U.S. $350,000,000.00 Spent: No Electricity, Water, Etc. Disarmament?


By J. Yanqui Zaza

The Perspective
Atlanta, Georgia
April 18, 2005


Panelists at a one-day Conference called “Building Peace in Liberia: Uphill Battle or Lost Cause told Liberians on Friday, 4/8/05 that agents of both the UN and US have spent US $350 million dollars with little to show for. The sad news came at the same time Liberians at home are debating the decision by ECOWAS to hire auditors to examine the corrupt Bryant government. Counselor Jerome Verdier, Sr., the Executive Director of Liberia Democracy Watch (LDW), one of the panelists, stated that Liberians are disappointed and shocked to learn that agents of both the UN and US who have custody and supervisory role did poorly perform. Further, he said that even the feeling good report on the progress made on disarmament is deceiving, because the warlords are still controlling heavy weapons. Most importantly, the former combatants who are unemployed, and still mobilized, even if they have been disarmed, are willing to fight for the next bounty hunter that comes around.

In December 2003, Liberians felt good when the Interim Government, UN Development Group, United Nations, World Bank and the US government assessed “Thirteen Priority Sectors” such as electricity, disarmament, rehabilitation, reintegration, and economic development and estimated a cost of US $487 million dollars. After the February 2004 Donor Conference was held, which netted U.S. $520 million dollars, UN and US representatives stated that they would use funds and restore basic necessities such as electricity, etc. Liberians became hopeful because they thought that besides the silence of the sound of the machines of war, those experts would wisely coordinate the use of the funds.

In less than thirteen months after the donor conference, happiness has disappeared and an additional economic pain has permeated the Liberian society. The influx of thousands of peacekeepers and UN experts who were willing to pay more US dollars for any items than the market price triggered the pain. For example, the cost to lease a three-bedroom house jumped from a little amount to US $20,000.00 or $30,000.00 per annual. Cutthroat landlords evicted low-paying tenants and leased such properties for higher amount. In addition, the demand for high priced housing sparked an increase in the cost of other items. A 100 pound beg of rice is now US $50.00, from as low as US $20.00 in December 2003.

However, squandering the funds earmarked for infrastructure has by far more serious economic implications, then the impact of the high cost of living. Investors wishing to invest in industries that use high power electricity might have to search for a new domicile/country. Residents of rural towns will have to wait long before electricity, or water and sewer, etc, can reach their communities. Even a privileged resident, who bought generator for temporary period, will have to reconsider the original plan.

If UN and US experts were responsible for monitoring, how did the $350 million dollars disappear? A participant at the forum, who claimed to be a former employee working with Jacques Klien, stated that funds pledged at UN donor conferences have become cash cow. He was responding to Ms. Kathryn Jones’ concern as to why clr. Verdier, Sr. had not informed UN officials on his assertions that UN experts, were not only responsible for the missing funds, but are also digging diamonds in Liberia. Ms. Jones was one of the panelists and is a senior political officer with the Department of Peacekeeping at the UN.

Submitting proposal to the UN has become a new profit making industry, one UN expert stated. Once the UN has accrued the revenue or the funds, private aid groups begin to submit in their proposals. Those who have followed the US budget process in Washington may understand how the private aid groups exaggerate the figures. Just as US Congress lawmakers overstate the US annual budget by attaching local projects to the bill, private aid groups also overstate their proposals by adding more profits disguised as expenses. UN experts, for whatever reasons, do not question those expenses, called royalty expense, commission fees, professional fees, and advisory fees. Consequently, the cost (i.e., a combined cost of the proposals from the private aid groups) is more than the estimated revenue (i.e., pledged donations).

Let us look at an approved proposal, which is the recent price of $200 million dollars the US Ambassador in Liberia offered to a US Corporation (DynCorp International) to train the Liberian Army. Given that the country is bankrupt, and assuming that nor of our neighboring countries has the inclination to launch any kind of an aggression, was it practical to hire a high-priced corporation? Corporation such as DynCorp that perform for clients like the United States of America include all kinds of costs unrelated to direct performance. Obviously a significant portion of the $200 million dollars is part of the profit, but the profit is allocated and reported as expenses.

There are countries, including Iraq, Bosnia, and Afghanistan with stories similar to the story of Liberia where an estimated amount earmarked for developmental projects was spent on something else. The US Ambassador in Iraq has threatened to terminate the contract with Kellogg, Brown and Root, a subsidiary of Halliburton, Vice-President Dick Cheney’s former employer. The subsidiary and parent have paid back to the US Treasury over million of dollars representing payments for over-charging the government. In the case of Afghanistan, billions of dollars allocated for energy, aviation, telecommunication, etc. were squandered by private aid groups, which controlled 2/3 of the 4.8 billion dollars, according to Hamid Karzai, President of Afghanistan. In response, President Hamid Karzai has proposed a new idea, which would help developing countries use funds for the intended purposes. He argues that a government should handle the funds and let the private aid groups monitor the budgeting and expensing of the funds.

The million-dollar question is how do we restore electricity and water now that the money has vanished? Is it possible for agents of the UN and US to resist the efforts of NGO’s if a new government had another successful donor conference? It is a Herculean task to try to change this trend since a significant funding of our annual budget would come from international agencies. However, if we really want to spur development across the country, increase the employment roll, thereby preventing future calamity, we must begin now to recommend a different approach to the UN. But remember, if the oldest not-for profit NGO (i.e., the World Bank) could earn $43 billion dollars profit just based on investing $5 billion dollars in Nigeria, no one should expect that profit-making NGO’s would want to earn less profit.