Menu

02/08/13 -  Along the Malecón Blog (Miami) - No Godiva chocolates: Sweet news for USAID 

Tracey Eaton


The latest GAO report on the U.S. government's democracy programs in Cuba
faults the State Department for weak financial oversight while commending
USAID for progress it has made toward tighter internal controls.  The
report says the State Department failed to properly review the internal
accounting practices of two-thirds of its contractors for Cuba work from
Oct. 1, 2009, through Sept. 30, 2012.  USAID, on the other hand, hired an
outside contractor to review its programs and found "questionable charges
and weaknesses in partners' financial management, procurement standards,
and internal controls."

The 58-page report does not name names. It does not say what happened, if
anything, to the contractors who submitted questionable expenses. Nor does
it give any details about those charges - nothing like the GAO's 2006
report which criticized the taxpayer-financed purchase of such
democracy-enhancing items as a gas chainsaw, Nintendo Game Boys, leather
coats, a mountain bike, crab meat, cashmere sweaters and, yes, Godiva
chocolates.  The lack of any scandalous revelations was no doubt a relief
to USAID officials, who said in a memo to GAO: ...we are proud of the
continuous progress that USAID has achieved since your previous reports...
Financial oversight measures have led to the identification of $6.8 million
in questioned costs. Of those amounts, $5.1 million in questioned costs
have been adequately resolved; and $1.7 million in questioned cases are in
the process of being resolved. Overall, there was approximately $50,000 in
refunded amounts to USAID.  Systematic monitoring and evaluation help us
establish targets, monitor progress, and determine ways to improve our
programs.

GAO, or General Accountability Office, is the investigative arm of
Congress. It released the results of its 17-month investigation on Feb. 7,
three days after John Kerry began as Secretary of State.  Kerry requested
the investigation in 2011 while he was chair of the Senate Committee on
Foreign Relations.  The report dings the State Department, but I don't
believe it is damaging enough to impact the Cuba programs in any
significant way. A more important question is whether Kerry will have
interest in making changes to the programs and he hasn't said anything
publicly about that.  The GAO's investigation is a notable step toward
improving accountability in the Cuba programs, but falls short of
fulfilling Barack Obama's 2009 promise to "usher in a new era of open
government." Obama made that pledge on Jan. 21, 2009, the day he took
office, writing: A democracy requires accountability, and accountability
requires transparency. As Justice Louis Brandeis wrote, "sunlight is said
to be the best of disinfectants."  Yet both the State Department and USAID
remain secretive in their handling of democracy programs in Cuba, and the
GAO report does not change that.

In 2009 and 2010, USAID paid an outside auditor more than $1.4 million to
examine its Cuba programs, but in response to a Freedom of Information Act
request the agency released only 10 heavily redacted pages that omit most
findings, recommendations and other key information, including the identity
of the aid recipients named in the audit. See "USAID audit cost taxpayers
nearly $150,000 per page?"  The business of bringing democracy to Cuba
remains a closed, cottage industry of government officials and contractors
who resist broader international trends toward greater transparency and
accountability in aid programs.  Phil Peters, creator of the Cuban Triangle
blog, points out that the GAO report focuses on "management and financial
accounting as opposed to measuring impact and effectiveness in Cuba."
Indeed, the GAO report is limited in scope. Among its goals were to:
Identify "the types and amounts of assistance that USAID and State have
provided, as well as characteristics of their partners, subpartners, and
program beneficiaries Review "USAID's and State's efforts to implement the
program in accordance with U.S. laws and regulations and to address program
risks Examine "USAID's and State's monitoring of the use of program funds."
As part of its investigation, GAO examined six of the top 15 recipients of
program funding from Oct. 1, 2006, through Sept. 10, 2010.  The unnamed
partners received 10 awards and contracts - five from State, five from
USAID - during the time GAO was carrying out its investigation.  Federal
regulations require State and USAID to give written guidance to partners
that hire subcontractors. USAID generally met that requirement, but the
State Department failed to follow the guidelines while overseeing
contractors' distribution of "at least 91 subawards and subcontracts," GAO
said.

Alan Gross: The report refers to the case of Alan Gross, but does not
mention him by name.  ...Cuban law prohibits citizens from cooperating with
U.S. democracy assistance activities. In December 2009, a subcontractor
working for one of USAID's partners was arrested in Cuba while delivering
computer equipment to provide Internet access to Jewish communities on the
island. He was subsequently sentenced to 15 years in prison for "acts
against the independence or the territorial integrity of the state." Peters
wrote: So the dollars are well accounted for, but as to whether they are
being spent in ways that make a positive difference, well, that's outside
the scope of the report.  Which is worth noting because in the case of
USAID's satellite Internet program run by Alan Gross and other grantees,
the dollars may have been perfectly managed and 100 percent accounted for,
but they were 100 percent wasted because these operations were rolled up by
Cuban intelligence.  Sometime after authorities jailed Gross, employees of
the U.S. Interests Section in Havana stopped delivering democracy
assistance to activists in Cuba. The GAO report said: Conditions in Cuba
continue to pose substantial challenges for U.S. assistance. Cuba is a
Communist state that restricts nearly all political dissent on the island;
tactics for suppressing dissent in Cuba include surveillance, arbitrary
arrests, detentions, travel restrictions, exile, criminal prosecutions, and
loss of employment.  The United States, which maintains an embargo on most
trade with Cuba, does not have diplomatic relations with the Cuban
government. Consequently, USAID does not work cooperatively or
collaboratively with Cuban government agencies, as it does in most other
countries receiving U.S. democracy assistance. Because of heightened
security concerns, USINT no longer has a role in implementing assistance
for USAID and State/DRL partners.  USAID and State program staff have been
unable to obtain visas to visit Cuba over the past decade, which poses
challenges for program implementation, monitoring, and evaluation.

Among other facts in the report: From Oct. 1, 1995, through Sept. 30, 2011,
Congress appropriated $205 million for Cuba democracy aid.  Since 2004,
USAID has received 68 percent of the funding and State, 32 percent.  From
Oct. 1, 2005, through 2012, USAID and State gave 111 awards and contracts
to 51 partners.  Programs in recent years have increased their focus on
"information technology, particularly on supporting independent bloggers
and developing social networking platforms on the island." Aid to political
prisoners and their families dropped after the number of political
prisoners in Cuba decreased.  The Interests Section does not provide any
humanitarian aid on the island.

The report said the U.S. government's programs "generally focus on
developing an independent civil society and promoting freedom of
information in Cuba."  The overall goal and guiding principle of U.S.
democracy assistance for Cuba is to improve the effectiveness of citizens
to participate in activities affecting their lives and to increase access
to information.  Efforts to develop Cuban civil society include training in
organizational and community development, leadership, and advocacy. Related
material assistance may include the provision of books, pamphlets, movies,
music, and other materials that promote democratic values. In addition,
efforts to promote freedom of information have included the following,
among other activities: Information technology training for Cuban
nationals, ranging from basic computing to blogging Support for independent
publications Provision of material assistance.  A sensitive but
unclassified version of the GAO report was issued in December.

David Gootnick. Photo: GAO The main contact for the report is listed as
David Gootnick, director of international affairs and trade at GAO. Those
assisting with the report included: Leslie Holen, Elisabeth Helmer, Heather
Latta, Joshua Akery, Laura Bednar, Beryl Davis, David Dayton, David
Dornisch, Ernie Jackson, Crystal Lazcano, John Lopez, Reid Lowe, Kim
McGatlin, Etana Finkler and Jeremy Sebest.