Three organizations claiming to do vital relief work on behalf of the United Nations in ravaged Somalia diverted millions of dollars intended for food, water, medicine, and other relief services for thousands of the most desperately suffering people in the world, according to confidential U.N. reports obtained by Fox News. Some of the money may have gone to terrorists.
Most of the aid supplies and services the organizations claimed to deliver never existed, according to U.N. investigators who began looking into the issue in late 2012, and issued their “strictly confidential” investigation results in November 2013 and May 2014.
Much of the missing money from the U.N.-administered Common Humanitarian Fund (CHF) for Somalia, the probers concluded, was diverted into the pockets of the officials involved -- but in one case, the investigators noted tersely, evidence “suggested possible payment of project funds to a terrorist group.”
That evidence, as presented in the reports obtained by Fox News, is intriguing but slender: a 2012 email between officials of one U.N. contractor who asks the head of his non-governmental organization (NGO) for money transfers, while reporting that a third colleague “is pressed by al-Shabab to do the three payments as quickly as possible.”
The size and purpose of the briefly-mentioned payments is not mentioned in the email, and the U.N. investigators said they didn’t have the investigative authority to look further into suspect bank accounts “without the consent of bank owners.”
For its part, the Geneva-based United Nations Office for the Coordination of Humanitarian Assistance, or OCHA, told Fox News flatly that “OCHA has no indication that any CHF cases are linked to the transfer of funds to terrorist organizations”
Terrorist group al-Shabab is the radical Islamic organization that at times has controlled much of the hinterland of Somalia, and even much of its capital of Mogadishu, and still constitutes a deadly threat to the fledgling Somali government.
More than a year after the relief email was written, al-Shabab militants launched a May 2013 attack on the U.N.’s own headquarters in Mogadishu, killing 15 people. The organization continues to launch attacks, including on U.N. relief efforts, even though recent U.S. drone strikes have killed some of its top leadership.
Where all the diverted money went is just one of the urgent issues that gets limited coverage in the three separate investigations into alleged NGO scams involving the high-priority CHF.
The humanitarian consequences of the alleged fraud are also not examined by the investigators—except to note in every case that the relief was tied to alleviating Somalia’s 2010-2012 famine, “which claimed the lives of over 260,000 Somalis—half of whom were children.”
Indeed, the CHF was specifically intended to deal with that problem. It doled out more than $260 million between 2010 and 2013, the high-water mark of international concern for Somalia, with the aim of cutting red tape and getting aid fast to those who most desperately needed it. It was also expected to hand out tens of millions more in 2014 and this year.
Of the 2010-2013 tally, some 162 million was handled by the U.N.’s Geneva-based Office for the Coordination of Humanitarian Affairs—an agency that was singled out by U.N. auditors last year for the way it ladled out CHF money with “no assurance that the funds disbursed to NGOs were used for the intended purposes.”
Many of its failings were linked in that examination to OCHA’s practice of doling out 80 percent of the money for each CHF project up-front, and handing out the remaining 20 percent after project completion.
What the U.N. investigators’ examinations state is that in the case of three Kenya and Somalia-based organizations known as the Africa Rescue Committee (AFREC), the Humanitarian Action for Relief and Development Organization (HARDO), and the Mubarak for Relief and Development Organization (MURDO), the documentation of how the NGOs spent that initial 80 percent was largely a sham.
In each case, the probers’ reports offer lengthy proof that the trio showered their OCHA funders for years with phony receipts, padded invoices and doctored project reports as proof of their good work and expenses.
None of the three accused organizations had responded to questions from Fox News asking for their response to the reports by the time this article was published.
Given the vast amount of false documentation they say was involved, the investigators, working for the U.N.’s Office of Internal Oversight Services, could only offer best estimates of the minimum amount of alleged fraud in 17 of 21 projects tied to the offending NGOs:
• “at least” 79 percent, or $2.31 million, of some 12 projects completed by AFREC and worth $2.94 million overall
• “at least” 73 percent, or roughly $620,000, of $850,000 given to HARDO for three projects
• “at least” 70 percent of spending claimed by MURDO in connection with two agreements, or about $378,000 out of $428,000
• in addition, possible similar distortions on four other projects with AFREC that the probers never examined. OCHA suspended the projects after spending about $1.4 million once concerns about the NGO’s performance began to rise; the AFREC report notes that AFREC despite the suspension kept exaggerating project costs and continued “under-implementing project activities.”
Much of the allegedly fraudulent documentation could hardly be described as sophisticated. NGO officials ran padded invoices off of templates they allegedly stored on their office computers. The handwriting on invoices and other documentation from different sources was often the same.
In the case of HARDO, the investigators say, photographs offered as evidence that a U.N.-financed cash-for-work program was benefiting 1,100 people showed only a handful working on two small field projects.
When it came to staffing costs, the organizations not only padded their payrolls, but often double-billed the same staff to projects funded by other U.N. organizations or other humanitarian organizations. The same went for such things as vehicle rental expenses.
One reason why such double-billing was possible is that like OCHA, many -- if not most -- big humanitarian organizations rely on networks of local and international NGOs to carry out much of the delivery of humanitarian goods and services in harsh and dangerous areas like Somalia.
Many of them serve both as contractors and subcontractors on an array of different projects at the same time—in the case of OCHA’s portion of the CHF, for example, documents on the U.N. agency’s website show that its contractors also include other U.N. agencies, from UNICEF to the U.N. Population Fund to the United Nations High Commissioner for Refugees.
At the same time, the investigators noted that the suspect NGOs had similar ties themselves. In the case of AFREC, their report cites funding received from, among others, UNICEF and the private relief agency Oxfam; for HARDO, the report mentions UNICEF and Oxfam again, as well as the U.S.-based private agency Mercy Corps.
All of which raises the question of whether, in the case of the three tainted organizations, how far the funding diversions might go.
In response to questions from Fox News, UNICEF reported that it had signed eight contracts with AFREC in Somalia from 2011 to 2015, and spent $2.6 million on them by 2013. It had an additional deal with MURDO for about $848,000, of which $767,000 had gone out the door.
So far as problems went, a UNICEF spokesperson declared that through its own monitoring and tips from other U.N. agencies, “we determined that we needed to scrutinize the implementation and reporting (including financial reporting) on these projects. The process is on-going.”
Britain’s Oxfam told Fox News that it had worked with all three of the suspect NGOs in the past, including AFREC in 2011, MURDO in 2013 and HARDO in 2014. A spokesperson said the agency “has not experienced issues with any of the projects run by these partners,” though it suspended work with HARDO “pending three internal and external investigations into our programming.” The investigations found nothing wrong, she said.
Mercy Corps, based in Portland, Oregon, reported that it had worked with HARDO until August 2012 and with AFREC until March 2013, but as sub-contractors on USAID projects. Two projects with AFREC were budgeted at about $1.19 million and in the case of the second—building of a school—the project finished behind schedule and “we decided that we would not work with them again.”
As for HARDO, Mercy satisfactorily completed five projects budgeted at about $533,000 but added that “we have not had the opportunity to work on any news projects with HARDO since August 2012.”
For its part, OCHA told Fox News that when it came to the NGOs that U.N. investigators had probed, it was “not able to comment on specific cases due to the ongoing investigations.”
An OCHA spokesperson added, however, that the agency “is determined to manage rather than avoid the risks of operating in high-risk environments in order to deliver critical programs.”
Of course, no-one knows how widespread all of those risks may prove to be.
The most recent report of the U.N.’s external Board of Auditors, for example, makes a guess that in Somalia, the amount of money OCHA might be at risk of losing to fraudsters -- or more sinister organizations -- is a lot more than the $3.3 million involved in the three investigative reports.
The external auditors put the number at more like 5 to 6 times as much, or about $17.1 million.