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Corruption plagues the UN Food Program

By Jason McLure | Newsweek

The foreign-aid industry has had a bad news cycle. First, British newspapers were consumed with a spat between the British Broadcasting Corp. and Live Aid founder Bob Geldof over a BBC report that tens of millions of dollars of aid to Ethiopia during the 1984–1985 famine were used for arms. Now a more current and equally egregious scandal involving the world’s largest humanitarian agency has spun out of Ethiopia’s neighbor Somalia. A U.N. report released last week paints a damning portrait of the World Food Programme’s operations there: an estimated 50 percent of food delivered by the U.N. agency is essentially being stolen—not only by the WFP’s own personnel and contractors, but also Somalia’s armed militias, some of whom are radical Islamists.

Somalia is not the first crisis for the agency. These new allegations join a series of recent missteps there that have brought its contracting and operations under scrutiny for its role in aid missions around the world, from North Korea to the Horn of Africa. And the report sent the U.N. backpedaling in its war of words with Washington over the Obama administration’s decision to cut aid to Somali operations last year. What is going on at the WFP?

The ugliest revelations are in the report’s details. Three Somali businessmen won about 80 percent of the agency’s $200 million in transport contracts last year, in what is described as a 12-year-old “de facto cartel.” One of them, Abdulqadir Nur “Enow,” apparently staged a hijacking of his own trucks in order to sell the food. In another case, the report cites witnesses saying Enow’s company sold hundreds of thousands of dollars of food aid in local markets, an outcome made possible by the fact that WFP depended on a local agency run by Enow’s wife to verify his deliveries. Meanwhile, a second WFP trucking contractor, Abukar Omar Adaani, used his wealth to finance a rebel militia that launched an offensive in Mogadishu last year against Somalia’s U.N.-backed transitional government and African Union peacekeepers. Adaani also persuaded the WFP to fund a road officials said was designed to give Islamist insurgents access to an airstrip, according to the report.

In response, the WFP has suspended contracts with the three businessmen and accused U.N. investigators of overstating the amounts of its trucking payments. (In January it suspended operations in some areas controlled by Islamist rebels.) The agency didn’t respond to a question from NEWSWEEK about its knowledge of Somali trucking magnate Adaani’s links to Somali insurgents, and it said that the Adaani-built road it had funded was meant for the delivery of humanitarian aid.

Except these aren’t isolated problems. Next door, in Ethiopia (one of the largest recipients of food aid in the world), the WFP has spent millions on contracts with transport companies controlled by the country’s increasingly authoritarian ruling party, NEWSWEEK has learned. In the country’s eastern, Somali-speaking region, where nearly 2 million people receive food aid overseen by the WFP (along with other aid agencies) and where insurgents have long claimed the Ethiopian government uses food as a weapon, a mere 12 percent of food reached the people for which it was intended in 2008, according to figures from the U.S. State Department.

Meanwhile, for its $1.2 billion, three-year food-relief program in Afghanistan, the WFP’s trucking and shipping costs for food were two to three times above commercial rates, according to an analysis by Fox News’s George Russell published last month, which noted that less than 40 percent of the mission’s budget was actually for food. Likewise an investigation by Russell last year also found WFP’s planned shipping costs to send more than a half billion dollars of food aid to North Korea were inflated—prompting the agency to admit that some of its shipping budget went to companies owned by dictator Kim Jong Il’s government.

As for the WFP, it says it doesn’t know how the United States arrived at its calculations about aid deliveries in Ethiopia. In Afghanistan, it said the need to construct warehouses and replace trucks helped account for its high transit costs, and it notes that donor governments and agencies have funded less than a fifth of its North Korea operations. North Korea’s remote location and lack of competition in shipping routes to the country also account for the high costs, Ramiro Lopes da Silva, a WFP spokesman said in an e-mail.

Admittedly, places like Afghanistan and Somalia are some of the most difficult countries in the world for aid agencies to work. Some leakage of aid is inevitable. But the U.N.’s agencies are notorious for their high administrative costs and the opacity of their spending. A 2008 Brookings paper coauthored by William Easterly, a well-known aid researcher, ranked 39 large aid donors on criteria including transparency, overhead costs, and selectivity of aid spending. The WFP, which received $4 billion in donations last year—including $1.8 billion from the United States—tied for last place (though the study noted that data from some agencies was unavailable).

The problem in part may be that U.N. aid agencies see themselves as accountable to the world’s governments, which provide 92 percent of the WFP’s funding, rather than to the public. Asked for data on its contracts with ruling-party trucking companies in Ethiopia—including one owned by a conglomerate whose No. 2 official is the Ethiopian prime minister’s wife—the WFP said disclosing such information to the public would jeopardize “its ability to negotiate the best possible rates and delivery conditions.” A spokesman did not respond to a request for how much it pays Kim Jong Il’s government to ship food to North Korea.

Indeed, what’s so unusual about the report on Somalia aid isn’t just its conclusions, it’s the mere fact that an independent body conducted a thorough probe into U.N. contracting and published its findings. As the Brookings paper notes, “it is a sad reflection on the aid establishment that knowing where the money goes is still so difficult and that the picture available from partial knowledge remains so disturbing.”

4 thoughts on “Corruption plagues the UN Food Program

  1. Of course everyone knows the food aid industry, operated by western “aid agencies” and UN are corrupt to the core. But what is amazing is that the western news agencies never publish the corruption on the part of the “aid agency” and UN employees. These westerners are also making money in the name of aid to the poor, needy and hungry in third world countries, yet no western agency would publish or broadcast how much money the “aid agency” and UN employees are making in these deals.

    That is why the government of Eritrea kicked out these corrupt “aid agency” and UN agencies out of Eritrea. The main reason they were kicked out was because they refused to open their books and some of them even admitted that they can’t possibly spend only 10% in overhead. These merchants of hunger and death should never be allowed to operate in third world countries because all they do is depress local markets to perpetuate their “aid industry” year after year.

  2. This is what we have been saying for the last five years and no one was listening to us, all of a sudden the BBC starts the exposure of the TPLF, everyone follows. Selling and diverting the money of donated grain for the needy has been one of the main tragedies of “donation” as a whole. Using the money gained from the sell of the grains and diverting it to buy detonators and landmines used in a war against the government of Ethiopia (Mengistu’s regime) is truly a sad episode of aid and the meaning of it all. The Live Aid Band collected over a $US 100-million and delivered the money in the hands of Meles zenawi, Seyoum Mesfin, and Sinhat Nega according to inside sources. They allocated 95% of the money to buy armament while only 5% of it was allocated to help the hungry, we witnessed evil on television, and everyone blamed the Ethiopian government, but the culprit is still in power in Ethiopia and has been for the last twenty years. The Europeans and North Americans, including the Inuit from the northern most part of Canada gave what they have, not knowing what they were giving was essentially diverted to promote civil war in Ethiopia.

    A man who was part of the scam (Gebremedhin Araya) comes forth to expose the TPLF fiasco where the money was diverted for war against government is in hiding. Thanks to the freedom in Europe he is safe for now, and his life must be protected for exposing such a network of crimes committed by TPLF. While millions were starving and dying TPLF was celebrating Party consolidation, because of the Live Aid Band money it was strengthening its political capacity spending $36 million of the $100 million according to the very eye witness, and he was censured because he spoke against the crimes on his people. In fact, according to Gebremedihn (“Arab Merchant”), three cows and two big sheep were slaughtered to feed the participants every week for there weeks. Where the theme of the convention was Marxist Leninist convention, and Europeans were fighting the expansion of the Soviet empire at the same time they did not know they were donating money to promote another communism ideology in the Horn of Africa. While TPLF leaders told the hungry people to migrate to Sudan to be the responsibility of the international community they were drinking whiskey and beer with donation money.

    As far as EFFORT contracting out all the food aid distribution throughout the country is not new to us, almost all the EFFORT employees are Tigrians, and they get paid over 4,800 BIRR a month driving the aid distribution trucks. This is in a country the average Ethiopia earns 100 BIRR, and a medical doctor gets paid $1800 BIRR a month salary. The food aid distribution from Djibouti to throughout Ethiopia is a secret contract, and the company (Mesfin Engineering and Addis Transport) belongs to EFFORT and the owners are Meles Zenawi, and wife (Azeb Mesfin) is the director of the company. Inflating the population of Ethiopia is done, in order to get more food aid and their company signs contract to distribute it throughout Ethiopia, and the more aid, would mean the more contract, and the more money from the WFP.

    In fact Gibe3 dam contract did not go through a normal bidding process, the ruling party gave it to one of the companies (Segel construction and Berhan construction) under EFFORT conglomerate and tried to get IMF finance the project, and IMF refused to finance it, because there has not been a proper bidding contest, because the ruling party gave the contract to EFFORT subsidiary. Its time for the people to get the facts about Gibe3. Ethiopians have been used to beg and use that money to enrich the Ruling clique, TPLF. All the cover up of TPLF’s crimes against Ethiopians was afforded by western media outlets in order for the regime to be used to invade Somalia and other neighboring countries. I am happy to see BBC initiate the exposure, and now Reuters and Newsweek are on top of it.

  3. It seems a lot of people have sold their souls to the Devil–everybody is looking out for themselves and forgetting the poor who are dying of hunger mainly due to world wide corruptions. I never had faith in UN, even with OIL for Food Program, there was some kind of suspicion with the former UN Secretary-General Kofi Annan’s son who was employed by UN Oil For Food Program and others like him.
    Why did it take Journalists twenty years to reveal the truth about Live Aid? When are they going to expose the truth about how Meles and his cronies literally robbed the poor Ethiopians and stashed millions of money out side of Ethiopia and their despicable crimes on innocent Ethiopians? Why haven’t they dug up the whole truth about woyanes? Are they going to wait another twenty years to tell us about the crimes that have been committed on Ethiopian people? I beg the International Journalists to do their job now and save innocent human lives.

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