USAID suspends funds to major aid groups after inquiry finds corruption in Syrian aid pipeline

A women walking near one of curtains on Bustan Alqasr district in Aleppo city on Feb. 1, 2016. (Credit: Karam Almasri/NurPhoto)

Millions of dollars to major aid organizations working in Syria was temporarily suspended following revelations of systemic corruption. An investigation revealed bid-rigging, bribery and kickback schemes involving organizations and individuals based in neighboring Turkey and Jordan that provide humanitarian assistance in Syria. Further, the evidence suggests that people were working together to create this rigged system.

The U.S. Agency for International Development (USAID) Office of Inspector General announced on May 6 that 14 entities and individuals working out of Turkey were suspended by USAID following a months-long investigation. In addition, money to some aid groups has been put on hold. In one case, a partial termination of a program carried out by one unnamed group meant that nearly $1 million in pharmaceuticals were not bought.

It is a scandal that touches on some of the major humanitarian NGOs and may have ramifications for future aid work in Syria. The International Rescue Committee and the International Medical Corps were among the USAID fund recipients to have their funding temporarily suspended as the investigation continues. The organizations reportedly fired one and three staffers respectively in recent months as a result of the findings. Both groups are not directly implicated, just a few staff.

The crux of the problem revolves around overpayment of goods bought in Turkey. Individuals working for NGOs were found to have been paying high prices for low-quality goods. These goods included essentials like blankets intended for civilians in Syria. The investigation found that NGO staff members were active participants in the overpayment scheme, receiving kickbacks from the vendors selling the goods.

In one example, the two now-fired International Rescue Committee staff took bribes from vendors in exchange for sub-contracts from the aid group. In another case, an organization made a profit of $106,000 by manipulating the contents of more than 55,000 food baskets it distributed. The unnamed organization agreed to not charge for the money lost by USAID and the vendor was suspended.

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All of this matters greatly given the scope of the humanitarian crisis in Syria. Aid groups taking the risk to work in the country are an essential lifeline for people still in the country. The delivery of sub-standard aid and the loss of money when the international response is already woefully underfunded can make a terrible situation worse. Reports indicate that tens of millions of dollars in contracts were suspended as a result of this scandal.

“Aid organizations providing life-saving assistance in Syria and the surrounding region face an extremely high-risk environment,” said a statement from the Office of Inspector General. “Lack of fully competitive procurements, insufficient oversight, and the absence of adequate internal controls for obtaining, storing, and delivering relief supplies can jeopardize the integrity of these relief efforts and deny critical aid to those in need.”

The U.S. alone spent nearly $400 million in Syria through aid groups in 2015. It relies heavily on local partners and international organizations to carry out vital humanitarian work in the country. There is little response from the organizations involved thus far outside of confirming general details about the findings and affirming opposition to corruption.

“International Medical Corps has been actively cooperating with the USAID Inspector General, and we have also mounted our own internal investigation,” said the International Medical Corps’ Chief Compliance Officer Ambassador William Garvelink said in a statement. “We have a zero-tolerance policy for fraud and corruption and have fired staff members who were suspected of involvement.”

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The implications for the organizations involved is unknown. For groups that rely heavily on U.S. contracts, this could be a massive blow. USAID suspended contracts to the Academy for Educational Development (AED) in December 2010 due to “evidence of serious corporate misconduct, mismanagement, and a lack of internal controls,” as well as “serious concerns of corporate integrity.” By March the group announced it was selling off its assets and no longer exists.

The early impacts are already being felt. Staff cuts due to the lost funding are being felt. IRIN News reported that the International Medical Corps let go of at least 800 people and AFP reports a slightly lower number, claiming that one-third of the 2,000 total staff were on their way out. One charity that received funding from the two suspended aid groups told AFP that it has been unable to buy medicine or goods using U.S. funding since January.

Note: This story has been updated for the sake of clarity. The initial version wrongly implied that IMC and IRC were suspended by USAID. In reality, both groups saw some procurement funding related to the current scandal temporarily halted in order for the investigation to proceed. Both groups say they are supporting the Inspector General and USAID in the matter.

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About Author

Tom Murphy

Tom Murphy is a New Hampshire-based reporter for Humanosphere. Before joining Humanosphere, Tom founded and edited the aid blog A View From the Cave. His work has appeared in Foreign Policy, the Huffington Post, the Guardian, GlobalPost and Christian Science Monitor. He tweets at @viewfromthecave. Contact him at tmurphy[at]humanosphere.org.