USAID Afghanistan — SIGAR, OIG Investigates Second Largest Recipient of Reconstruction Funds

May 15, 2014 By in Af/Pak, Contractors, Follow the Money, Foreign Assistance, Snapshots, U.S. Missions, USAID Tags: , , , , , , , ,

— Domani Spero  

Via SIGAR — Snapshot of Top Ten Recipients of USAID Funds in Afghanistan Reconstruction (2002-2013):

Our analysis of USAID data indicated that the top ten implementing partners in total awards accounted for about $7.7 billion, or 58 percent of total obligations. The remaining 42 percent of obligations were awarded to a total of 193 implementers who averaged $29 million in total awards. The World Bank was the top overall recipient of USAID funds in Afghanistan, with total awards equal to approximately $1.75 billion. USAID provided $1.74 billion to the Afghanistan Reconstruction Trust Fund (ARTF), which is administered by the World Bank, and awarded the Bank a $2 million grant for a project supporting business environment reform in Afghanistan. International Relief and Development, Inc. (IRD) received the second highest amount of total rewards at approximately $1.1 billion. Table 2 shows the top ten recipients by total obligation as reported by USAID. Figure 3 demonstrates the percentage of total USAID reconstruction awards received by each of the top ten recipients.

via SIGAR

via SIGAR

Via SIGAR

Via SIGAR

 

International Relief and Development, Inc. (IRD), number #2 on the list above is the subject of a recent WaPo investigation on Big budgets, little oversight in war zones. Quick notes from the report:

  • International Relief and Development increased its annual revenue from $1.2 million to $706 million, most of it from the USAID.
  • The nonprofit rewarded its employees with generous salaries and millions in bonuses. 38 IRD employees received more than $3.4 million in bonuses during the same period, according to the company’s tax filings.
  • IRD’s impressive board of advisers included former House majority leader Richard A. Gephardt and John D. Negroponte, who served as ambassador to several countries, including Iraq, and was the nation’s first director of national intelligence.
  • The company hired an all-star cast of humanitarian officials, drafting them from the top levels of USAID. In addition to the former acting administrator, the officials have included the deputy assistant administrator, the director of contracts and a key operations officer. According to WaPo, it has hired at least 19 employees from USAID. “Several of them came directly from their desks at the agency to occupy important posts at the company.”
  • As acting director of USAID, Alonzo Fulgham made $199,418. As vice president of IRD, he received $330,000. Jeffrey Grieco made $185,000 as the top public affairs official at USAID. As chief of public affairs at IRD, he received $225,000.

According to WaPo, the Special Inspector General for Afghanistan Reconstruction John F. Sopko had opened an investigation into allegations of “significant waste and mismanagement” and “kickbacks and bribery by IRD senior employees over a road project, which wound up costing $317 million.

We understand that SIGAR is also investigating IRD for  attempting to “use confidentiality agreements as a way of prohibiting its employees from making critical statements about IRD to “funding agencies” or “officials of any
government.” 

Via WaPo:
Some of the people who might know the most about what has happened with IRD-run programs — former company employees — say they have been barred from speaking about their experiences. Before leaving IRD, they said, they were asked to sign confidentiality agreements.

The agreements warn employees that they could be sued for making any “derogatory, disparaging, negative, critical or defamatory statements” about IRD to anyone, including “funding agencies” or “officials of any government.” Lawyers who reviewed the agreements at the request of The Post said it appeared that they could violate federal protections afforded to whistleblowers under the False Claims Act.

[Read a copy of the confidentiality agreement.]

In a letter to IRD, SIGAR Sopko writes that “IRD’s policy of prohibiting employees fiom informing government officials of critical information appears to violate the False Claims Act, 31 U.S.C. §§ 3729-3733, federal whistleblower statutes, and the Federal Acquisition Regulation. … The threat of retaliation for reporting problems to oversight agencies is all too real. I am simply not willing to tolerate an attempt to institutionalize employee intimidation. Therefore, I am initiating an inquiry into these allegations.”

SIGAR had also asked USAID to consider inserting a provision in all future contracts, cooperative agreements, and grant agreements for Afghanistan reconstruction that forbids the recipients of federal funds from using confidentiality agreements that prohibit their employees from talking to U.S. government officials.

Meanwhile at USAID/OIG — a “well-placed government source” told devex.com that the agency’s watchdog has been conducting an investigation into IRD for “months.” Devex.com reports that Bill Pierce, who serves as a spokesperson for IRD, told Devex that he was not aware of an OIG investigation that had been going on for months. 

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