USAID Awards $16M to Nathan to Fight Corruption, but Says Nothing About the 66 Fraudulent Concessionary Agreements and Illegal Wealth Accumulation (Part I)

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By J. Yanqui Zaza

The United States agency for International Development has awarded a $16M contract to Nathan, a private international economic and analytics consulting firm, to help Liberia fight corruption. Mr. Jeffrey Singer, Senior Vice President of Nathan, as per Nathan Website, stated that Nathan is excited that USAID selected its Team to help Liberia increase domestic revenue, enhance tax administration, and reduce inefficiency.

Preceding Nathan, USAID has been operating in Liberia for a long time. It was established by US former President John F. Kennedy of the United States to help reduce conflict, support stable, and strengthen democratic societies, etc. in developing countries. Explaining its mission on its website, USAID states that it has strategized an activity called Revenue Generation for Governance and Growth (RG3). Specifically for Liberia, RG3, according to its website, is designed to build the capacity of the Ministry of Finance Development and Planning (MFDP) and the Liberia Revenue Authority (LRA).

Continuing, USAID states that RG3 supports the MFDP to develop the capacity to formulate revenue policies and supports the LRA to become effective and efficient in domestic revenue mobilization. Well, if USAID is advising both MFDP and LRA, how come the two institutions are giving separate and conflicting information on revenue collection? The Commissioner of the LRA continues to report that the LRA is outperforming revenue projections, but the Minister of MFDP is insisting that there is no revenue for government to pay salaries.

Liberia’s domestic revenue is low, not necessarily due to the lack of policy and/or the lack of competent staff, but due basically to administrative decisions awarding fraudulent concessionary agreements to private business interests. Did USAID play a role when former President Ellen Johnson Sirleaf awarded 66 fraudulent concessionary agreements to greedy corporate interests, which is dampening revenue collection? The Moore Stephens LLP, the largest UK accountancy (which has now merged into BDO as of 2/4/2019), reported in 2014 that Liberia signed 66 fraudulent concessionary agreements.

Further, what was the role of USAID when former President Sirleaf and Governors of the Central Bank decided and used depositors money to finance excessive salaries. This administrative decision has indebted Liberia to the Central Bank in the amount of $260M in 2016, according to the International Monetary Fund June 19, 2019 Report.

In view of this situation, the public is left to speculate, rightly or wrongly that USAID failed in its mission; therefore, it has hired Nathan to help Liberia. Let us review a few of the services offered by Nathan according to information provided on its website: (1) Macroeconomic analyze and forecasting, (2) Economic policy formulation and reform, (3) Monetary and capital markets, (4) domestic revenue mobilization, (5) Tax policy, and (6) Tax administration strengthening.

`From the summaries of the functions of these foreign consultants, can either of these consultants fix Liberia’s economic problems, which are primarily rooted in official graft and corrupt behavior by public officials with impunity?

1) Was it possible for either of these foreign consultants to have prevented President George Weah from using government money to accumulate real estate, a loss of government revenue? Since becoming President in 2018, Mr. Weah has built over 49 buildings.

2) Was it not the decision of former President Ellen Johnson Sirleaf that had encouraged health officials to abandon accountability and transparency, which resulted into the loss of excess Ebola money? The International Monetary Fund reported that Liberia’s international partners have withdrawn money from Liberia’s Net International Reserves because Liberia did not account for excess Ebola money.

3) Was it the lack of policies and/or incompetent personnel that allowed Mr. Robert Sirleaf, former President Sirleaf’s son, to evade accountability for the US $10M, a social responsibility fund given to Liberia by an oil company, Chevron? No, rather it was under the watch of former President Sirleaf that the responsible government officials failed to audit the disbursement of the US $10M and abut which she did absolutely nothing.

4) Was it the lack of competent personnel and/or lack of policy that prevented officials from infusing the L$16bn into Liberia currency circulation? Well, everyone knows now that the L$16bn was not infused into the commercial banking system because the government has admitted that it has no new banknotes. The public widely suspects that the L$16bn new banknotes are at private homes largely because former President Sirleaf and President George Weah failed to ensure the infusion of the 16bn Liberian dollar banknotes into circulation.

Another foreign consultant, Kroll, hired to investigate and examine the L$16B saga, I guess, was aware that the L$16B was missing but was encouraged to go along with the Government’s version that only a small amount of money was missing, but government should instead focus on correcting accounting irregularities and personnel negligence. Assumingly, had it not followed the government line, Kroll would have been compelled to follow the International Standards on Auditing (ISA) 500, which requires an external auditor to obtain reliable evidence from third parties (in this case, the nine commercial banks of Liberia).

Responding to letters from Kroll, each of the nine commercial banks would have been required to report the values of new banknotes each received and infused into Liberia’s currency circulation and the values of old banknotes each returned to the Central Bank.

This approach would have revealed that no new banknotes were infused into Liberia currency circulation, which would have confirmed the allegation that officials siphoned the L$16B. Of course, the government was not ready to give the hard truth to the population; hence, our international partners, stakeholders, and Kroll went along.

If I may ask, can any hired Liberian employee or foreign consultant reject President George Weah’s request to get money for any reasons? For reference, I recommend a review of the story of President Ronald Reagan’s attempt to assist former President Samuel K. Doe regime with tax policy, revenue collection and disbursement in the 1990s, and Liberia Governance Economic Management Assistance Program accomplishment, if any.

To be continued in Part II

3 COMMENTS

  1. On behalf of the children of Liberia, we would like to thank the United States Government through its embassy near Monrovia for this donation to help fight corruption.
    However, do you think the recommendations and advice from Nathan will be adhered to? These are people who say “da book we’ll eat here? We don’t Socrates to rule Liberia”.

    We hope your efforts will bring some stability and sanity in public finances. We just hope the meagre salaries of our poor civil servants can be paid continually henceforth.

  2. The US has tried to assist Liberia straighten up its finances before. The OPEX Team was in Liberia in the mid 80’s. Before the arrival of OPEX, the 11th floor of the Ministry of Finance where government checks that have cleared are kept, was set on fire. All the returned checks were burned leaving no traces of government transactions.

    And CIC Doe didn’t allow the team to access all the government agencies, particularly, FDA, LPRC, etc. These “No go” agencies were considered as Doe’s pepper bushes. Eventually, out of frustration, OPEX left Liberia. And the US dollars followed. Doe minted his own money, “Doe Coins,” as they were called. That was the beginning of Liberia’s FINANCIAL problems. The civil war(s) followed a few years later. Will Nathan make a difference without attacking Liberia’s core problems, Corruption and impunity? The US could probably help enforce our laws. That might help reduce corruption and increase our local revenues. Anything else will just be another FAILURE by the US because corruption in our country has become our culture. Getting rid of a bad culture requires punitive and corrective measures.
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  3. Very grateful once again for the assistance that has been given from the US government. We hope that this assistance will not be abused, but rather appreciated and embraced.

    As the author notes, the payment of high salaries to the country’s lawmakers and government officials during the Johnson-Sirleaf years has dealt a severe blow to Liberia’s economy. Johnson-Sirleaf was a poor technocrat who had no idea of how a government should work. While she approved of high salaries for the lawmakers, public schools were left in the mud, teachers and other civil servants were underpaid. What a disgrace!

    Hopefully, things will change for the best in Liberia sooner or later. A reduction in pay for the greedy lawmakers is a good place to start making a difference.

    A Liberian Representative….$180,000 per year.

    A Liberian Senator……………..$192,000 per year. It’s been a shame. It’s still a shame. It will continue to be a shame if nothing is done to cut the yearly salaries of a bunch of “do nothing legislators”.

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