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EXPENSIVE (AND DUBIOUS) ADVICE

by Fariba NawaSpecial to CorpWatch
May 2nd, 2006

Part of the United States’ grand scheme for rebuilding Afghanistan into a self-sufficient nation was to lift the country’s agriculture industry into the 21st century. Afghan farmers, who make up about 80 percent of the working population, needed canals and irrigation systems and the means to get their product to domestic markets more efficiently, to minimize crop loss, and to reestablish their access to the international market. In this spirit, USAID awarded a contract worth $153 million over three years to the Washington, D.C.-based Chemonics International Inc. The company’s job: provide the information and infrastructure to ensure food security and improve the lives of Afghanistan’s farmers. The program was dubbed Rebuilding Agricultural Markets Program (RAMP).

Highly paid experts were flown in to consult. Chemonics worked with 40 NGOs and dozens of subcontractors. In Parwan province, near Kabul, the brain trust envisioned a farmers’ cooperative. Chemonics, along with a French NGO called ACTED, built grain storage silos and greenhouses and invented fruit-drying machinery to preserve perishable produce. Built only two years ago, today these structures sit along a lonely road, looking like war casualties or abandoned children’s playthings. All had collapsed or disintegrated during their first Afghan winter, before the farmers had ever used them. The farmers are not heartbroken; they say they would never have used these flimsy storage solutions for their crops anyway because their fruits, grains, and vegetables would have been easy prey for thieves.118

Before the country descended into war in 1978, Afghanistan was poor but self-sufficient, with an economy primarily based on agriculture. Historically, 80 percent of the country’s export revenues and 50 percent of its gross domestic product have come from agriculture. Dried fruits, pomegranates, and grapes were once a major export, but the war and drought ravaged the fields, destroying irrigation systems and drying up revenues.

Desperate for means to feed their families, farmers turned to an illegal but lucrative native crop—the poppy, the local variety of which contains opium that can be altered to produce heroin. Poppies need very little water or fertilizers to thrive. That’s where the drug war and the War on Terror converge. The United States government awarded Chemonics an additional contract worth $120 million over four years to train opium growers in alternative skills, as part of the United States’ and United Nations’s ongoing efforts to eradicate opium cultivation and squeeze off the heroin trade in Central Asia.118 Some opium growers were redeployed as manual laborers, helping to construct concrete canals.

According to the The Center for Public Integrity, 90 percent of Chemonics’ income is from taxpayer money funneled through USAID. Chemonics’ controlling owner, Scott Spangler, served as a senior USAID director under the first President Bush. Between 1990 and 2003, Spangler and his wife gave about $100,000 to the Republican Party. The Center’s profile of the firm includes details on Chemonics’ spotty past:

In September 1997, the company received a $26 million five-year USAID contract to promote democracy in local government in Poland. During the first year of the project, Management Systems International, independent evaluators hired by USAID, called it poorly designed, and criticized Chemonics for not hiring locals and instead hiring too many consultants who hadn’t worked in Poland before. “The returns [on] cost of the first year, $7.3 million, are very difficult to show,” said Management Systems’ report for USAID. “Polish counterparts were able to see that the quality was low and resented, justifiably, that [the foreign] experts were being paid large salaries and were producing little.”

USAID then stepped in and appointed new managers and hired Polish workers to replace American ones. In the end, despite the independent evaluators’ criticisms, USAID gave Chemonics an “excellent” rating for the project. ...

In May 14, 1991, USAID solicited proposals for the Black Integrated Commercial Support Network, a 5-year project to promote greater entry of black firms into the mainstream economy in South Africa. Six companies, including Chemonics and Labat Anderson, submitted proposals. Labat Anderson’s proposal was lower than Chemonics’ by about $2 million; Chemonics was awarded the contract. In October 1991, Labat filed a bid protest with the Government Accounting Office, charging that USAID had improperly negotiated with Chemonics after both companies had submitted their best and final offers. Labat also charged that USAID permitted only Chemonics to amend that offer. In February 1992 the GAO sustained Labat’s protest on both grounds. In a subsequent court action, Labat failed to win monetary damages, but the judge questioned why USAID reimbursed Chemonics for more than $45,000 in legal fees from 1991 and 1992 which “may have been incurred” for an “unsuccessful defense of a contract award that violated several procurement regulations.”119

Chemonics deferred requests for interviews in Kabul and Washington, D.C., to USAID. USAID told us it had given permission to Chemonics to do the interview, but the company did not respond to our requests.

The Afghan Ministry of Agriculture has been pointedly unimpressed with Chemonics’ work in the country. Among the primary goals set out by USAID in the Chemonics contract was the establishment of reliable domestic and international markets for Afghan agricultural goods. By nearly all accounts but its own, Chemonics has been a failure in this regard.  A “market center”—a small patio with a pitched roof RAMP built on the main road in Parwan where farmers from the cooperative were supposed to sell their harvest—was vacant and covered with dust.120

On a tour of the RAMP projects in Parwan, the province’s agriculture deputy director wanted to show me both the successes and the failures. On the main road, a large tent made of a sturdy material penetrable by sunlight—a new type of greenhouse—could be seen from afar. Inside, the senses are assaulted with the green smells of fresh vegetables. Shiny cucumbers hung from healthy plants. This project was overseen by the International Center for Agricultural Research in the Dry Areas (ICARDA), an NGO in the RAMP program, and allowed one farmer to make $1,200 last year, enough to support his family.

“With this greenhouse, we were consulted in every step and asked what the farmer’s capabilities were, what his resources were and what would work for him, and that’s why it has worked,” said Abdul Hafiz, the provincial agriculture director.121
The farmer’s cooperative  that had disintegrated in its first winter was an example of the flip side of the coin. The contractors never consulted the local agriculture ministry, Hafiz said. “If they had asked us, we could have told them that this type of greenhouse will not hold up to the harsh weather conditions here. But they never did and we did not insist to know because they are the experts who should know. At least, that’s what we are told,” he said, shrugging his shoulders.122

 Agriculture ministry officials say they are open to the American push to shift the country from a socialist to a capitalist economic model, but they fear that rushing the conversion could backfire, or make a few wealthy at everyone else’s expense. As a case in point, Hafiz’s assistant showed a huge, newly built warehouse that could be used by several local farmers to store and distribute their harvests. Instead, RAMP gave it to a single landowner who is using it to store refrigerator parts and bags of pesticides.123

In Kabul at the agriculture ministry, Sharif Sharif, one of the deputy ministers who speaks English and works closely with Chemonics, said the contractor was getting better at working with the government but that the improvement only occurred after constant complaints and errors.

“We asked them to please work with us. Give us a chance. Please allow our experts to join in the actual work so they can learn because they have degrees, but they need the know-how,” he said.124

Sharif points to several RAMP projects that he considers wrong-headed or wasteful. A flour mill RAMP built for one farmer in the northern province of Kunduz could store enough flour for the entire province. A project for 25 cold-storage units planned to be ready to hold vaccines and medicines is behind schedule; only seven units had been constructed so far.125

Sharif also feels that Chemonics’ urgency for RAMP to develop international markets—which largely failed—has caused them to neglect domestic needs for food security. RAMP, for example, has instructed farmers in Parwan to grow more vegetables, and promised to find buyers for them both within the country and beyond. The farmers, who normally planted beans and lentils, grew green vegetables as encouraged. But instead of profiting, they lost money. Vegetables flooded the market and drove the price down.126

The agriculture ministry’s frustration with RAMP and Chemonics seemed validated by the July 2005 report from the United States Government Accounting Office, which evaluated reconstruction programs in Afghanistan. The report says that while Chemonics met most of its targets, it had failed to consider the sustainability of its projects or make Afghan farmers any more self-sufficient.127 A GAO official in Washington said Chemonics also did not submit required reports updating the agency on its progress, partly because USAID had pressured the company to complete projects quickly to reassure the Afghans that work was moving forward in a timely fashion.128 The failure to submit reports allowed the company to hide failed, redundant, counterproductive, or otherwise embarrassing projects without reporting their financial price tags.

One project that flew under the radar involved building irrigation canals for farmers in Helmand province. A little advanced research might have exposed the fact that the farmers in the region are overwhelmingly opium poppy growers and that they were using the water to grow even more poppies. The success of one of Chemonics’ contracts was openly undermining another: to wean farmers off the opium market.129

$1,000 A DAY

I spent nearly six months in a house rented by BearingPoint, the American contractor USAID hired to revamp Afghanistan’s economic infrastructure for an initial $98 million from 2002 to 2005 and then boosted by another $46 million for the next three years. BearingPoint is the management consulting company that split off from KPMG Peat Marwick following the accounting scandals of the early 2000s. A significant portion of its consultants are former employees of Arthur Andersen, another accounting firm  that split up and renamed itself in the wake of a scandal.130

Wazir Akbar Khan, the unmarked neighborhood of Kabul that used to house the Afghan rich and famous, is now compound for foreign contractors and the American military. The U.S. military administrative headquarters is here, as is the American embassy. The streets are blocked and barricaded and one must brave a maze of security posts to get anywhere in the neighborhood.

BearingPoint has about eight houses here sheltering its 30 to 50 international staff. The house I stayed in a few nights out of the week (clandestinely, since guests are not allowed overnight) was a sanctuary away from the chaos that has become Kabul. It was quiet, warm and complete with the amenities of a wealthy Westerner’s home. I shared this 1970s-style six-bedroom house with six BearingPoint staff in relative harmony. There was 24-hour satellite internet service, 24-hour electricity provided by a massive generator. There was a house manager—a young Afghan who spoke English—who supervised the rest of the house staff, including a cook who made three meals a day, three cleaning women, and innumerable guards. In the kitchen, there were electrical appliances including a microwave and toaster oven, things I had never seen in an Afghan home. BearingPoint provided an unlimited supply of bottled water, juices, and dairy products. Each BearingPoint employee had a driver and when the personal driver was off, had access to a 24-hour driving service that usually put an SUV at his disposal.

This was not the most upscale or extravagant example of a foreign adviser’s life in Kabul but perhaps it reflected a common expatriate contractor’s experience and lifestyle.

It was something of a golden cage; some of the residents rarely left. They watched movies, played on their laptops—also provided by BearingPoint—and had long dinners chatting with each other. Those who left went to non-Afghan restaurants or other non-Afghan homes. Rarely did they interact with local Afghans other than the servants.

But for me, this was a surreal shift from the Soviet-built apartment buildings five minutes away where Afghans had rationed electricity and water and lived 12 to a two-bedroom flat. I worked for an NGO at the time and shared a home with two other aid workers, but I escaped my dreary housing by going to the BearingPoint compound when possible—at my house we had no electricity or reliable water, and I nearly froze because my Afghan heater had blown up.

The officials of BearingPoint in Virginia say it takes this magnitude of perks to draw qualified workers to conflict zones. A USAID official agreed. “You can’t draft people. You have to pay prevailing Western wages and they cannot be expected to live under Afghan conditions. They need safe houses with generators and water.”131

Afghans refer to the “$1,000 a day foreign adviser” with disdain. According to our sources and The New York Times, the average cost to taxpayers for each imported adviser is about $500,000 a year—$150,000 in salary, and the rest for security, living expenses, and the contractor’s overhead and revenue.132

Seema Ghani Masomi, a deputy minister at the finance ministry until December 2004, told CorpWatch that her experience working with BearingPoint’s advisers was unpleasant. BearingPoint had been brought in to modernize Afghanistan’s financial systems, including the government’s budget. “They were concerned with making money. They became sales people. It wasn’t about what was good for the people but what was good for them.”133

She fired six foreign advisers (not all employed by BearingPoint) for incompetence and “attitude” issues. “They had good CVs but didn’t have the attitude and commitment. It’s not just a job—we’re contributing to the future of a country,” she said.134

Nargis Nehan was the treasurer at the finance ministry at the same time. She also complained that initially, BearingPoint employees were oblivious to the local situation, casually gulping soft drinks in the ministry when the Afghan employees who worked there did not even have water to quench their thirst.

One of the biggest gripes Nehan had concerned the software FreeBalance that BearingPoint recommended for the Afghan national budget. FreeBalance is advertised on its website as the best option for government accountability services for developing nations. The software, which Afghans would use to enter data, was in English. “Every time the system went down, we had to contact Canada, and Canada speaks a different language than we do, and our days off were in conflict.”135 She said the software often left them baffled.

Nehan also accused the company of overspending, hiring unqualified people, and nepotism. She said staff were allowed to hire their unqualified relatives, whom BearingPoint would then lavish with large salaries. Steve Lunceford, a spokesman for the company, denied her accusations.136

Nehan said relations improved over time with BearingPoint because the leadership changed and the foreign staff became more accommodating to local needs.
Lori Bittner, a spokeswoman for BearingPoint in Washington, D.C., said critics don’t consider the magnitude of their responsibilities—essentially overhauling an entire country’s financial systems. “They [advisers] had an uphill battle because you were starting from zero,” Bittner said. “We’re working to change a culture.”137

PINK IPODS AND THE INFO WARRIORS

The employees of Voice for Humanity, in a fever of righteous idealism, traveled six hours on donkeys and horses through the remotest parts of the Afghanistan countryside. They were on a mission: to deliver what they thought was an invaluable literacy tool for Afghans. Pink for women, silver for men.

They were custom digital audio players which function like the trendy iPod although they look more like generic radios or MP3 players. They are made in China and filled with public service messages on topics including human rights, women’s rights, Afghanistan’s election process, and health.

The aid workers distributed 65,800 recorders, which cost $50 each, to remote villages and some of the most dangerous and volatile areas in the country. The staff of Voice for Humanity, a non-profit humanitarian aid agency that claims to be dedicated to developing literacy in the world, says it has trained tribal chiefs and other community leaders to listen to the recorders and then pass them on to individuals and families.

The pseudo-iPods were funded by a group of U.S. government funders that included the United States Agency for International Development (USAID). An $8.3 million contract was awarded to Kentucky-based Voice for Humanity, a small group run by two Lexington businessmen, to use its audio players to “promote democracy” in advance of the 2004 Afghan presidential election as well as similar projects in Nigeria.

How VFH got the contract is a matter raising some skeptical eyebrows in the aid community. When the two founders needed to sell their idea to the federal government, they turned to a lobbying group run by Hunter Bates, the former chief of staff to Senator Mitch McConnell. McConnell, it turns out, chairs the senate subcommittee that controls the money allocated to USAID.

Critics say it was those connections that resulted in millions of taxpayer dollars going to an ineffective and laughable program of throwing trendy technology at serious international issues.

“It shows how foolhardy people can be when they’re not thinking practically,” said Patricia Omidian, an aid worker with the American Friends Service Committee.

There are further questions about the propriety of the U.S. government distributing “public service messages” about an election in which it openly backs one candidate over the others. VFH has gone to great lengths to ensure that the recorders “have no U.S. footprint,” despite the fact they are funded by the U.S. government and distributed by an American NGO.

Assuming that the content of the recorded audio on the players was purely educational and did have value as a literacy tool, it would have been cheaper and more affective to provide these communities with radio transmitters, which cost about $500 total. Radio programming would have reached more people, and is already how most Afghans get their information. Further, the information could be updated on the fly, whereas the VFH recorders must be rounded up and fitted with new chips bearing new material, and then redistributed. Each new chip costs $10, plus the cost of labor and travel.

¨Why not radios?¨ said one aid worker critical of the deal. “You see this time and time again to what (the politicians) think makes political sense regardless of feasibility or viability.”

Yet Pete McLain, director of Voice for Humanity, said that Afghan focus groups and surveys have shown that the recorder has educated the public about pertinent material they had no access to before.

¨Some of the work can be done with the radio. We’re different because of the depth and the fact that it can be repeated whenever you want it, like in the kitchen, in the field. There’s an ability to listen to it as a group and rewind it. Radio is good for soundbites,” McLain said. “This is about training. We don’t want to compete with radio. It’s apples and oranges. This is supplemental. We see some synergy.”

VFH has hired Altai Consulting to audit the project for efficiency and effectiveness. Its results will be presented to USAID to bolster VFH’s claim that the program is successful.

In Kabul, VFH’s staff of 40 is entirely Afghan. The supervisor, Abdul Wakil, is a firm believer in the product and its utility. He recalled a case where the device was played at a wedding in front of 500 women in Logar province. The program included information on women’s right to vote, including instructions on how to go about it. Although the women had been warned by traditionalists not to vote, many of them had the courage of conviction to register upon hearing the messages, Wakil said.

“It’s a school for them,” he added.

The Women’s Affairs Directorate in Logar confirmed that the players had provided beneficial information before the election, but that it was an impractical means of educating their communities. At their offices, a child could be seen playing with one of the audio players, switching the buttons like it was a toy.

In Khoshi, one of the districts in Logar where the player was distributed before elections, men in shops said they had listened to the material on the tape and gained some insight into the election process but afterwards, the digital device became a toy for their children.

The color-coded idea for the players emerged when VFH learned that men had taken the devices from women and were using them for themselves. Then the Ministry of Women’s Affairs suggested changing the color of some of the silver recorders to pink so that men would be too embarrassed to carry them around. So VFH ordered more players, this time in pink.

Wakil sat in his guesthouse in his pressed black suit showing me the recorder’s features. It’s a set with a solar charger and a hand crank. The programming now includes informational dispatches and dramatic performances read in the Afghan languages of Dari and Pushto.

Wakil said VFH is now lobbying to receive more grants so that it can continue making new chips with additional information on health, counter narcotics and children and eventually, build a library of data.

But many at USAID aren’t buying it. “We had to play it politically so we gave them some money. But they could not leverage us to give them too much,” said another USAID source.

Planting Good News

The recorders are just a small part of a massive information offensive coordinated by the Pentagon and USAID to burnish the United States’ image in the Muslim world. A number of public relations companies have been brought into the fold to fashion the messages and make sure they reach the widest audience.

One of them, the Washington, D.C.-based The Rendon Group, is a shadowy consulting firm with close ties to the Bush Administration. The Pentagon has awarded Rendon more than $56 million in contracts since September 11, 2001, as part of a coordinated effort to disseminate positive press about America and its military in the developing world. Like similar contracts awarded to The Lincoln Group in Iraq, the contracts call for “tracking foreign reporters” and pushing (and sometimes paying) news outlets worldwide to run articles and segments favorable to United States interests. One of its contracts is to influence Puerto Rico not to close a U.S. Navy base where several training accidents have resulted in inadvertent bombings of civilian neighborhoods.

A USAID official said Dick McGraw, the head of public relations for the prestigious and influential Afghanistan Reconstruction Group in the U.S. embassy (and a friend of Defense Secretary Donald Rumsfeld) successfully pushed for Rendon to be granted a contract in 2004 to train staff at President Karzai’s office in the art of public relations. Rendon later received another hefty grant of $3.9 million from the Pentagon to develop a counter-narcotics campaign with the Afghan interior ministry—despite objections from Karzai and the State Department.

Several former employees of Rendon in Afghanistan initially agreed to speak with
me about the company’s activities, but quickly changed their minds, claiming unconvincingly that they didn’t have time. The sudden clam-up coincided with very public press coverage of bogus news reports painting the American war in Iraq in a favorable light had been planted by the Lincoln Group. Pentagon documents show that Lincoln paid Iraqi newspapers to run the articles.

One U.S. government official in Washington told us Rendon was up to the same shenanigans in Afghanistan, and had been painted with the same brush as the Lincoln Group. “DoD and State didn’t want to touch them. They said we have got to get rid of them. They are basically blackballed. They’re perfectly willing to manufacture information. They have no scruples about that.”

But clearly Rendon has powerful supporters high up in the Pentagon who can override such objections from lower-ranking bureaucrats.

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