Excerpts from written testimony of James Pooley delivered February 24, 2016, to the House Committee on Foreign Affairs hearing on Establishing Accountability at the World Intellectual Property Organization: Illicit Technology Transfers, Whistleblowing, and Reform.
In 2009 I was asked by the White House to join the World Intellectual Property Organization in Geneva, where I served for five years as a Deputy Director General and was the senior American official at the agency. My main job was to manage the international patent system under the Patent Cooperation Treaty.
Based on my experience I can report to you that the vast majority of the people at WIPO are competent, dedicated and deliver as required, many of them well beyond that. But this belies a profoundly serious problem with governance. The agency, in my opinion, is run by a single person who is not accountable for his behavior. He is able to rule as he does only with the tacit cooperation of member countries who are supposed to act as WIPO’s board of directors. And he is ultimately protected by an anachronistic shield of diplomatic immunity.
The current Director General, Francis Gurry, is an Australian who started working at WIPO over thirty years ago and knows the system well. During my tenure I witnessed how a lack of any effective oversight frequently led to reckless decisions, often reflecting a disregard for the legitimate interests of the U.S. There are many examples I could provide, but here I will focus on three: his gift of high-end computer equipment to North Korea, his secret agreements with Russia and China to open satellite WIPO offices, and his relentless retaliation against whistleblowers who dared to come forward with the truth.
Computers to North Korea
By March of 2012 I had been at WIPO for over two years, and had developed some understanding of Mr. Gurry’s secretive management style. But I wasn’t ready for what I learned from Miranda Brown, his senior advisor. She told me that a WIPO international wire payment had been intercepted and halted by the Bank of America because it was to reimburse the purchase and shipment to North Korea of powerful Hewlett Packard computers and a printer, as well as a state of the art electronic firewall made by SonicWall, another Silicon Valley company.
None of this equipment was necessary for the operation of the North Korean patent office. Over the entire 33 year span of its membership in WIPO, North Korea submitted a grand total of 25 international patent applications. And I knew that the computers were “dual-use” technology that could easily have been applied to telemetry calculations or other military use. I was also alarmed by the firewall, which had only one purpose: to keep North Korean citizens from gaining access to the Internet.
This project had been going on for some time but had not been revealed in WIPO’s high-level budget reporting, and so was unknown to the member states. And it had been kept secret from almost all of us on the senior management team. As a result, there had been no chance to discuss the wisdom of the activity, and no one had even considered the impact of U.N. or U.S. sanctions.
Once the bank transfer was halted, WIPO’s senior counsel and head of administration advised cancelling the project, but Mr. Gurry insisted on proceeding with it. I went to speak with him privately and urged him to reconsider. I explained that regardless of whether this was a technical violation of Security Council sanctions, there were some very practical considerations relating to other sanctions that had been imposed on North Korea by various countries, including the U.S. I told him that in the U.S., where anyone caught doing this would go to federal prison, it would be seen as unacceptable for a UN agency to be doing the same thing. This was especially true because WIPO in effect was spending the patent application fees paid by U.S. inventors to help a rogue government oppress its people. He said basically that I should shut up, that I didn’t know what I was talking about, and that he didn’t care what the U.S. thought, because WIPO was an independent agency of the UN and was not required to follow U.S. law.
Secretly Opening Satellite Offices
As time went on I learned of another secret project that Mr. Gurry was planning. This one would involve opening one or more WIPO offices in China, where some confidential patent applications would be processed outside of Geneva for the first time. Naturally, this involved serious operational risks, and so I organized a team to analyze and report to him on what could go wrong with that project. But early in 2013 he sent me a short handwritten memo directing me to “desist work” on the risk analysis.
Although I didn’t know it at the time, his secret plans for opening satellite WIPO offices also included a promise he had apparently made to Russia in advance of his first election to Director General, that WIPO would open an office in Moscow. On the merits, it made no sense to me, since Russia produces fewer
international patent applications each year than Belgium. But I learned after the fact that Mr. Gurry had negotiated secret agreements with both China and Russia, which were first announced not by WIPO but by the China Daily News and The Voice of Russia, respectively.
Retaliation Against Whistleblowers
Whistleblower protection is a core principle for the U.S., which recognizes that evidence of institutional corruption normally is only discovered when insiders are guaranteed safety in coming forward with what they know. In early 2014, I was approached by a trusted colleague for advice about an external competitive procurement for a major IT contract. Mr. Gurry had ordered the team first to add to the list of invited bids a company run by a friend of his in Australia. Then when the bids came in and that company was 40% higher than the others, he ordered that the bidding process be canceled and the contract awarded directly to his friend’s company. I asked my colleague to report what had happened, but he was not prepared to take that step. So I did, and at the same time reported on a separate and earlier incident of apparent corruption. All of the relevant information and supporting documents were contained in my Report of Misconduct by Director General, submitted to the Chair of WIPO’s relevant governing committees on April 2, 2014 (and amended on April 11).
The retaliation for my report was swift and hard. A U.S. journalist had posted an article about my complaint, along with a copy of it. (He did not get it from me; I provided it only to official channels.) Within days the chief legal officer of WIPO sent me a memo implying that I would be held liable for any resulting claims made by Mr. Gurry’s Australian friend. Even worse, he wrote to the U.S. journalist, asserting as fact that my complaint was “insulting,” “false” and “defamatory” of Mr. Gurry, and demanding that he take down from his website all relevant information and “publish an apology to the Director General.” The demand was reinforced with a threat to invoke criminal proceedings in Switzerland or “any jurisdiction to which you may be subject.” The journalist, who was then going into the hospital for an operation, took down the material and in its place posted the lawyer’s threatening notice.
There was public condemnation from the press of the international IP community, but the U.S. State Department issued no statement about it. Three weeks later the member states of WIPO gathered and re-elected Mr. Gurry by consensus to another six-year term.
Various other acts of retaliation were taken against me, and as required by WIPO’s Whistleblower policy, I notified WIPO’s Chief Ethics Officer, Avard Bishop, of what was going on, and he agreed that there was nothing he could do about it. Coincidentally, a week before I filed my complaint Mr. Bishop had approached me in confidence to share his personal distress at continuing to do what he thought was an impossible job. Although at his request he no longer reported to Mr. Gurry but instead to his Chief of Staff, most of the serious complaints to the Ethics Office involved Mr. Gurry himself, and Mr. Bishop knew that nothing could be done about them. I encouraged him to carry on, because people at least had someplace they could go and he gave them hope. Just over three months later, at the end of a week in which I understand he was told he should leave WIPO, Mr. Bishop committed suicide. Orders were immediately issued to secure his office, and even his widow was denied access to his emails. I am not aware of any investigation into these events.
In the meantime, a “preliminary investigation” had begun into the allegations contained in my report. Ultimately, two independent investigation firms were engaged, because it turned out that one of them had a conflict of interest concerning the procurement corruption allegations. Their reports were apparently finished by September 2014, because I received word that a “full investigation” was underway, something that under the rules would not happen unless the preliminary work had found good cause to believe that misconduct had occurred. However, in November that investigation was abruptly terminated. I am informed that this happened because Mr. Gurry made certain unrelated allegations against WIPO’s Director of Investigation, who was providing office support to the external investigation. I understand that the U.S. made private interventions with the Chairs of the relevant WIPO governance committees, but it took until May of 2015 for any investigation to begin again, and this time it was undertaken not by a private firm, but by OIOS, the UN’s own internal investigation group. I have heard that that investigation has been completed and the report submitted, but I have received no official confirmation.
My term at WIPO ran from December 1, 2009 to November 30, 2014. On October 8, while I still had almost two months to serve, I filed a complaint for whistleblower retaliation, in accordance with WIPO’s policy that required this to be done within six months from the first act of retaliation. It was submitted to the Acting Chief Ethics Officer, a staff member in Mr. Gurry’s office who had been given these duties in addition to his existing job. For the next six months, I exchanged a series of emails with this person, who claimed variously that he couldn’t understand what I wanted, that he needed to confer, or that it wasn’t clear what he was to do. I repeated that I wanted him to do what the rules required, and perform a preliminary evaluation of the issues raised in my complaint. Finally, on March 31, 2015, I received an official WIPO memorandum
informing me that there was nothing to be done because by that time I was no longer a WIPO employee. Perhaps needless to say, this position was not justifiable, and indeed could be used to encourage managers to fire staff once they had filed retaliation complaints.
In any event, the next month WIPO’s position turned from merely untenable to completely inconsistent, when on April 29 I received an official notice that I was being placed under investigation for an alleged false and defamatory statement made by me as part of my report that had been filed more than a year earlier. I cooperated in this investigation, which was completed externally and quickly. On June 17, I received a notice that the case against me was being closed for “insufficient evidence.”
To this day, WIPO has taken no action on the merits of my complaint for retaliation, and it has refused to provide me with access to external arbitration, as required by the Congressional Consolidated Appropriations Act of 2014.
How This Happened
What we see in these three examples is an agency suffering from a lack of effective oversight. The first incident showed a flippant disregard for U.S. sanctions against a rogue regime. The second showed secret politics run amok, contrary to transparency and common sense management of the international IP system. And the third showed a defiant self-interest in sabotaging a legitimate whistleblower complaint, contrary to a core U.S. policy.
I do not believe that the problem lies with the majority of career civil servants within the State Department. In my experience they see the issues clearly and
have been as helpful as they can. Rather, the problem is with competing geopolitical considerations that weigh on the most senior leaders and political appointees. These come in at least two types. First, there is the general concern that the U.S. “keep our powder dry” or “pick our battles,” resulting in a hesitation to take on issues that are deemed insufficiently important for the commitment of our power. And then there are specific transactions in which other countries tell us what they want us to do, saying that it’s very important to them.
It is this second kind of situation that I believe has been at work in the U.S. response to the problems at WIPO. Mr. Gurry is the highest-ranking Australian in the UN system, and at every point where it mattered, Australia made it abundantly clear to the U.S. that it wanted him to stay where he was and wanted the U.S. to back off or stand down. While there are many examples of this, all of which are presumably well known to the State Department, the most public case in point resulted from the open letter of November 21, 2013, by twelve Members of Congress to Secretary Kerry.
Lessons Learned and Recommendations
What lessons should be drawn from this experience, and what can this Committee do to improve the situation at WIPO and the other UN agencies? It’s no surprise that when you create a political structure owned by a group of sovereign countries, governance is going to be a challenge. Individual countries will try to influence decisions on budgets, programs, office locations and even individual hiring and firing of personnel. And the U.S. can’t be the self-appointed referee or decider on all of these questions. But it seems to me that there is an important role for Congress and this Committee, as elected representatives of the American people, to insist that those who act on behalf of the U.S. consistently and powerfully project its position on questions that truly matter to us, even when that means standing up to one of our friends and pointing out that they are wrong.
I don’t mean to suggest that Congress should micromanage the State Department, which is filled with some of the smartest and most dedicated professionals in the world. But those professionals could benefit from the cover that comes with a strong public expression of priorities by Congress.
I respectfully request that this Committee consider the following reforms:
First, establish an independent board to oversee the executive at WIPO, and ensure that it is beyond the power of the Director General to influence its composition.
Second, insist on better financial and operational reporting to ensure that all agency activities are identified and open to detailed inspection.
Third, establish a meaningful procedure to receive and investigate complaints of wrongdoing by agency executives, ensuring that the process will always be handled by a professional organization that is independent of the UN.
Fourth, establish and enforce a UN-wide requirement that whistleblower retaliation complaints be subject to external arbitration.
Fifth, reconsider the grant of traditional, near absolute diplomatic immunity to UN agency executives.