“Aid agency figures were caught with their hands too blatantly in the till, their main aid activity being to supply Georgian and Chinese prostitutes with a constant stream of income.”
… by Henry Kamens, with New Eastern Outlook, Moscow
[ Editors Note: We have another great investigative journalism piece for you today from Henry and NEO. Brother Kamens ran across the US aid corruption story while working on the epidemic corruption of the former US supported Georgian regime. Below you will have a front row seat to view top US ‘development’ agencies using huge amounts of taxpayer money to hire criminals to do their dirty work for them. We just wanted you to know that the contractor corruption scandals of the past have not even slowed down the stealing. With the US on the way out in 2014 many of those involved want to get one last looting under their belts before going home to a hero’s welcome… Jim W. Dean ]
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– Published December 12, 2013 by NEO, Moscow –
Expensive to move goods in and out
Over the past 12 years the United States has expended huge financial resources and diplomatic endeavours to establish supply routes to landlocked Afghanistan.
This undertaking had two main effects: it ensured that the ever-increasing number of foreign and local troops in Afghanistan was adequately supplied and it tied scores of Eurasian countries, into broader US foreign policy objectives which often went beyond Afghanistan.
Moreover, securing lines of communication and supply within Afghanistan itself involved entering into a labyrinth of often “murky” contracting arrangements with locals, which has engendered an increasing insecurity and fueled terrorism.
The dependencies among host nations and beneficiaries that have come with maintaining these routes and the overall flow of aid have created long lasting security challenges for the US, which may slow or even stall the anticipated withdraw of troops by the end of 2014.
Basically, the US has had to promise so much to get these supply lines working, including financial and development assistance and political kickbacks, that it cannot just walk away from Afghanistan without leaving a legacy of broken promises and manipulation which will induce further instability in the surrounding region – further threatening US interests and making the retention of a US military presence to defend them inevitable.
Presidents come and go but their problems remain. It is highly likely that the word “Afghanistan” will have the same resonance for future generations as “Vietnam” did for those who remember the 60s and 70s, the very people generally in power today.
Of course, the US is not allowed to be seen making criminal deals openly, even when the only people it can deal with are criminals, whether in government or the private sector. Therefore it is obliged to call its interventions “development support”, designed to enhance democratization, state-building, rule of law, gender equality, etc.
This is the sort of development which introduced gang violence and disease to Jamaica and Haiti, and others countries once remarkably free of gun crime, by sending guns in UN consignments of food aid. It is often forgotten that in development literature (Chambers, et, al.) development means “Good Change”, thus in the eye of the beholder.
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Bad Change
Andrew Wilder – Tufts Univ.
Some years ago Andrew Wilder,a development expert and professor at Tufts University, gave a talk on the radio about how foreign aid can contribute to endemic corruption.
Almost casually, he stated that the military in Afghanistan now thinks of development aid as a “weapons system”–a soft one to be sure, but a very real one for it to be so obviously stated as such.
He added that such “aid”, by its nature, creates winners and losers in the local community, depending on who gets it, and how subcontracting and sub-sub-contracting merely adds to the corruption.
Wilder’s 18-month research study, “Winning Hearts and Minds? Examining the Relationship between Aid and Security in Afghanistan, Pakistan and the Horn of Africa”, which was funded by the governments of Australia, Norway and Sweden, focuses on the effectiveness of humanitarian and reconstruction assistance in promoting security in insecure areas.
It addressed the widespread assumption that aid projects can help promote stability and security by helping to win hearts and minds, a doctrine often touted in support of actions the US would never be allowed to undertake at home, and concludes that, “given how influential this assumption is in influencing where aid money is spent, how much is spent, and who spends it, there is currently remarkably little empirical evidence that either proves or disproves the assumption.”
In fact there are too many instances where such aid has had just the opposite effect, and actually undermined the US and its allies and any efforts to bring about stability and viable democracies – by installing the real controllers of the supply routes in effective power, then leaving vulnerable to armed revenge from various groups, with different agendas, when Uncle Sam chooses to no longer cover their backs at the expense of the local community.
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Big Picture
Guarding supply lines can use up a lot of troops
There are several supply routes to Afghanistan, and one of their features is how closely they follow the best established international trade routes in the region – the ones used for smuggling drugs are also used for providing weapons and supplies to NATO forces.
The Northern Supply Route, which passes through Georgia and Central Asia, has now become an important hub for extending US policy in the region. Of course these routes are not always officially controlled by governments, but if the criminals and warlords can be bought off they are more secure than those which are fully in civilian hands.
So governments have to be helped in controlling the criminals, and therefore the supply routes, by brokering deals between criminals and governments; this satisfies all parties, including the U.S.
To enforce these, actors outside national boundaries who can threaten both parties are needed – thus creating a tangled web of “foreign policy” connections between a vast array of countries and extrajudicial forces which cannot be broken overnight, as too much is at stake for too many.
The reality on the ground in Afghanistan drives US policy in a number of countries of the former Soviet Union, such as the Baltic States, Georgia, Azerbaijan and various Central Asian countries, which lie along the supply routes and serve as hubs for the transit of US troops, or satellite/proxy forces, often referred to as NATO allies, weather members or not.
This has created dependencies which now operate independently of any coherent US or NATO policy.It’s like being forced by a bully to go to a pub with him – you just can’t quit.
So what exactly is the “development aid” being provided to buy off the supply route bosses? Take this case from Afghanistan.
In September 2006, USAID/Afghanistan awarded a three-year, $80 million grant to the Academy for Educational Development (AED) to implement the Agriculture, Rural Investment and Enterprise Strengthening (ARIES) programme.
Its intended aim was to provide microfinance and SME lending in certain areas where USAID is trying to get people to shift away from opium cultivation, including a Northern Alliance-held area near the Tajik border, an area east of Kabul centred on Jalala.
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Feeding Frenzy
AED, the prime contractor which oversees all the subcontractors, had no institutional expertise in rural credit. The money was divided up as follows:
AED headquarters in Washington, D.C.
An agency called FINCA received $10 million for micro financing work. One called WOCCU, run by ex-Green Beret Randall Spears, received $15 million to create 20 credit unions.
One called ACDI/VOCA, run by another ex-senior military ops guy with no welfare provision background who happens to have fallen into development.
Rusty Shultz, received a $12 million grant to set up credit cooperatives, about $30 million went to an apex organization called MISFA to make SME loans through banks and microfinance loans, ShoreBank managing this operation as the official advisor to MISFA, and the remainder went to administration.
The Director of AED was Leon Waskins, who has longstanding links with the importation and funding of the terrorists introduced into Georgia’s Pankisi Gorge from Afghanistan in cooperation with the Northern Alliance back in the late 1990s.
Due to this, and institutional knowledge, it was actually run by Rusty Shultz and his close buddy Gerry Anderson of USAID, who entered Afghanistan having previously filled a significantly more senior role in USAID Georgia.
They did this until several aid agency figures there, including Rusty Shultz, were caught with their hands too blatantly in the till, their main aid activity being to supply Georgian and Chinese prostitutes with a constant stream of income.
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Alcoholics and worse
“Which is Which?”
One of the projects they funded was a juice factory, which ARFC, the Afghan Rural Finance Centre, provided a loan to and Chemonics, a US-based development contractor, provided technical assistance for.
This was ostensibly given a loan for about $4 million for a project which many people involved in the project believed could have been delivered for about $900,000 from accounts, a common “leakage” which has occurred in many USAID projects.
USAID’s former Technical Cognizant Officer, in charge at the time, was Dorvin Stockdale, who didn’t last long – most probably removed, along with three others, for corruption or covering up corruption in the name of the US.
He oversaw dozens of projects and contracts, and in at least one of these a contract went missing from files, only to be found on Stockdale’s desk, no longer in its original form. He also oversaw the appointment of key personnel to the funded projects.
One of the reasons that allegations were made against him was that most of these individuals were known to professional aid workers as people who had been kicked out of projects in other countries for being alcoholics and worse.
People whose own pasts can be used against them, therefore, if they decide that they have seen enough and want to put a halt to the gravy train.
To deal with criminals, you have to either prosecute them or become criminal yourself. The criminals have always maintained the drug routes the US relies on to get troop supplies back and forth. Aid provides a neat way of buying off the criminals in the name of democracy.
But to do that you have to employ them, buy them off under the counter; misuse what is, after all, taxpayers’ money. All of this does not win any hearts and minds other than those of criminals and the governments which are themselves reliant upon them. This creates regimes with no popular support and undermines any attempt to support democracy or human rights.
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Threat to broader US interests
“Who always pays in the end?”
If the US ups and leaves, too many people who won in one deal but lost out in others will want to claim the whole pot for themselves.
That threatens broader US interests, and the only way to defend these will be by leaving troops and “advisers” there to create a new generation of criminal leaders no better than the old.A study of any of the countries along the route from Afghanistan to Europe shows how well the US has done this over the years.
The ineffectiveness of what has transpired in Afghanistan comes with many unintended consequences. By design or incompetence, the US and its allies have found themselves in a quagmire, and to depart without leaving in place a functioning government is to give the keys to the inmates, The US troop withdrawal isn’t going to happen.
What now? There are two options, declare victory – and then the redeployment of the troops to a new trouble spot, even justifying their continued presence by starting a new war in the region, beyond the drone war.
It makes any normal person question why we went in there in the first place. Ever wonder where the weapons used in the Arab Spring, and its more enduring offspring, came from? Or why so many people in Afghanistan now prefer the much hated Taliban to US and NATO occupation?
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Henry Kamens, columnist, expert on Central Asia and Caucasus, exclusively for the online magazine “New Eastern Outlook”.
Jim W. Dean was an active editor on VT from 2010-2022. He was involved in operations, development, and writing, plus an active schedule of TV and radio interviews.
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