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Useful Transparency vs Meaningless Paper Chasing

I’ve been called out by the blogger Transparency Extremist, in response to yesterday’s post on aid transparency and what matters.

For those of you keeping score at home, Till Bruckner from the University of Bristol lamented that USAID, World Vision, and others refused to provide uncensored budget documents for several aid projects operating in Georgia.  Famed aid reform guru Bill Easterly echoed this umbrage in the Wall Street Journal.   I then cried foul and argued that transparent budgets aren’t very useful or meaningful.  Which is when Transparency Extremist waded in and eloquently and simply pointed out “…he is wrong.”

Now, a couple of my more carefully followed personal rules are:

  1. Never start an argument where you appear to take the side against peace, puppy dogs, Justin Bieber, or transparency, and
  2. Never argue with someone who calls himself “Jim-Bob”, “The Punisher” or “The Extremist”

Nonetheless, I am going to throw caution to the wind and respond to the critiques in the order that they were raised.

Point: “….everything the taxpayer funds should be transparent.”

Counterpoint: In an ideal thought experiment, yes. But in reality, this doesn’t happen for a variety of good reasons.  Consider your neighbor, the postman. You don’t know his income or the fact that his wages are garnished for child support.  As a taxpayer, you are paying his salary, but for valid personal reasons you aren’t entitled to know exactly how much.  The FBI office in Karachi.  You don’t know how much they just spent on reinforcing the compound wall.  You paid for it, but if this was public information then a car bomber would realize it’s actually 3 feet thick and he’d need to double up on the fertilizer. And back to those aid contract budgets. One of the basic elements of open competitive bidding is ensuring that other competitors don’t know the precise financial details of other bids.  Judging from your site, you believe this is a travesty. I am not going to argue with you about the ethical philosophy underpinning the modern world’s consensus that this is necessary to ensure fair bidding. But I am going to insist that this consensus is a reality and asking aid NGOs to abandon it first is asking too much from organizations that have more pressing issues to worry about.

Point: “Budgets aren’t the meat; what we need to see are the actuals. And not just the agency’s actuals, but also those of the aid recipients. If we could see both, we wouldn’t need the audits.”

Counterpoint: If your goal is to use transparency to prevent or stop corruption, actuals are just as meaningless as budgets.  People with their hand in the till cover their tracks. If money is being siphoned off to the local government or one of the employees, the budgets vs actuals do not include a line that states “Bribery” or “Protection Money”. At the very best they will be listed as “Administrative costs” or “Security costs”. Open books won’t magically reveal the corruption.  You need deep, expensive, exhaustive audits, and even then you will be stymied by the fact that in the places where these projects operate receipts are not given and paper trails simply don’t exist.

Point: “…the aim of transparency in the process is to help ensure that we do get the impact. Lack of transparency isn’t the only thing stopping the schools being built, but it’s one of them.”

Counterpoint: I can agree with that last line, a lack of transparency is contributing to the lack of impact.  But you and I are shining our “transparency” spotlights on two different parts of the process.  You want to see if the NGOs spent 5% on bricks or 50%.  I want to know if they actually built any schools.  As simple as that sounds, it is extremely difficult to find out from government donors what the actual deliverables were.  And if you think counting schools is hard, wait until you try and figure out what the “governance” projects actually did.

Point: “….transparency must be universal and compulsory. It’s not enough for a few high-minded NGOs to open their books, if the competition doesn’t. This isn’t about WorldVision, it’s about USAID – which should make it a condition of every contract that the budgets and the actuals are published. Not an aspiration, but a condition. Not released under an FOI request, but published.”

Counterpoint: Amen. And free chocolate bunnies for all. Zero calorie chocolate bunnies, mind you. I was doing sprint intervals this morning before work and I still feel like vomiting.  (The following clip of unnecessary sarcasm is brought to you entirely in Spanish.)

YouTube Preview Image

So, to recap my rather hurried post yesterday:

  • This is not a debate about transparency vs secrecy. It’s about meaningful transparency vs useless paper chasing.
  • If the goal is to make aid more effective, to save more lives, feed more people, build more schools, we need transparent results, not process.
  • If the goal is to weed out corruption, open budgets and uncensored actuals are not going to point a red blinking arrow to the evil-doers.

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17 Comments

  1. [...] Dividend Trust Blog « A Budget Unexamined is a Budget Wasted? Useful Transparency vs Meaningless Paper Chasing [...]

  2. [...] This post was mentioned on Twitter by William Easterly, Scott Gilmore. Scott Gilmore said: @bill_easterly @ejoftheweb: This is about meaningful transparency vs useless paper chasing (and free chocolate) http://2.ly/cpdc [...]

  3. Well said Scott,

    Even auditors know not to chase things down that are worth less the cost of their effort (except in a forensic audit, of course). Accounting and transparency should (and almost always do) follow a similar guideline. Why should organizations spend even more than are now tracking money around – this only takes away from resources left to accomplish objectives. As a donor, I don’t you wasting my money telling how perfectly you accounted for it, spend it on the mission – that’s what I’m paying you for!

    Now, lest I be called an ignoramus or anti-transparency jerk, let it be known that I work inside an independent audit and evaluation department for a large NGO and have written papers on anti-corruption and good governance. You can be both pro-transparency and reasonable, something not everyone seems to realize.

    BTW, can you ship my chocolate bunnies to me in Colombia please?

  4. [...] This post was Twitted by NedBreslin [...]

  5. Sherrie Zollinger says:

    Personally, I really want to know impact, if that takes knowing how many bricks it takes to build a school, then great, tell me that, and I’l have an additional reason to cheer if you can do it for less.
    Having said that, I agree that spending more money on chasing where the money went is a waste of the money being spent on the chase.
    So, how does an effective aid agency or NGO or corporation for that matter travese the mucky waters of doing business in other countries and other cultures and deal with corruption for example while trying to achieve their goals? Do they just give in and absorb the “fees” as a cost of goods sold or do they make it a new line item or do they say “NO” and find another way?
    And how do you communicate to those “on the take” that your organization is there to better the whole, not just to line their pockets?

  6. [...] Peace Dividend Trust Blog « Useful Transparency vs Meaningless Paper Chasing [...]

  7. [...] That Day Gilmore responds to the Transparency Extremist and [...]

  8. [...] That Day Gilmore responds to the Intelligibility Extremist and [...]

  9. Jeffrey Silverman says:

    You would take a totally different position if you understood how development money has been siphoned off in Georgia, money generated under the Food for Peace Program used to provide material support for Chechen fighters, State Department Distributions used to support political candidates, especially when donated good were distributed to consider with political rallies, a recent vocational education project, VEP, was used by the director of the school to take his mistress and secretary on a one month vacation in Germany – and staff tried to submit expenses for helping students with job placements when they were physically out of the country. The sorted history of international development, especially USAID is a shame, and to turn a blind eye while the American People are being looted under the guise of development. I have personally investigated and forced USAID to fire three country directors in Georgia, two for Counterpart International and one for CARE international and cleaned up UMCOR more than 10 years ago.

    USAID has one investigator for all of Europe to the Afghan border, and that is not by happenstance but by design. The Pankisi gorge operation was set up with money siphoned off from a rural credit union and used to provide material support for Chechen fighters. It comes as no surprise why UMCOR is now so transparent as they had to pay back a lot of USAID and State Department funds, and some people should have gone to jail – as Art Keys and Associated under a Food for Peace Program. I made a nice commission by busting them a few years ago. Follow the money will show connections between political agendas, and payoff to Afghan war lords, and it is interested that some of the same staff that were involved in illegal operations in Georgia ended up working again with USAID project in Afghanistan. Only when the good were spilled – did USAID have to cover themselves by canceling some at will employment contracts for a former employee of ACDI/VOCA. He feeding FRENZY continues with the flows in the aftermath of the 2008 Georgian-Russian wars, and the real corruption is in the hired guns used for project evaluation to bring back the desired results, so more money flows.

    Jeffrey Silverman, MSc University of Kentucky
    Resident in Tbilisi Georgia for 18 years

  10. [...] That Day Gilmore responds to the Transparency Extremist and [...]

  11. Jeffrey Silverman says:

    Sleeping in the same bed with AEI makes for strange bedfellows for a whistle blower against USAID abuses

    The underlying motivations are not crystal clear, why a lone scholar as Till Bruckner, accruing a long list of enemies who label him a whistle blower, has a sharp axe to grind against USAID’s lack of even a clear and present transparency. Till Bruckner, whose name cannot pull up much at all on a Google search of anything unrelated to his new polemic emerging circa April 2010, which sprang out of nowhere to bemoan the lack of transparency that may be hiding corruption in USAID and their nongovernmental organization affiliates, including their religious aid network? Why would he pick the American Enterprise Institute’s magazine, THE AMERICAN, to lead the armada as a flagship into the murky waters of investigating the similarities between World Food Program and USAID shortcoming? Many people today fear that the USAID may have itself have mutated into a bloated behemoth of intelligence affiliates. Not only Till.

    http://www.american.com/archive/2010/april/how-corrupt-is-the-world-food-program/?searchterm=till

    The AEI is well known and notorious among its detractors for being the birthplace of hard core neo conservatism, which has been a frightful infestation of American democratic ideals and foreign policy for over 20 years now. You may be thinking by now that I am a blind supporter of USAID and the black clouds of legitimate and illegitimate NGOs swarming around USAID and the Republic of Georgia like sweet flies. On the contrary, I have been a long time investigative reporter dredging up such information for public disclosure for a few decades here in the Caucasus.

    The motivations of Mr. Bruckner have been portrayed by some as purely PhD research, but I find this is a mouthful to chew on and not choke. One can simply Google his mentors, allies, and affiliations and see that there is a smorgasbord of envy and jealousy of a vast rival power network such as USAID, to make an overflowing Georgian ‘supra’ table seem meager. USAID now far eclipses the former glory of AEI and their tangled web of patronages
    Something akin to the legendary rivalry between the Templars and the Hospitallers during the Crusades is going on here, and I don’t think I am the only muckraking hillbilly in these here hills that has noticed it so effortlessly, do you?
    And I question if the poor and needy of our planet, and their even more unfortunate brothers and sisters living under bloody repression, who truly need humanitarian aid and development assistance, would be impressed by this infighting and feuding squabble between two juggernauts who in the end will lay out very little for the poor themselves, and leave the recipients questioning the sincerity of the benefits coming from “the American People”. Remember Katrina and Ward 9? Charity starts at home, as well as transparency.
    I have to give Mr. Bruckner credit for coining one of the pithiest sentences I have read in a very long time, “Secrecy and charity make for strange bedfellows.”

    http://aidwatchers.com/2010/05/secret-ngo-budgets-publish-what-you-spend/

    I absolutely agree, and whistle blowing against abuses of U.S. monies exemplified by USAID projects, makes strange bedfellows for AEI.
    Jeffrey Silverman, Freelance journalist and former Editor of Georgian Times, 18 years resident of Georgia, who has investigated corruption within USAID in Georgia, Azerbaijan, and Afghanistan, in the last ten years

  12. Personally, I really want to know impact, if that takes knowing how many bricks it takes to build a school, then great, tell me that, and I’l have an additional reason to cheer if you can do it for less.
    Having said that, I agree that spending more money on chasing where the money went is a waste of the money being spent on the chase.
    So, how does an effective aid agency or NGO or corporation for that matter travese the mucky waters of doing business in other countries and other cultures and deal with corruption for example while trying to achieve their goals? Do they just give in and absorb the “fees” as a cost of goods sold or do they make it a new line item or do they say “NO” and find another way?
    And how do you communicate to those “on the take” that your organization is there to better the whole, not just to line their pockets?

  13. You would take a totally different position if you understood how development money has been siphoned off in Georgia, money generated under the Food for Peace Program used to provide material support for Chechen fighters, State Department Distributions used to support political candidates, especially when donated good were distributed to consider with political rallies, a recent vocational education project, VEP, was used by the director of the school to take his mistress and secretary on a one month vacation in Germany – and staff tried to submit expenses for helping students with job placements when they were physically out of the country. The sorted history of international development, especially USAID is a shame, and to turn a blind eye while the American People are being looted under the guise of development. I have personally investigated and forced USAID to fire three country directors in Georgia, two for Counterpart International and one for CARE international and cleaned up UMCOR more than 10 years ago.

    USAID has one investigator for all of Europe to the Afghan border, and that is not by happenstance but by design. The Pankisi gorge operation was set up with money siphoned off from a rural credit union and used to provide material support for Chechen fighters. It comes as no surprise why UMCOR is now so transparent as they had to pay back a lot of USAID and State Department funds, and some people should have gone to jail – as Art Keys and Associated under a Food for Peace Program. I made a nice commission by busting them a few years ago. Follow the money will show connections between political agendas, and payoff to Afghan war lords, and it is interested that some of the same staff that were involved in illegal operations in Georgia ended up working again with USAID project in Afghanistan. Only when the good were spilled – did USAID have to cover themselves by canceling some at will employment contracts for a former employee of ACDI/VOCA. He feeding FRENZY continues with the flows in the aftermath of the 2008 Georgian-Russian wars, and the real corruption is in the hired guns used for project evaluation to bring back the desired results, so more money flows.

    Jeffrey Silverman, MSc University of Kentucky
    Resident in Tbilisi Georgia for 18 years

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  16. Margarita Sarishvili says:

    Dear Mr. Silverman

    Here is something you might want to look into, and how can I get in contact with you.

    I was provided document yesterday from Azerbaijan of a major fraud case involving USAID and credit unions, (perhaps some WB money too), involving about 3.5 million dollars. I also have a copy of the letter sent to the US Embassy in Baku about this – and it is alleged that the Credit Agri, which was established with US and World Bank money operated a pyramid system and and gave fake rural credits to various organizations. This will not be the first major cover up of USAID in Azerbaijan and Georgia – and they have also been active in Iraq and Afghanistan, and even some of the same human resources.

    Currently Creditagro operated in 27 districts of Azerbaijan.

    Can you suggest how best to distribute this information – also – do you have anyone in DC that can go to ACDI/VOCA and get all the reports and complaints made under a FOIA request about alleged corruption in ACDI/VOCA for both Georgia and AZERBIJAN.

    The point of contact would be Seth McDonald, Project Coordinator/Financial Services
    202 469-6172 or Bill Polidoro, Chief Operating Officer, President Office

    202 383-4989

    As I understand, more than 3.5 million dollars was written off as bad loans and some kind of banking scam, US taxpayer money, and more than 100 court cases dropped to recover outstanding debts, people in the organization who did not want to participate in this were set up and arrested – and this was done in collaboration with the home office in DC as part of the damage control and money trading hands in Azerbaijan with the legal system.

    I only suspect the worst as how much of this money was used based on the experience with ADCI/VOCA in Georgia, based on what I read and what I know myself. It did not surprise me that Chechens were provided money for weapons and drugs – and the drugs were traded for weapons. That is how Pankisi was first set up to justify the US train and equip program.

  17. [...] see Peace Dividend Trust’s Scott Gilmore, Useful Transparency vs Meaningless Paper Chasing, http://buildingmarkets.org/blogs/blog/2010/08/19/useful-transparency-vs-meaningless-paper-chasing/, 19 Aug 2010.   An example of sustainable assistance through the development of indigenous [...]


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