US funds for democracy in Cuba spent on cashmere

Campaign News | Thursday, 16 November 2006

Congressional audit finds most money goes to enrich Miami emigres

WASHINGTON, Nov 15 - U.S. funds intended to promote democracy in Cuba have been used to buy crab meat, cashmere sweaters, computer games and chocolates, according to a U.S. congressional audit published on Wednesday.

The survey by the Government Accountability Office found little oversight and accountability in the program, which paid out $76 million between 1996 and 2005 to support Cuban dissidents, independent journalists, academics and others.

It also found that 95 percent of the grants were issued without competitive tenders.

To protect recipients from prosecution, none of the money from the U.S. Agency for International Development or State Department is paid in cash to people in Cuba. A Cuban law sends citizens to jail for receiving money from the U.S. government.

Instead, the funds are distributed to Cuban-American groups in Miami, the heartland of opposition to Cuban President Fidel Castro, and in Washington, and used to buy medicines, books, shortwave radios and other goods that are smuggled into Cuba.

President George W. Bush has proposed increasing spending on Cuba-related programs, including propaganda transmissions by Radio and TV Marti, by $80 million over the next two years.

Critics have long charged the grants are aimed more at winning votes in Miami than triggering political change on the communist island, where the now-ailing Castro has ruled since his 1959 revolution.

Out of 10 recipients of public money reviewed by the auditors, three failed to keep adequate financial records, the Government Accountability Office said. A lot of the money was used to pay smugglers, or "mules, to avoid U.S. restrictions on taking goods to Cuba.


The auditors questioned checks written out to some staff members, questionable travel expenses and payments to a manager's family. One group acknowledged selling books it was supposed to distribute under the democracy-promoting program.

One grantee "could not justify some purchases made with USAID funds, including a gas chain saw, computer gaming equipment and software (including Nintendo Game Boys and Sony PlayStations), a mountain bike, leather coats, cashmere sweaters, crab meat and Godiva chocolates," the report said.

The auditors did not identify the recipients.

Juan Carlos Acosta, executive director of Miami-based anti-Castro group Cuban Democratic Action, told the Miami Herald he sent those items to Cuba, apart from the chain saw.

"These people are going hungry. They never get any chocolate there," Acosta said, according to the newspaper.

He said he bought the jackets and sweaters at a sale.

"They (the auditors) think it's not cold there (in Cuba)," Acosta said. "At $30 it's a bargain because cashmere is expensive. They were asking for sweaters, from Cuba."

Acosta did not immediately return a phone call from Reuters.

The audit was ordered by U.S lawmakers opposed to the 44-year-old U.S. economic embargo on Cuba, and they said the findings confirmed the need for a thorough review of U.S. policy.

"Let me just say that, to continue a current level of funding, given the results and given the disarray this program seems to be in, would be a tremendous waste of taxpayer dollars," Rep. Jeff Flake, a Republican from Arizona, told reporters in Washington.

Miami Herald: Cash for Cuban dissidents programme is not working

Report suggests need to change rules for aiding anti-Castro opposition

From the Miami Herald newspaper, 14 November 2006

Ten years ago, a Republican-led Congress pressed President Clinton to help bring democracy to communist Cuba in the wake of Cuban MiGs' shootdown of two unarmed Brothers to the Rescue planes and mounting U.S. fears of yet another rafter crisis.

Today, the program - funded by the U.S. Agency for International Development (USAID) - has spent $55.5 million, for studies on a future Cuba without strongman Fidel Castro, for exile groups to lobby foreign governments to sanction the island, and to ship children's books, food, medical equipment, laptops and clothes to dissidents and their families.

None of that money has reached the dissidents in cash.

Most of the USAID money has remained in Miami or Washington - creating an anti-Castro economy that finances a broad array of activities, ranging from university studies to spending millions to ship goods surreptitiously to the island's opposition. An intricate network of "mules" are paid at least $13 a pound to smuggle medicines, laptops and books into Cuba. That's 13 times more than it costs to ship to many other Caribbean countries.

Several Cuba experts in the Bush and Clinton administrations blame arbitrary USAID rules that ban sending cash directly to dissident groups in Cuba for derailing the program's purpose.

Now that President George W. Bush has promised $80 million over the next two years to amp up pro-democracy programs for Cuba - a strategy announced before an ailing Castro ceded power July 31 to his brother, Raúl - the philosophical battle over whether to send cash directly to Cuban dissidents endures. And the question of USAID's effectiveness in Cuba has become all the more relevant.

Bush's plan, likely to be taken up by a majority Democratic Congress next year, comes as the General Accountability Office prepares to release on Wednesday its audit on how well USAID's Cuba program is working.

Although no USAID funding is allowed to go to Cuba, at least one other taxpayer-funded program that promotes democracy in Cuba --the National Endowment for Democracy - allows its money to go to the island in cash. NED has sent about $970,000.

Millions of dollars get spent locally on companies and people that specialize in slipping goods into Cuba. Washington struggles to verify how much aid and information actually reaches the island -- or whether they've had any effect in promoting democracy.

What's more, the Cuba program's first USAID director, Peter Orr, and other Clinton era officials said it was designed to be weak as a divided adminstration bickered over the goals of pursuing regime change and some worried about exile groups' using the money for militancy.

"Shipping stuff into the island is an incredible waste. It's very expensive, it can get confiscated, all these arguments were raised by me and others at the time," Orr told The Miami Herald. ``And my opinion -- I can prove it -- is that the decision was consciously made to distance the program from the ground in Cuba, and to make it less effective."

A Miami Herald review of USAID Cuba programs found that many of the same accountability problems raised by a 2000 outside examination remain unresolved. That study, conducted for USAID, found Congressional disagreements over Cuba policy hindered the program; USAID had no one in Cuba to ensure supplies made it; the program was "severely constrained" by its policy prohibiting cash to be sent to opposition groups in Cuba.

The Miami Herald reviewed hundreds of USAID records -- some requested more than two years ago through the Freedom of Information Act -- and interviewed more than 100 people for this series. The Herald found:

? Paying mules and other shipment costs swallowed nearly half of the $7.4 million spent by Grupo De Apoyo a la Democracia, the largest USAID recipient, and almost half the $3.2 million spent by Cuba OnLine to send pro-democracy mailings to Cuba from 2001 to 2004, according to tax records and interviews. As a result, Grupo De Apoyo spent about 13 percent of its U.S. funds, or $986,000, on food and medicine.

? USAID still has no employee at the U.S. Interests Section in Havana to monitor the program's effectiveness there. Successes are often based on media reports -- something as minor as someone taking the glasses from a John Lennon statue at a Havana park -- or statements from the relatives of dissidents on the island.

? A 1996 confidential memo from USAID reveals there was broad bipartisan support -- from the Senate Foreign Relations Committee to the State Department -- to let USAID groups send as much as $400 at a time to "victims of repression" in Cuba.

? Two top USAID managers who helped create the program said it was set up to preserve the status quo in Cuba; Clinton's senior Cuba advisor, Richard Nuccio, believed both the Clinton and Bush administrations used the programs to court Cuban-American voters.

"My impression is that during the second Clinton term and continuing into the Bush administration, the way the program was administered turned it more into a program to garner political support from the Cuban American community...than to actually produce things inside Cuba to benefit a democratic transition," Nuccio said.

Several Clinton officials also feared that directly funding dissidents could subject them to persecution in Cuba, which routinely accuses dissidents of being U.S. mercenaries.

Nuccio now thinks it was a bad decision. ``We shouldn't be so arrogant as to decide for them [the dissidents] that they could be contaminated by this, and therefore we won't provide it."

Orr said he left USAID's Cuba post by 1997, frustrated that he was unable to convince higher-ups to have Cuba's program work the same way USAID operates in Haiti and most troubled countries -- with cash sent to reformers working inside the country.

Instead, Clinton's inner circle opted for a go-slow, indirect approach, Orr said, because the Democratic president worried that political instability in Cuba could result in mass migration to the U.S. Clinton had lost re-election as Arkansas governor after Mariel refugees rioted at a prison there.

"The shocking conclusion was that nobody in the administration wanted to rock the boat in Cuba," Orr said.

Larry Byrne, an assistant USAID administrator from 1993 to 1997, never wanted to send money directly to dissidents. He called the program he helped devise -- under pressure from Republicans in Congress -- ``a waste of U.S taxpayer dollars."

"It's just ridiculous that someone would think this program would destabilize Cuba," he said. I thought it was a good idea to open up a dialogue with Cuba. I didn't think the program was ever going to work. It was ill conceived, ill thought-out, underfinanced.

Clinton did not respond to repeated requests for comment. A spokesman at the William J. Clinton Foundation referred questions to Mark Schneider, the assistant administrator of Latin America and the Caribbean at USAID from 1993 to 1999.

Schneider said the program was designed to get "non-controversial" support into Cuba.

"These programs by themselves cannot bring about change," he said. ``The people carrying it out tried hard to make it work, but it's very hard."

Even supporters of the no-cash policy concede the bulk of the money is getting siphoned off by exorbitant shipping costs.

"There is a strong philosophical debate here and it's a tough one," said Roger Noriega, former undersecretary of State for the Western Hemisphere during President Bush's first term. He said the policy ``created a ridiculous situation where we were spending 10 times the cost of shipping to send in materials that could be bought on the market [in Cuba] if we just gave cash and got a receipt."

Getting items into Cuba is art for USAID groups: Documentaries about dissidents' struggles and human right abuses are packed in DVDs with covers of Cuban musical bands.

Still, there are no guarantees that supplies make it to the island.

University of Miami Professor Jaime Suchlicki, who runs Cuba OnLine and the UM's Institute for Cuban and Cuban American Studies, both USAID-funded programs, said he relies on phone calls and letters as proof that his mailings reach Cuba. He estimates that "50 to 60 percent" of Cuba OnLine's mailings get through. Mailings are sent because few Cubans have access to the Internet, and Cuba blocks many of the e-mails CubaOnLine sends.

"We assume a great percentage get in," Suchlicki said. ``This has to be based on partial evidence."

David Mutchler, the USAID Cuba program's director, would not elaborate on how the agency verifies if shipments reach dissidents: ``We do have ways to check."

Mutchler points to a study, published by USAID-funded Directorio Democrático Cubano, which chronicles instances of civil disobedience in Cuba.

Based in Miami, Directorio has received more than $3 million in federal money. It has documented an increase in peaceful anti-government activities, such as dissident meetings, in Cuba from 44 in 1997 to 1,805 in 2004.

Adolfo Franco, USAID's Latin America and Caribbean program director, said sending money to dissidents would result in a Cuban government crackdown, as happened in 2003 when 75 dissidents, independent journalists and librarians were jailed.

The Cuban government considers the USAID program subversive and imprisons or harasses Cubans who dissent.

Franco said the program is effective: ``If it's such a waste of time and money and patronage, I think they'd be laughing about it in Havana as money down the rat hole. But I think that's a measurement - [the Cuban government], they've put a lot of effort into trying to derail this program."

During a recent tour of the Washington office of the Center for a Free Cuba, director Frank Calzón pointed to a toy water gun the size of his palm, not far from a "Hello Kitty: Use Your Imagination" coloring book.

"This is one of the counter-revolutionary things we send to Cuba," Calzón joked of the water pistol. ``We send arms."

Calzón's human-rights group received more than $5 million from USAID from 1998 through 2004, according to the group's March 2004 quarterly report. The group sent more than 209,244 books, pamphlets, magazines and videos to Cuba, the report states.

Calzón also lobbies foreign governments to condemn Cuba's human rights abuses. In 2004, a Cuban diplomat knocked Calzón unconscious in Geneva after a United Nations vote that condemned Cuba's human rights record.

"Our basic mission is to encourage and help build a democratic, civil society in Cuba," Calzon said. ``That cannot be done if Cubans have no access to books, tapes and other material explaining democratic ideas."

Among other items shipped by USAID-financed groups to Cuba: books by former Czech President and Soviet-era dissident Vaclav Havel, veterinary manuals, powdered milk, children's videos -- along with the Harry Potter series and wheelchairs,

"It's a complicated program to quantify," said Xavier Utset, who directs the Cuba Democracy Project at Freedom House, which received $2.7 million in USAID funds from 1996 to 2005. ``Internal repression makes it difficult to evaluate a program that supports people inside the island."

Federacion Sindical de Plantas Electricas, Gas y Agua, a Miami-based group of exiles who once worked at Cuban electric, gas or water plants, got almost $600,000 from USAID since 2003 and tens of thousands more from the National Endowment for Democracy, NED.

The group sent $9,000 from NED directly to two women in Cuba - only to learn they were Cuban agents, said Joel Brito, former director of Federacion.

"It's very difficult to tell from Miami who the people are that we help in Cuba," he said.

Vladimiro Roca, a pro-democracy activist in Cuba, said in a telephone interview from Havana that fax machines, computers and more can be bought in Cuba's black market.

"What we need most is money," he said.

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