The Humanitarian Aid Industry: Corruption, Neoliberalism and Fraud

sealTranslated by Paul Antonopoulos – CSS Project Director;  MENA and Latin America Research Fellow

Furthering the Critical Deconstruction of the Non-Profit Industrial Complex

 

This piece should be read in tandem with CSS’s “What is the Non-Profit Industrial Complex?

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By MisionVerdad – The humanitarian industry circulates $150 billion a year – its main driver is poverty and its key machinery is non-governmental organizations (NGOs). These can accurately be compared to large corporations: they have to beat the competition by securing the greatest amount of donations to snatch markets from other organizations.

80% of NGO funds come from governments. The three largest donors on the planet are the United States, the European Union and Great Britain. This allows them to decide how and where it is invested, consequently they do not choose the poorest countries but where they have a political and/or economic agenda.

These public funds transferred to private sectors not only serve to industrialize neoliberal corruption, but to enhance mechanisms of international intervention that evade the nation-states in favor of the power games developed by transnational economic sectors.

With this, we look at three emblematic cases.

The Bottomless Pit of NGO’s in Haiti

More than 10,000 humanitarian aid organizations arrived in the Caribbean country after the devastating 7.0 magnitude earthquake that shook the capital of Port-au-Prince on January 12, 2010. Donations exceeded $9 billion and many of these organizations executed their projects through private companies and without any kind of control from the local government.

In 2016, Hurricane Matthew left hundreds of people dead, 1.4 million people without food or water, several towns were completely destroyed, especially in the southwest of the country. Six years after the devastating 2010 earthquake, more than 60,000 Haitians still lived in temporary homes, with limited or no access to health services or doctors. The immediate call of the United Nations (UN) was to request an urgent contribution of another $120 million to alleviate the emergency in the poorest nation in the Western Hemisphere.

A significant portion of the NGOs based in Port-au-Prince, the Haitian capital, requested contributions through their websites, and helicopters from the US government arrived with shipments of water and rice, as in 2010.

More than 99% of the money ended up in the bank accounts of the NGOs, together they had more money than the government of Haiti and the local authorities received little of that help. Despite the billions of dollars donated since the 2010 earthquake, one wonders why Haiti was not better prepared for the storm that came six years later.

One example, among many: the Clinton Foundation helped its donors benefit from the earthquake, the Bill and Melinda Gates Foundation and USAID established the Mobile Phone Initiative in Haiti. In January 2011, the Digicel company of Irish billionaire Denis O’Brien received the first prize of $2.5 million so that Haitians could receive money through a mobile phone network. In 2012, just two years after the earthquake, Digicel’s operation in Haiti made a profit of $86 million out of its $439 million in revenue in 2012.

O’Brien donated between 5 and 10 million dollars to the Clinton Foundation. In October 2010, two months before Digicel received the money to help Haiti, the company sponsored an event in Jamaica where Bill Clinton was paid $225,000 to give a speech.

In July 2017, former Haitian official Klaus Eberwein appeared before the Ethics and Anticorruption Commission of the US Senate to testify against the Clinton Foundation for the alleged appropriation of international donations, but could not and will not, since he was shot in the head in a Miami motel.

Somalia: Piracy, Famine and Diversion

In 2010, a UN report warned how at least half of humanitarian aid to the Horn of Africa nation was being diverted. The recipients were corrupt contractors who sold it to the highest bidder, Islamist sectarian groups and even United Nations aid workers. The document also claimed that the Somali government collaborated with the pirates and provided them with visas to travel to Europe.

The Said report recommended to Secretary General Ban Ki Moon for the opening of an immediate internal investigation to clarify what happened. The World Food Program (WFP) does not stand well as responsible for the distribution of humanitarian aid in Somalia. This UN agency, which was allocated $485 million to alleviate the famine of 2.5 million people, appeared responsible for the looting and collaboration with corrupt cartels distributors across the country.

The WFP was classified as a decomposed body according to the document. Some humanitarian resources, especially food, have gone to the military and a handful of Somali contractors have organized a cartel that has become power traffickers [some of them channel their benefits or help themselves to groups and militias opposed to the government].

There, the Somali government is also accused of sending pirates to Europe on official government committees. A part of the text claims Somali ministers, members of parliament, diplomats and freelance agents have made access to visas a growing business, which can only be achieved by pirates. The text also said the passports would have cost between $10,000-$15,000.

Both the Somali government and the WFP denied the information, while the constant rumors about the distribution of humanitarian aid in Somalia caused situations such as the delay of new shipments by the United States.

Curiously, the Secretary of State of the United States in 2010 was Hillary Clinton, however, years later, specifically in 2015, K’naan Warsame, a hip-hop artist and defender of Somali pirates, participated in the Global Clinton conference Initiative in Morocco. “A lot of people do not like to say this, but I support the pirates,” K’naan said in a radio interview in 2009, arguing that piracy “really helped us clean up our environment” by holding ships for ransom, including some that dump toxic waste off the Somali coast.

Dance of Dollars and Premiums in Syria

Resolution 2165 of the UN Security Council in July 2014 explicitly allowed UN agencies to deliver aid across Syria’s international borders. However, international NGOs have been working in this way since at least 2012.

Most aid in areas controlled by Syrian opposition is sent across the borders of Turkey, Jordan and occasionally Lebanon. The value of formal cross-border aid from major donors is at least $500 million per year.

The supply chain involved is a big business. The goods and services acquired by the UN system in Turkey increased as the war in Syria dragged on: it bought goods worth $339 million from Turkey in 2014, up from $196.7 million in 2013 and $90 million 2012

In 2016, millions of dollars were temporarily suspended for the main “humanitarian aid” organizations working in Syria following revelations of systemic corruption. An investigation by the United States Agency for International Development (USAID) revealed bid rigging and bribery plans that involved 14 organizations and individuals with locations in neighboring Turkey and Jordan.

The Office of the Inspector General of USAID also announced that the money for some aid groups would have been suspended. It was a network of commercial vendors and employees of NGOs that conspired to participate in bid rigging and multiple bribery plans related to Syrian humanitarian aid subsidies.

The key to the delinquent scheme revolved around the overpayment of goods bought in Turkey. It was found that people who worked for NGOs paid high prices for low quality products. These assets included essential items such as blankets for civilians in Syria. The research found that the staff members of the NGOs were active participants in the overpayment scheme, receiving bribes from the vendors who sold the products.

The three NGOs involved grew rapidly since the beginning of the war in Syria, driven in part by funds for cross-border aid from the United States and the United Kingdom. The revenues of the International Medical Corps (IMC, for its acronym in English, based in the United States) more than doubled to $232 million between the fiscal year 2011-2012 and 2014-2015. The revenues of GOAL (Irish) increased by 94% between 2013 and 2014 alone. The International Rescue Committee (IRC), the largest of the three in terms of revenue, managed more than $500 million in annual funds.

One example: two members of the IRC accepted bribes from the vendors in exchange for subcontracts from the aid group. In another case, an organization obtained a profit of $106 thousand by manipulating the contents of more than 55,000 food baskets distributed. The unidentified organization agreed not to charge for the money lost by USAID and the vendor was suspended.

The investigations led to $239 million in funds suspended from the program, 35 decisions of suspension or disqualification of the agency and 19 resignations, rescissions or suspensions of personnel. In one case, a partial termination of a program carried out by an “unnamed group” meant that almost $1 million in pharmaceuticals was not purchased. The IRIN environment understands that at least 800 people involved in IMC contracts in Turkey were dismissed due to the suspension of USAID.

Looking Towards Venezuela

The humanitarian industry has been enlisting its embezzling scheme to include Venezuela within its logic of diagnosis and intervention, while in the geopolitical sphere the crisis is created and stimulated through an attack on the currency and financial blockade. On the other hand, intervention is sought through programs and humanitarian channels that evade state control.

In the case of Venezuela, huge amounts of dollars have flown into Colombia and Brazil, announced the vice president of the United States, Mike Pence, during a meeting with anti-Chavez spokespersons, who evidently interfered with these funds and are already fighting over the handling of them.

In the midst of the media device on Venezuelan migration a UNHCR spokeswoman announced in May that they had “a drastic lack of funds” while asking the States for $46 million, since they only had 7% financing. However, 35.1 million euros were promised by the European Union (EU) to deal with the cases of Venezuelans self-exiled in neighboring countries.

Last July, Martha Youth, director of the Bureau of Population, Refugees and Migration of the US Department of State, explained that in 2017 Washington contributed more than $30 million to assist the Venezuelan refugees, and that until that date the assistance was more than $20 million. Of that figure, $12 million was assigned through UNHCR and $8.1 million to the International Organization for Migration (IOM). He argued that it is the “largest displacement in the region,” obviating the same UNHCR figures on displacement in Colombia.

There are no details of where and how these funds are distributed; at the global level, the NGOs linked to these activities lack clear control or oversight mechanisms, which has been recognized by many of them and by one in particular: Transparency International.

In 2012, the then Secretary General of the UN, Ban Ki-moon, affirmed that 30% of the development aid failed to reach “its final destination” due to corruption. It would not be strange that this is happening around the siege that is being established against Venezuela, where the turbulent river could be generating juicy profits for humanitarian franchises.

 

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