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USAID and NGO transparency: When in doubt, hide the data

by Till Bruckner, PhD candidate at the University of Bristol and former Transparency International Georgia aid monitoring coordinator

In my last blog post on this website, I claimed that some NGOs had instructed USAID to hide part or all of their project budgets in a FOIA response, and praised others for their openness. Aid Watch subsequently contacted all NGOs mentioned in the piece for comments.

In its response, World Vision denied ever having asked USAID to withhold budgetary information:

World Vision has checked thoroughly with all of its relevant offices and found no record of having received notification of this FOIA request by USAID or any evidence that WV asked USAID to redact information in the documents requested of USAID by Bruckner. After contacting USAID officials, we learned that the redaction was made independently by the USAID FOIA office, not at the request of WV.

Referring to a letter from the donor agency, World Vision correctly pointed out that in the letter, “USAID did not state or imply that World Vision asked that this information be withheld.”

Why had I pointed the finger at World Vision, rather than at USAID? Half a year after filing my FOIA, I had received an email from USAID stating that:

From the nature of your request, we anticipate the need to send a “submitter notification” to the companies awarded the contracts.  We notify them that we received a FOIA request for their proposals. We will afford them an opportunity to provide their arguments concerning the release or withholding of the proposal.  We will contact you when we send out the notifications.

USAID never did contact me again on this matter. When it finally provided the budgets a further eight months down the line, the type and amount of information withheld varied dramatically from one budget to the next, suggesting that the response was not the result of a process centrally managed by USAID in isolation.

Asked to clarify these apparent inconsistencies, USAID confirmed in an email that:

Yes, we did receive differing responses from the submitters. As these were grants, we had to obtain the submitters’ recommendations. Section 1 of Executive Order 12600 requires that we give submitters of confidential commercial information the opportunity to address how the disclosure of their information could reasonably be expected to cause substantial competitive harm.

This is astounding. USAID claims that it contacted its grantees, and now one of the NGOs insists that it was never contacted by its donor. Did USAID fail to contact some or all of its contractors, possibly breaching the law in the process? Did USAID go ahead and black out World Vision’s budgets on its own initiative?

Of the eight NGOs contacted by Aid Watch, only World Vision and CNFA have responded so far. CNFA’s response confirms that it regards its detailed project budgets as confidential proprietary information whose release might cause it competitive harm. However, CNFA declined to comment on a follow-up question which asked specifically whether it had been contacted by USAID, leaving open the possibility that USAID may have acted in line with its grantee’s interests without consulting CNFA in the process.

Did UMCOR, Mercy Corps and AIHA really agree to release their full project budgets in the Republic of Georgia, as I had assumed, or did USAID just throw open their books without consulting them? Did Save the Children and CARE truly instruct USAID to withhold select pieces of budgetary information? Did I mistakenly malign Counterpart International for opacity when the real culprit was USAID? Who received submitter notifications, and who did not?

Yesterday, Aid Watch asked USAID to confirm that they had indeed contacted each NGO. They replied the same day with this statement:

As a matter of standard operating procedure, USAID notified in writing all the organizations whose budgets were sought under the FOIA request. When we did not receive a response from some of the organizations, the FOIA office followed the regular process regarding redactions. USAID redacts trade, commercial, financial, and personally identifying information in order to protect USAID’s and external organizations’ business and personal data.

For more information, please see http://www.usaid.gov/about/foia/foireg.htm

So the default position is non-disclosure: USAID is legally bound to contact each NGO, but if USAID’s message gets lost, or if the NGO decides not to respond for any reason, then USAID redacts their data for them. Incentives are thus set up for aid agencies NOT to respond, and for USAID NOT to disclose.

I have begun to doubt that we will hear back from any of the other NGOs that Aid Watch has emailed. What incentives are there for NGOs to take part in an open dialogue, when their own funder sets such low standards for transparency and accountability?

Related posts:

The accidental NGO and USAID transparency test
Till Bruckner Responds to Critics on Meaningful Transparency
NGO Response: CNFA Reaffirms Commitment to Transparency
World Vision responds on transparency

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5 Comments

  1. Nick Gogerty wrote:

    Till,

    I am glad you are doing this kind of work. I wish there were a crowdsourcing initiative or something similar that would allow people to pursue similar requests and track things. A little daylight does a lot of good in these murky waters.

    Posted August 24, 2010 at 8:56 am | Permalink
  2. Nicolas wrote:

    Am I wrong to believe this emphasises the emptiness and toothlessness of all the transparency initiatives, grand aid effectiveness meetings, agreements to work towards more aid coordination, etc that we have seen in recent years? Is it all just talk with lofty ambitions, vague benchmarks and no individual accountability? When push comes to shove, it seems like the organisations handling aid money are not even able or willing to provide the most basic information about their core business (which is: spending money). How difficult is it to come up with a coherent set of rules for all players to abide by, and to make that stick? I’m talking about simple things: NGOs making data available about where their funding comes from and where/how it is spent, official donors publishing data on where, when, and for what aid is used. How can we even begin to assess aid’s effectiveness if we don’t know who is doing what, where and when…

    Posted August 24, 2010 at 9:45 am | Permalink
  3. Mike Tierney wrote:

    Hi Nick,

    My colleagues and I at AidData have been thinking about how to operationalize a crowd-sourcing initiative where the project is the unit of analysis. There may be lots of other ways to do this kind of thing, but here is one idea that we articulated in a blog post a few days ago:

    http://blog.aiddata.org/2010/08/leveraging-wisdom-of-crowds-enhanced.html

    We would appreciate any ideas you might have about how to improve this concept.

    Posted August 24, 2010 at 7:42 pm | Permalink
  4. Jeffrey K. Silverman wrote:

    Sleeping in the same bed with AEI makes for strange bedfellows for a whistle blower against USAID abuses

    The underlying motivations are not crystal clear, why a lone scholar like Till Bruckner, accruing a long list of enemies who label him a whistle blower with an axe to grind against USAID lack of even basic transparency. Till Bruckner, whose name cannot pull up much at all on Google unrelated to this new polemic emerging circa April 2010, sprang out of nowhere to bemoan the lack of transparency that may be hiding corruption in USAID and their nongovernmental organization affiliates, including their religious aid networks, would pick the American Enterprise Institute’s magazine, THE AMERICAN, to lead the armada as a flagship into the murky waters of investigating the similarties between World Food Program and USAID, which may itself today have grown to be a bloated behemoth of intelligence affiliates.

    http://www.american.com/archive/2010/april/how-corrupt-is-the-world-food-program/?searchterm=till

    The AEI is well known and notorious among its detractors for being the birthplace of hard core neo convervatism, which has been a frightful infestation of American democratic ideals and foreign policy for over 20 years now.

    You may be thinking by now that I am a blind supporter of USAID and the black clouds of legitimate and illegitimate NGOs swarming around USAID and the Republic of Georgia like flies. On the contrary, I have been a long time investigative reporter dredging up such information for public disclosure for a few decades here in the Caucasus.

    The author’s motivations portrayed by some as purely PhD research is a mouthful to chew on and not choke. One can simply Google his mentors, allies, and affiliations and see that there is enough envy and jealousy of a vast rival power network to make an overflowing Georgian ‘supra’ table seem meager. USAID now eclipses the former glory of AEI and their tangled web of patronages.

    Something akin to the legendary rivalry between the Templars and the Hospitallers during the Crusades is going on here, and I don’t think i am the only muckracking hillbilly in these here hills that has noticed so effortlessly, do you?

    And I question if the poor and needy of our planet, and their even more unfortunate brothers and sisters living under bloody repression, who truly need humanitarian aid and development assistance, would be impressed by this infighting and feuding squabble between two juggernauts who in the end will lay out very little for the poor themselves, and leave the recipients questioning the sincerity of the benefits coming from “the American People”. Remember Katrina and Ward 9? Charity starts at home, as well as transparency.

    I have to give Mr. Bruckner credit for coining one of the pithiest sentences i have read in a very long time, “Secrecy and charity make for strange bedfellows.”

    http://aidwatchers.com/2010/05/secret-ngo-budgets-publish-what-you-spend/

    I absolutely agree, and whistle blowing against abuses of U.S. monies exemplified by USAID projects, makes strange bedfellows for AEI.

    Jeffrey Silverman,
    Freelance journalist and former Editor of Georgian Times, 18 years resident of Georgia, who has investigated corruption within USAID in Georgia, Azerbaijan, and Afghanistan, in the last ten years. MS University of Kentucky

    Posted August 29, 2010 at 2:52 pm | Permalink
  5. Rats Everywhere, can you fill in the gaps?
    Intercepted correspondence from USAID, OIG

    RE: Everyone looks bad, so everyone looks the other way.’

    “Can you please advise a telephone number and let me know of a few convenient times, which I may try to contact you in reference to the information about USAID programs and activities?”

    Thank you,
    KC Smith
    Special Agent
    USAID Europe & Eurasia
    RIG Frankfurt, Germany
    OFFICE: 49-69-7535-7845
    FAX: 49-69-7535-7841
    SmithKC2@state.gov

    1) A source under contract to USAID, as employed business development expert, Mr. X, who may be the source on ADCI corruption with good access states the following: ACDI started a rural credit SME program funded by USAID about 2001 in Azerbaijan. It was the largest of the USAID funded credit projects. About $4 million was in loans. They made loans to rural enterprises, farmers, etc. They had offices in most areas of the country (Lenkoran, Imishli, Ganja, etc.) ACDI/VOCA, an international development organization dedicated to empowering people worldwide.4

    2) However, regardless if this source will be forthcoming, he can give more information about the basis of Azerbaijan Business Assistance and Development Program (ABAD), and how things were flawed (how there was bid rigging, and how it was the contract was awarded to a group with weak organizational credentials in business development at best. You just need to look into how the project was solicited, and it may not have been a RFP, and the winner did not win in full and open competition, and thus USAID participated in corruption and did not acquire the services of the most capable technical assistance provider.

    The ACDI system in Azerbaijan was established to provide local control and a local company was set up to run all the local offices. The company was called CreditAgro This system was unlike that in Georgia, where credit associations were formed. This was more centralized, with offices reporting to a central office in Baku. However, the same propensity to hand the operation over to corrupt locals was observed. In this case, ACDI/VOCA hired a man called Eldar Jafarov, initially as credit officer, but he eventually became head of CreditAgro. Soon problems developed between Eldar and the ACDI/VOCA Chief of Party and other expatriates, who considered that Eldar was taking too much power and hiring cronies for every position in CreditAgro. Despite numerous attempts by ACDI/VOCA expatriate staff to remove Eldar Jafarov these attempts were consistently blocked by ACDIVOCA Washington. An internal audit proved many allegations against Eldar. Still, ACDI/VOCA refused to fire Eldar or change human resource personnel practices.
    In 2005, however, enough was enough and ACDI decided to fire Eldar. Then Eldar told all managers of Creditagro to go on strike in his support. As a result, ACDI/VOCA Washington completely caved in (ACDI’s VP Dennis DeSantis), and gave the position back to Eldar. The fallout was immediate and the ACDI/VOCA Country Director resigned in disgust, [check out this source] and Eldar, now much more powerful, personally fired the other principal expatriate himself, cleaning up loose ends. The impression was that Creditagro was now a private enterprise of Eldar.

    The United States Agency for International Development, USAID was well aware of this scandal but decided to turn a blind eye, and often sided with Eldar in subsequent criticism of ACDI/VOCA. However, they still made a grant of the USAID funds (about $4 million) to ACDI/VOCA/Credit Agro. ACDI continues to be the owner of CreditAgro, yet it forced into a curious position where they are telling all potential investors and lenders to stay clear of CreditAgro because of the above-mentioned shenanigans, and not to taint their reputation more than it is already.

    It was obvious that ACDI/VOCA had really mishandled the project, setting up a private company serving one individual. Still, even though USAID was for a very long time aware of the problems, never penalized ACDI/VOCA, but instead, in 2005, rewarded ACDI/VOCA with a major rural enterprise development project in Azerbaijan, which is now employing the old second in command fired by Eldar.

    Successful Track Record
    This is not the first incidence of ACDI/VOCA incompetence in running credit projects. The Georgia ACDI rural credit project was a well-known complete disaster, as local credit associations created by ADCI and funded fully by USAID and USDA were taken over by the local managers selected by ACDI/VOCA and turned into a private money making racket with accountability to none. A later USAID project to assist these entities found out later that the managers had illegally fleeced the associations of most of their funds. Most of the funds disappeared as “dividends” to the local project managers, who normally had been selected due to their power within the local community (for example, some of them were heads of the local tax inspectorate and well known bandits, including members of state security, and not because of any credit or relevant knowledge.

    Professional skills are not the decisive factor. The result is that senior local bureaucrats, politicians, and businessmen gain positions. This was part of the problem with the credit unions set up by ACDI/VOCA in 1993 and funded by the US government.

    ACDI/VOCA hired these people ostensibly because their muscle could be used to guarantee repayment from poorer farmers. Even as far back as 1998 the then Agriculture Deputy Minister Nugzar Duchidze had remarked that ACDI/VOCA’s setup was a “rich farmer’s club designed to help these well connected individuals. The Georgia operation was obviously even worse than the Azerbaijan setup. Still, USAID encouraged the Azerbaijan operation was to be patterned after Georgia by the USAID program officers who controlled aid programs in both countries.

    One International TV network producer wrote an email dealing with accountability in international organizations ‘Ahh – there is the problem. Nobody is interested in corruption. Western agencies would be very embarrassed to be seen dealing with a bunch of second-rate crooks. After all, you must remember that it looks bad if your programme which is funded by the US or Europe has no correct oversight. Everyone looks bad, so everyone looks the other way.’

    Nonetheless, it does appear that the US government and the Bush Administration were a bit concerned about the “total” lack of accountability NGOs (including a host of international organizations) have when receiving grants and cooperative agreements from USAID. These NGOs can do what they want, and are “assumed” to be doing well, because they are “fellow travelers” with USAID. They all claim to be helping in improving the livelihood of local farmers, small business, etc.

    No noise was made of this incredible debacle of ACDI/VOCA in Georgia because none other than Rusty Schultz a very close friend of Gerry Anderson, high-ranking USAID official in Tbilisi, ran the ACDI/VOCA project in Georgia. Many sources (including a those close to a Chemonics run project of assistance to credit organizations) confirm that Anderson did everything in his power to protect Rusty and his corrupted minions. And finally because of their disastrous management, Jim Holderbaum, ACDI Country manager was lost as what to do. Many claim that those working in NGOs only to come to Georgia in order to get laid regularly, something Rusty was good at arranging. Then visiting experts had access to the Rusty castle where they could be entertained, and the rest is history.

    Gerry Anderson, USAID Georgia, directly instructed even those visiting experts that were involved in proposal writing when he was in Georgia in mid-2001 that they needed to hook up with ACDI. Now that is interesting and what authority would Gerry have in making such recommendations? He was proposing to work with a specific group and the instructions were outlined in such a way in terms of value chains, and that the only clear choice was that ACDI as the company that they he needed to work with. A month or so later on other business, same instructions were provided to visiting experts to make sure that there was a connection with ACDI.

    It should also be noted that ACDI/VOCA has a policy of putting on its payrolls mainly old USAID hands. That is why ACDI/VOCA is a favorite in all parts of USAID’s world. Others need not apply. Financially ACDI/VOCA is a disaster, but it is doubtful that any of the board members have the brass to go against the entrenched senior employees, for whatever reason. – and AgVantage is doing well as can be expected. SAVE, the original project in Georgia, which was renamed AgAdvantage and this project was doomed from the start because of the problems with ACDI. First their money problems: Then there was a lack of any clear direction or focus, other than to pander to Gerry Anderson and USAID.

    It is clear that what happened is Azerbaijan and Georgia is par for the course; Gerry Anderson had gone to great pains to cover up USAID scandals and to protect his friends. What is less clear is the motivation. He has made sure that many project evaluations are stacked with the people that will come back with results that conform that all went well and program objectives were achieved. In one instance, he had bumped off a person from an evaluation that may not have brought back the desired results. Allegations of his morals are well documented, and there is a large age difference between him and his Asian mail order bride, and there are still allegations of sexual harassment of staff of USAID floating around Tbilisi (he demanding that some USAID staff works share in housekeeping responsibilities, such washing his plates).

    Eventually it is known, as part of damage control Rusty Schultz, the program coordinator in Georgia, was sent to head up a high profile ACDI/VOCA operation in Iraq. It was clear that criminal activity had proliferated unchecked in the Georgia project and the cover up was complete. And still, with similar noise filtering out of the Azerbaijan project, and still USAID does nothing other than praise a bankrupt project and continue to dole the pork to an incompetent but rich organization.

    Moreover, there are serious allegations of money being used to support the trafficking of weapons. One source shares the following: “If there was money going to arms I rather suspect it would have been more likely to have been connected to Rusty’s sidekick, the New Zealander mercenary who had been all over Africa and Asia soldiering in places they would pay. I heard lots of stories about how he and Rusty got hooked up, but I suspect all of them were at least partial fabrications just to make both of them look good.”

    There are many stories in Tbilisi about how he and Rusty got hooked up, but in all likelihood most of them were at least partial fabrications just to make both of them look good. The bottom line, Rusty needed the soldier of fortune (he may have officially been his deputy but it is difficult to say if he had that title) because he made the parties and the stories so much more fun for Rusty to use to encourage people like Gerry that he wanted to co-opt the parties. Gerry is all about spin and control and the soldier wanted everyone to know that though he was in the background it was he who was still the one carrying the entire buzz.

    The most notorious corruption in Georgia involved Micro and SME Credit activities in the South Caucasus countries of Georgia and Azerbaijan. It is hardly accidental that program have been so unsuccessful that there is even doubt if they were even intended to be effective from the very start.

    How long can USAID continue to support an organization with such a record of negligence and criminal malfeasance as ACDI/VOCA and others? ACDI/VOCA continues to win all the contracts it wants and nobody brings their record to the public light. ACDI/VOCA works in approximately 40 countries and claims to foster vibrant communities, organizations and enterprises that can manage and finance themselves.

    See acdivoca.org for more information. All this is a matter of record with USAID, OIG, Office of Inspector General.

    Posted September 7, 2010 at 5:43 am | Permalink

3 Trackbacks

  1. [...] USAID and NGO transparency: When in doubt, hide the data By Daniel J. Smith http://aidwatchers.com/2010/08/usaid-and-ngo-transparency-when-in-doubt-hide-the-data/ [...]

  2. [...] at least, appears to be the assessment of one Till Bruckner, a former Transparency International aid monitor in Georgia (the country in [...]

  3. [...] AidWatch, an equally compelling dialogue has unfolded over the last  few weeks over the efforts of Till Bruckner,  a PhD candidate at the University of Bristol and former Transparency International Georgia aid [...]

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