MESOP INVESTIGATION : USA probe into Turkey-Syria aid corruption Funding of major agencies put on hold over kickbacks & bribery

NORTH KURDISTAN (TURKEY) – By Annie Slemrod  – Ben Parker  – JERUSALEM/LONDON, 9 May 2016

An IRIN investigation has found that a probe by a US government watchdog into corruption in aid delivery across the Turkey-Syria border runs deeper and involves more NGOs than previously reported. Corrupt sub-contracting and procurement fraud is undermining vital cross-border relief for desperate USAID announced on 6 May that it had asked some NGOs delivering aid from Turkey to Syria to halt a portion of their work. The move followed an ongoing investigation by its Office of Inspector General that found a network of commercial vendors, NGO employees and others who colluded “to engage in bid-rigging and multiple bribery and kickback schemes related to contracts to deliver humanitarian aid in Syria.”

While USAID would not comment on specific cases, IRIN interviews revealed that several major agencies, including International Medical Corps (IMC), International Rescue Committee (IRC), and the Irish NGO GOAL, are implicated in the investigation and have received at least partial funding suspensions.

A ‘sophisticated operation’

UN Security Resolution 2165 in July 2014 explicitly allowed UN agencies to deliver aid across Syria’s international borders. However, international NGOs have been delivering this way since at least 2012.

Most aid into opposition-controlled areas of Syria is delivered across the borders from Turkey, Jordan, and occasionally Lebanon. The value of formal cross-border aid from major donors is at least $500 million per year.

The three NGOs implicated have grown fast since the start of the Syria crisis, fuelled in part by funding for cross-border aid from the US and the UK. IMC (US) income more than doubled, to $232 million, between the 2011/2012 financial year and 2014/15. GOAL’s income jumped 94% between 2013 and 2014 alone (figures for 2015 are not yet available). IRC, the biggest of the three in terms in revenue, currently manages over $500 million in annual funding. The supply chain involved is big business. While procurement data about the NGO operations is not public, goods and services procured by the UN system in Turkey has leapt as Syria’s war drags on: it purchased goods worth $339 million from Turkey in 2014, up from $196.7 million in 2013 and $90 million in 2012.

The three NGOs are big players, but they are also largely dependent on governmental sources of funding. If their relationship with USAID (the foreign aid arm of the US government) is damaged beyond repair, their capacity to continue work in other countries might also suffer.A senior USAID official, speaking on the condition of anonymity, told IRIN that the investigation, which began in March 2015, was focused on procurement in Turkey and had uncovered “a sophisticated operation that can be tough to catch.”

The official said that the probe was prompted by a report from one of the NGOs about a possible supply chain issue.

‘Systemic’ problems

Since March 2015, according to IRIN’s interviews and the Office of the Inspector General’s own report published this March, one part of the investigation has revealed “systemic weaknesses on the part of an implementer in the procurement, storage, handling, transportation, and distribution of pharmaceuticals and medical supplies purchased for use in Syria.”

The OIG report also states that companies and individuals “were found to have violated federal or state antitrust statutes by having colluded with each other in order to win an award to provide supplies to displaced persons.”

Furthermore, there were issues with a vendor that profited by manipulating the contents of aid packages headed for Syria. This report and IRIN’s own interviews with donor officials, NGO staff members and analysts, almost all of whom insisted on anonymity, make clear that the procurement problems involve both the NGOs, and their Turkish suppliers – 14 individuals and companies in Turkey are provisionally banned from receiving US government funding.

Among them are the firms ROVA Relief and Senkardes, both of which advertise services as suppliers to the aid operation on English-language websites. One of them has also supplied a UN agency. Another firm on the list appears to be a provider of medical supplies.

The OIG report mentions the termination of one IMC staff member from its Turkey office, but IRIN understands that at least 800 people involved in IMC contracts in Turkey were let go of because of the USAID suspension.

Shortly after OIG began its investigation, an April 2015 report mentioned a $10.5 million reduction in funding due to “detected fraud” in a cross-border programme.

The scale of the fraud reported so far would affect only a small fraction of the hundreds of millions of dollars involved. However, were the agencies involved to be suspended for a long period, or disbarred from future funding, it would create a sizeable hole in Syrian relief operations. It could also trigger similar sanctions by other donors and drive the NGOs involved into a major cash crunch. The UN estimates that 13.5 million Syrians need humanitarian assistance – be it food, medical care, or shelter – and it is ultimately these victims (mostly civilians) of the five-year war who will suffer as a result of aid agency graft. International NGOs also fund programmes run by local charities, so the impact of the funding suspensions will likely trickle down further into the aid response.The USAID official told IRIN that there had been a break in aid delivery but it was still delivering assistance and was looking for new agencies to step in and fill the gap.