Guest Post by Willis Eschenbach
The US has some of the world’s most boring looking money—it’s all green. So we have terms like “greenbacks” for dollars, and “long green”, meaning lots of money.
I offer this as context for what I found when I got to wondering what had happened to the United Nations “Green Climate Fund”. You may recall that the Green Climate Fund was set up by the UN as the only result of the recent Rio de Janeiro Cancun conference on climate idiocy. When the Fund is going full throttle, it is supposed to disburse no less than $200 billion ($200,000,000,000) dollars each and every year to the developing countries.
It turns out that, unlike those of us skeptics who are falsely accused of receiving big bucks from big oil, the “Green Climate Fund” has already raked in millions of dollars to spend on fighting the evil forces of carbon. They have a catchy slogan, viz: “The urgency and seriousness of climate change call for ambition in financing adaptation and mitigation”. Ambition in financing? What’s not to like?
Now, I’ve worked for development organizations before. The rule of thumb is that no more than 15% of the funds should go for administration, the rest needs to go to the eventual intended recipients of the largesse.
So … how many of the millions of dollars that have been “donated” by taxpayers in a variety of countries have gone to the actual poor, to aid them in their battle against the dread CO2?
Let’s start how much money we’re talking about.
Here’s a list of the countries who are both rich and improvident enough to squander their taxpayers’ money on the Green Climate Fund. It’s the usual suspects, my condolences to their citizens who are paying for this:
Australia, $513,000
Denmark, $608,000
Finland, $648,000
France, $326,000
Japan, $500,000
Germany, $1,053,000
South Korea, $2,099,000
Netherlands, $286,000
Sweden, $752,000
UK, $770,000
TOTAL, $7,555,000
The Koreans put in two megabucks … but then, they also negotiated a deal where the Green Climate Fund is headquartered in Seoul. So no tears for them, they’ll make out like bandits. Landing a UN drone hive is like landing a money machine, the local landlords will be overjoyed.
Now, of course, $7.5 million, that’s a long ways from their goal of dispersing $200 billion per year. In fact, it’s about this far from their goal:
I see this as very good news—perhaps the countries of the world have figured out that they have better things to do with their money.
Anyhow, I started all of this out with a simple question. How much of the $7.5 million went to help the people it’s supposed to help?
Here’s the not-so-simple answer. When you do this kind of thing, first you have to hand out the plum jobs. Among those are the Members of the Board. Of course, then you have to pay for their travel, and a place for them to meet, for their meetings. And it turns out that three Board Meetings cost just under a million dollars. Expensive meetings. Very expensive meetings.
Oh, can’t forget the Board Committees, Panels, and Working groups. They cost just under four hundred thousand. Total, a million three …
The next round of plum jobs are the people who make up the “Interim Secretariat”. From the name, I take it that these folks are just placeholders until we get more parasites for the real Secretariat …in any case, there’s two million in the budget to hire fifteen people. My mathematics makes that $133,000 per person per year.
So one thing is clear. The UN Personnel came to do good for the poor … and they’re doing very well indeed. A hundred and thirty grand per person? You can see why the South Koreans will be the big winners in the deal.
It gets worse. They actually hire themselves to do the work, at incredible rates. For example, from the UN FCCC they are hiring one full-time and one part-time person, plus some administrative support … for a cool half million dollars. One and a half people. Half a megabuck.
And from the UN GEF, same deal, one full-time and one 60% time person, cost, another half million.
Now, you and I might be satisfied by that. But the UN folks are realists. They know that even if all those fifteen UN drones could somehow work together, they still couldn’t organize a booze-up in a frat house. For that, they always hire consultants. You know, people who can actually do the stuff the UN employees can only talk about.
So the Green Climate Fund has three-quarters of a million bucks in the budget for consultants, to make sure something gets done.
Oh, and did I mention $200,000 per year for the Executive Director?
Now, you gotta know that you can’t have fifteen pluted bloatocrats, plus 3.1 loan-drones from other UN agencies, and three-quarters of a million dollars worth of consultants, without renting some executive-type hive to house the worker bees. Plus phones and faxes and the like, that’s a million two …
Of course, you can’t do business by email, phone, and Skype. Gotta have a travel budget … three hundred grand.
Add all that up, and the “Interim Secretariat” costs $5.3 million …
Lastly, a Trust Fund needs an Interim Trustee. The Green Climate Fund hires that service from the World Bank for just under three-quarters of a million dollars per year … one trustee …IT costs … I can hardly believe it myself, but by a strange coincidence, what it costs them to run the Green Climate Fund adds up to … well … about seven and a half million dollars.
And that means that of the $7.5 million dollars donated by taxpayers all over the world, the people in the developing countries will get …
None.
Like I said, while I bemoan the waste of resources, I see all this as good news. Any country that takes a serious look at what’s happened to the first seven plus million that was donated to the Green Climate Fund will certainly have second thoughts about giving them money.
And that’s a good thing, because if they are this profligate with the first seven and a half million … can you imagine these same pack of over-fed fools in charge the dispensing of two hundred billion dollars to the developing world? I shudder to think of the waste, corruption, bribery, blackmail, and tribalism that would be involved in that kind of an industrial-scale goat-rope. The only people who’d be happy if that happened would be corrupt developing world leaders … and of course, Swiss bankers …
w.
DATA: I do give the GCF high marks for one thing: transparency. All relevant documents are here.
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Who audits these thieves?
If this part of the project broke even, I am shocked. Willis, are you sure there is no deficit?
My Drill Sgt used another word for this sort of thing, also involving goats, that one doesn’t use in polite company. An alternative he would sometimes use substituted the word “cluster” for “goat”.
policycritic says:
October 28, 2013 at 12:36 am
So let’s say that Bill Gates puts all his money in the Bill and Melinda Gates Foundation. $56 billion. By law, he has to spend 10% of the income annually on the foundation’s projects. But the remainder is spent on the foundation’s assets, like this house, travel, meals, income for himself and his wife, children, his airplane. It’s all tax-free.
You and I praise his great generosity, as if he’s doing this for his conscience and his health.
***************************************************************************************************************
Talk about speaking out your backside. IT IS HIS MONEY, not yours or anyone else’s. HE earned it. (The foundation also gets funds from Warren Buffet.)
Here is their financial information link. http://www.gatesfoundation.org/Who-We-Are/General-Information/Financials.
While I live in the Seattle area, I have no financial link to Bill Gates, other than the software I am currently using. Which software do you use?
Since ALL the money is in believing the great AGW god – I’m tempted to switch and finally get those Petro dollars I am been accused of receiving. Tempted but I won’t.
It is simply organized crime, racketeering.
The Climate Brick Road Song, all you need to know about the scam. I love it:
Ya gotta love the Korean angle to this. What can I say about a country that had to bring in laws that make student tutorial centers shut down at midnight? They know what is important (math, sciences, etc) and work crazy hard to achieve. So we have the math-challenged UN and a very math-competent Korea working out a deal? Gee, I wonder who will get the best of it?
🙂
policycritic says:
October 28, 2013 at 12:36 am
You’re misconstruing one the provisions of the tax code. A recognized tax-exempt instutution cannot just sit on its endowment and accumulate income forever; it must actually spend money on the activities which qualify it for tax-exempt status. I am not acquanted with the details of those provisions, but I have previously seen them described as a percentage of the total endowment value, not a percentage of the endowment income.
Nothing in the tax code prevents a foundation from spending more than the minimum amount.
The efficiency of a tax-exempt organization is a separate issue. Organizations which watch this sort of thing have a guideline that anything over 33% overhead is excessive for a national charity. It’s interesting that this page lists among those with 20-30% administrative overhead (which is considered large, but not excessive):
American Red Cross keeps administrative overhead to 5% and spends over 92% of their income on actual programs. The Charity Navigator site has no rating for the Bill and Melinda Gates Foundation because:
So I have no idea how efficient they are.
I’m betting the documents won’t be available for long…
Oh the irony — the money raised matches the percentage of CO2 of the atmosphere. Lets hope, unlike the rest of AGW, it stays in line with reality.
Willis has just given them ideas. They may now plan to take 15% of 200 Billion for office costs. 🙂
Very little of this imaginary 200 Billion will ever get to those who need it. Other offices will be set up to dispense the cash locally – they will need their cut, and so will the local politicians, contract inflators etc.
Being inquisitive i decided to check out Hela Cheikhrouhou. After all, I am single and desirous of a wife who could possibly support me in a lifestyle to which I would like to become accustomed. Well, I find out that she was an investment banker with Citibank. Word to the wise: you may wish to marry an investment banker but you certainly don’t want to work for one. Do the terms; right sizing, downsizing, restructuring, ring a bell? Moreover, has one ever heard the description, ‘corporate raider’? Rest assured, that in many cases the definition of investment banker and corporate raider can be synonymous.
Then there’s her Citibank connection to investment bankering. In 2007 I lost my job for medical reasons and immediately applied for Social Security disability. Well, following his win in 2008, Barack Obama started, what I recall was called, ‘The Making Home Affordable’ program. It was in response to the popped housing bubble following the 2008 recession and was a scheme through which underwater mortgage holders could get favorable refi’s. With an $1,100/month mortgage and SS disability income I certainly qualified. A years worth of paperwork to no avail, then 2 1/2 years later, I suddenly received an unsolicited refinance from Citibank, the holder of my mortgage. Let’s see, that was October of 2012. Who was fighting for his life for re-election? Was that vote held one month later in November 2012? Coincidence? Hmm.
Then there’s our new Treasury Secretary, Jack Lew. Didn’t he run Citibank’s offshore Cayman Islands’ accounts?
So, all of this begs a question: Why in the hell did the GCF spend 200K on an ‘Executive Search Firm’ to find an Executive Director, Hela Cheikhrouhou, who was always in plain view as part of this network anyway? I’m hoping to marry into money but even I wouldn’t spend 200K for the privilege. And certain not if I had always been a suitor anyway. But, then again, with someone else’s money?
ConTrari says:
October 28, 2013 at 2:35 am
Thanks, Con. According to the Fund website, Norway has promised money, but so far none has been actually provided … so there’s hope for you yet.
w.
Sigmundb says:
October 28, 2013 at 3:33 am
If you think that they will actually be distributing $200,000,000,000 per year in say ten years, you are not serious.
And in any case, the Fund is disbursing nothing now, every penny is going for overheads, so they have no money in trust … and despite that they paid three quarters of a million for an “Interim Trustee”. He sits around and does … exactly what for that huge salary? Watches over the non-existent fund?
You want irresponsible? There it is.
Nor does the future look good, thankfully. In lieu of the chimeric two hundred billion per year, they have a million and a half in pledges and THAT’S IT at this point … and at their current burn rate, that will last one-fifth of a year.
And your business advice is that they should spend every penny they have on salaries and rent, in fact you say that not doing so would be irresponsible? Really?
My business advice would be that as with any organization, they should wait on the excess spending until they actually know that they need the personnel and the services and the office space. They should start lean, with only a few salaries and a smallish office. They should contract for specialty services sparingly, and then only as and when they are necessary.
Then they should take at least some of the seven and a half million, say half of it, and make a number of small grants with it. See what kind of problems they encounter in the process. Use that as a learning experience to guide them in the types of challenges that they will encounter on the way, and the types of people that they would need to hire to meet those challenges.
That way, they could be well on the road to doing what they were set up to do … rather than endlessly and expensively setting up to do it.
This is important because the money isn’t going to magically appear. They will have to prove themselves. The good news is that prospective donor countries will look at the waste and profligate spending and go “Sorry, got better things to do with $200 billion than blow it on parasitic rent-seekers”.
Look, Sigmund, this UN cluster-fark has been going on for two years now. Not one country has put up anything even getting close to one-hundredth of one lousy billion, and every dime that they’ve put up has been wasted. I’m willing to bet good money that the Green Climate Fund will never disburse $200 billion in a single year, and I’m overjoyed that that is the case.
Heck, I’d even bet that they won’t disburse that amount over the entire lifetime of the fund.
Regards,
w.
Oh, yeah, the basis for my business advice above?
Among much other business-related work in my life, my previous job was as the Chief Financial Officer of a very successful company with $40 million dollars in annual sales …
w.
Bob Greene says:
October 28, 2013 at 4:19 am
What’s a few measly million bucks spent by dedicated people who are out there daily fighting to save the third world and the planet? Sooner or later a few bucks will accidentally be spent on the deserving poor along with great fanfare.
_________________________________________
“Saving the third world…” Absolutely! Can’t let it disappear! One can’t hold station if everybody has the same capacity to be rich and/or privileged. That was tried by allowing the middle class to flourish, but look how they turned out: multiple cars, homes, kids to college, retirement! A correction for that by other well-intentioned pluted bloatocrats is well underway. Its a full-time job and a calling to work tirelessly and without pecuniary gain to save the natural hierarchy.
Hilary Ostrov (aka hro001) says:
October 28, 2013 at 3:43 am
Thanks, Hilary. I’ve changed the head post to reflect that. Cancun, Rio … I wonder which resort town they’ll grace next.
w.
As several people mentioned, the Gates Foundation is private, and don’t have to open their books, so we don’t know how much goes to overheads.
We have indirect information, however, from the Gates Foundation rules for how their own grant monies can be used, which are here. Inter alia they say:
“Indirect cost rates for grants and contracts are subject to the following limitations:”
NGOs: up to 15%
Schools and colleges: up to 10%
Governmental agencies, for-profit organizations: up to 0%
They also note:
w.
The UN Climate Drama Queen weighs in on the subject … from Reuters, emphasis mine:
A trillion a year? Whatever she’s drinking, I want some …
w.
Regarding the manifold challenges thankfully facing the Green Climate Fund, there’s an interesting paper here. Inter alia they discuss the problem I pointed out above—what incentives does any country have to choose this fund over one of the many, many others?
w.
Willis writes:
“…U.N. climate chief Christiana Figueres said most of the money needed to combat climate change would have to come from the private sector.”
Most of the money? Ms Figueres doesn’t understand that all of the money comes from the private sector?
I’ll have some of what she’s drinking, too.
At least when Exxon made its name change they squandered only the stockholders’ money.
For the benefit of potential respondents who may be confused; the GCF and the GFC are two different things!
I didn’t see anyone point out the other end of this transfer:
“When the Fund is going full throttle, it is supposed to disburse no less than $200 billion ($200,000,000,000) dollars each and every year to the developing countries.”
…and by “developing countries”, they mean exclusively the bank accounts of the crooks who control the governments of said countries.