U.S. aid meant to reward reforms goes to countries listed as corrupt

Good governance is key qualification for MCC

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A groundbreaking, 6-year-old initiative meant to reward developing countries with U.S. aid for good governance and efforts to institutionalize democracy is giving billions of dollars to nations upbraided by the State Department for corruption in government.

The Millennium Challenge Corp. (MCC), the U.S. government agency that provides large-scale grants to the chosen countries to reduce poverty and stimulate economic growth, will begin distributing $540 million in aid next month to Senegal despite persistent questions from members of Congress and others about the African nation’s commitment to good government and democracy.

Although MCC says control of corruption is the single most important indicator by which a nation is deemed qualified for aid money, a review of the State Department’s most recent report on human rights reveals that Senegal — and virtually every country receiving similar grants — has been criticized for government corruption.

Some members of Congress and others point to Senegal as the prime example of a country where MCC should reconsider its aid. They cite Senegalese President Abdoulaye Wade, who built a 164-foot monument with scarce public resources that will benefit his personal foundation and who appointed his son to a senior government post.

The persistence of corruption in grantee nations has drawn concern to a program generally hailed as innovative, which has forged a total of $7.2 billion in multiyear aid agreements with MCC in 20 countries.

“We can’t just give out money and say we will put up with whatever you are doing,” said Rep. Kay Granger of Texas, the ranking Republican on the House Appropriations subcommittee for state and foreign operations. “We are talking about foreign aid and helping their countries.”

Sheila Herrling, MCC vice president for policy and evaluation, said the organization takes corruption seriously and continues to monitor countries that receive the grants.

“Corruption is a fact of life, not an if, in all countries,” she said. “The question is how we deal with it.”

Yet MCC has not suspended or terminated aid to any country solely because of corruption issues.

Meanwhile, the State Department’s 2009 human rights reports, released in March, detail corruption in other countries receiving or in line for MCC money, including:

Benin, where the department found “widespread” corruption, noting that no action had been taken by the end of last year on a 2007 state audit finding that about 300 civil servants may have embezzled approximately $51 million. Earlier this month, Benin silenced a French state-owned radio station for 14 hours after it reported that lawmakers were attempting to impeach the president on corruption charges.

Yet MCC continues to fund and administer a $307 million multiyear compact with Benin signed in 2006 for projects that include reforming the justice system and improving market access to a port.

Benin noted that President Thomas Yayi Boni established the state audit office and that cases of embezzlement have been reported to the judiciary for further investigation and sanctions. Officials also say the government reported cases of six current and former Cabinet ministers to the parliament for further action.

The Embassy of Benin said the country “remains a beacon of freedom of speech and press” and the current administration has been fighting corruption.

• Mozambique, where the State Department report says “officials engaged in corrupt practices with impunity” in part because “there are no laws against conflict of interest for government officials” and the government did not implement existing corruption laws effectively.

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