The former and current development minister have been criticised for ignoring concerns from civil servants about possible corruption and financial irregularities in the climate organisation Global Green Growth Institute (GGGI).
GGGI was established as an NGO by the South Korean government in 2010 to promote economic growth through green technology. Denmark got on board in 2011, contributing 90 million kroner over three years, and helped transform it into an international organisation.
GGGI has been put under the microscope in recent weeks following revelations that its chairman, the opposition leader Lars Løkke Rasmussen (V), flew first class 15 times for the organisation at a cost of 770,000 kroner.
Mismanaged climate organisation
GGGI's travel rules were changed this summer – before the media revelations – to no longer allow first-class travel and Rasmussen has since apologised for not changing the rules earlier in order to minimise the organisation’s overspending of taxpayer funds.
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The trouble at GGGI may run much deeper, however, after media revelations in the wake of the Rasmussen scandal indicate that Danish and South Korean civil servants have been critical of the organisation from the start.
It was the former development minister, Søren Pind (V), who secured the 90 million kroner needed to join GGGI in 2011, despite concerns his ministry outlined in a so-called ‘appraisal note’.
Concerned civil servants
In the note – which was discovered by tabloid Ekstra Bladet via a freedom of information request – Development Ministry civil servants wrote that the organisation needed to be properly investigated before Danish investment.
“We know too little about the financial administrative procedures in the GGGI to be able to assess whether the organisation would be effective or whether it follows good administrative procedures," the note read. "The salary levels and the leadership culture can also not be assessed at the current time.”
Pind did not present this note to parliament before asking for the 90 million kroner, and he denies ever seeing it.
Minister withheld report
The current development minister, Christian Friis Bach (R), was also under fire at a meeting of parliament’s Foreign Affairs Committee yesterday.
Bach took over Pind’s place on the GGGI board – a spot that was secured by the 90 million kroner donation – and stood accused of withholding a critical report about GGGI that was published by the South Korean state auditor last November.
The report examined GGGI in the first seven months of 2012 – while it was still officially a South Korean NGO – and identified a number of irregularities, including illegal payments to civil servants, inflated salaries and high housing subsidies.
READ MORE: Development minister aware of climate organisation’s questionable spending
Irregular expenses
The report – which Politiken newspaper discovered after searching Korean media – also exposed how the organisation's administration costs were running at up to 25 percent of the organisation’s budget, which is more than double what the government thought it would be when it joined the organisation.
Bach yesterday denied that any of the report’s findings actually constituted corruption, saying that therefore he had no obligation to report them to parliament.
“We have followed all the guidelines regarding who we should inform and when,” Bach said yesterday. “We have taken the South Korean report very seriously. We are following up on 27 points.”
Denies corruption
He added that while Denmark joined the organisation without much evidence that it would fulfil its lofty ambitions, the concept of ‘green growth’ was considered cutting edge at the time.
“It can be hard to remember, but in 2010 and 2011 there was not much talk about green growth in developing countries,” Bach said. “We needed to turn the agenda away from quotas and limitations and towards trade, growth and jobs. GGGI has played a central role in this.”
Neither Bach nor Pind nor Rasmussen appear to have broken any rules and their jobs remain safe.
GGGI's uncertain future
But the biggest loser in the whole affair is GGGI itself, which has yet to demonstrate any concrete results from the hundreds of millions of kroner that have been pumped into the organisation.
The media scrutiny has led Norway to announce that it has frozen its funding until the Danish government releases a report in two weeks' time about the organisation.
Parliament will use the report to decide on whether continue funding GGGI after 2013, but the parties Enhedslisten and Dansk Folkeparti have already publicly withdrawn their support.
