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US probe into Turkey-Syria aid corruption deepens

Funding of major agencies put on hold over kickbacks and bribery

Syrian refugees, mostly Kurdish, recently arrived in the semi-autonomous region of Iraqi Kurdistan pictured at a reception and registration area near the town of Faysh Khabur. Aid was handed out at the reception area by the UN, Iraqi Kurdish authorities a Younes Mohammed/Metrography

An IRIN investigation has found that a probe by a US government watchdog into corruption in aid delivery across the Turkey-Syria border runs deeper and involves more NGOs than previously reported.

Corrupt sub-contracting and procurement fraud is undermining vital cross-border relief for desperate Syrians.

USAID announced on 6 May that it had asked some NGOs delivering aid from Turkey to Syria to halt a portion of their work. The move followed an ongoing investigation by its Office of Inspector General that found a network of commercial vendors, NGO employees and others who colluded “to engage in bid-rigging and multiple bribery and kickback schemes related to contracts to deliver humanitarian aid in Syria.”

While USAID would not comment on specific cases, IRIN interviews revealed that several major agencies, including International Medical Corps (IMC), International Rescue Committee (IRC), and the Irish NGO GOAL, are implicated in the investigation and have received at least partial funding suspensions.

A ‘sophisticated operation’

UN Security Counil Resolution 2165 in July 2014 explicitly allowed UN agencies to deliver aid across Syria’s international borders. However, international NGOs have been delivering this way since at least 2012.

Most aid into opposition-controlled areas of Syria is delivered across the borders from Turkey, Jordan, and occasionally Lebanon. The value of formal cross-border aid from major donors is at least $500 million per year.

The three NGOs implicated have grown fast since the start of the Syria crisis, fuelled in part by funding for cross-border aid from the US and the UK. IMC (US) income more than doubled, to $232 million, between the 2011/2012 financial year and 2014/15. GOAL’s income jumped 94% between 2013 and 2014 alone (figures for 2015 are not yet available). IRC, the biggest of the three in terms in revenue, currently manages over $500 million in annual funding.

The supply chain involved is big business. While procurement data about the NGO operations is not public, goods and services procured by the UN system in Turkey has leapt as Syria’s war drags on: it purchased goods worth $339 million from Turkey in 2014, up from $196.7 million in 2013 and $90 million in 2012.

The three NGOs are big players, but they are also largely dependent on governmental sources of funding. If their relationship with USAID (the foreign aid arm of the US government) is damaged beyond repair, their capacity to continue work in other countries might also suffer.

A senior USAID official, speaking on the condition of anonymity, told IRIN that the investigation, which began in March 2015, was focused on procurement in Turkey and had uncovered “a sophisticated operation that can be tough to catch.”

The official said that the probe was prompted by a report from one of the NGOs about a possible supply chain issue.

‘Systemic’ problems

Since March 2015, according to IRIN’s interviews and the Office of the Inspector General’s own report published this March, one part of the investigation has revealed “systemic weaknesses on the part of an implementer in the procurement, storage, handling, transportation, and distribution of pharmaceuticals and medical supplies purchased for use in Syria.”

The OIG report also states that companies and individuals “were found to have violated federal or state antitrust statutes by having colluded with each other in order to win an award to provide supplies to displaced persons.”

Furthermore, there were issues with a vendor that profited by manipulating the contents of aid packages headed for Syria.

This report and IRIN’s own interviews with donor officials, NGO staff members and analysts, almost all of whom insisted on anonymity, make clear that the procurement problems involve both the NGOs, and their Turkish suppliers – 14 individuals and companies in Turkey are provisionally banned from receiving US government funding.

Among them are the firms ROVA Relief and Senkardes, both of which advertise services as suppliers to the aid operation on English-language websites. One of them has also supplied a UN agency. Another firm on the list appears to be a provider of medical supplies.

The OIG report mentions the termination of one IMC staff member from its Turkey office, but IRIN understands that at least 800 people involved in IMC contracts in Turkey were let go of because of the USAID suspension.

Shortly after OIG began its investigation, an April 2015 report mentioned a $10.5 million reduction in funding due to “detected fraud” in a cross-border programme. 

The scale of the fraud reported so far would affect only a small fraction of the hundreds of millions of dollars involved. However, were the agencies involved to be suspended for a long period, or disbarred from future funding, it would create a sizeable hole in Syrian relief operations. It could also trigger similar sanctions by other donors and drive the NGOs involved into a major cash crunch.

The UN estimates that 13.5 million Syrians need humanitarian assistance – be it food, medical care, or shelter – and it is ultimately these victims (mostly civilians) of the five-year war who will suffer as a result of aid agency graft.

International NGOs also fund programmes run by local charities, so the impact of the funding suspensions will likely trickle down further into the aid response.

The USAID official told IRIN that there had been a break in aid delivery but it was still delivering assistance and was looking for new agencies to step in and fill the gap.

Transparency and accountability?

Several of the NGOs involved were initially reluctant to speak to IRIN, citing concerns about the safety of their staff. Operations across borders into areas controlled by various armed factions are fraught with risk, and both donors and NGOs offer little by way of public information about them, despite their scale. The locations of projects, and the sources of funding are generally kept confidential. If parties to the conflict were to know exactly what and where aid operations were, it could expose them to a risk of intimidation, manipulation and even kidnap or armed violence.

Despite this official policy of deniability, and public data that contains no agency names, several of the NGOs publish promotional material about their Syria work on their websites.

In 2015, the US reported $397 million in funding to NGOs’ work inside Syria, according to the UN’s Financial Tracking Service, but no breakdown is provided due to the sensitivity of the information.

The US wings of IMC and IRC receive more than two thirds of their funding from government – somewhat higher than some other NGOs of their size. IMC US and UK, when combined, receive only two percent of their income from private individuals, and IRC (US) receives 68% of its funding from government grants, according to public tax filings. GOAL (Ireland) receives funding from USAID, the UK, and the EU, and may be less vulnerable to a collapse in confidence from USAID. However, 88% of its funding comes from grants, not private individuals.

A spokesman from the UK’s Department for International Development (DFID), the second-largest donor for Syria and a major contributor to some of the same NGOs or their affiliates, told IRIN that they “are aware of concerns relating to US-funded aid programmes in Syria and continue to monitor the situation. It would be inappropriate to comment on individual cases.”

The spokesman added that DFID has not opened its own investigations into the issue.

Following OIG’s 6 May announcement that its investigation had forced it to suspend funding for certain programmes, IMC emailed IRIN a comment from its chief compliance officer, William Garvelink, (himself a former senior USAID official) saying the organisation is “actively” cooperating with the OIG and has mounted its own internal investigation.

“We have a zero-tolerance policy for fraud and corruption and have fired staff members who were suspected of involvement,” the statement from Garvelink said. “We have already implemented improved controls to combat fraud and corruption and will continue to make adjustments as needed.”

Meanwhile, IRC wouldn’t respond in the context of an ongoing investigation and referred IRIN to USAID.

GOAL’s partial suspension has already been reported in the Irish press, and a statement on their website confirms that GOAL Syria “is cooperating in an ongoing investigation by the Office of the Inspector General… in the US into alleged supply chain irregularities to US sponsored aid programmes in Syria.”

Mercy Corps, another aid organisation involved in cross-border relief, told IRIN that activities under two USAID grants had been suspended in December but were reinstated shortly after it cooperated with the investigation and demonstrated “it has in place appropriate controls and risk-mitigation measures.”

If you have information on this issue, you can contact IRIN and we will protect your anonymity.

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