Two American NGOs being probed by NAB for corruption

By: Ansar Abbasi

ISLAMABAD: True to the old saying, do in Rome as the Romans do, a few of the American NGOs engaged by the USAID in some of its projects under US$750 million Fata uplift aid programme have allegedly been found involved in massive misappropriation and corruption.

Sources in the USAID reveal that the National Accountability Bureau (NAB) is inquiring into the matter following some complaints lodged by USAID itself. At least two leading American NGOs were interestingly hired by the USAID itself for the work.

These cases reaffirm the USAID decision to let Transparency International Pakistan monitor all USAID funded projects because corruption was going on in unchecked projects. A senior spokesman of the NAB Peshawar chapter confirmed that the massive frauds have been committed in the projects, which were under the direct monitoring of the USAID and had nothing to do with the government of Pakistan.


These incidents raise serious concerns about the US$7.5 billion aid, being offered to Pakistan under Kerry-Lugar Act, which too would be spent through the USAID and mostly by involving the NGOs.

Already it is said that generally the NGOs, involved in such programmes, are involved in massive corruption as has been pointed out in different projects of the reconstruction and rehabilitation of the 2005 earthquake affectees/areas.

The NAB sources fear that if all the USAID projects are scrutinized by the accountability bureau, it might become a major scandal as to how foreign money is plundered. Two USAID officials Asma Farooq and R Z Taylor were approached for their comments on these fraud cases. Mr Taylor committed that the USAID would get back "shortly" to The News with the response, however, it was not done till the filing of this report.

The sources said that USAID filed complaints against two American NGOs, Academy for Educational Development (AED) and Sheledia for alleged corruption, misappropriation and embezzlement in two different projects given by the USAID.

The sources said that the AED local head Phil Colgin has already left the country and gone to Russia to avoid NAB inquiry while a director of Sheledia and American-Pakistani Salim Baz Khan is being interviewed by the NAB officials for fraud and embezzlement.

Sharing the details, these sources said that one of the projects under scrutiny of the NAB is Fata Livelihood Development Programme, which is part of the US grant aid of US$750 million committed a few years back for the uplift of the tribal areas.

This particular project, Fata Livelihood Development Programme, was meant for northern Fata including Bajour, Mohmand, Khyber Agency, their adjacent FRs and district Peshawar. The USAID decided to implement the project through the American NGO AED and accordingly a cooperative agreement amounting US$149 million was awarded to the AED. This project was meant to raise the income earning capacities of the inhabitants of Fata but ended up in a scam.

It was the USAID that recently approached the Bureau to probe into the project and provided to the NAB forensic audit for the expenditure of US$3.5 million, which showed the spending of US$1.5 million through fraudulent bids and proposals. All the persons suspected of being involved belong to the AED.

The complaint in particular mentioned the embezzlement in procurement of food and other items during Nov 2008. The said procurement was made for distribution to the people of Khyber Agency and suburbs of Peshawar, who were badly affected by heavy flood in July-Aug 2008.

What NAB found, according to the USAID sources, include the facts that no advertisement for calling of quotation was available in any of the contract, specifications of goods were not mentioned in any of the order for supply, in most of the contracts for supply for food items and non-food items three suppliers were involved who jointly supplied goods worth more than Rs160 million.

The NAB has also found that the operators behind the three supplier companies were three business partners running these firms and they had manipulated the bidding process to get the contract.


The other project, under the same US grant aid programme for the uplift of Fata, was the construction of the 21-km Bareng Road. The USAID gave the contract to Sheledia, a US NGO, for Rs350 million. Later the USAID found something fishy in the project and approached the NAB, which has already identified an embezzlement of at least Rs80 to Rs100 million.