This is a very odd story about how a UN agency gave over $60 million to a British businessman and his daughter. It involves a socialite party in Manhattan, a pop song—and missing houses in Goa.
The United Nations Office for Project Services (UNOPS) is one of the less glamorous agencies of the UN. It is typically hired by other agencies to do stuff like build schools and roads or take care of logistics, like delivering medical equipment. But it is one of the few UN organisations to actually make money—and lots of it.
The big plan: In 2014, Grete Faremo—the former justice minister of Norway—took over as UNOPS chief. She and UNOPS colleague Vitaly Vanshelboim cooked up a grand plan to lift the agency from obscurity: “Instead of a humdrum contracting hub, they would run a revolutionary in-house investment firm”—which gave seed money to private companies to fund projects in the developing world. UNOPS had $61 million of unspent revenue—how better to spend it?
The birth of S3i: The initiative was called Sustainable Investments in Infrastructure and Innovation, or S3i—and Vanshelboim took over as its head in 2020. Its aim: To make initial investments in infrastructure projects—which in turn would make them attractive to private investors:
“S3i has touted its ‘unique role as a co-investor and trusted partner’ that enables it to ‘channel private financing in regions and sectors that have struggled heretofore to attract capital.’ Its pitch to investors is the chance to take part in projects with positive environmental, social, and economic impact, with ‘financial returns above prevailing market rates.’”
The result would be sustainable and profitable development in less affluent parts of the world. A win-win for everyone then.
Having cooked up this grand scheme, Faremo and Vanshelboim then made a very bizarre decision. They gave all of their $61 million to a man named David Kendrick and his daughter Daisy. This fateful path to UNOPS’ eventual implosion all started at a Manhattan soiree.
The glitzy Manhattan party: It was hosted by Faremo and held at the 5,000-square-foot apartment of Gloria Starr Kins—the editor and publisher of a diplomatic society magazine that covers UN parties and events. Yes, the UN has its own Page 3. And in came a man named Paolo Zampolli—an Italian American businessman who oddly is also the ambassador of Dominica. But mainly he is a fixer whose achievements include introducing Donald Trump to Melania.
Meet David Kendrick: On this particular night, Zampolli was on a mission to help his buddy David Kendrick—who was looking for investors in his company Sustainable Housing Solutions. SHS boasted it had come up with a system to quickly build cheap, sturdy houses in the developing world. According to the New York Times:
“Mr Kendrick is a 58-year-old British native who has listed addresses in Spain, according to public records, and he is associated with more than a dozen interlocking companies in multiple countries, mostly in the world of construction. One video, from a project in Antigua in 2014, shows him saying: ‘I don’t build houses. I’m inspired to build communities.’”
Also at the party: Kendrick’s daughter Daisy—who was a student at Boston’s Northeastern University at the time. This fortuitous encounter would soon lead to a match made in fraudster heaven.
Soon after the meeting, the agency started doling out money like laddus to the Kendricks.
The WATO scam: The first beneficiary was the beti not the baap. Daisy Kendrick created a company called We Are The Oceans (WATO)—a name she stole from none other than Zampolli, btw, who later complained: “I was truly used.” Five months after the first introduction, UNOPS agreed to give WATO $5 million—a decision pushed through by Faremo without any due diligence of a company with no track record. It had not been properly incorporated—and listed directors who claim zero association with it.
Far more amusing: is what the first tranche of $3 million paid for: events, a website, ocean-themed games by the makers of Angry Birds and a pop song about the ocean recorded by the British singer Joss Stone. FYI: Stone did not charge a fee thinking it was for a UN fundraiser. As of today, the website doesn’t exist, neither do the games. But hey you can still check out the song:
And get a peek at one of the games called Island Nation Defence:
Another funny side note: Faremo gave a grand performance of the song at a UN conference in New York—with a backing band specially flown in from the UK. Sadly, the hall was mostly empty—though Faremo to this day insists “there was still a crowd in the hall.”
The much bigger scam: But the WATO dud was small change compared to the money doled out to papa Kendrick:
“Over the next two years, according to UN records, it lent $8.8 million to a company investing in a wind farm in Mexico and $15 million to another company for renewable energy projects. A further $35 million went to build housing in Antigua, Ghana, India, Kenya and Pakistan, projects overseen by a third company.”
All these companies are linked to David Kendrick. And here’s the thing. No houses have been built anywhere in the world. The reason: “SHS Holdings never secured the necessary private funding, or financial backing from local banks, to start building homes.” The wind farm couldn’t attract investors either—and UNOPS itself has withdrawn from the project.
The Goa connection: Part of the deal with SHS was the construction of 50,000 affordable homes in Goa. The proposed investment: $5 million, but the UNOPS’ records show only $2.5 million—allocated to build 100,000 homes. This money should have been channelled via SHS India—which is run by Amit Gupta and his wife Arti Jain. Now here’s what’s interesting about SHS India:
Former UN whistleblower Mahesh Kapila’s investigation into SHS India concludes:
“Thus, SHS India appears to be a shell company, created at the same time as the UNOPS/S3i housing partnership was being set up globally with SHS. A question comes to my mind: was it created just to be a conduit for UNOPS funding for India? However, there is no reference to this in its accounts. It is also odd if UNOPS was, at that earlier time, setting up to do business with a limited private company owned by a husband-and-wife team with no previous corporate history and track record of any business, let alone building houses.”
The final kicker: Now that the UN leadership has woken up to the fraud, it is scrambling to get back its money—which seems highly unlikely:
“Finally, according to a UN audit report last year, one of Mr Kendrick’s companies admitted it had used the UN’s loan 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.”
The bottomline: A fraud at this scale in the government or the corporate world would have consequences. Heads would roll and there would be a public investigation. But that’s not how it works at the UN—even though it is funded through contributions from taxpayers around the world.
Mahesh Kapila sums up the likely fallout: “In true UN fashion, nothing will happen. Vitaly [Vanshelboim] will go quietly. His contract ends soon this year. UN investigation reports are rarely public. That’s why the UN self-policing system is rotten.” His boss Grete Faremo has already announced her plans to retire this September.
The scandal made global headlines because of this New York Times investigation—which is very much worth your time if only for the colourful details. Devex first broke the story—and places it in the context of a dysfunctional UN work culture. For the India angle, check out Indian Express’ reporting—and more so Mahesh Kapila’s personal investigation into SHS India. Kapila also offers a sharp analysis of the WATO disaster—and what it tells us about UN decision making.
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