Food Aid Bypasses Somalia’s Needy, U.N. Study Finds

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By JEFFREY GETTLEMAN and NEIL MacFARQUHAR

As much as half the food aid sent to Somalia is diverted from needy people to a web of corrupt contractors, radical Islamist militants and local United Nations staff members, according to a new Security Council report.

The report, which has not yet been made public but was shown to The New York Times by diplomats, outlines a host of problems so grave that it recommends that Secretary General Ban Ki-moon open an independent investigation into the World Food Program’s Somalia operations. It suggests that the program rebuild the food distribution system — which serves at least 2.5 million people and whose aid was worth about $485 million in 2009 — from scratch to break what it describes as a corrupt cartel of Somali distributors.

In addition to the diversion of food aid, regional Somali authorities are collaborating with pirates who hijack ships along the lawless coast, the report says, and Somali government ministers have auctioned off diplomatic visas for trips to Europe to the highest bidders, some of whom may have been pirates or insurgents.

Somali officials denied that the visa problem was widespread, and officials for the World Food Program said they had not yet seen the report but would investigate its conclusions once it was presented to the Security Council next Tuesday.

The report comes as Somalia’s transitional government is preparing for a major military offensive to retake the capital, Mogadishu, and combat an Islamist insurgency with connections to Al Qaeda.

The United States is providing military aid, as the United Nations tries to roll back two decades of anarchy in the country.

But it may be an uphill battle. According to the report, Somalia’s security forces “remain ineffective, disorganized and corrupt — a composite of independent militias loyal to senior government officials and military officers who profit from the business of war.”

One American official recently conceded that Somalia’s “best hope” was the government’s new military chief, a 60-year-old former artillery officer who, until a few months ago, was assistant manager at a McDonald’s in Germany.

The report’s investigators, part of the Monitoring Group on Somalia, were originally asked to track violations of the United Nations arms embargo on Somalia, but the mandate was expanded.

Several of the report’s authors have received death threats, and the United Nations recently relocated them from Kenya to New York for safety reasons.

Possible aid obstructions have been a nettlesome topic for Somalia over the past year and have contributed to delays in aid shipments by the American government and recent suspensions of food programs in some areas by United Nations officials.

The report singles out the World Food Program, the largest aid agency in the crisis-racked country, as particularly flawed.

“Some humanitarian resources, notably food aid, have been diverted to military uses,” the report said. “A handful of Somali contractors for aid agencies have formed a cartel and become important power brokers — some of whom channel their profits, or the aid itself, directly to armed opposition groups.”

These allegations of food aid diversions first surfaced last year. The World Food Program has consistently denied finding any proof of malfeasance and said that its own recent internal audit found no widespread abuse.

“We have not yet seen the U.N. Somalia Monitoring Group report,” the World Food Program’s deputy executive director, Amir Abdulla, said Tuesday. “But we will investigate all of the allegations, as we have always done in the past if questions have been raised about our operations.”

The current report’s investigators question how independent that past audit was, and called for a new outside investigation of the United Nations agency.

“We have to tell these folks that you cannot go on like this — we know what you are doing, you can’t fool us anymore, so you better stop,” said President Ali Bongo Ondimba of Gabon, who was at the United Nations, where his country holds the presidency of the Security Council this month.

The report also charges that Somali officials are selling spots on trips to Europe and that many of the people who are presented as part of an official government entourage are actually pirates or members of militant groups.

The report says that Somali officials use their connections to foreign governments to get visas and travel documents for people who would not otherwise be able to travel abroad and that many of these people then disappear into Europe and do not come back.

“Somali ministers, members of Parliament, diplomats and ‘freelance brokers’ have transformed access to foreign visas into a growth industry, matched possibly only by piracy,” selling visas for $10,000 to $15,000 each, the report said.

The report’s authors estimate that dozens, if not hundreds of Somalis have gained access to Europe or beyond through this under-the-table visa business.

Mohamed Osman Aden, a Somali diplomat in Kenya, said: “Maybe there’s been one or two cases that have happened over the years. But these are just rumors. These allegations have been going around for years.”

The report also takes aim at some of Somalia’s richest, most influential businessmen, Somalia’s so-called money lords. One, Abdulkadir M. Nur, known as Eno, is married to a woman who plays a prominent role in a local aid agency that is supposed to verify whether food aid is actually delivered. That “potential loophole” could “offer considerable potential of large-scale diversion,” the report said.

The report accuses Mr. Nur of staging the hijacking of his own trucks and later selling the food.

In an e-mail message, Mr. Nur said he had sent the investigators many documents that “showed very clearly that the gossip and rumors they are investigating are untrue,” including the alleged hijacking or any link to insurgents. He said that his wife merely sat on the board of the local aid agency and that only “a tiny fraction” of the food he transported was designated for that aid agency.

In September, Somalia’s president, Sheik Sharif Sheik Ahmed, wrote a letter to Secretary General Ban, defending Mr. Nur as a “very conscientious, diligent and hard-working person” and saying that if it were not for the contractors, “many Somalis would have perished.”

The report questions why the World Food Program would steer 80 percent of its transportation contracts for Somalia, worth about $200 million, to three Somali businessmen, especially when they are suspected of connections to Islamist insurgents.

The report says that fraud is pervasive, with about 30 percent of aid skimmed by local partners and local World Food Program personnel, 10 percent by the ground transporters and 5 to 10 percent by the armed group in control of the area. That means as much as half of the food never makes it to the people who desperately need it.

In January, the United States halted tens of millions of dollars of aid shipments to southern Somalia because of fears of such diversions, and American officials believe that some American aid may have fallen into the hands of Al Shabab, the most militant of Somalia’s insurgent groups.

The report also said that the president of Puntland, a semiautonomous region in northern Somalia, had extensive ties to pirates in the area, who then funneled some of the money they made from hijacking ships to authorities.

Puntland authorities could not be reached on Tuesday, but Mr. Aden, the Somali diplomat, dismissed the allegations, saying that the Puntland government had jailed more than 150 pirates and that it had not “received a penny from them.”

“It’s unfortunate that this monitoring group thinks they can stick everything on the Somalis,” he said.

Jeffrey Gettleman reported from Gisenyi, Rwanda, and Neil MacFarquhar from New York.

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• Much of Somalia's food aid diverted from needy (ctv.ca)

Cuba detains contractor for U.S. government

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American was handing out mobile phones, laptops to activists

By William Booth and Mary Beth Sheridan
Washington Post Staff Writers
Sunday, December 13, 2009

MEXICO CITY -- The Cuban government has arrested an American citizen working on contract for the U.S. Agency for International Development who was distributing cellphones and laptop computers to Cuban activists, State Department officials and congressional sources said Saturday.

The contractor, who has not been identified, works for Bethesda-based Development Alternatives. The company said in a statement that it was awarded a government contract last year to help USAID "support the rule of law and human rights, political competition and consensus building" in Cuba.

Consular officers with the U.S. Interests Section in Havana, the capital, are seeking access to the contractor, who was arrested Dec. 5. The charges have not been made public. Under Cuban law, however, a Cuban citizen or a foreign visitor can be arrested for nearly anything under the claim of "dangerousness."

The detention of an American contractor working for the U.S. government may raise tensions between the Castro brothers' communist government in Cuba and the Obama administration, which has been taking a "go-slow" approach to improving relations with the island.

The new U.S. policy stresses that if Cuba takes concrete steps such as freeing political prisoners and creating more space for opposition, the United States will reciprocate.

A senior Republican congressional aide said the American contractor was being held in a secure facility in Havana.

"It is bizarre they're just holding him and not letting us see him at all," said the aide, who was not authorized to speak on the record. Attempts to reach Cuban government officials to discuss the case were unsuccessful.

Cellphones and laptops are legal in Cuba, though they are new and coveted commodities in a country where the average worker's wage is $15 a month. The Cuban government granted ordinary citizens the right to buy cellphones just last year; they are used mostly for texting, because a 15-minute phone conversation would eat up a day's wages.

Internet use is extremely limited on the island. It is available in expensive hotels, where foreign visitors stay, and at some government facilities, such as universities. Cubans who want to log on often have to give their names to the government. Access to some Web sites is restricted.

A person familiar with the detained American's activity said he was "working with local organizations that were trying to connect with each other and get connected to the Internet and connect with their affinity groups in the U.S."

The person, who spoke on the condition of anonymity because of the delicacy of the case, said Cuban authorities were aware of the project. "Why they picked on this situation," the person said, "is a bit of a mystery."

Cuba has a nascent blogging community, led by the popular commentator Yoani Sánchez, who often writes about how she and her husband are followed and harassed by government agents because of her Web posts. Sánchez has repeatedly applied for permission to leave the country to accept journalism awards, so far unsuccessfully.

"Counterrevolutionary activities," which include mild protests and critical writings, carry the risk of censure or arrest. Anti-government graffiti and speech are considered serious crimes.

"It should come as no surprise that the Cuban regime would lock up an American for distributing communications equipment," said Rep. Ileana Ros-Lehtinen (Fla.), a Cuban American and the top Republican on the House Foreign Affairs Committee.

The detention of an American in Cuba is rare. The handful of U.S. citizens behind bars in Cuba are there for crimes such as drug smuggling, said Gloria Berbena, the press officer at the U.S. Interests Section in Havana.

"An activity that in any other open society would be legal -- giving away free cellphones -- is in Cuba a crime," said José Miguel Vivanco, director of the Americas program of Human Rights Watch. The group recently issued a critical report on freedoms in Cuba called "New Castro, Same Cuba," a reference to installing Raúl Castro as president in place of his ailing older brother Fidel.

Human Rights Watch highlighted 40 cases, including that of Ramón Velásquez Toranzo, who was sentenced to three years in prison for "dangerousness" in 2007 after setting out on a peaceful protest march across Cuba.

Vivanco said that the accused in Cuba are often arrested, tried and imprisoned within a day. He said that any solution to the contractor's case would probably be political and that the Cuban government often provokes a negative reaction in the United States just as both countries begin to move toward more dialogue.

"Our prime concern is for the safety, well-being and quick return to the United States of the detained individual," said the contractor's boss, Jim Boomgard, chief executive officer of Development Alternatives.

Sheridan reported from Washington.

U.S. Fears Iraq Development Projects May Go to Waste - NYTimes.com

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By TIMOTHY WILLIAMS

BAGHDAD — In its largest reconstruction effort since the Marshall Plan, the United States government has spent $53 billion for relief and reconstruction in Iraq since the 2003 invasion, building tens of thousands of hospitals, water treatment plants, electricity substations, schools and bridges.

But there are growing concerns among American officials that Iraq will not be able to adequately maintain the facilities once the Americans have left, potentially wasting hundreds of millions of dollars and jeopardizing Iraq’s ability to provide basic services to its people.

The projects run the gamut — from a cutting-edge, $270 million water treatment plant in Nasiriya that works at a fraction of its intended capacity because it is too sophisticated for Iraqi workers to operate, to a farmers’ market that farmers have not been able to decide how to divvy up space for, to a large American hospital closed immediately after it was handed over to Iraq because the government was unable to supply it with equipment, a medical staff or electricity.

The concern about the sustainability of the projects comes as Iraq is preparing for pivotal national elections in January and as rebuilding has emerged as a political imperative in Iraq, eclipsing security in some parts of the country as the main anxiety of an electorate frustrated with the lack of social, economic and political progress. American forces are scheduled to begin withdrawing in large numbers next year.

In hundreds of cases during the past two years, the Iraqi government has refused or delayed the transfer of American-built projects because they can not staff or maintain them, Iraqi and American government officials say.

Other facilities, including hospitals, schools and prisons built with American funds, have remained empty long after they were completed because there were not enough Iraqis trained to operate them.

“As large-scale construction projects — power plants, water-treatment systems and oil facilities — have been completed, there has been concern regarding the ability of Iraqis to maintain and fund their operations once they are handed over to the Iraqi authorities,” said a recent analysis prepared for Congress by the Congressional Research Service.

The Government Accountability Office and the special inspector general for Iraq reconstruction have also issued reports during the past several months about the potential failure of American-financed projects once they are transferred to Iraq.

Stuart W. Bowen Jr., inspector general for Iraq reconstruction, said his watchdog agency had “regularly raised concerns about the potential waste of U.S. taxpayer money resulting from reconstruction projects that were poorly planned, badly transferred, or insufficiently sustained by the Iraqi government.”

The blame is shared, officials said. While Iraq has often been guilty of poor management, American authorities have repeatedly failed to ask Iraqis what sort of projects they needed and have not followed up with adequate training. And whether or not the American-built health centers and power plants are ever used as intended, the American companies that won the lion’s share of rebuilding contracts from the federal government have been paid.

The Iraqi government, prodded by American officials here, has pledged to begin spending more of its own money on reconstruction, but the country is facing a substantial budget deficit because of declines in international oil prices.

Prime Minister Nuri Kamal al-Maliki has insisted that reconstruction is the next task. What is not clear is where the $400 billion the government says it needs will come from.

“We will use the revenue we have from oil, but the government feels it has to do more than that to rebuild,” said Ali al-Alak, an adviser to Mr. Maliki.

In the meantime, the Americans — military and civilian reconstruction specialists alike — continue to depart in large numbers, taking with them their money, equipment and expertise.

Despite the $53 billion spent by the United States, many Iraqis have criticized the rebuilding effort as wasteful. Ali Ghalib Baban, Iraq’s minister of planning, said it had had no discernable impact. “Maybe they spent it,” he said, “but Iraq doesn’t feel it.”

Iraqis, for whom bombed-out buildings are an unremarkable part of urban existence, also say they have seen little evidence of rebuilding.

“Where is the reconstruction?” asked Sahar Kadhum, a resident of Kut, about 100 miles southeast of Baghdad. “The city is sleeping on hills of garbage.”

Indeed, despite the billions in American funds, more than 40 percent of Iraqis still lack access to clean water, according to the Iraqi government. Ninety percent of Iraq’s 180 hospitals do not have basic medical and surgical supplies, according to the aid organization Oxfam. Iraqis also have from disproportionately high rates of infant mortality, cerebral palsy and cancer.

Exacerbating the problem, Iraqi and American officials say that hundreds of thousands of Iraq’s professional class have fled or been killed during the war, leaving behind a population with too few doctors, nurses, engineers, scientists and others.

In Hilla, 60 miles south of Baghdad, a recently completed $4 million maternity hospital built by the Americans is open, but the staff members are unable to operate much of its equipment.

“The building is fairly good and the Americans have provided the hospital with a variety of high-tech medical devices, but they did not pay attention to the training of doctors in how to use them,” said Jawad al-Jubouri, a district officer.

In Falluja, west of Baghdad, a $98 million waste water treatment plant built by the United States serves only one-third of the homes it was intended to because the Iraqi government has not supplied it with sufficient fuel “raising the possibility that the U.S. effort has been wasted,” according to a special inspector general’s report.

At Ibn Sina Hospital in Baghdad, which had been the American military’s largest medical center in the country, Iraqi security forces took up guard positions even before the conclusion of a ceremonial transfer to the Iraqi government last month. The hospital, however, has been closed because the Health Ministry lacks the staff and equipment to reopen it, even though the American military said it left $7.9 million in equipment behind.

Iraq’s most notorious reconstruction project might be the $165 million Basra Children’s Hospital in southern Iraq. Championed by Laura Bush when she was the first lady, its completion has been delayed by more than four years, and the project is $115 million over budget.

Once the hospital opens — perhaps next year — there will be too few doctors and other medical staff members to take advantage of much of its modern equipment.

“It was supposed to open in March, but I don’t think it will be ready,” said Ahmed Qassim, the hospital’s director. He added: “Maybe July, but we don’t know. Maybe not July.”

Duraid Adnan contributed reporting from Basra, John Leland from Baghdad and Iraqi employees of The New York Times from Basra, Hilla and Kut.

China Helps the Powerful in Namibia - NYTimes.com

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By SHARON LaFRANIERE

BEIJING — Like parents everywhere, mothers and fathers in Namibia, an impoverished southern African nation, worry about college costs and opportunities for their children. The Chinese government has stepped forward to help — for a select and powerful few.

So far this year, the Beijing government has secretly awarded scholarships to study in China to the offspring of nine top officials, including to the daughter of Namibia’s president, Hifikepunye Pohamba. Two young relatives of Namibia’s former president and national patriarch, Sam Nujoma, also received grants.

The disclosure of the scholarships, first revealed by a feisty Namibian newspaper, has unleashed a wave of fury from the nation’s civil society groups and youth organizations. In a country where five in six high school graduates do not go on to college, many find it unconscionable for well-paid government leaders to accept overseas university scholarships for their children.

“Only senior people in government knew about the scholarships,” said Norman Tjombe, director of the nonprofit Legal Assistance Center. “No chance was given at all to the general public.”

The controversy has reignited a simmering debate in Namibia over deals with the Chinese government, already under scrutiny by Namibian prosecutors. Inquiries there and in other developing countries in Africa and Asia have cast a fresh light on how China sometimes uses its treasure chest of foreign loans and aid to create elite alliances and ease the approval of no-bid contracts.

Even some within Namibia’s governing Swapo party are asking whether China is trying to buy influence with their nation’s political leadership to gain access to mineral resources or to win business for its well-connected companies.

“How is it that this favor just comes like manna from heaven?” said Elijan Ngurare, secretary general of Swapo’s youth league, in a telephone interview. “Clearly there must be something that they are after.”

To some international relations experts, the scholarship controversy illustrates a blind spot in China’s aggressive strategy to cement diplomatic alliances, lock in natural resources and solicit trade and business on the African continent. In Namibia at least, Chinese government officials seem caught off guard by the public scrutiny exercised by a vibrant civil society.

The scholarship scandal was first revealed in Informante, a free tabloid in the Namibian capital, Windhoek, with a proud motto: “You conceal. We reveal.” It has no counterpart in China, where even the most aggressive media outlets stop short of raising unfavorable questions about the dealings of top officials or their children.

Bates Gill, director of the Stockholm International Peace Institute, said China was accustomed to opaque, controlled, government-to-government relations. “China’s engagement in Africa is moving further and faster than its ability to try and shape perceptions there,” he said. As a result, “there will inevitably be embarrassments.”

The list in Namibia is growing. In July, anticorruption investigators alleged that a state-controlled Chinese contractor had facilitated a $55.3 million deal to sell the Namibian government security scanners with millions of dollars in kickbacks. The inquiry is particularly delicate because until late last year, Hu Haifeng, the son of President Hu Jintao, ran the scanner company. A Chinese Commerce Ministry official recently said that China was cooperating with the Namibian authorities.

Another investigation centers on allegations that a Chinese weapons company funneled $700,000 to Lt. Gen. Martin Shalli, the commander of Namibia’s defense force. Namibia’s president suspended General Shalli from his post in July. General Shalli so far has declined comment.

Mr. Gill said such allegations threatened to undermine China’s impressive campaign to link its development with Africa’s. Over all, while China is making “an enormous and positive contribution to Africa’s development,” he said, it is still unaccustomed to the dynamics of some African democracies.

At the Forum on China-Africa Cooperation this month, the Chinese prime minister, Wen Jiabao, announced that China would double the amount of low-interest loans it offered Africa to $10 billion over the next three years, increase the number of scholarships and reduce tariffs on products from the poorest nations.

But he sounded frustrated when asked whether China was only after Africa’s natural resources.

“Why are there always accusations against China?” he said at a Nov. 8 news conference in Cairo. “Is this an African viewpoint or rather a Western viewpoint?”

In Namibia, political scientists say concerns are growing about whether officials are negotiating arm’s-length contracts with China. “People are thinking China is making secret deals with the government here and they are having all kinds of suspicions,” said Carola Engelbrecht, a citizen activist.

The scholarship recipients include children of some of Namibia’s most powerful officials, including the inspector general of the Namibian police and the justice minister, who is also the secretary general of Swapo.

One grant recipient is the son of the defense minister, whose agency buys weapons from China. Another is the son of the home affairs and immigration minister, whose agency is responsible for approving residence and work permits for an army of Chinese workers whose companies have won government or private contracts for business in Namibia.

Three other recipients are children of the minister, deputy minister, and a third high-ranking official at the Ministry of Mines and Energy. In July, the ministry renewed a license that gives a subsidiary of a state-owned Chinese company sole rights to search for uranium and other minerals in a prime prospecting area.

The nation’s anticorruption commission has begun a preliminary inquiry into how the scholarships were awarded. Chinese government officials have reacted in a familiar fashion: three government agencies in Beijing did not answer written questions.

Xia Lili, first secretary of the Chinese Embassy in Windhoek, said he had no obligation to respond to queries. “This is over,” he said.

But with national elections scheduled at the end of the month, it clearly is not. Bill Lindeke, a political scientist with the Institute for Public Policy Research in Windhoek, said Namibian officials might be forced to pay for their children’s educations in China to quiet the controversy.

Chinese Embassy officials initially insisted that the Education Ministry was in charge of the selection process. But Namibia’s education minister, Nangolo Mbumba, said at a news conference this month that his ministry handled only 10 scholarships to underprivileged students and had nothing to do with the other grants — some of which apparently cover five years of tuition.

He said the president’s daughter, Ndapanda Pohamba, who is now studying at the Beijing Cultural and Language University, “applied for the scholarship in her own right and only notified the parents afterwards.”

The minister’s statement that “you cannot bribe someone with a bursary” set off a fresh wave of indignation in a nation whose two universities can accommodate only about 2,000 of the 12,000 high school students who graduate each year.

“Mr. Mbumba: anything of value you accept, or even worse, solicit, constitutes a bribe if you hold public office,” one citizen said in a text message posted on the Web site of The Namibian, a Windhoek daily.

Pakistanis Balk at U.S. Aid Package - washingtonpost.com

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By Karen DeYoung and Scott Wilson
Washington Post Staff Writers
Thursday, October 8, 2009

The Obama administration's strategy for bolstering Pakistan's civilian government was shaken Wednesday when political opposition and military leaders there sharply criticized a new U.S. assistance plan as interfering with the country's sovereignty.

Although President Obama has praised the $7.5 billion, five-year aid program -- approved by Congress last week -- Pakistani officials have objected to provisions that require U.S. monitoring of everything from how they spend the money to the way the military promotes senior officers.

Their criticism threatens to complicate the administration's efforts in the region, where Pakistan's assistance is seen as crucial to the war in Afghanistan.

"Obviously, it demonstrates we've still got work to do," White House spokesman Robert Gibbs said of the Pakistani criticism.

On Wednesday, Obama convened his top national security officials to discuss policy in Pakistan and its role in the developing strategy in Afghanistan. A senior administration official described the three-hour White House meeting, which coincided with the eighth anniversary of the Afghanistan war, as "a comprehensive update on the situation" in Pakistan, including an "intelligence and counterterrorism assessment, as well as an assessment of the political and diplomatic situation."

With Taliban attacks on U.S. and NATO forces planned and launched from within its borders, an al-Qaeda sanctuary in its tribal areas and a nuclear arsenal whose security is of international concern, Pakistan is the most strategically important country in the region.

When Obama concluded his first strategy review in March, he praised Pakistan's newly elected civilian government and proposed a sharp increase in military and civilian aid. Since then, the administration has tried to overcome decades of mistrust between the two countries, to calm Pakistan's fractious politics and prop up its faltering civilian institutions. U.S. military officials have carefully cultivated their counterparts in the country's politically powerful military, encouraging them to fight militants with whom they have long been allied and to submit to democratic rule.

The White House has been encouraged by the Pakistani government's decision to challenge the Taliban within its borders. The Pakistani army fought the Taliban this spring as the group pushed toward the capital, Islamabad. It then pursued the fighters into the Swat Valley. The army also has been preparing for a push into al-Qaeda and Taliban sanctuaries along the border in South Waziristan. With the government's tacit approval, U.S. missile attacks launched from unmanned aircraft against high-value insurgent targets in the border area have brought what a senior administration official called "a real degradation of al-Qaeda."

As White House strategy sessions on Afghanistan began last week, administration officials contrasted what they described as a worsening situation there with a better-than-expected one in Pakistan, which has been rattled by one political crisis after another in recent years.

"Many in Washington were not prepared for this," one senior official said of Wednesday's outbursts in Islamabad.

A senior U.S. military official said that the relationship with Pakistan is "still positive" but that "we need to understand the sensitivities better." The officials spoke on the condition of anonymity because of the sensitivity of the issue.

The Pakistani media reported mounting anger over the aid bill within the military on Tuesday, when Gen. Ashfaq Kiyani, the army chief, met in Islamabad with Gen. Stanley A. McChrystal, the top U.S. and NATO commander in Afghanistan. The terms set in the bill were described as "insulting and unacceptable" by one publication. On Wednesday, the dispute was the subject of a special debate in the Pakistani Parliament.

"Not a single Pakistani can accept the [aid legislation] in its current form," said Chaudhry Nisar Ali Khan of the Pakistan Muslim League, a leading opposition party.

In a statement issued after a meeting with top military commanders, Kiyani expressed "serious concerns" over the legislation and said that Pakistan had the right to analyze and respond to all threats "in accordance with her own national interests."

For its part, the cash-strapped Pakistani government of President Asif Ali Zardari appears caught between its desire for closer relations with the United States -- and the resources that relationship promises -- and the political liability it entails.

Pressed during the debate, Prime Minister Yousaf Raza Gillani said the aid provisions should be discussed "as long as desired" by Parliament. Saying he was closely consulting with the military, Gillani declared that the aid package "is neither a contract signed with the U.S. administration, nor is it binding on Pakistan. It is the legislation of the U.S. Congress, and it is we who have to decide whether to accept it or not."

U.S. and Pakistani officials said that the government was on board with the aid package and that accommodation could be reached with the political opposition. They suggested that the criticism was part of what one senior Pakistani official close to Zardari called an "orchestrated campaign" by elements within Pakistan's military and its intelligence service opposed to civilian control of foreign and defense policies. The army had been "completely briefed" in advance about all elements in the aid package, the official said, describing the military's alarm this week as disingenuous.

Pakistani political analyst Hasan-Askari Rizvi said that the language in the legislation could have been "more diplomatic and softer" but that the bill had become a vehicle for unrelated disputes. "If the Pakistani government, the opposition and the military cannot come to a consensus," Rizvi said, "then it is going to create problems for the ties between the U.S. and Pakistan."

The bill, named after its chief sponsors, Sens. John F. Kerry (D-Mass.) and Richard G. Lugar (R-Ind.), the chairman and ranking minority member of the Senate Foreign Relations Committee, triples the amount of U.S. economic assistance to Pakistan, which has long been overshadowed by military aid.

Obama was an original sponsor of the measure, first introduced when he served in the Senate, and the bill is the centerpiece of his administration's development efforts in Pakistan. Its passage this year was stalled when House members, recalling a lack of supervision over billions of dollars given to Pakistan during the Bush administration, insisted on stricter monitoring provisions. The version that ultimately emerged from a conference committee and was approved last week mandates regular administration certification that Pakistan is adhering to a wide range of requirements.

Special correspondent Shaiq Hussain in Islamabad and staff writer Ben Pershing in Washington contributed to this report.

Uneasy Engagement - China Spreads Aid in Africa, With a Catch - Series - NYTimes.com

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By SHARON LaFRANIERE and JOHN GROBLER

WINDHOEK, Namibia — It is not every day that global leaders set foot in this southern African nation of gravel roads, towering sand dunes and a mere two million people. So when President Hu Jintao of China touched down here in February 2007 with a 130-person delegation in tow, it clearly was not just a courtesy call.

And in fact, China soon granted Namibia a big low-interest loan, which Namibia tapped to buy $55.3 million worth of Chinese-made cargo scanners to deter smugglers. It was a neat illustration, Chinese officials said, of how doing good in Namibia could do well for China, too.

Or so it seemed until Namibia charged that the state-controlled company selected by China to provide the scanners — a company until recently run by President Hu’s son — had facilitated the deal with millions of dollars in illegal kickbacks. And until China threw up barriers when Namibian investigators asked for help looking into the matter.

Now the scanners seem to illustrate something else: the aura of boosterism, secrecy and back-room deals that has clouded China’s use of billions of dollars in foreign aid to court the developing world.

From Pakistan to Angola to Kyrgyzstan, China is using its enormous pool of foreign currency savings to cement diplomatic alliances, secure access to natural resources and drum up business for its flagship companies. Foreign aid — typically cut-rate loans, sometimes bundled with more commercial lines of credit — is central to this effort.

Leaders of developing nations have embraced China’s sales pitch of easy credit, without Western-style demands for political or economic reform, for a host of unmet needs. The results can be clearly seen in new roads, power plants, and telecommunications networks across the African continent — more than 200 projects since 2001, many financed with preferential loans from the Chinese government’s Exim Bank.

Increasingly, though, experts argue that China’s aid comes with a major catch: It must be used to buy goods or services from companies, many of them state-controlled, that Chinese officials select themselves. Competitive bidding by the borrowing nation is discouraged, and China pulls a veil over vital data like project costs, loan terms and repayment conditions. Even the dollar amount of loans offered as foreign aid is treated as a state secret.

Anticorruption crusaders complain that secrecy invites corruption, and that corruption debases foreign assistance.

“China is using this financing to buy the loyalty of the political elite,” said Harry Roque, a University of the Philippines law professor who is challenging the legality of Chinese-financed projects in the Philippines. “It is a very effective tool of soft diplomacy. But it is bad for the citizens who have to repay these loans for graft-ridden contracts.”

In fact, such secrecy runs counter to international norms for foreign assistance. In a part of the world prone to corruption and poor governance, it also raises questions about who actually benefits from China’s projects. The answers, international development specialists say, are hidden from public view.

“We know more about China’s military expenditures than we do about its foreign aid,” said David Shambaugh, an author and China scholar at George Washington University. “Foreign aid really is a glaring contradiction to the broader trend of China’s adherence to international norms. It is so strikingly opaque it really makes one wonder what they are trying to hide.”

Until recently, wealthy nations could hardly hold themselves out as an example of how to run foreign aid, either. Many projects turned out to be tainted by corruption or geared to enrich the donor nation’s contractors, not the impoverished borrowers. But over the past 10 or 15 years, some 30 developed nations under the umbrella of the Organization of Economic Cooperation and Development (O.E.C.D.) have made a concerted effort to clean up their assistance programs.

They demanded that foreign money be awarded and spent transparently, using competitive bidding and outlawing bribery. Increasingly, they also are also pushing to give borrowers more choice among suppliers and contractors, rather than insisting that funds be recycled back to the donor nation’s companies.

China, which is not a member of the O.E.C.D., is operating under rules that the West has largely abandoned. It mixes aid and business in secret government-to-government agreements. It requires that foreign aid contracts be awarded to Chinese contractors it picks through a closed-door bidding process in Beijing. Its attempts to prevent corrupt practices by its companies overseas appear weak.

Some developing nations insist on independently comparing prices before accepting China’s largesse. Others do not bother. “Very often they are getting something they wouldn’t be able to get without China’s financing,” said Chris Alden, a specialist on China-African relations with the London School of Economics and Political Science. “They presume that the Chinese are going to give value for money.”

Development experts say they have tried to convince the Chinese government that better safeguards and a more open process will enhance its efforts to gain influence and business. If its projects collapse because of kickbacks or inflated costs, they argue, China will end up exporting not only goods and services, but a reputation for corruption that it is already battling at home.

But Deborah Brautigam, the author of a coming book on China’s economic ties with Africa titled “The Dragon’s Gift,” says Beijing is hesitant to hobble its companies with Western-style restraints before they have become world-class competitors.

Thinking Business, Not Ethics

“The Chinese are kind of starting out where everyone else was years ago, and they see themselves as being at a disadvantage,” Ms. Brautigam said. “The Chinese don’t particularly want a big scandal. That doesn’t further their interests. They just want their companies to get business.”

Sometimes they get both. In 2007, the Philippines was forced to cancel a $460 million contract with the Beijing scanner company, Nuctech Company Ltd., to set up satellite-based classroom instruction after critics protested the company had no expertise in education.

It also canceled a $329 million contract awarded to ZTE Corporation, a state-controlled Chinese communications company, after allegations of enormous kickbacks. ZTE denied bribing anyone, but the controversy has lingered. Last month an antigraft panel recommended filing criminal charges against two Philippines officials in connection with the contract.

A Manila-based nonprofit group, the Center for International Law, has mounted a legal challenge against still another Chinese contract in the Philippines, to build a $500 million railroad. Professor Roque, who leads the center, contends that the price of China’s state-owned contractor “was simply plucked out of the sky.” Officially, China’s directive to its companies is toe an ethical line overseas.

“Our enterprises must conform to international rules when running business, must be open and transparent, should go through a bidding process for big projects and forbid inappropriate deals and reject corruption and kickbacks,” Wen Jiabao, China’s prime minister, told a group of Chinese businessmen in Zambia in 2006.

But China has no specific law against bribing foreign officials. And the government seems none too eager to investigate or punish companies it selects if they turn out to have engaged in shady practices overseas.

Indeed, it has an added incentive to look the other way because of the state’s ties to many foreign aid contractors — connections that sometimes extend to families of the Communist Party elite.

In January, for example, the World Bank barred four state-controlled Chinese companies from competing for its work after an investigation showed that they tried to rig bids for bank projects in the Philippines. But two of those companies remain on the Chinese Commerce Ministry’s list of approved foreign aid contractors, according to its Web site.

The Namibia controversy is especially delicate because until late last year, the contractor’s president was Mr. Hu’s son, Hu Haifeng. The younger Mr. Hu is now Communist Party secretary of an umbrella company that includes Nuctech and dozens of other companies. As soon as allegations against the company surfaced this summer, China’s censors swung into action, blocking all mention of the scandal in the Chinese news media and on the Internet.

“This is a signal to everyone to back off,” said Russell Leigh Moses, an analyst of Chinese politics in Beijing. “Everyone goes into default mode, because once you get the ball rolling, no one knows where it will stop. No one wants their rice bowl broken.”

Nuctech has denied any wrongdoing in court papers filed here in Windhoek. A spokeswoman said the company had no comment because the matter was unresolved. China’s Commerce Ministry and other government agencies did not respond to repeated requests for comment.

Namibia’s anticorruption investigators allege that Nuctech funneled $4.2 million in kickbacks to a front company set up by a Namibian official, who split the funds with her business partner and Nuctech’s southern Africa representative, a Chinese citizen.

A Deal Ends in Arrests

China has promoted Nuctech as one of its global “champions.” In 10 years the company has gained customers in more than 60 countries, marketing advanced-technology scanners that help detect contraband or dangerous materials inside cargo containers. Nuctech’s spokesman says it is the only Chinese company that makes such equipment.

The Namibian government was interested in equipping its airports, seaports and border posts with scanners to comply with stricter regulations on international commerce. On a state visit to China in 2005, Hifikepunye Pohamba, Namibia’s president, visited Nuctech’s headquarters and factory, according to court testimony. The following year, Nuctech sent a representative, Yang Fan, to Windhoek, Namibia’s capital.

Hu Jintao’s visit to Windhoek a few months later opened up an option for finance. “China says the sky is the limit. Just say what you want,” said Carl Schlettwein, the permanent secretary of the Namibian Finance Ministry, who participated in the negotiations.

At first, Mr. Schlettwein said, the talks stalled because Namibia was unwilling to grant China access to its substantial mineral deposits in exchange for lines of credit. Once China dropped that condition, Namibia agreed in principle to a $100 million, 20-year-loan at a 2.5 percent interest rate, then well below the market. “Purely from a financial point of view, it was a fine deal,” Mr. Schlettwein said.

Namibian officials decided to draw on the credit line to finance most of the cost of the scanners. Mr. Schlettwein, who negotiated the scanner contract, said he wanted to seek competitive bids from scanner suppliers around the world, but Chinese negotiators refused.

“They said ‘that is not our system,’ “ he said. “ ‘We tell you from whom you buy the equipment.’ All of us, including the minister, were very worried about the nontransparent way of doing things,” he said, but reasoned that the Chinese government “will not unduly cheat us.”

Last March, less than a week after the Finance Ministry paid Nuctech an initial $12.8 million, Mr. Schlettwein’s unease turned to distress.

A Windhoek bank official, following the strictures of Namibia’s new money-laundering act, called to ask why Nuctech had deposited $4.2 million in the account of a consulting company set up by Tekla Lameck, a Namibian public service commissioner.

Mr. Schlettwein, who says that he has never met Ms. Lameck and that she had nothing to do with the scanner purchase, alerted Namibia’s anticorruption commission. In July, Ms. Lameck, her business partner and Nuctech’s representative in Windhoek were arrested on suspicion of violating Namibia’s anticorruption law. All three have denied wrongdoing.

Investigations Galore

Investigators charge that Nuctech agreed to hire Ms. Lameck’s consulting company, Teko Trading, in 2007, a month after President Hu’s visit. Nuctech agreed to pay Teko 10 percent of the contract if the average price of one scanner was $2.5 million. If the price was higher, Nuctech would pay Teko 50 percent of the added cost. A subsequent agreement fixed the amount of commissions at $12.8 million, according to court records.

At his bail hearing last month, Yang Fan, Nuctech’s representative, said his company hired Teko because “Teko explained how to do business here in Namibia.” He did not elaborate. But in 2007, another Namibian official complained to the anticorruption commission that Ms. Lameck had introduced herself to the Chinese Embassy in Windhoek as a representative of Swapo, Namibia’s governing political party. She claimed that no business could be done in Namibia without Swapo’s involvement, the complainant said.

Investigators have been seeking Nuctech’s explanation of the affair for more than two months. There is little sign the company has complied with their requests, although investigators say they remain hopeful.

Namibia’s chief national prosecutor, Martha Imalwa, traveled to Beijing in July, hoping to question officials from Nuctech and another company involved in a separate inquiry. But according to her deputy, Danie Small, Ms. Imalwa was allowed to present questions only to the international division of China’s Supreme People’s Procuratorate.

A court has temporarily frozen $12.8 million in Nuctech’s assets while the inquiry continues. Meanwhile, at Namibia’s Finance Ministry, Mr. Schlettwein is belatedly trying to determine what other buyers paid for comparable scanners. When he asked South African officials for pricing information, he said, he was told Nuctech’s contract there is also under investigation.

Perhaps predictably, competitors say Namibia agreed to pay far too much. Peter Kant, a vice-president at Nuctech’s American rival, Rapiscan Systems, said that comparable equipment and services costs about $28 million, or $25 million less than Nuctech’s contract.

Mr. Schlettwein last month tried to send a letter through official channels to Rong Yonglin, Nuctech’s chairman, to ask that the contract be renegotiated. But a Chinese Embassy official in Windhoek refused to accept the correspondence, saying he knew no one with that name.

Stephen Castle contributed reporting from Brussels, and Carlos H. Conde from Manila. Jonathan Ansfield contributed research from Beijing.

IMF: stop funding Honduras - guardian.co.uk

Image via Wikipedia

by Mark Weisbrot

The IMF is undergoing an unprecedented expansion of its access to resources, possibly reaching a trillion dollars. This week the EU committed $175bn, $67bn more than even the $108bn that Washington agreed to fork over after a tense stand-off between the US Congress and the Obama administration earlier this summer.

The Fund and its advocates argue that the IMF has changed. The IMF is "back in a new guise", says the Economist. This time, we are told, it's really going to act as a multilateral organisation that looks out for the countries and people of the world, and not just for Washington, Wall Street or European banks.

But it's looking more and more like the same old IMF on steroids. Last week the IMF disbursed $150m to the de facto government of Honduras, and it plans to disburse another $13.8m on 9 September. The de facto government has no legitimacy in the world. It took power on 28 June in a military coup, in which the elected President Manuel Zelaya was taken from his home at gunpoint and flown out of the country.

The Organisation of American States suspended Honduras until democracy is restored, and the UN also called for the "immediate and unconditional return" of the elected president.

No country in the world recognises the coup government of Honduras. From the western hemisphere and the EU, only the US retains an ambassador there. The World Bank paused lending to Honduras two days after the coup, and the Inter-American Development Bank did the same the next day. More recently the Central American Bank of Economic Integration suspended credit to Honduras. The EU has suspended over $90m in aid as well, and is considering further sanctions.

But the IMF has gone ahead and dumped a large amount of money on Honduras – the equivalent would be more than $160bn in the US – as though everything is OK there.

This is in keeping with US policy, which is not surprising since the US has been – since the IMF's creation in 1944 – the Fund's principal overseer. Washington made a symbolic gesture earlier this year by cutting off about $18.5m to Honduras, and the state department announced on Thursday that it is terminating other assistance.

But more than two months after the Honduran military overthrew the elected president of Honduras, the US government has yet to determine that a military coup has actually occurred. This is because such a determination would require, under the US Foreign Appropriations Act, a complete cutoff of aid.

One of the largest sources of US aid is the Millennium Challenge Corporation (MCC), a government entity whose board is chaired by Hillary Clinton, the US secretary of state.

Interestingly, there were two military coups in the last year in countries that were receiving MCC money: Madagascar and Mauritania. In both of those cases MCC aid was suspended within three days of the coup.

The IMF's decision to give money to the Honduran government is reminiscent of its reaction to the 2002 coup that temporarily overthrew President Hugo Chávez of Venezuela. Just a few hours after that coup, the IMF's spokesperson announced: "We stand ready to assist the new administration in whatever manner they find suitable."

This immediate pledge of support by the IMF to a military-installed government was at the time unprecedented. Given the resources and power of the IMF, it was an important source of international legitimacy for the coup government. Members of the US Congress later wrote to the IMF to inquire how this happened. How did the IMF decide so quickly to support this illegitimate government?

The Fund responded that no decision was made, that this was just an off-the-cuff remark by its spokesperson. But this seems very unlikely, and in the video on the IMF's website, the spokesperson appears to be reading from a prepared statement when talking about money for the coup government.

In the Honduran case, the IMF would likely say that the current funds are part of a $250bn package in which all member countries are receiving a share proportional to their IMF quota, regardless of governance. This is true, but it doesn't resolve the question as to whom the funds should be disbursed to, in the case of a non-recognised, illegitimate government that has seized power by force. The Fund could very easily postpone disbursing this money until some kind of determination could be made, rather than simply acting as though there were no question about the legitimacy of the coup government.

Interestingly, the IMF had no problem cutting off funds under its standby arrangement with the democratically elected government of President Zelaya in November of last year, when the Fund did not agree with his economic policies.

We're still a long way from a reformed IMF.

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• US halts aid over Honduras coup (news.bbc.co.uk)
• U.S. Hardens Stance Against Honduras (abcnews.go.com)
• Ousted Honduran Leader Seeks Tougher U.S. Stance Against Coup (nytimes.com)

India's Afghan Aid Irks Pakistan

With $1.2 Billion in Pledged Aid, New Delhi Hopes to Help Build a Country That Is 'Stable, Democratic, Multiethnic'

By PETER WONACOTT

KABUL -- After shunning Afghanistan during the Taliban regime, India has become a major donor and new friend to the country's democratic government -- even if its growing presence here riles archrival Pakistan.

From wells and toilets to power plants and satellite transmitters, India is seeding Afghanistan with a vast array of projects. The $1.2 billion in pledged assistance includes projects both vital to Afghanistan's economy, such as a completed road link to Iran's border, and symbolic of its democratic aspirations, such as the construction of a new parliament building in Kabul. The Indian government is also paying to bring scores of bureaucrats to India, as it cultivates a new generation of Afghan officialdom.

India's aid has elevated it to Afghanistan's top tier of donors. In terms of pledged donations through 2013, India now ranks fifth behind the U.S., U.K., Japan and Canada, according to the Afghanistan government. Pakistan doesn't rank in the top 10.

Afghanistan is now the second-largest recipient of Indian aid after Bhutan. "We are here for the same reason the U.S. and others are here -- to see a stable, democratic, multiethnic Afghanistan," Indian Ambassador to Afghanistan Jayant Prasad said in an interview.

Such a future for Afghanistan is hardly assured, as the run-up to Thursday's presidential election shows. On Tuesday, a pair of mortar shells hit near the presidential palace in Kabul while Taliban insurgents attacked polling stations across the country, as part of wave of violence aimed at preventing people from casting ballots in the election.

Despite backing the Taliban in the past, Pakistan doesn't want to see an anarchic Afghanistan, say Pakistani security analysts.

"Pakistan is doing nothing to thwart the elections in Afghanistan and everything to help Afghanistan stabilize and have a truly representative government," says Gen. Jehangir Karamat, Pakistan's former ambassador to the U.S. and a retired army chief.

Yet India's largess has stirred concern in Pakistan, a country situated between Afghanistan and India that has seen its influence in Afghanistan wane following the collapse of the Taliban regime. At the heart of the tensions is the shared fear that Afghanistan could be used by one to destabilize the other.

"We recognize that Afghanistan needs development assistance from every possible source to address the daunting challenges it is facing. We have no issue with that," says Pakistani foreign-ministry spokesman Abdul Basit. "What Pakistan is looking for is strict adherence to the principle of noninterference."

The two countries have sparred repeatedly about each other's activities in Afghanistan. Indian officials say their Pakistani counterparts have claimed that there are more than the official four Indian consulates in Afghanistan, and that they support an extensive Indian spy network. For years, Pakistan refused to allow overland shipment of fortified wheat biscuits from India to feed two million Afghan schoolchildren. India instead had to ship the biscuits through Iran, driving up costs for the program.

The World Food Program, which administers the shipments, said the Pakistan government gave its approval for overland shipment in 2008 -- six years after the first delivery from India. "Why did it take six years ... is something that WFP cannot answer," a spokesman for the aid organization said. "However, we are indeed thankful to the government of Pakistan for allowing transit for the fortified biscuits."

Mr. Basit, the foreign-ministry spokesman, didn't respond to a question about the Indian food assistance.

India's aid has extended well beyond physical infrastructure to the training of accountants and economists. For a nation devastated by decades of war, these soft skills fill a hole, says Noorullah Delawari, Afghanistan's former central-bank governor and now head of Afghanistan Investment Support Agency, an organization that promotes private enterprise. "The country shut down for 20 years," he said. "We stopped producing educated people to run our businesses and government offices."

Some believe there is room for cooperation between India and Pakistan in Afghanistan since both countries share an abiding interest in its stability. "The opportunity is there," says Gen. Karamat, "if we can get out of the straitjacket of the past."

—Matthew Rosenberg contributed to this article.

Write to Peter Wonacott at peter.wonacott@wsj.com

Clinton Hails New S. African Government's Policies on HIV/AIDS

By Mary Beth Sheridan
Washington Post Staff Writer
Saturday, August 8, 2009

PRETORIA, South Africa, Aug. 7 -- Secretary of State Hillary Rodham Clinton on Friday welcomed the new South African government's approach to fighting HIV/AIDS after years in which officials questioned the link between the two and suggested such "cures" as eating beets and garlic.

"We have the challenge everyone is aware of. We have to make up for some lost time, but we are looking forward," Clinton said at a U.S.-funded clinic where patients receive antiretroviral drugs.

The clinic visit underscored a new juncture in U.S.-South African relations after years of tensions over AIDS, the Iraq war and other issues. Clinton wants to improve ties with a country regarded as Africa's economic powerhouse, and she and the South African foreign minister agreed to work together more closely on such issues as climate change and nuclear nonproliferation.

Clinton was accompanied to several of her meetings by Eric Goosby, the U.S. global AIDS coordinator. That "shows how eager we are to broaden and deepen our relationship" with the new government led by President Jacob Zuma, she said.

South Africa has the highest number of HIV-positive people in the world, with about one in five adults, or nearly 6 million people, infected. But under Zuma's predecessor, Thabo Mbeki, authorities questioned whether HIV caused AIDS and were skeptical about treating it with antiretroviral drugs. One of Mbeki's health ministers urged HIV-positive people to cure themselves by eating lemons, beets and garlic.

The policies caused the premature deaths of an estimated 365,000 people, according to a recent study by Harvard University researchers.

Goosby said in an interview that he was "thrilled" about the AIDS policies of Zuma, who has pledged to halve the incidence of HIV in the country.

The U.S. government's global AIDS program has a major presence in South Africa, spending $550 million a year on treatment and testing. Clinton said the U.S. program "stands ready to work with the South African government in whatever way the government believes is effective."

Clinton's delegation toured a clinic in the poor mining town of Cullinan, outside Pretoria, that is funded by the U.S. and South African governments. She was greeted in the courtyard of the low-slung building by about two dozen children in pink and red T-shirts, some of them patients at the clinic, others orphans whose parents had died of AIDS-related illnesses.

Before the facility opened in 2006, the nearest clinic that treated people with HIV/AIDS was 40 miles away, and transportation there was too expensive for many residents, officials said.

"It has changed life around this place as people used to know it," South Africa's new health minister, Aaron Motsoaledi, told Clinton after she toured the clinic.

A young woman who has been treated at the clinic, Simangele Ncube, told Clinton that when she tested positive for HIV, "I felt like the world was collapsing in on me."

But "here I am -- and I look good," she said.

More than 900 people die of AIDS-related causes each day in South Africa. U.S. Rep. Nita M. Lowey (D-N.Y.), the head of the House Appropriations subcommittee that funds foreign aid programs, said at the ceremony that she hopes to see more assistance going toward prevention, rather than just treatment.

South Africa is the second stop on Clinton's seven-nation swing through Africa, a trip aimed at improving ties with the continent and addressing security, economic and development concerns.

One of Clinton's priorities is building closer ties with what she called "major and emerging global powers," including South Africa and countries such as China, India and Brazil.

The Obama administration is especially hopeful that South Africa will push the authoritarian president of neighboring Zimbabwe, Robert Mugabe, to cease harassment of opposition leaders and the media.

South Africa's foreign minister, Maite Nkoana-Mashabane, said her government was trying to persuade Mugabe to make more progress on a power-sharing agreement signed in February with the opposition. But South Africa gave no indication Friday that it would go as far as the United States wanted.

Anti-Drug Aid Delayed as Leahy Blocks Positive Report on Mexico's Rights Record

By William Booth and Steve Fainaru
Washington Post Foreign Service
Wednesday, August 5, 2009

MEXICO CITY, Aug. 4 -- A key senator rejected a State Department plan to issue a report this week affirming that Mexico is respecting human rights in its war against drug traffickers, delaying the release of millions of dollars in U.S. anti-narcotics assistance, according to U.S. officials and congressional sources.

The State Department intended to send the favorable report on Mexico's human rights record to Congress in advance of President Obama's visit to Guadalajara for a summit of North American leaders this weekend, U.S. officials familiar with the report said.

That plan was scrapped after aides to Sen. Patrick J. Leahy (D-Vt.), chairman of the Senate Appropriations foreign operations subcommittee, told State Department officials that the findings contradicted reports of human rights violations in Mexico, including torture and forced disappearances, in connection with the drug war.

At stake is more than $100 million in U.S. aid under the Merida Initiative, a three-year, $1.4 billion counternarcotics package begun by President George W. Bush in 2007. The law requires Congress to withhold 15 percent of most of the funds until the secretary of state reports that Mexico has made progress on human rights.

"Those requirements have not been met, so it is premature to send the report to Congress," Leahy said in a statement. "We had good faith discussions with Mexican and U.S. officials in reaching these requirements in the law, and I hope we can continue in that spirit."

Soaring Violence

The State Department's failure to push through the report is a setback for the U.S. and Mexican governments at a time when drug violence in Mexico continues to soar and President Felipe Calderón has come under growing pressure to revise his U.S.-backed anti-narcotics strategy, which relies heavily on the military to fight the cartels.

State Department officials said they are considering whether to rewrite the report before submitting it to Congress, probably after it reconvenes Sept. 7.

Mexico is likely to lose some of the money if it is not released by Sept. 30, U.S. officials said. U.S. aid under the Merida Initiative is used to buy helicopters and surveillance aircraft, train police, and improve intelligence-gathering in the fight against the drug cartels.

But congressional aides and human rights experts expressed doubt that the State Department would be able to make a compelling case that Mexico has made sufficient progress.

"In the area of prosecuting human rights abuses and ending the impunity, I don't believe we have seen any real progress," said Maureen Meyer, who oversees Mexico for the Washington Office on Latin America, a human rights group that opposes release of the funds. "There is no sign that people are being held accountable. Every major human rights group has opposed releasing the money."

Push for Transparency

Mexican officials acknowledge that human rights violations have occurred in the fight against traffickers but say the cases are isolated.

The Mexican government is sensitive to U.S. criticism about rights violations because the military is a respected institution -- and many Mexican leaders say the U.S. government has not done enough to reduce consumption of illegal drugs in the United States or stem the flow of weapons and cash heading south.

In recent weeks, frustrated U.S. officials have pressed the Mexican government, including Defense Secretary Guillermo Galván Galván, to provide additional information, according to three officials involved in the campaign.

Late last week, after the report was completed, Mexican officials disclosed details of a number of cases in which they said soldiers had been tried on charges of human rights violations, according to a U.S. official. He said the State Department is trying to verify whether the soldiers were prosecuted and has not decided whether to include the new information.

"We are looking for the Mexicans to be as transparent as possible," said a U.S. official who spoke on the condition of anonymity because of the sensitivity of the discussions. "We are pushing them to be more transparent than they think they can be. What happens when complaints are lodged? What do they do with them? What processes do they go through? What happens to individuals accused of abuses?"

A spokesman for the Mexican military said it would be unable to comment. Arturo Sarukhan, Mexico's ambassador to Washington, said Tuesday: "Mexico is unequivocally committed to ensuring the protection of human rights in the fight against drug-trafficking organizations." He added, "We are confident that this will be recognized by Congress."

140 Complaints a Month

Since Calderón launched his war against the cartels after taking office in December 2006, human rights complaints against the military have soared 600 percent, rising to 140 a month this year, according to government statistics. The National Human Rights Commission has issued reports on 26 cases involving the military since the beginning of Calderón's term, and it found evidence of torture in 17 of the cases.

In April, Human Rights Watch issued a report highlighting 17 cases, including several from 2007 and 2008, involving what it said were military abuses of more than 70 victims. The alleged abuses include killings, torture, rapes and arbitrary detentions. According to that report, "not one of the military investigations into these crimes has led to a conviction for even a single soldier on human rights violations."

On July 9, The Washington Post reported that the Mexican army had carried out numerous acts of torture, forced disappearances and illegal raids in pursuit of traffickers, according to court documents, political leaders and human rights monitors in Mexico's most conflicted regions.

With the State Department report imminent, many prominent human rights organizations in the United States and Mexico released advance statements saying that Mexico had failed to meet the Merida Initiative requirements and urging the U.S. government to withhold the money.

"Why is this so important? Because Mexico cannot win this fight against drug cartels without human rights protections. Human rights provisions are not a headache. They are absolutely critical to the success of the whole initiative," said José Miguel Vivanco, director of the Americas program at Human Rights Watch.

Carlos Cepeda, of the Miguel Agustín Pro Juarez Human Rights Center, said: "Mexico is not fulfilling the human rights requirements of the initiative and the government does not seem close to fulfilling them, and so of course it is a bad idea to release the funds. It would be a green light for further human rights abuses and for continued impunity for the military."

A Case Not Yet Made

Under Merida, the State Department is required to report to Congress on Mexico's progress in four areas: improving transparency and accountability; establishing regular consultations with civil institutions; ensuring that civilian and judicial authorities are prosecuting police and military officers credibly accused of violations; and prohibiting the use of testimony obtained through torture.

The most controversial of the provisions is determining whether the Mexican government is prosecuting human rights offenders. To date, the military has handled all allegations of crimes under its own justice system. U.S. officials and Mexican and international human rights groups say the Mexican military is secretive and hostile to scrutiny by outsiders.

Last month, amid growing allegations of abuses, Gen. Jaime Antonio López Portillo, head of the military's human rights office, held a news conference and announced that the military had prosecuted seven human rights cases dating to 1996, in which 12 members of the armed forces were found guilty of crimes, including homicide and kidnapping.

Only one of the completed cases appeared to date from the Calderón term. An additional 14 cases involving 53 troops were working their way through the military's judicial process, according to López Portillo.

The State Department had still intended to argue for the release of the Merida funds this week, U.S. officials said. But officials with the department's bureau of Western Hemisphere affairs got a chilly reception from Leahy's foreign policy expert, Tim Rieser, at a meeting last week. According to people familiar with the meeting, Rieser told officials that they had not made the case on any of the four areas required under Merida.

After receiving the additional information from Mexico, State Department officials went back to Rieser over the weekend to find out whether Leahy would support the report. He said he would not.

Next week Mexico's Supreme Court will address whether it is unconstitutional to try cases of human rights violations in military courts. The legal challenge, brought by the Miguel Agustín center, involves four civilians who were shot dead in Sinaloa state last year, allegedly by Mexican soldiers. Mexico's attorney general declined to take the case, and the military investigated the deaths instead.