Watchdog Uncovers Contractor Fraud in U.S. Humanitarian AidTweet
August 8, 2016
The Syrian civil war has claimed hundreds of thousands of lives, nearly 1,500 by chemical weapons, and has produced more than 4.8 million refugees. Now, there are allegations of rampant fraud in programs charged with aiding victims of the war.
Last month, after the Office of Inspector General (OIG) for the U.S. Agency for International Development opened 25 new investigations, more than $200 million in contracts to organizations aiding victims of the Syrian civil war were frozen. In addition to revealing potential contractor fraud, the USAID OIG also highlighted the need for increased oversight in the aid disbursement process.
In a Semiannual Report to Congress released in March, the USAID OIG found “systemic weaknesses on the part of an implementer in the procurement, storage, handling, transportation, and distribution of pharmaceuticals and medical supplies purchased for use in Syria.” And in May, after international press raised concerns about misconduct, the USAID OIG released a statement announcing an investigation of cross-border aid programs operating out of Turkey and Jordan. The ongoing OIG investigation has resulted in the suspension of 14 aid organizations and staff members based on evidence of wrongdoing.
Unfortunately, this is not the first time there have been problems with USAID’s oversight of humanitarian funds. In 2014, the Special Inspector General for Afghanistan Reconstruction (SIGAR) detailed a significant risk of misuse of direct assistance USAID provided to 16 Afghan government agencies. Soon after, the Government Accountability Office (GAO) testified before Congress about how the $15 billion invested in Afghanistan humanitarian aid since 2002 is at high risk of misuse and corruption due to shrinking oversight access bubbles, locations where aid monitors can safely travel and inspect U.S. funded projects.
Speaking to House Foreign Affairs Committee last month, Thomas Melito, a senior official at GAO, suggested that USAID and the State Department had no reasonable estimate of how much money had been lost. USAID requires humanitarian organizations providing assistance to Syrians to evaluate some program risks, but does not require assessments of susceptibility to fraud, theft, diversion, or poor program governance. The GAO report on the subject concluded, “State and USAID may not have visibility into areas of risk needed to effectively oversee programs and provide reasonable assurance that humanitarian assistance funding is being used for its intended purpose—to assist individuals in desperate need inside Syria.”
According to The Washington Post, International Medical Corps (IMC) was one organization whose USAID-funded procurement was suspended due to alleged fraud and diversion. Anonymous IMC employees described a “mafia” of regional suppliers that fixed contract bids and obtained inadequate goods. Following the funding suspension, about 800 employees, most of whom live in war zones, were dismissed.
The alleged fraud, while egregious, is not the most discouraging element of USAID’s oversight problems; what is most pressing is the agency’s inability to fix its blind spots. Since USAID lacked appropriate oversight, corrupt contractors were able to replace lentils with salt in numerous Syrian refugee food kits and divert essential funds for hospitals in Aleppo. Failed oversight has evident financial repercussions, but less obvious are the human costs of failing to oversee humanitarian funds.
Allegations of contract fraud and corruption in Syria come as no surprise when contextualized by USAID’s long history of oversight challenges in war zones. If USAID were to finally implement the suggestions of government watchdog organizations, it would not only shield taxpayer money against waste and abuse, but also better aid the victims of war.
Carter Salis is an intern with the Project On Government Oversight.
Topics: Contract Oversight
Related Content: Special Inspector General for Afghanistan Reconstruction (SIGAR), Contractor Accountability, Inspector General Oversight, Iraq & Afghanistan Reconstruction Contracts, Contractor Misconduct, Financial Oversight, U.S. Foreign Aid
Authors: Carter Salis
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