14 May 2014
John Kehoe AFR correspondent
When lawyer Francis Gurry was re-elected director-general of the World Intellectual Property Organisation last week, Foreign Affairs Minister Julie Bishop and Trade Minister Andrew Robb praised him as an “eminent Australian”.
What they didn’t mention was that Gurry, the most senior Australian in any United Nations organisation, was accused of serious misconduct over his leadership of the organisation that administers the international patent system.
A senior United States official, James Pooley, delivered a 13-page Report of Misconduct on April 2 to the international committee that oversees the Geneva-based UN agency.
The report alleges that circumstantial evidence suggests Gurry was involved in the “theft” of DNA samples and favoured a Sydney company in awarding a procurement contract.
The US and South Korean governments have called for an immediate independent investigation. Gurry says he hasn’t done anything wrong and has nothing to fear after earlier internal reviews cleared him.
“I welcome an independent evaluation of the allegations made by Mr Pooley,” Gurry told The Australian Financial Review.
“They can do as many independent evaluations, ultimately investigations, as they like, it’s fine by me.”
In 2007, Gurry received three anonymous threatening letters at his Geneva office, containing inflammatory and untruthful allegations about Gurry and his family. They were also sent to senior managers at the World Intellectual Property Organisation (WIPO) in an apparent attempt to stop him from being elected director-general.
As the agency’s deputy director-general, Gurry was about to start his campaign to be elected by 83 member countries to the organisation’s top job.
WIPO director-general is a powerful position overseeing international rules to protect inventions and brands for businesses and innovators, and resolving IP disputes outside the courts. WIPO employs about 1300 people and has an annual budget of 673 million Swiss Francs ($810 million).
Gurry says he reported the matter to Swiss police, who found fingerprints on the envelopes. The police wanted to take fingerprints of about 10 WIPO staff to identify and eliminate suspects. Initially, the outgoing WIPO director-general, Sudanese public servant Kamal Idris, refused to remove the diplomatic immunity granted to WIPO employees.
Pooley’s report alleges that in February 2008, a WIPO security guard confiscated cigarette containers, lipstick, dental floss and staplers belonging to three staff. The objects were handed over to Swiss police for DNA analysis without the knowledge or permission of employees, and before diplomatic immunity was lifted by Idris some months later.
One of the three staff who had items taken from her office, Carlotta Graffigna, later insisted on seeing her police investigation file which revealed the so-called “theft” of her DNA samples by WIPO security.
Pooley’s report alleges there is “strong circumstantial evidence” Gurry set up the illegal seizure and that WIPO’s internal evaluation – which did not proceed to a formal investigation – was tainted by not being fully independent. Gurry, who at the time was deputy director-general and soon to take over as director-general in October 2008, vehemently denies any role in taking the DNA. “I was the victim of anonymous highly defamatory letters which were highly offensive and threatening,” he says.
“The security people did not report to me and I had no power over them. I never instructed the security people to do anything.”
Pooley is not alone in raising concerns.
Senior Australian diplomat Miranda Brown, who worked as Gurry’s special adviser between June 2011 and November 2012, fell out with her boss after making representations on behalf of aggrieved staff about the handling of the DNA saga.
After Graffigna complained and asked for an investigation, Gurry later tried to relocate her to Singapore, Pooley and Brown allege.
Brown filed her complaint with WIPO’s internal auditor, Thierry Rajaobelina, after her contract was not renewed and just before she departed the agency.
The auditor’s initial evaluation found no evidence of wrongdoing by Gurry and did not proceed to an investigation.
Independence of reviews questioned
In February this year, Brown filed a new claim at the International Labour Organisation, making numerous allegations of misconduct. Gurry has dismissed some of the claims as “trivial” and believes Brown is a disgruntled former employee. In her departure letter to Gurry, Brown said she would have preferred to stay at WIPO and “for reasons that need not be recited here, you have made that impossible”.
Brown now works for the UN High Commissioner for Human Rights, on secondment from the Department of Foreign Affairs and Trade. Through her lawyer, she declined to comment.
Pooley and Brown have raised questions about the independence of the earlier internal reviews that cleared Gurry. WIPO’s internal auditor, Rajaobelina, has a dual reporting line to Gurry (for administrative matters) and to the Independent Audit Oversight Committee (for reviews).
A letter written by Singapore’s WIPO ambassador, Kwok Fook Seng, on April 25 this year in response to Pooley’s claims said they were inaccurate and that WIPO’s internal auditor had acted “by the book”.
The other main allegation in Pooley’s report is that Gurry broke procurement rules on a tender for an IT security contract. Gurry last year directed procurement staff to consider a company belonging to an Australian associate, Pooley’s report claims.
Sources said the tender was worth between about 50,000 and 100,000 Swiss Francs, relatively small by the standards of WIPO, which procures about 30 million Swiss Francs worth of services each year.
The Sydney IT firm
The Sydney technology company – named in Pooley’s report and seen by the Financial Review – came in about 20,000 Swiss Francs or 40 per cent more than the next highest offer, prompting the procurement committee to initially recommend another firm. Gurry, who also chaired the IT board, ordered more weight to be given to technical expertise and less to price.
“In our IT area, quality is fundamental to what we seek, not at any cost, but cost is not the only factor,” Gurry says.
Gurry openly admits he has known the owner of the Sydney firm since the 1990s and at one stage they were “professional antagonists” on opposite sides of an industry debate. They both attended a leadership conference in Queensland last August, around the time Gurry directed the procurement team to invite the company to tender.
Gurry says he added other firms to the tender, including a company that arranged security for the Vatican. For several years he pushed internally for WIPO to broaden the list of firms it engaged on tenders, he says. “The allegations are unsubstantiated and there is no truth to them,” Gurry says. “We get along fine, but the idea that [name withheld] and I are friends is just nonsense.”
A lawyer representing the Sydney company said in an email to the Financial Review that his client had “no relationship” with Gurry and “the only link apparently relied upon by Mr Pooley to support his allegation of corrupt conduct is that they are both Australian-born” .
There is a history of disagreements between Gurry and Pooley. Pooley, the former Silicon Valley IP lawyer, appointed by the Obama administration as deputy director-general of WIPO in 2009, has previously put Gurry under the microscope.
Shipment to Iran, North Korea
Gurry was probed by the powerful US House Foreign Affairs Committee in 2012 about his oversight of the shipment of US-manufactured technology, made by Hewlett Packard and SonicWALL, to North Korea and Iran. The transfers were part of WIPO’s technical assistance program to expand the countries’ patent offices.
Congress was alerted by Pooley, who is well connected to several US politicians, that the transfer of computer equipment to the blacklisted rogue states breached US law.
WIPO is not bound by US law and it was cleared of breaching UN sanctions by an independent investigation.
However, the review did note “we simply cannot fathom how WIPO could have convinced itself that most member states would support the delivery of equipment to countries whose behaviour was so egregious it forced the international community to impose embargoes”.
Even after Gurry was cleared of breaching UN sanctions, the revelations on North Korea and Iran were leaked in 2012 to Fox News in the US. Fox mounted a concerted campaign against Gurry, claiming the technology could potentially be used to advance nuclear and missile programs.
Democrat House representative Zoe Lofgren, who knows Pooley from his legal career in Silicon Valley, went after Gurry. She wrote letters to Australia’s ambassador to the US, Kim Beazley, about her concerns.
Beazley defends Gurry
In response, on November 26 last year, Beazley described the computers shipped to North Korea and Iran as “standard office equipment”, including workstations, laptops, printers, scanners and servers, designed to aid the implementation of WIPO programs. Beazley also dismissed the DNA allegations, saying they had resurfaced to hurt Gurry’s chances of being re-elected director-general.
“The notion that Mr Gurry is involved in a scheme to illegally acquire DNA samples from WIPO employees is deeply alarming. Fortunately it isn’t true,” Beazley wrote. “Events have been distorted, exaggerated, misrepresented and misconstrued to undermine Dr Gurry’s campaign. I think you can see Australia’s confidence that there is no ‘evidence of criminal wrongdoing’ is soundly based.”
The disputes have been characterised by some sources in Geneva and Washington as an internal power struggle between Gurry and Pooley, who has referred to himself as a “whistleblower” on behalf of colleagues.
Pooley and Gurry hail from very different backgrounds.
Gurry, 62, has worked at WIPO since 1985, after brief stints as a commercial lawyer and teaching at Melbourne University. He has a PhD from Cambridge University, is articulate and can be very “charming”, one Geneva source says.
Pooley, 65, was a private sector law firm partner hired by technology companies on trade secret, copyright and trademark litigation matters. In his 37-year private sector career, He once represented the founder of Apple, Steve Jobs. He never worked in the public sector until joining WIPO in Geneva in 2009 after campaigning for Obama to become president.
Gurry was first elected WIPO director general in 2008, narrowly winning a secret ballot 42-41, apparently attracting support from a large number of less developed nations. He succeeded Idris after it emerged the former head had repeatedly misstated his age on official documents for many years. Idris claimed to have been born in 1945, but later admitted in 2006 to being born in 1954, blaming a typing error.
Two different men
During his six years in the top job, Gurry has championed the inclusion of developing countries at WIPO, sealed IP treaties with China and Morocco and helped provide equipment to North Korea, Iran and many other developing nations.
Gurry’s approach has not always endeared him to the major developed countries, which have long been concerned that less developed markets are ripping off their IP in the technology, pharmaceuticals and entertainment sectors.
Some supporters of Gurry have questioned Pooley’s motives. His complaint report was filed confidentially to the chairmen overseeing WIPO on April 2 after Gurry was nominated by consensus on March 6, 2014, for a second six-year term, but before member states confirmed the appointment last week.
A supporter of Gurry’s says Pooley had “been at war” with his boss and that Pooley may have been positioning himself for Gurry’s job.
Congresswoman Lofgren, to whose election campaign fund Pooley contributed $US2300 in 2008, has been supportive of Pooley’s allegations, raising them in Congress. A letter written by Lofgren to Beazley last November and copied to 11 Congress colleagues said America had no closer ally than Australia but “the interests of the United States and its large community of innovators cannot be served well with Mr Gurry continuing as director-general of WIPO”.
(Political contributions are not uncommon in America and are an accepted means of gaining access to politicians).
The US State Department last year considered proposing Pooley as a candidate to run against Gurry, in the 2014 WIPO election, although a US source says he did not actively seek the role. Senior people in the Australian government made it known to the US administration that it would not look favourably upon America putting forward a candidate against an incumbent from its close geopolitical ally.
Pooley’s complaint report says his five-year term ends on November 30, 2014, and he will return to the private sector.
“My main interest in making this report is to uphold the oath I took to the United Nations, and to comply with the obligation of all staff to report misconduct,” Pooley says.
Joff Wild, who runs respected global IP publication Intellectual Asset Magazine, says Gurry has made hugely important contributions to the development of the global IP infrastructure. “In the ideal world, that’s what his time in charge of WIPO should be remembered for,” Wild says. “I, for one, certainly hope that this is how it turns out.”
“So let’s see that investigation get under way as quickly as possible.”
Despite the lingering controversies, Gurry was comfortably recently returned as director-general by a majority of 46 votes, compared with a combined 37 for the three other candidates from Nigeria, Panama and Astonia.
After Gurry was re-elected, the United States Mission in Geneva said in a public statement that it looked forward to working closely with Gurry, but supported Pooley’s call for an investigation. “The United States is deeply committed to the principles of transparency and accountability, including whistleblower protections, in all international organisations,” the statement said.
“We strongly support the call made in the General Assembly meeting today for a full, independent, and external investigation of the entirety of the complaint filed by a WIPO deputy director-general. We expect this investigation to be implemented promptly and executed expeditiously.”
The statement had the support of the US State Department, two sources said.
Some people in the Australian camp believe the State Department has acted in response to intense political pressure from members of Congress, in the midst of a heated domestic political environment in the US.
The Republic of Korea congratulated Gurry last week and said a “transparent and independent investigation” was needed.
Pooley’s allegations have been referred to the Independent Audit and Oversight Committee for a “preliminary evaluation”. It will meet on May 19 and determine whether to elevate the matter to a formal investigation, as the US and Korea requested. Brown’s case before the International Labour Organisation is likely to take some years to process. The complaint was earlier dismissed by the internal WIPO Appeal Board.
For now, the Australian government is sticking loyally by its man.
“This appointment recognises Gurry’s achievements and demonstrates confidence in his capacity to serve the interests of WIPO’s diverse membership,” Ministers Bishop and Robb said in a joint statement last week.
In his acceptance speech on Thursday to the WIPO General Assembly, Gurry thanked Bishop, Robb and member states for their support.
“Ambassadors and their colleagues have been extremely generous with their time and availability, very indulgent of my failings and shortcomings and always willing to engage and to assist in overcoming difficulties,” Gurry said.
In a statement the Department of Foreign Affairs and Trade said: “The Australian government is aware of Mr Pooley’s complaint. Most of the claims made in the complaint have been subject to scrutiny prior to Dr Gurry’s reappointment as director-general, with the exception of the procurement allegation.
A process, established under WIPO rules, is under way to assess the complaint,” adding the process was independent of the director-general and WIPO secretariat.
“It would be inappropriate for Australia to prejudge the outcome of this process. Australia has supported the proper investigation of allegations of misconduct and supports accountability and transparency in all international organisations.”
The Australian Financial Review