More Than Enough Blame to Go Around

This post was written by a friend who worked who used to work in Liberia.

As an aid worker with a major U.S. agency based in Liberia during 2004-2005, I was saddened but hardly shocked by the recent news of the million dollar fraud perpetrated under a USAID project implemented by World Vision.

Conditions in post-war Liberia were ripe for such fraud: if you inject vast sums of donor funding into one of the poorest countries in the world, emerging from fifteen years of warfare, under auspices of a transitional government composed of former warlords, corruption is going to be a problem.

What angers me about this particular case isn’t the scale of the fraud or the betrayal of humanitarian principles at work, it’s that these crimes were foreseen and could have been prevented. A March 2006 risk assessment by USAID’s Office of the Inspector General raised significant red flags about US funded projects in Liberia. Among the highlights:

- USAID staff were unable to visit the majority of project sites throughout Liberia because of a combination of security restrictions and infrastructure problems. The armored cars that USAID staff were required to use outside of Monrovia were too heavy to pass over bridges, including bridges that were rehabilitated as part of USAID projects!

- USAID Liberia had the largest funding portfolio in West Africa in FY2006 and the smallest staff. Only 28 people (including 8 drivers) were responsible for oversight of more than $107 million in U.S. taxpayer money!

- A specific assessment was made of the risk factors affecting USAID Liberia’s programs, including those of World Vision, who was given high risk ratings for its implementing arrangements and the nature of the activities that were financed.

The overarching conclusion of the Inspector General’s report was USAID should conduct performance audits for the Liberia programs. Although USAID did respond to some of the more detailed comments in the report, the Inspector General’s website does not indicate that any audits were carried out of Liberia programs in the wake of this assessment.

Sadly, we are far too likely to learn all the wrong lessons from this debacle.

Despite being the victims of this crime, the Liberian people will be blamed for it. Yes, corruption is a severe challenge in Liberia, as it is in many post-conflict, developing, and developed countries (see Blogojevich, Rod), but that is a challenge that has to be managed as part of the reconstruction process.

Unfortunately, our dysfunctional foreign aid institutions only exacerbate this problem. By channeling our funding through myriad spigots (State, USAID, PEPFAR, and the Millennium Challenge Corporation), several layers of subcontractors, and tying aid back to domestic interests such as agriculture subsidies, the very measures intended to ensure accountability only create more confusion and opportunity for wholesale fraud.

During the past few years, momentum for foreign assistance reform has slowly but steadily built steam on Capitol Hill, as policymakers and NGOs alike have attempted to dispel notions of foreign aid as ‘money down a rathole’ and sought to rebalance development, diplomacy and defense within U.S. foreign policy.

In the current atmosphere of economic crisis, I have a sinking feeling that Liberia’s million dollar fraud will provide just the ammunition that aid skeptics need to once again torpedo reform, perversely ensuring that the same pattern of too much money and too little accountability will continue to give rise to fraudulence in fragile states worldwide.

[Photo from the US Embassy in Liberia]