USAID Conceals Information on the Misuse of Afghan Aid Funds

Last month James Rosen of Fox-News uncovered a scandal within the U.S. Agency for International Development (USAID) in Afghanistan. He reported that USAID had decided to illegally (i.e., without competitive bidding) extend an existing contract with Checchi and Company to provide “Rule of Law Stabilization Services” in Afghanistan. The scope of work included such things as the training of Afghan judges. The extension would have provided Checchi with $24,673,427.00 in Afghan aid funds.

This type of award is called a “sweetheart” contract in America because Checchi has close political ties to the politicians currently in power in Washington, D.C. While USAID later announced that it was canceling the award of the contract, it refused to fire the agency officials responsible. In fact, Assistant Secretary of State P.J. Crowley and USAID Director of Public Information Joseph A. Fredericks defended the Kabul contracting officer. Secretary Crowley argued that the judicial training was urgently needed (and that there was no time for legalities). Under the “Crowley Doctrine” any Afghanistan contract could be labeled “urgent” as there is no standard regarding when this term applies. Crowley’s baseless argument is being used to justify the corrupt practice of awarding contracts to a small group of privileged insider companies.

USAID knew that its existing judicial training contract was scheduled to run out at the end of 2009. Crowley failed to explain why USAID did not put out a request for proposals six months earlier. Secretary Crowley’s half-answers and inconsistent statements further tarnish the reputation of the United States Government. While Secretary Crowley is out in front issuing these misleading statements, Rajiv Shah, who was brought into USAID to lead and revitalize this troubled agency, remains invisible.

Kabul Press^? has taken the lead in the news media in documenting USAID misconduct and mismanagement in Afghanistan. During the past year alone, there have been half a dozen major stories. Regardless of the number of scandals, USAID never changes and never reforms. Last month USAID was named the lead agency for American relief to Haiti and Rajiv Shah was named the point man for the Obama Administration in Haiti. However, within a few days he and his agency faded from view as other agencies and officials had to step in and take over.

The original goal of this investigative report was to review three current USAID Afghan aid programs, but because there is limited transparency within USAID, our review was only partially successful. Kabul Press and the general public only have access to a small percentage of the USAID records. USAID keeps the rest from public view. Regardless, what we found is as follows:

“Junkets to Germany”

Last month USAID announced that it was paying for 18 Afghan carpet dealers (and their carpets) to fly to Hanover, Germany for a carpet exhibition which was running the week of January 16th. This all-expense-paid junket is a misuse of American tax dollars. It might make sense to lend the funds to the 18, to be repaid out of sales, but that apparently was not the case. The costs involved could run from $3,000 - $5,000 per dealer, with the total being as high as $90,000. A privileged few in Afghanistan continue to receive the bulk of the American aid. The rest of the Afghans have to be content with the table scraps.

“Chicken Farm Flop”

The current USAID-Afghanistan internet web site contains a press release boasting of the agency’s success in the Qalat district of Zabul province in training and funding poultry farmers. According to USAID data, 180 persons were trained for six months in how to operate and manage a poultry business. Upon graduation, each was provided with two male and 13 female chicks. Out of those 180 participants, only 35 decided to actually launch a business and only the “average” among them is successful. It is at this point that the available information ceases. Apparently only a percentage of these 35 farmers are commercially viable. The exact number has not been revealed by USAID. All we can say is that the success rate is something less than 20%. Under most standards this program would be halted as it does not appear to be effective, however USAID never acknowledges a failure. There appears to be such pressure to show progress in Afghanistan that USAID and the U.S. Embassy are willing to label even a program such as this, a success. USAID does not explain why 145 farmers decided not to go into the poultry business, after apparently being trained and funded to do so. Was the training deficient, were the chicks sick or diseased, is local corruption to blame? The American and Afghan public deserve more than superficial press releases. They should be given sufficient facts and information so that these programs and the officials running them can be properly evaluated.

“Let Them Eat Art”

A December 16, 2009, USAID press release trumpets the use of Afghan aid funds to support a private art school in Kabul called the Turquoise Mountain School. Kabul Press is familiar with this School and supports its effort and goals. Afghanistan’s cultural heritage has suffered greatly during the past three decades. However, the rationale for graduating more art students is mystifying in a country where the United Nation’s World Food Programme (WFP) estimates that one third of Afghans (7.4 million) do not get enough to eat every day. Providing food to the hungry is apparently not sexy to some USAID economists who prefer to fund more exotic projects which they think will look better on their performance reports. Funding a variety of small projects, such as the arts school, also permits the U.S. Embassy to generate more press releases which creates the appearance of progress.

If there was sufficient aid to fund both food programs and this school we would support funding both, but as aid is limited, the priority must be feeding the hungry. The WFP estimates that its deficit (i.e., money it needs for Afghan food aid) is $1.2 billion for the next three years. The WFP should be fully funded first.

USAID and the U.S. Embassy in Kabul do not fully disclose how they spend Afghanistan’s aid funds. As a result investigations, such as conducted by the Kabul Press, are limited to those projects which USAID elects to publicize. If these are the “trophy” programs and they are being so badly mismanaged, imagine the waste and fraud that exists within the remainder of the USAID programs which are being kept hidden from public review.

USAID Administrator Rajiv Shah must begin to open his agency up to the sunshine and to public scrutiny. Every contract needs to be publicized and a detailed explanation provided for why each contractor and consultant was selected. Administrator Shah needs to halt the awarding of contracts to politically connected insider companies and he must begin to punish those corrupt officials who refuse to act lawfully and those who protect them.

James Rosen of Fox-News reported this week that USAID stamps its no-bid contracts with the deceptive label that they were awarded “with full and open competition after exclusion of sources.” Such an intentional flouting of America’s Competition in Contracting Act should result in criminal charges by the U.S. Department of Justice, but too many times regarding U.S. government misconduct, it is the Department of Justice in name only.

Afghan aid funds must be spent in Afghanistan on the behalf of all Afghans and not stuffed into the pockets of either influential Washington, D.C. consultants or a privileged few in Kabul.