Whistle-blowers and a U.S. senator are calling out a federal foreign aid agency’s internal watchdog saying that it scrubbed key details and cut important sections from audits of aid programs.
The edits were applied to reports issued by the inspector general’s office (IG) of the U.S. Agency for International Development, or USAID, which manages foreign aid initiatives.
In one particular report, obtained in an investigation by The Washington Post, the agency’s IG questioned the utility and legality of the U.S. government’s 2012 transfer of $4.6 million in “bail” money to the Egyptian government to free 43 nongovernmental organization workers detained there following a raid.
The Post uncovered other changes among 12 reports from the IG for the years 2011 to 2013.
Of the dozen reports, the paper found “that more than 400 negative references were removed from the audits between the draft and final versions.” In one report, negative mentions had been whittled down from 170 to 13.
Oklahoma U.S. Sen. Tom Coburn, who reviewed complaints from six whistle-blowers, said that the IG’s alterations were particularly troubling compared to other internal watchdogs.
“You don’t hardly ever see this with other IGs,” Coburn told The Post. “You certainly don’t see it to this extent. This is the worst we’ve seen.”
Perhaps the most blatant change came in a general audit of a program to fund several nongovernmental organizations, or NGOs, to help promote democracy in Egypt following the 2011 ouster of Hosni Mubarak.
On Dec. 29, 2011, Egyptian security forces raided the NGOs and detained 43 workers, including 16 Americans. One of the workers arrested was Sam LaHood, the son of Transportation Secretary Ray LaHood.
The Egyptian government said that the 43 people arrested faced up to five years in prison for a variety of offenses including operating without a license and receiving unauthorized foreign funding.
To free the workers, $4.6 million was paid to the Egyptian government, and the aid workers were released on March 1, 2012.
At the time, the State Department claimed that the federal government itself did not make the payment.
“There were no bribes paid. This was paid by the NGOs,” State Department spokeswoman Victoria Nuland said at the time.
But USAID made the payment, and during a general audit, the inspector general’s office raised questions over whether the transfer was legal.
One section of the first draft of the report titled “USAID/Egypt Borrowed Local Currency From the Trust Fund for Bail Expenses” ended up on the cutting-room floor. The Post notes that the first draft of the Egypt report was 21 pages long. The final product had been whittled down to nine pages.
A regional auditor based in Cairo flagged concerns raised by “mission staff” who worried that disclosing the transfer would effect U.S.-Egypt relations and the pending trial against the NGOs, The Post reported. The regional auditor also noted that Michael Carroll, then the acting director of the inspector general’s office, met with U.S. Ambassador to Egypt, Anne Patterson.
The $4.6 million “bail” payment was disclosed, but only in the financial section of the audit which is not made available to the public.
Carroll denied that Patterson had any influence on the final audit. But other reasons cited by The Post for the systematic alterations to IG reports were pinned on Carroll’s increased defensiveness of the parent agency as he hoped to gain Senate approval for the permanent auditor position.
Current and former employees at the IG’s office slammed the way it handles audits.
“The office is a watchdog not doing its job,” Darren Roman, an audit supervisor who retired from the office in 2012, told the Post. “It’s just easier for upper management to go along to get along. The message is: ‘Don’t make waves, don’t report any problems.'”
A report on another program also withheld key findings, The Post found.
That program, started in Oct. 2010, employed three contractors to help cut waste and fraud in a $1 billion assistance program to Pakistan.
A rough draft of the inspector general’s 2012 audit of the initiative “found that $32 million of the program’s $44 million budget went to ‘fringe benefits, consultants and travel,'” The Post reported.
The final audit also did not contain a section from the first draft titled “Program Is Not Being Efficiently or Effectively Implemented.”
Rather than disclose the finding publicly, the IG included the information in a management letter, a document shared only among agency officials — a move the IG defended.
But Coburn, a Republican whose mission in the Senate has been to tackle wasteful spending, disagreed with the non-disclosure.
“That’s ridiculous,” Coburn told The Post. “The finding shouldn’t have been removed, and it should have been a glaring recommendation that said, ‘Hey, here’s where Americans are spending their money.'”