 by Paulo Zampolli, an Italian-born businessman who claims he introduced former US President Donald Trump to his third wife Melanie.
It was after this party, hosted by UNOPS head Grete Faremo, that the agency loaned $58.8 million – the agency’s entire investment portfolio at the time – to three companies appearing to be connected to Mr Kendrick between 2018 and 2020 under a UN scheme called S31.
These investments included lending $8.8million to a business investing in a wind farm in Mexico, $35 million to building housing in developing countries and $15million to a company for renewable energy projects.
But auditors, who raised alarms that the UN agency had concentrated its loans on one person, wrote in a report that Mr Kendrick’s companies had admitted to using the UN’s loans to pay off other loans.
‘A large portion of the $15 million deposit had been used to discharge its pre-existing debts and liabilities,’ the auditors report said.
Mr Kendrick’s companies, which had agreed to return the millions lent by the UN for the sustainable energy projects, were therefore not able follow through and auditors said they expected the UN agency to lose $22 million.
UNOPS said last month that ‘funds are at risk, but to date, no funds have been lost’. It said it would ‘pursue all available legal remedies to protect its operations and assets, including the recovery of outstanding payments’.
But former UN officials said that the ties reveal the issues with top UN leaders who hold massive budgets with little oversight.
‘What do you call it when you believe you’re God?’ Jonas Svensson, a former employee of UNOPS told the newspaper. ‘Ambition and stupidity. All the way into the wall.’
Chris Lu, the U.S. ambassador to the U.N. for management and reform, tweeted: ‘At a minimum, we believe that UNOPS leadership missed clear warning signals, failed to provide necessary oversight, and took unacceptable risks with funds.’
UN spokesperson Stephane Dujarric said that António Guterres, the U.N. secretary general, (pictured) would ‘take appropriate action on the findings of the investigation report once it has been reviewed and analyzed.
Since the ties between the Kendrick father and daughter duo and the UN Office for Project Services came to light, Grete Faremo, the top official at the agency, said she would step down from her position.
‘Without knowing the full story, it happened on my watch,’ Faremo wrote in a letter to employees that was obtained by the New York Times. ‘I acknowledge my responsibility and have decided to step down.’
Faremo, a former justice minister of Norway, earlier told the newspaper: ‘I want to get to the bottom of what has happened, and rigorous investigative processes are under way. We know this much now: failures have occurred.’
Vitaly Vanshelboim, chief executive of UNOPS, has been placed on administrative leave because of the investigation, the agency said.
UN spokesperson Stephane Dujarric said that António Guterres, the U.N. secretary general, would ‘take appropriate action on the findings of the investigation report once it has been reviewed and analyzed.’
Gloria Starr Kins, and Paolo Zampolli attend We Are The Oceans (Wato) And Save Our Shark Coalition in New York City in 2016
Paulo Zampolli, who introduced Mr Kendrick to UN officials at the New York party, has his own U.N.-approved conservation group called We Are the Oceans, or WATO.
Zampolli, who serves an an ambassador for Dominica, said he was never paid a finder’s fee after introducing Mr Kendrick and his daughter to UN officials.
He said he regretted introducing the father and daughter to officials because Ms Kendrick decided to name her group We Are The Oceans as well.
‘I was truly used,’ Zampolli told the New York Times.
UNOPS has declined to explain why it chose to invest $3million in Ms Kendrick’s organisation, which at the time was only a year old and had not obtained approval from the Internal Revenue Service for a tax exemption as a charity.
The London law firm Carter-Ruck, which is representing Mr Kendrick and his daughter Ms Kendrick, said their clients had done nothing wrong.
‘Our clients strongly believe in the projects they are running and in their ability to deliver these, and regret the fact that they appear to have become, through no fault of their own, the targets of a campaign seeking to harm their reputations,’ the law firm told the newspaper.
Ms Kendrick’s lawyers said her organisation had ‘delivered on all of its promises to the UN’ and that ‘the rates paid to all Wato’s participants were at all times legitimate and fair’.
They added: ‘Unops awarded a grant to Wato through an entirely legitimate process. Wato set out their proposal to Unops for music, gaming and social media campaigns for the oceans, which were considered and approved by Unops.
‘All of Wato’s activities, budgets and projects were also pre-approved by Unops, and the rates paid to all Wato’s participants were at all times legitimate and fair.’
The lawyers added that the pandemic had negatively impacted some S3I projects, adding: ‘SHS Holdings is in a restructuring process with Unops regarding its loans and this process is critical to ensure the commercial viability of all the projects SHS Holdings is committed to.’