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Q&A: Top US aid fraud investigator defends tough counter-terror stance

The OIG chief of investigations reveals $8.5 million of food aid diversion in Syria

Anmar Qusay/UNHCR
Families from Falluja, Iraq, continue to flee from the city as fighting for its control continues

The USAID Office of the Inspector General (OIG) is a watchdog that has launched multiple investigations into aid diversion in Syria and Iraq, and banned at least 20 individuals and companies connected with an elaborate fraud involving Turkish suppliers and four NGOs.

Recently, it has focused on aid skimmed off by extremist groups in Syria: not just fraud, but potentially cases of financing terrorism. Despite its successes in clamping down on corruption, critics say its rigid attitude is preventing aid from getting through to people in need.

IRIN interviewed the OIG’s head of investigations, Dan Altman, by phone in late December. He disclosed new details about the diversion of over $8 million worth of food aid to a Syrian armed group – a case first reported by IRIN.

Altman said several other Syria diversion investigations are still underway. He also rejected accusations of over-aggressive enforcement and spelled out what he believes NGOs need to do to respond to allegations of material support to terrorists.

Extracts of the interview follow, edited for length and clarity.

IRIN: Are the OIG’s expectations of ‘zero tolerance’ for fraud or diversion realistic?

Dan Altman: This is a really, really critical point. The type of issues we investigate is when we have an organised and systemic effort to penetrate and take control of an implementer. We're not talking about a one-off, like a staff member that maybe took a couple bags of flour and threw it in their trunk, or one little distribution team maybe giving a couple things to cousins. We're talking about organised crime, where they've completely infiltrated and taken control of the procurement or logistics systems of USAID implementers. That's the type of issue that we’re investigating.

[For example], the implementer at their headquarters… believes there's one reality going on inside of Syria, but the actual reality is that their office in Syria and their staff in Syria are in some way under the control of HTS [the sanctioned Islamist group Hayat Tahrir Al-Sham], which is resulting in a systemic manipulation of the programme.

IRIN: What do you say to allegations of an aggressive attitude from OIG agents in the field?

Altman: The reality is that the US government is the only bilateral donor that sends criminal investigators out into the field. Basically, we have the right to have reasonable access to all of their records and documents, and to their people to ask questions.

So if the allegation is that we’re aggressive and that we're forward-leaning, then ‘guilty as charged’.

In the cases that we've run in [Syria’s northwestern province of] Idlib, we have directly confronted people who have later admitted to intentionally diverting tens of thousands of food kits, and potentially millions of dollars worth of resources, to HTS, knowingly. We're sitting in the room talking to them. In other instances, we've encountered NGO staff that actually have some direct relationship with HTS.

And, in fact, I've noticed that there are many NGOs that appear to have strong opinions about our work. But I have also noted that the NGOs that are most affected by this... they're not complaining, and it's because they took on a very difficult job in a difficult place, and through our investigative work they determined there was an issue. They put things on hold for long enough to satisfy themselves and USAID that issues were addressed and they got back to work.

IRIN: How serious are the cases currently being investigated?

Altman: I'm not going to identify the name of the organisation. But we have an instance in Idlib where we had a diversion of almost 400,000 food kits that are worth about eight and a half million dollars. [IRIN believes he is referring to a previously reported food diversion case involving Catholic Relief Services. A CRS spokesperson declined to comment, citing an ongoing investigation.]

Anybody stealing eight and a half or nine million dollars worth of humanitarian commodities: we would investigate that. We’d do our best to collect the information and facts necessary to make sure that the organisation… was made ineligible to work for the US government and, if appropriate, try to put the people in jail.

Whether or not those items were stolen by people and sold in the market so they could enrich themselves and buy boats or houses, or whether those kits were diverted to be given to the family of fighters and armed groups in lieu of salary, that's sort of a side point.

I don't think that anyone reasonable would say that, as the oversight body for USAID, that we should do anything other than aggressively investigate that; notwithstanding the fact that the stuff is going to an armed group, that eight million dollars is not going to intended beneficiaries.

IRIN: Is the OIG demanding an excessive amount of conditions and requirements?

Altman: OIG doesn’t set any requirements for the [foreign aid] projects. USAID sets the requirements… [and] has put more stringent requirements in place [on Syria] when they perceive there is a risk or a problem. In the environments where USAID is operating and the implementers are operating, perfection is not only impossible but it might be said that any organisation that claims to be working in that area and never had a problem, that would be something that would raise our eyebrows. So in no way are we expecting perfection.

These are really, really complicated environments. And so as soon as we think of a good system or control, the bad guys will think of a way to exploit it. It does mean that we should constantly be vigilant and creative about ways to keep trying to outsmart them.

IRIN: What are some examples of the kind of fraud uncovered in Syria?

Altman: A family of five is supposed to get X amount of food, but they only get 60 percent of it because someone is diverting the other 40 percent; they make the families sign for the whole amount… We [US aid programmes] paid for parkas and lined insulated boots for children, but what they got were rubber rain boots and a sweatshirt of a such poor quality that you could stick your finger through it. We have given women burlap underwear… we have given expired and unsanitary medical commodities [to some medical facilities].

Where the staff of an NGO is providing basically the salaries for fighters in an armed group [using diverted aid resources], not only is it an obscenity, in the sense that it's a loss of resources that are meant to go to hungry Syrians, we are actually funding the conflict.

And so those are the reasons why we take these cases seriously. While we’re an oversight body, I don't think that any of the work that we're doing is inconsistent with the humanitarian principles.

So if the allegation is that we’re aggressive and that we're forward-leaning, then ‘guilty as charged’, but we're doing it primarily because we want the programmes to be effective and reach the intended beneficiaries.

IRIN: Which criticisms of the OIG investigations bother you?

Altman: OIG has no problem with being challenged. Our IG [Inspector General], Ann Calvaresi Barr, when she came in, wanted to raise the level of the work that we do to point out when there are systemic and strategic problems. So when we're identifying issues like this, and it's causing disruptions and it's causing people to really reflect on the work they're doing, I'm perfectly fine with them being upset with us.

We’re having a conversation; the conversation is resulting in information getting out, it’s raising awareness, and hopefully will help tighten up the systems and controls.

And that's why we keep gathering the whole industry together. But like when we had those 54 organisations [in an OIG “roundtable” meeting] in July, it wasn't a love-fest… but we were having a good, open dialogue.

IRIN: One activist’s campaign has led to heavy fines for one or two NGOs that didn’t reveal to USAID their connections with sanctioned groups. Legal cases relied in part on the NGOs’ public web postings. How do you view these cases under the False Claims Act?

Altman: We get, over the course of a year, 1,500 to 2,000 complaints that come in from all over the world. And we get complaints that are true and complaints that aren't true. We get complaints from people that are doing it with a positive motivation. We get complaints from people that have an axe to grind with somebody.

Our job is to assess whether or not there's a violation of rule, regulation, or law; and then to determine whether something is of a sufficient priority that we think that we need to look into it or whether it could be handled by somebody else. We don't spend a whole lot of time worrying about who's bringing the complaint.

I read in one of your articles, somebody at the workshop commented that we were being heavy-handed or threatening or whatever.

The point of that event in July was to say to people, ‘this is something you need to pay attention to’, and that if you have questions or concerns on previous engagements [with sanctioned groups], discuss that with USAID directly, don't lie [when applying for US government funds]..

This is the thing that's important for the NGOs to understand: that because of the way the law is set up, anybody has the ability to bring these things forward, and the US government's required to respond to it. Therefore, don't lie.

It would be far more productive to understand the regulations, to comply with the regulations, to be honest and to negotiate, versus to be dishonest and then have to deal with the consequences of it.

I think, as a general principle, being honest is a good idea, and not lying when you're applying for awards.

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