By Emma Farge

GENEVA (Reuters) - Four months after a U.N. agency's decision to send computer equipment to Iran and North Korea first stirred controversy, a feud has erupted between the body's director general and a suspended senior manager over misconduct allegations.

In a suit filed with a U.N. tribunal, the manager accuses Francis Gurry, the Australian head of the Geneva-based World Intellectual Property Organization, of pledging the equipment to the two sanctioned countries in exchange for their votes.

The suit also alleges Gurry earmarked posts for member states who backed him in his 2008 election and those whose votes he is trying to secure as part of his 2014 re-election bid.

WIPO is the U.N.'s richest body and is almost entirely self funded with annual revenues of over $300 million, mostly earned from patent application fees. It was created in the 1970s to promote intellectual property rights, particularly in the developing world, to further economic progress.

"The evidence suggests that the Director General has a track record of manipulating appointments to WIPO professional posts in exchange for votes," said the complainant's brief to the International Labour Organization's Administrative Tribunal (ILOAT) filed on August 20.

The lawsuit was filed by Swiss-based lawyer Matthew Parish, partner at Holman Fenwick Willan, on behalf of a senior WIPO employee, Christopher Mason. Mason contends he was unjustly suspended for corruption in May 2011, wrongly accused of an improper relationship with a contractor at a firm bidding for a WIPO contract.

Gurry denied the allegations, saying he made no deals with any country in exchange for its support. He said a document cited by the claimant, which appears to list political appointments, was fabricated.

"No job pledges were made in exchange for political support, and no such document was ever created or approved by me. I believe that any document purporting to list pledges must be a work of fabrication," he said in an emailed statement last week.

Mason's lawyer Parish said: "The commitments document has been widely circulated throughout the diplomatic community for many months and is an open secret in WIPO."

An International Labour Organization official declined to comment on the proceedings which she said were confidential.

SEEKING REVENGE OR JUSTICE?

Some diplomatic sources in New York, where the United Nations has its headquarters, dismissed Mason's suit as a publicity ploy by an employee intent on embarrassing his former boss. They said they considered it unlikely the equipment in question would breach U.N. sanctions, which are less stringent than those imposed by the United States and European Union.

U.N. sanctions primarily target Iran and North Korea's nuclear and missile programs. They also include a ban on arms exports and, in the case of North Korea, a ban on exports of luxury goods.

One diplomatic source familiar with the case said Mason may be motivated by a desire for revenge after his suspension.

Mason asked the WIPO Appeal Board to review his suspension in August 2011. The board found that the decision to suspend Mason from duty was "flawed" and recommended re-instatement and a moral injuries payment, a document of their conclusions dated March 2012 showed. Mason remains suspended, however.

Although the suit alleges that the transfers to Iran and North Korea were promised in return for their votes in Gurry's 2008 election, it contained no proof to support this claim.

The allegations of vote buying could not be independently verified by Reuters. WIPO records show that Iran and North Korea were among 83 countries on the WIPO committee that selected the director general in 2008 in a secret ballot. The Iranian and North Korean diplomatic missions in Geneva did not respond to repeated requests for comment.

Nevertheless, Mr. Mason's supporters maintain that the suit's claims are credible. These supporters include some inside the organization who declined to be named because they are not authorized to speak to the press and said they feared management retribution.

Mason's sympathizers say further that the case offers a rare glimpse into what critics say is a widespread system of political patronage within the United Nations and raises broader questions about accountability at the world body.

For instance, the head of WIPO's staff council Moncef Kateb has complained of political appointments "that contravene the most basic principles of international public service, particularly that of its independence", according to a statement in 2010 before WIPO's Coordination Committee, a body that advises the director general.

Kateb declined to comment for this story because he is not authorized to speak to the press.

"It's totally unacceptable to have this type of deals and it corrupts the system," said Hillel Neuer of U.N. Watch, a non-governmental group that monitors the United Nations. "Regrettably, it is common. Governments jostle for their own interests and a lot of unsavory dealings occur."

Officials at the U.N. press office in New York did not respond to repeated email requests for comment.

The equipment in question, including servers, firewalls and computers worth roughly $200,000, was sent to Iran and North Korea, without the knowledge of other member states, according to a statement by Esther Brimmer, U.S. assistant secretary of state, earlier this month.

The 185-member agency says the transfers were legal and form part of a technical assistance program involving more than 80 countries to help them develop their patent offices.

U.S. SCRUTINY

The transfers of equipment by WIPO to Iran and North Korea are the subject of two U.S. government probes to establish whether they represented a breach of U.N. and U.S. sanctions aimed at curbing the development of nuclear technology.

The U.S. State Department said in July it was reviewing WIPO's dealings with countries that are under sanctions after media released documents showing WIPO had been involved in shipments to Iran and North Korea. The Department's initial conclusion is that there was no breach of U.N. sanctions because the items in question did not appear to be subject to a ban. The review is ongoing.

A U.N. Security Council diplomat said it was unlikely that its sanctions committees would take any action regarding the WIPO transfers of technology to Iran and North Korea for the same reason.

The U.N. panel of experts on North Korean sanctions said in its latest annual report that it was continuing to collect information on the WIPO case in relation to North Korea.

The House of Representatives Committee on Foreign Affairs is not yet convinced the transfers were legal, suspecting they may have involved banned items, a senior Congressional official involved in the investigation said. It is also reviewing a possible breach of the United States' own sanctions as some of the equipment may have been produced by U.S. computer maker Hewlett Packard Co, the official added.

The company did not respond to a request for comment.

Lawmakers on the bi-partisan House Committee raised concern about possible WIPO retaliation against whistleblowers in a letter to U.S. Secretary of State Hillary Clinton on July 12 and in a letter to Francis Gurry on July 16, both seen by Reuters.

"I can't think of any action that has been taken against any whistleblower," Gurry told Reuters in July.

Email correspondence dated July 20 from Gurry to WIPO senior staff member James Pooley, seen by Reuters, indicated that the director general denied him permission to give evidence to the House Committee. Pooley declined to comment for this story because he is not authorized to speak to the press.

Members of the Committee said a second senior WIPO staff member was prevented from testifying at the committee hearing in a letter to Gurry dated August 1, forcing the cancellation of the session.

Asked in July about claims that witnesses were being blocked, Gurry said he would allow any "properly competent person" on the Iran and North Korea projects to testify.

Gurry said in a statement on the WIPO website on July 19 that supplies to sanctioned countries would in future need to be referred to legal counsel, which would consult the U.N. Sanctions Committee where necessary. WIPO has also commissioned an external enquiry to review the projects with Iran and North Korea, led by a Swedish police official and a U.S. attorney.

(Additional reporting by Louis Charbonneau in New York; editing by Will Waterman and Janet McBride)