RELATIONS between the United States and the United Nations seemed to be mending when Zalmay Khalilzad, a veteran of diplomacy in very hot spots (first his native Afghanistan, then Iraq), took over in April as America's envoy to the world body.

AFP Melkert: a Dutchman flies into a storm

Having guided Afghanistan towards democracy and struggled with tribal and sectarian politics in Iraq, Mr Khalilzad was viewed as a wily conciliator, epitomising a more flexible American policy: one that looked for consensus on how to deal with tricky problems. More than his abrasive predecessor, John Bolton, he accepted that the UN could do some useful things.

All the stranger, then, that the mood in American-UN relations has in recent weeks been darkening again. Behind the latest row are American complaints that the United Nations Development Programme (UNDP) broke its own rules by disbursing Western currency to North Korean citizens—and possibly abetted the Pyongyang government's military ambitions—as it administered agricultural projects worth $2m a year.

Both America and the UN proclaim identical goals: full disclosure of any malpractice that may have occurred, avoidably or otherwise; and suitable corrective action, in the event that the regime in Pyongyang lets the agency (which was forced to leave in March) resume its work.

It is not only on New York's East River that emotions are running high. An Albanian ex-manager of UNDP operations in Pyongyang, Artjon Shkurtaj, claims to have been victimised after blowing the whistle on abuses. In Tirana, where denouncers of sleaze are a rareish breed, he has been hailed as a hero. The Dutch press, meanwhile, sees an American “smear campaign” against a countryman even nearer the heart of the affair: Ad Melkert, the UNDP's second-ranking official and (significantly, many say) an ex-chairman of the World Bank's ethics committee. (In the probe which led to the downfall of Paul Wolfowitz as head of the World Bank, Mr Melkert's evidence was crucial: he said he did tell Mr Wolfowitz to move his girlfriend, Shaha Riza, out of the Bank, but denied endorsing the very sweet terms.)

American and UN officials all say they want to know what went wrong in Pyongyang, and how to correct it. The bare facts—that payments were made in hard currency, and that North Korean conditions make this hard to avoid—are not in doubt. So why don't they work together? That is a harder question. Wherever the problem lies, it does not seem to reflect bad chemistry between Mr Khalilzad and the head of the UNDP, Kemal Dervis, an eminent Turkish economist who oversaw his country's financial recovery. The two men respect each other. And till recently, the Bush administration liked the UNDP. Last year it praised the agency for being “supportive of US strategic interests in democracy, prosperity and security”.

But these days UNDP staff feel under siege. They complain that American officials have fed copious details of their agency's alleged misdeeds in North Korea to the press, to Congress and to other UN missions—while those same officials have made it hard for the UNDP to defend or correct itself, by refusing to give the agency any incriminating documents that detail what it is supposed to have done wrong. American officials say the UNDP has engaged in a cover-up; UNDP officials retort that the Americans won't tell them what sort of thing they are allegedly hiding.

If their aim was to blacken the UNDP, then leaks to American newspapers and to Republicans in Congress have had the desired effect. Headlines like “dollars for dictators” duly appeared, and Republican legislators denounced the UNDP for hiding its misdeeds and “firing” Mr Shkurtaj. David Morrison, the UNDP's spokesman, replies that Mr Shkurtaj's contract simply expired in March; Mr Shkurtaj says “Morrison doesn't know shit” and insists he could have worked until 2008 if he had not spoken up for moral rectitude.

Mr Shkurtaj says he spoke out after being shocked by the discovery of $3,500 in counterfeit American bills, sitting in the UNDP safe in Pyongyang. The UNDP says the money was handed in by an Egyptian consultant in 1995, and forgotten: an oversight, yes, but hardly an appalling scandal.

Some Europeans at the UN are unimpressed by the charge sheet against the UNDP which the American mission has circulated; their governments quietly made up a $20m grant to the UNDP which America's Congress withdrew after being briefed by Mike Wallace, the Bush administration's point man on UN reform.

Whatever lies behind them, certain items on the charge sheet look serious. American officials say they have evidence of around $15m in UN money being misused by North Korea between 2001 and 2005; this allegedly included $7m used to buy property in Britain, France and Canada. They also claim the UNDP was duped into providing computer equipment that could be used for a nuclear programme, without first seeking an export licence as had been done in 1999. UNDP officials say the most sophisticated thing they provided was crop-forecasting equipment.

To Europeans, it looks as if some Americans' main motive is personal: to punish Mr Melkert for betraying Mr Wolfowitz. But it would be sad if settling scores were the decisive factor in the outcome of a dispute where real issues are at stake, like the need to scrutinise the way all Western agencies do business with dictators.

Perhaps those two eastern sophisticates, Mr Dervis and Mr Khalilzad, should cut through the squabbling and sort the matter out. The honour in which both men are held would only grow.