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This article was originally published
in The Guardian (UK) Corruption takes many forms, and
if the United States seems like it
has less of it than many developing
countries, this is partly because we
have legalized so much of it. Election
campaign contributions are
only the most costly and debilitating
form: a legalized bribery that,
for example, gives the pharmaceutical
and insurance companies a veto
over healthcare policy and generally
hollows out our limited form of democracy. This legalization of corruption
reached a new milestone last
December when one Lewis Lucke,
a long-time US Agency for International
Development (USAID) official turned influence-peddler, sued
a consortium of firms operating in
Haiti for $492,000, for breach of
contract. As Lucke would have it
(sorry!), he was promised $30,000
a month, plus incentives, to use
his influence to secure contracts for
these nice fellas. He got them $20m
worth of contracts, but they cut him
off after two months. The defendants
in the case are Ashbritt, a US
contractor with a questionable track
record, and the GB Group, one of
the largest Haitian conglomerates.
Together, they formed the Haiti Recovery
Group, which they incorporated
in the Cayman Islands, to bid
on reconstruction contracts. Lucke was well-positioned for
the job, having formerly been in
charge of the multibillion dollar reconstruction
effort in Haiti for the US
government. (He was also previously
the USAID Iraq mission director;
we know how that reconstruction
turned out.) His lawsuit states that
when he worked for USAID, “He
met with Haitian offi cials, former
United States Presidents Bill Clinton
and George W Bush, the state
department, World Bank, and other
participants …” He was then hired
by Ashbritt to, among other things,
make “strategic introductions to
key stakeholders, organizers and
brokers of Haitian recovery efforts
…” Bill Clinton and George W Bush
established the Clinton-Bush Haiti
Fund to help Haiti “build back better,”
and Clinton is co-chair of the
Interim Haiti Recovery Commission
(IHRC), which has met about six
times since the earthquake, and has
been widely criticized for its lack of
Haitian representation in decision making. And then there’s the World
Bank, which has spent many years
complaining about corruption in developing
countries, often using it as
a convenient excuse for its decades
of failed policies. Lucke scored big
with the bank, landing a $10m contract
for his clients. (The ingrates!)
The other $10m contract was with
the Haitian government. Politicians here are quick to
blame the Haitians for the lack of
progress since the earthquake, and
corruption is often assumed to be
exclusively a Haitian problem. But
it is clear that some of it comes from
outside. Maybe a lot.
For example, influence-peddling
might help to explain why not
a single US government contract
for Haiti’s reconstruction in the last
five months has gone to a Haitian
company. In fact, out of $194m
awarded since the earthquake, just
$4.8m, or 2.5% of the total, has
gone to Haitian companies. USAID
has given out $33.5m, none of
which has gone to a Haitian company;
some 92% of USAID’s contracts
have gone to Beltway (Washington,
DC, Maryland and Virginia) contractors.
Now, isn’t that a geographical
oddity? About 15.5% of contracts in
January 2010 were “no bid”, which
presumably could be justified because
of the urgency; however, this
proportion has increased to 42.5%
over the last five months. Nassim Nicholas Taleb, author
of The Black Swan, has pointed
out how legalized corruption affects
policy in the United States, and has
compared it to bribery in African
countries, often with delayed payments.
The former Clinton treasury
secretary and top economic adviser
to Obama, Larry Summers, pulled
down $5.2m from a Wall Street
hedge fund for part-time work,
along with hundreds of thousands
of dollars from financial giants, including
Goldman Sachs. One has
to wonder whether this influenced
his decision-making in the Obama
White House, which often seemed
to go against his prior academic
writings, his columns in the Financial
Times, or even what he has said
since he left office. I think I’d rather have some of
the poorer countries’ corrupt practices
that don’t have so much influence
on policy – like paying a bribe
to get my passport renewed – than
the ones that give us 25 million
people unemployed, underemployed
or having dropped out of the labor
force. Unfortunately, though, our
corruption is an even bigger problem
for the Haitians, who are desperately
poor and can afford it much
less. As a result of two centuries
of foreign intervention, which has
caused more damage than the earthquake,
including the overthrow of
two democratically elected governments
in the past two decades, Haiti
has been reduced to dependency on
foreign aid. This week, 53 members of
Congress, including Democratic
leaders such as Eliot Engel and Steny
Hoyer, sent a letter to the Obama
administration lamenting the “appalling
conditions” that continue
to prevail in tent camps and calling
on organizations receiving US funding
to “demonstrate that they are
making concrete progress in the
camps.” It’s time for the so-called
international community to clean up
its act. |
