“This is a highly sensitive issue; we cannot overstep the line and speak beyond what is appropriate”. This is one of the few answers I received from the USAID officials when I started my investigation on the scandal concerning allegations of corruption in one of its programmes, “Sim Sim Hamara”, a Pakistan children’s educational TV project (PCTV), meant to be a local version of the famous “Sesame Street” series.
The only primary sources that remained available for me were the accused themselves, the Peerzadas who run the Rafi Peer Theatre Workshop (RPTW). The “Sim Sim Hamara” programme was welcomed by very favourable reviews with 26 episodes having been aired to the delight of over 120 million viewers.
Back in June 2012, the USAID asserted that they had enough substantial evidence of corruption to interrupt the project. So far, not a single piece of evidence has been disclosed to the public. Meanwhile, the Peerzadas have had to fire 150 people and have been left contemplating their shattered reputation.
Initially, the project was supposed to be shut down by September 30, 2012 due to the unavailability of funding from the USAID. The controversy started in early June with an article that appeared in a Pakistani newspaper accusing the Peerzadas of turning the project into a family affair, of embezzling money to pay off old debts, of programmatic delays, of poor quality of compliance and of fake tenders. The next day, a US State Department spokesperson asserted that the USAID had “credible evidence” of corruption. The only basis for this assertion were some calls supposedly made on the USAID’s anti-corruption hot line.
The agency decided to appoint a firm to conduct a forensic audit of an office of inspector general’s (OIG) internal investigation that had taken place at the RPTW. It then sent a letter to the Peerzadas stating that “the investigation revealed that four major PCTV procurements … totaling $929,701 failed to comply with PCTV’s own procurement policy”. The entire procurement process, however, is scrutinised by the USAID with supporting documents, before any approval on payments to vendors is to be undertaken, which makes it complicated to carry out any hanky-panky.
The OIG’s final report is to be found on the USAID website. The Peerzadas had a lot to say when they discovered it. They assert that the US funding was $10 million, not $20 million. Up till today, $1.6 million are still owed by the USAID to the RPTW. Furthermore, the OIG report does not allege of fraud or embezzlement of funds. On the contrary, it states that “the fund accountability statement presented fairly, in all material respects, programme revenues and costs incurred under the agreement for the period audited”. However, it mentions unsupported costs of $15,629, and $595,394 supposedly allocated for personnel cost. This figure contradicts the previous findings of the OIG about the procurement policy. Apart from this, the report only points to “weaknesses” and “instances of non-compliance”. The RPTW is also accused of failing to air the programme within the agreed time frames. However, season one had to be broadcasted within one year of disbursement of funds and it was. Finally, the so-called findings have been and remain those of a one-sided audit. Around mid-August, the Norwegian embassy, which has been pursuing a nine-year-old collaboration with the RPTW, conducted its own audit within the organisation and everything was found to be in order.
In the comments sent to the Peerzadas by the USAID at the end of August, new contradictions arose with regards to the previous statements. It is once again all about procurement compliance issues. The USAID denies being “in a position to determine if any fraud was committed” but adds simply that “certain findings … give rise to suspicion of fraudulent intentions”. Really? So, was Elmo really caught with his hand in the cookie jar? What if it was the Cookie Monster?
Published in The Express Tribune, September 14th, 2012.
COMMENTS (26)
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it surely was the cookie monster please read this (http://www.bbc.co.uk/news/world-europe-19644897)
@John B: I totally agree with you. I suspect that like all the rest in Pakistan, artists too thought it appropriate to do their bit in conforming to their soceity. Anyway this killed a beautiful opportunity to learn for Pakistani kids. Too bad!
We depend on foreign aid. NGOs might be doing a lot here. We always look up to such aids to air a simple TV programme like translated version of "Sesame Street". We cant do anything good without foreign assistance. Then why are we always complaining about them? Yes we can do so only if we are strong enough to stand on our feet. We should be self sufficient in every way. It is we ourselves who provide loop holes for others to invade. When they do so then we start crying like a little kid. Please do grow up.
Mr John B is going on and on about the semantics of aid money without having an iota of knowledge about the nitty gritty. As someone who has worked on USAID projects before let me add to your knowledge which may help you avert some of the embarrassment you might have to face if you would use these arguments in front of someone well versed with how USAID works. RPTW is not the recipient of the grant. It is a contractor. USAID designs projects and then hires a firm to implement the project. Various firms bid with their technical proposals with the best one winning. RPTW is the prime contractor, i repeat prime CONTRACTOR. The word contractor implying that there is a contract in place. The contractors are for profit organizations who earn profit for implementing the project earmarked within the project budget however they are not the recipient of the grant, please correct your knowledge. If your assertion about grants is taken to be true then let me inform you there are other USAID projects on ground where the prime contractor is an american firm like J E Austin and Chemonics international, so does this mean these American firms are recipients of the grant? No, they are merely implementing the project. The beneficiaries are others depending on the nature and scope of the project. The grant is being given to Pakistan but not in form of direct funding but through projects. Now there is a clause in every contract which allows the USAID to stop the funding, but invoking it by saying it is USAID's right is just like saying Musharraf invoked emergency just because the constitution allows him. It is not illegal but very unethical on USAID's part to discontinue funding on grounds of corruption allegations which cannot be substantiated. Each and every procurement, whether service or material, is subject to close scrutiny of USAID's procedures and prying eyes while they are taking place. If there was any corruption taking place, USAID must be complicit. In any case, no matter what, When there is an obligated amount in place, it has to be delivered. The budget is not delivered as a whole, it is released periodically in tranches. The project cannot be shut down without fulfilling the obligation.
@John B
So you're saying if USAID, under the grant, gets into an agreement with a private contractor, has no obligation whatsoever to fulfill their part of the deal?
@Amna: @Aliya: @Raza Khan: I am not sure why there is an "entitlement" issue in grants.
Whatever the reasons, USAID is not convinced on the grant appropriations and I am sure concerned parties talked about it before the USAID pulled the plug.
Judging from the comments and opinion piece I am beginning to think that people are far more interested in the "entitlement" of grant to the production company than the merit of USAID decision that is funding mega projects in PAK.
PAK people should know US senators are fighting to keep the US Aid flowing to PAK for humanitarian aid, which PAK badly needs.
USAID (US tax payers) has (have)no ethical, moral, legal or contractual obligation to continue funding for PAK performing arts GRANTS, if it is not satisfied. It is PAK people's responsibility to fund their performing arts, if they love the program that was helped by USAID.
Grants for the Performing arts are not humanitarian aid. PAK blew it.
What do they mean by they are not in a position to determine if any fraud was committed” but adds simply that “certain findings … give rise to suspicion of fraudulent intentions” that’s purely ridiculous ! Can anyone tell me if these are the final on going investigation findings ? Sad what a sham thanks for this article.
@John B:
What part of humanitarian assistance is to allegate people without evidence causing their business major damage along with their name and the reputation of our country? Yes its allowed if you have proper evidence but it will have to be better than your argument in which u are repeatedly stating Donors can do this because they are dolling out cash at any time and because Pakistanis are receiving these funds to implement their projects have to bear the brunt of it all.
I'm sorry you don't convince me this does not seem fair to Rafi Peer at all People please see this (http://www.youtube.com/watch?v=9QDolxIYM-o)
Treat them as innocent till proven guilty!
@Ali: @Naeem Siddiqui:
I wrote a detailed comment to @Ali but the moderator ate it. Your concern is similar to @Ali.
Grants are not contracts In contracts both parties equally benefit. Whereas, Grant is given as a benevolent gesture at the pleasure of the donor expecting nothing in return. Only the recipient directly benefits and the donor gets the pleasure of giving and may be an award or thank you in return.
The grant recipient however has an obligation to meet the reasonable expectation of the donor and if the donor is not satisfied, he or she has no obligation to fund the grant further and has no moral or ethical duty to tell why.
The Burden of moral and ethical duty in grants is at the recipient side.
Will you write a check to Gandhi foundation, if they spend the money in luxury?
USAID as a donor feels that there is an accounting displeasure. So why don't the recipient correct it?
Contrary to your opinion, USAID has NO ethical or moral right to stop humanitarian assistance and that is the reason despite allegation of misappropriation and death to America slogans humanitarian assistance is continuing. It however has the right to demand that the money is spent properly.
The humanitarian assistance value far outweighs the waste in spending and petty politics.
I'm confused by all the language of this article but it appear that US have again taken advantage of pakistanis
@ John B
USAID has the right to stop funding any humanitarian projects w/o mentioning any reason.
BUT they certainly have NO right to stop the funding with allegation of corruption without any proof.!!
I agree the Americans need to save us from this drama of spending millions of dollars in Pakistan, please if it weren't in their interest they wouldn't do so in the first place. Now being a perfect example just because their strategy has changed they are pulling out of Pakistan, which proves that the millions of dollars being spent in Pakistan is for no good of our people, its is merely because their political interests lie within this region. However, if this is the result of money being spent in Pakistan in the name of education it certainly has nothing to do with the under privileged children of Pakistan who are now being deprived by this successful education program and sadly due to pure American strategy. If such funding means for our children to not get educated and for organizations like Rafi Peer to crash after working towards their repute and name for over 30 years then "please go home America we don't want your red taped monsters in our country any more".
@John B
Who says USAID has no obligation? Do you know something more than all of us Mr. John? If the OBLIGATED amount which both PARTNERS have signed on is 10 mil and only 5.2 mil has been disbursed that means YES THE ARE OBLIGATED. In theory recipients cant demand the right to receive donor money but are you saying even when parties are under contracts donors have no obligation? I'm sorry that does not make sense to me if parties are under contract they are both liable to pay and deliver. What makes them not obligated their nationality? I think all pakistani "Partners" or counter parts better start getting vary of USAID as they can decide not to be obligated to their obligations at any certain time during their partnership with us pakistanis and the sad part about this is that they will blame you for the damage and hold only you accountable as you are Pakistani.
I believe its good knowledge just to know that USAID owes money to the Peerzada's as per contract just like it was good knowledge to know that only 5.2 mil was spent on the project so far. For me being a pakistani one wants to see the flip side of a reputable company like Rafi Peer being blamed so brutally for embezzlement of 20 million dollars which apparently was not even the cost of the program if you see USAID's own OIG report, Then how come all USAID spokes person are quoting 20 Million everywhere? my questions to the above debate are slightly different, why has a case which by common sense seems to be much more about “weaknesses” and “instances of non-compliance” become into what it has? is USAID liable to ensure partnership with their partners here in Pakistan, they are working on many projects with much larger funding why make a 5.2 mil project the talk of the world? was it because its visibility of this program was far larger than other projects worth 100's of millions of USAID's spending? why couldn't USAID not discuss the weaknesses of the project across the table? i know of other USAID projects which have huge financial issues and OIG audits underway specially if u see the report online you will see some of the projects i'm referring to why are they being dealt with in another manner? why did they take this small project with huge visibility into media and the public? if i was USAID and none of my big bucks were working in this country and one small project was doing so successfully and acting as a goodwill project i would have really sit down and give it preference and rethink a strategy before shooting it down like this unless my Agenda was otherwise, was it to once again make us pakistanis look like who the americans what to belive we are? i say this saga doesn't look like something it has been made into and unfortunately it's a good thing USAID is wrapping up in Paksitan as this project certainly shows their failure to do good in our country.
The point auther is trying to make is fair. Why deprive Pakistani children of a good education if there are no misconducts but few documentry incompliences. Why not build capacity at pirzada's so they can better manage their accounting.
In fact if there were no misappropriations then USAID is obligated to restore the good name of Pirzada's, which got spoiled due to poor decision-making of one or few officials at USAID.
@John B
you are absolutely right.
Arguments given by John B are pretty sane and make sense.
Guys guys don't you remember poor american people are short of money themselves shutting down space exploration programs , draining $z on defeated war , OMG how can i forget the record breaking number jobless people and an endless list of there misery.... I believe US-AID is backing the US policy of restricting Pakistan for further funds. They now only need excuses for not paying ....
Teh author seems to imply that USAID is an entitlement. Why?As long as contractural requirements were completed by US AID it owes Peerzadas nothing more.
@Sara: I understand that there are sincere and sane people in PAK trying to make a difference. But one cannot blame USAID for not finding it any further.
It is a cardinal rule that donors cannot impose their agenda on the recipients and the recipients cannot "demand" the donors that they have the right to receive their money.
Considering the amount of money spent on PAK by USAID, the program funding is pittance. However, PAK should take a look at the problems and see how to correct them. If the USAID feels that there are misappropriations, then why not correct them instead of criticizing USAID that they don't know how to do accounting?
I am sure it was a case of embezzlement of funds. I agree with USAID. Kindly also watch projects where nepotism is being made for high cost trainings and other corruption modes.USAID funding in power sector is being wasted in murky heads of accounts.
John, not everything in Pakistan is about the Mullahs. Pakistan has quite sensible people and mistakes can also be made by USAID too. Although, I do agree that we should support it on our own! Both USAID and PCTV (Peerzadas) should fulfil their duties according to the agreement.
USAID has no obligation to continue to fund the program. Grants are given to jump start the program. If PAK people like the program, then they should fund it for themselves by regular means.
Whatever the internal politics is in PAK towards the program, it is not USAID issue. Perhaps, the mullah brigade would like to have xenophobic children's program as in middle east and PAK govt is yielding to them?