[Senate Prints 106-35]
[From the U.S. Government Publishing Office]
106th Congress S. Prt.
2d Session COMMITTEE PRINT 106-35
_______________________________________________________________________
INTER-AMERICAN FOUNDATION PROJECTS IN ARGENTINA AND HAITI
__________
A STAFF REPORT
TO THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
CHUCK HAGEL, Nebraska
GORDON H. SMITH, Oregon
ROD GRAMS, Minnesota
SAM BROWNBACK, Kansas
CRAIG THOMAS, Wyoming
JOHN ASHCROFT, Missouri
BILL FRIST, Tennessee
LINCOLN D. CHAFEE, Rhode Island
JOSEPH R. BIDEN, Jr., Delaware
PAUL S. SARBANES, Maryland
CHRISTOPHER J. DODD, Connecticut
JOHN F. KERRY, Massachusetts
RUSSELL D. FEINGOLD, Wisconsin
PAUL D. WELLSTONE, Minnesota
BARBARA BOXER, California
ROBERT G. TORRICELLI, New Jersey
Stephen E. Biegun, Staff Director
Edwin K. Hall, Minority Staff Director
LETTER OF TRANSMITTAL
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January 13, 2000.
The Honorable Jesse Helms
Chairman,
Committee on Foreign Relations
The Honorable Joseph Biden
Ranking Minority Member,
Committee on Foreign Relations
Dear Senator Helms and Senator Biden:
Following the discovery in late 1998 that the Inter-
American Foundation funded groups in Ecuador responsible for
kidnapping American citizens, Committee staff increased
oversight of the activities of the Foundation. Foreign
Relations Committee staff increased its contact with the
Foundation's Board of Directors and staff (including attending
several board meetings) and increased scrutiny of program
notifications sent to the Committee.
As a result of this, other problem grants were discovered.
One such grant was to an Argentine group that took over a
Catholic Cathedral during a violent street demonstration and
held people inside the church hostage while it made demands on
the local government. Another grant in Honduras was to a group
that lead demonstrations forcing the government to uphold a law
it intended to rescind that discriminates against American
citizens.
The Foundation implemented procedures with the State
Department to attempt to ensure that future grantees are not
terrorists, criminals, or anti-American subversives. However,
the Foundation has not yet agreed to the Chairman's request
that it allow the Central Intelligence Agency to review its
current list of grantees to ensure that no other terrorists,
criminals, or anti-American subversives are currently receiving
funds provided by the U.S. taxpayers.
In response to these and other problems, the fiscal year
2000 Foreign Operations Appropriations bill reduced the Inter-
American Foundation's appropriation to $5,000,000--a
$15,000,000 reduction from the previous fiscal year. As a
further indication of Congressional displeasure with the Inter-
American Foundation, the bill also authorizes the President to
abolish the Foundation. It is not expected that the President
will choose to exercise this authority.
On November 30, 1999, you approved my request to travel
overseas to visit Inter-American Foundation projects, inasmuch
as few, if any, such visits have taken place for many years.
From December 4-11, I traveled to Argentina (one of the
wealthiest countries where the Foundation operates) and Haiti
(the poorest country where the Foundation operates) to evaluate
its projects.
The reason for undertaking this review was not based on
information about problem grants in these countries, rather it
was to evaluate the following: whether desirable results are
achieved by current and past Inter-American Foundation
projects; whether or not the projects are sustainable; and to
what extent the projects have any relation to U.S. interests in
two very different countries.
The enclosed trip report describes the projects visited and
provides my general impressions. Also included are key findings
and recommendations, including my recommendation that Congress
seriously consider abolishing the Inter-American Foundation as
recommended in the fiscal year 2000 Foreign Operations
Appropriations bill.
Sincerely,
G. Garrett Grigsby,
Deputy Staff Director.
C O N T E N T S
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Page
Letter of Transmittal............................................ iii
Key Findings and Recommendations................................. 1
Argentina
Map of Argentina................................................. 3
Asociacion Civil Nortesur.................................... 4
Federacion Asociaciones Centros Educativos para la Produccion
Total (FACEPT)............................................. 4
Centro de Estudios de Estado y Sociedad (CEDES).............. 5
Fundacion Universidad Nacional de General Sarmiento (FUNAS).. 6
Fundacion ARCOR (FUNARCOR)................................... 7
Fundacion Juan Minetti....................................... 7
Instituto para la Cultura, la Innovacion y el Desarrollo
(INCIDE)................................................... 9
Union de Organizaciones de Base por los Derechos Sociales
(UOBDS).................................................... 9
Haiti
Map of Haiti..................................................... 11
Pwogram Fomasyon pou Organizasyon Dyakona (PWOFOD)........... 11
Fundacion La Ruche (FLR) (The Beehive Foundation)............ 12
Haitian Association of Voluntary Agencies.................... 13
Haitian Artisan Committee (CAH).............................. 14
Asosyasyon Transpo Ak Lojistik (ASTRAL)...................... 14
Sere Pou Chofe (SPC)......................................... 15
Fondasyon Enstitisyon-yo pou Devlopman ki Soti nan Baz-la
(FIDEB).................................................... 16
Appendix
A. Inter-American Foundation Legislation......................... 17
Enabling Legislation for the Inter-American Foundation
[Partial text of P.L. 91-175] (Part IV of H.R. 14480,
Foreign Assistance Act of 1971)............................ 17
Authority to Abolish Inter-American Foundation [Sec. 586 of
H.R. 3422] (Appropriations for foreign operations, export
financing, and related programs for the fiscal year ending
September 30, 2000, and for other purposes)................ 20
B. Correspondence between Chairman Helms and Inter-American
Foundation..................................................... 22
C. Letter of December 2, 1999 from Chairman Helms to President
Clinton........................................................ 33
KEY FINDINGS AND RECOMMENDATIONS
The purpose of the Inter-American Foundation is to
help poor people in Latin America by implementing
small-scale self-help development programs. The
enabling legislation of the Inter-American Foundation
as well as its Congressional Presentation Document
indicate that the purpose of the Foundation is to
improve the quality of life of the poorest people of
the Western Hemisphere in a direct and cost effective
manner. The Foundation distinguishes itself from the
Agency for International Development (AID) by stating
that it works directly with the poor on projects that
beneficiaries design themselves. The Foundation
justifies its independence from AID and its existence
by claiming to work directly with poor people.
A majority of Inter-American Foundation projects
visited in Argentina and Haiti do not appear to be
improving the lives of poor people in a tangible way.
While some Inter-American Foundation projects appear to
work with the poor directly and have enhanced their
quality of life, it appears that most Inter-American
Foundation funds are provided either to intermediary
organizations or constitute subsidies and are clearly
not sustainable. A majority of the projects reviewed
during this trip had little or no direct or indirect
impact on the lives of the poor. Moreover, some of the
project managers admitted this to be the case and spoke
about project goals that are designed to support macro
policies or social changes which are more in line with
the approach of the Agency for International
Development or international financial institutions and
not the mission of the Foundation. In several
instances, it was difficult to ascertain the purpose of
a project or how it could reasonably lead to tangible
and direct quality of life improvements for poor
people. It appeared that poor people themselves rarely
designed and participated in the formulation of project
proposals.
The Inter-American Foundation funds a number of
organizations that can operate successfully without
U.S. taxpayer support. A number of the projects visited
in Argentina receive substantial financial support from
other organizations or are well endowed by corporate
sponsors and do not require additional U.S. taxpayer
assistance. While some of these activities have merit,
it is also a fair question to ask whether these
projects should be supported with U.S. taxpayer funds
when sufficient private sector support is forthcoming.
Many of the organizations visited would not exist
absent substantial funding from the Inter-American
Foundation and should not be described as grassroots
organizations. Many organizations supported by the
Foundation are not sustainable because they lack
genuine grassroots appeal and because they lack an
income generation component or adequate and predictable
sources of income from other than the Inter-American
Foundation. Additionally, many of the projects visited
did not reach the poor directly but rather benefitted
relatively well-to-do employees of non-government
organizations. Significant resources are provided for
the salaries of project managers and employees of these
organizations rather than to the poor people whom the
Foundation purports to assist.
The Foundation should reconsider whether it is
appropriate to operate in Argentina, which is
prospering economically and has a high standard of
living compared to other Latin American countries where
the Foundation operates. With limited foreign
assistance funds and far higher levels of poverty
elsewhere, the United States Government should not be
providing foreign aid to countries such as Argentina,
which have achieved a high level of economic
development.
Congress should seriously consider abolishing the
Inter-American Foundation as recommended in the fiscal
year 2000 Foreign Operations Appropriations bill. One
of the reasons Congress gave consideration to
establishing a small foreign aid agency to benefit
directly the poorest-of-the-poor in Latin America was
because Soviet-supported Cuban insurgents were making
headway in poor communities in Latin America where AID
programs were having no impact in the late 1960s. Given
the end of the Cold War, one of the fundamental
rationales for the existence of the Inter-American
Foundation has disappeared. Furthermore, the concept of
working with non-governmental organizations may have
been novel 30 years ago, but it is clear that most, if
not all, of the legitimate projects funded by the
Inter-American Foundation today would be eligible for
support from the Agency for International Development
or other public or private international development
agencies. While operating differently from the
Foundation, the Peace Corps has a solid record of
working to help poor people in foreign countries at the
grassroots level and could accomplish many of the
results the Foundation seeks to obtain. Moreover, the
Peace Corps would likely do so in a more cost effective
and people-to-people approach. A senior U.S. Government
official in one of the countries visited bluntly stated
that the Inter-American Foundation ``is not a player''
in the U.S. Government's economic development strategy
for that country. AID officials in Washington have also
privately made similar points. Given the Foundation's
lack of relevance to U.S. foreign policy and
international development strategy, its redundancy in
light of the programs AID and the Peace Corps currently
carry out, the end of the Cold War, its recent funding
of terrorists and anti-American subversives, as well as
the problems illustrated in this report, Congress
should seriously consider following through on the
recommendation in the fiscal year 2000 Foreign
Operations Appropriations bill to abolish the Inter-
American Foundation (See appendix A, page 20, for the
text of the legislation).
Argentina
Map of Argentina (Source: CIA)
Asociacion Civil Nortesur
(North/South Civil Association)
Buenos Aires, Argentina
Inter-American Foundation grant: $394,590
On Monday, December 6, I met with two representatives from
the North/South Civil Association at the Inter-American
Foundation's regional office in Buenos Aires. According to the
Foundation's project notification documents, the Association
will administer a project to improve the quality of life in
four low-income municipalities of Argentina.
The documents enumerate the purpose of the project
activities, which are summarized as follows: (1) train training
teams; (2) co-finance socioeconomic development initiatives;
(3) generate and promote integrated management information
systems; (4) train municipal employees, civic, and business
leaders; (5) design and install documentation centers; (6)
carry out pilot projects; and (7) conduct training and
technical assistance activities. Inter-American Foundation
funds will cover salaries, training, publications,
administrative support, and pilot projects.
Unfortunately, after several hours of discussion, I was
unable to ascertain exactly what the Association actually does,
how the project activities directly or indirectly benefit poor
people, or what its accomplishments are to date. The
description of the project by Association representatives was
heavy on theoretical concepts and devoid of specific examples
of how the lives of poor people are improved or in any
meaningful manner affected by the project. The impression was
left that the vast majority of resources provided by the
Foundation are expended on seminars and meetings attended by
mid-level Argentine municipal bureaucrats.
While some grassroots Argentine organizations may be
involved with the project at some level and, therefore, derive
some intangible benefit (although that was never made clear
during the meeting), it is not accurate to describe the
Association's activities as having any measurable positive
impact on the lives of poor people. Given the description of
the activities, it is also difficult to understand how the
results of the project can be measured.
------
Federacion Asociaciones Centros Educativos para la Produccion Total
(FACEPT)
(Federation of Educational Centers and Associations for Total
Production)
Buenos Aires, Argentina
Inter-American Foundation grant: $300,000
The meeting with FACEPT occurred at the Argentine Ministry
of Education with a FACEPT representative who was previously a
consultant with the Ministry. FACEPT promotes a method of
educational instruction which alternates periods of study at
school with home stays, where students apply what they have
learned. The Argentine Government has adopted this method of
educational instruction in a number of rural areas in an effort
to stem the migration of young people from rural to urban
centers.
According to Inter-American Foundation project notification
documents, the Foundation will fund salaries, consultants,
training, travel, per diem, educational materials, a revolving
loan fund to support income-generating projects, and a
database. The central component of the project, however,
appears to be the revolving loan fund, the operation of which
was well described and easily understood.
The revolving loan fund is a $55,000 pool of money used to
make loans not to exceed $2,000 each to graduates of schools
that use FACEPT's educational program. The loans are made to
sons and daughters of farmers for a variety of agricultural
projects. Project proposals are submitted by graduates to the
local FACEPT board of directors which is comprised of
interested local adults with an expertise in agriculture. These
loans are made essentially to support family farms since,
according to FACEPT's representative, Argentine banks do not
make small loans to family farmers.
After our meeting with the FACEPT representative, we
visited one such board of directors that was discussing
recently received proposals. The board was comprised of parents
(farmers) of past graduates, local government officials and
other agricultural experts. All the proposals were of an
agricultural nature designed to help increase the productivity
of the family farm.
As some of the members of the board of directors were
parents of past graduates, it gave us an opportunity to meet
some past beneficiaries of the program. It was clear that these
farmers were not the desperately poor campesinos one would
expect the Inter-American Foundation to assist. Rather, they
appeared to be middle class farmers not unlike the average
family farmer in the United States who might be in need of some
technical assistance.
While this project seems to be having a positive impact on
individuals in rural areas, which is its goal, it does not
appear that the assistance necessarily supports poor people. It
is, therefore, difficult to understand why the Foundation chose
to fund FACEPT. Furthermore, given the relative wealth of
Argentina as compared to other Latin America economies, the
Argentine Government's official acceptance of FACEPT's
educational methods, and the support of local Argentine
Government officials, it is difficult to argue that FACEPT
cannot carry out its program absent Inter-American Foundation
funding.
------
Centro de Estudios de Estado y Sociedad (CEDES)
(Center for Studies of the State and Society)
Buenos Aries, Argentina
Inter-American Foundation grant: $291,750
This grant is the fourth provided to CEDES by the Inter-
American Foundation. CEDES is the Argentine affiliate of Johns
Hopkins University International Comparative Research project
on the Third Sector (non-government organizations). CEDES is
the recipient of generous funding from such institutions as the
Argentine National Council for Scientific and Technical
Research, Canada's International Development Research Center,
and the Ford, Mellon, MacArthur, and Kellogg Foundations of the
United States.
Inter-American Foundation funding helps support three CEDES
studies on corporate philanthropy which are designed to (1)
review the philanthropic activities of U.S. companies in
Argentina; (2) survey and analyze fundraising techniques of
Argentine non-government organizations; and (3) identify
factors leading to greater transparency in the philanthropic
practices of corporations and foundations. Specifically, the
Foundation covers the costs of salaries, travel, per diem,
dissemination of its studies, and some administrative expenses.
CEDES cited as results of its Inter-American Foundation
supported project that it was instrumental in the American
Chamber of Commerce instituting a corporate citizen award, and
raising the visibility of the issue of corporate philanthropy
in Argentina.
This project appears to support indirectly the Inter-
American Foundation's new emphasis on working with the
corporate community in Latin America on development projects.
While CEDES' findings will be interesting and perhaps generate
some pressure on the private sector to help improve the quality
of life for poor people, it has no immediate or direct impact
on the lives or income of poor people, nor does it claim to do
so. Accordingly, it is difficult to understand why the
Foundation would choose to support such a project whose purpose
is so different from the Foundation's generally understood
mandate to help poor people at the grassroots level.
------
Fundacion Universidad Nacional de General Sarmiento (FUNAS)
(The General Sarmiento National University Foundation)
Buenos Aries, Argentina
Inter-American Foundation grant: $250,000
The President of the Universidad Nacional de General
Sarmiento and the Director of FUNAS met with us at the Inter-
American Foundation regional office in Buenos Aires. For the
past two years, FUNAS' predecessor (Instituto del Conurbano)
has been conducting participatory assessments of community
needs and problems within seven local municipalities.
Using Inter-American Foundation funds, FUNAS plans to
disseminate the results of the assessments of its predecessor
and provide training and technical assistance to facilitate
public-private partnerships among various community
organizations. Specifically, Foundation funding will cover
costs for consultants, equipment, material, supplies,
documentation and dissemination of the assessments, and travel.
As with the North/South Civil Association, it was difficult
to ascertain exactly what FUNAS does, how the project directly
or indirectly benefits poor people, or what its accomplishments
are. Simply put, FUNAS seems to undertake studies, conduct
seminars, and issue reports for the benefit of local municipal
officials and interested non-government organizations.
It does not appear that FUNAS works with grassroots
organizations as these are generally defined and understood. As
described by FUNAS representatives, their organization's
activities only impact the lives of poor people (if at all)
indirectly and incidentally.
------
Fundacion ARCOR (FUNARCOR)
(The ARCOR Foundation)
Cordoba, Argentina
Inter-American Foundation grant: $240,000
FUNARCOR is the philanthropic foundation of ARCOR S.A.I.C.,
a 50-year old, one billion dollar Argentine candy corporation
with more than 30 plants in five countries, employing more than
10,000 people. In 1991, ARCOR spun off its philanthropic
activities to FUNARCOR in order ``to identify and work toward
solutions that will support the needs of local communities in
particular and of Argentine society in general''.
Between 1991 and 1994, FUNARCOR provided more than one
million dollars for research grants and projects in health,
nutrition, education, and culture. FUNARCOR concentrates on
projects that involve the family and local community in youth
development and which are sustainable and replicable.
The Inter-American Foundation's involvement with FUNARCOR
is an example of the Foundation's new emphasis on working with
the private sector in Latin America to address development
problems. Inter-American Foundation and FUNARCOR funds will
help establish a development fund to provide grants to
community-based organizations to carry out health, youth, and
non-formal education projects. FUNACROR and Inter-American
Foundation will also collaborate to promote greater social
responsibility within the Argentine corporate community by
producing publications and conducting seminars.
The FUNARCOR project I visited on Tuesday, December 7, was
located in a shanty town on the outskirts of Cordoba,
Argentina's second largest city. The project was a child care
center where working mothers can drop off their children to
stay while they are at work. The center provides lunch and
activities for the children. Inter-American Foundation funds
are used to train the women who operate the 44 centers in
nutrition, food preparation, and hygiene. FUNARCOR also works
with the Catholic church and other groups to provide the 44
centers with food and supplies.
The FUNARCOR project directly involves the lives of poor
people, especially children. FUNARCOR representatives stated
that they benefitted from their association with the Inter-
American Foundation because they were so new to development/
philanthropic work. Specifically, they have learned from the
Foundation about the importance of measuring the results of
projects and about the methods to do so.
In the very near future, FUNARCOR will have learned all
that it needs to know from the Inter-American Foundation, and
the only role for the Foundation will be to provide additional
funds, which in this case, is not needed.
------
Fundacion Juan Minetti
(The Juan Minetti Foundation)
Cordoba, Argentina
Inter-American Foundation grant: $348,100
The Juan Minetti Foundation is the philanthropic arm of
Juan Minetti S.A., one of the largest cement companies in Latin
America employing 840 people located at its facilities
throughout Argentina. The Juan Minetti Foundation was
established in 1987, and it conducts programs and provides
grant support in the areas of education and social development.
The Inter-American Foundation and the Juan Minetti
Foundation have entered into a partnership to promote social
responsibility and resource mobilization within the corporate
sector. They have established the Tendiendo Puentes fund
through which they provide support to non-government
organizations carrying out development projects. After meeting
with several members of the board of directors (the daughter
and granddaughter of Juan Minetti and the Foundation's staff)
at its headquarters in Cordoba, we visited an organization that
assists street children and which receives Inter-American
Foundation funding through the Minetti Foundation administered
Tendiendo Puentes development fund.
The children being assisted are not homeless, rather, they
are generally school dropouts and those at risk of quitting
school before graduation. They spend the day on the streets of
Cordoba hustling to make several dollars. The organization
supported by the Foundation oversees a program that produces
and circulates a magazine written, produced, and delivered by
street children. The magazine reports on issues confronting
street children and sells for one dollar. The magazine is well
known throughout the region and has won critical acclaim. The
children are supposed to sell the magazine on the streets
instead of participating in their usual schemes to earn money,
although we were told that many sell the magazine and also
hustle for additional money by shining shoes, washing car
windows, or begging.
The organization's facility is a house in a poor section of
Cordoba where activities are carried out after school hours.
(While the targets of the program are dropouts, they are
required to attend school or study to pass an equivalency exam
to graduate in order to participate in the program.) There were
a number of computers used for desktop publishing, a small
printing press, and a classroom.
Tendiendo Puentes funds are used by this organization to
conduct classes in conjunction with the magazine so that
dropouts can eventually graduate. Several young people have
participated in this program and have graduated from high
school.
The Inter-American Foundation's involvement with the Juan
Menitti Foundation is another successful example of its new
emphasis on working with the private sector and corporate
sectors on development projects. While the project visited is
only one of many funded by the Tendiendo Puentes development
fund, it clearly is one which directly impacts the lives of
poor disadvantaged children.
As in the case with FUNARCOR, the Inter-American Foundation
will soon impart all the knowledge and skills necessary for the
Juan Minetti Foundation to support independently successful
projects. Foundation funding is not necessarily essential given
the Juan Minetti Foundation's impressive track record of
philanthropic activities, in addition to the fact that a
majority of the Minetti company was recently purchased by a
Swiss firm that provides generous financial support to the Juan
Minetti Foundation. In light of its financial position, and
given the success of its programs, the Juan Minetti Foundation
should be considered for graduation from Inter-American
Foundation assistance in the near future.
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Instituto para la Cultura, la Innovacion y el Desarrollo (INCIDE)
(Institute for Culture, Innovation and Development)
Cordoba, Argentina
Inter-American Foundation grant: $146,700
INCIDE is a non-profit organization dedicated to assisting
grassroots organizations in northern Argentina. INCIDE has
provided technical assistance to poor farmers as well as local
governments and other non-government organizations.
Inter-American Foundation funding will allow INCIDE to
strengthen the capacity of local governments and non-government
organizations to plan and carry out local development projects.
Specifically, the Foundation will finance salaries, training,
technical assistance, and dissemination of information on
project activities.
The project activities described that use Inter-American
Foundation funds focused on training for poor farmers so that
they can more successfully produce and market their products.
INCIDE concentrates on the poorest region of Argentina where
crops are difficult to grow and little or no infrastructure
exists to enable farmers to transport their products to market.
INCIDE representatives appeared to be dedicated to working
strictly with the poor on solutions relevant to the everyday
problems faced by the poor in rural northern Argentina.
INCIDE expressed difficulty in measuring the results of
their work due to the nature of their training--which they
described as ``leadership training''--which may not result in
the immediate solution of problems. They expressed confidence
that their training program was beneficial to poor farmers and
INCIDE is working with the Inter-American Foundation to
determine the best ways to measure the results of their work.
------
Union de Organizaciones de Base por los Derechos Sociales (UOBDS)
(Confederation of Base Organizations for Social Rights)
Cordoba, Argentina
Inter-American Foundation grant: $256,476
UOBDS is a former grantee of the Inter-American Foundation
whose support was suspended after it organized violent
demonstrations in Cordoba, in which the local Catholic
Cathedral was taken over and the people in the church were
taken hostage while certain demands were made on the government
(see appendix B, on page 29, a July 14, 1999 letter concerning
this episode from Chairman Jesse Helms to the Chairman of
Inter-American Foundation Board of Directors). This meeting was
scheduled in order to evaluate the sustainability of
organizations previously supported by the Foundation.
The subject of the violent demonstrations was not discussed
with UOBDS as it was obviously a sensitive point of contention.
UOBDS did not discuss its current activities, but made an
obvious plea to heal its relationship with the Inter-American
Foundation in order to be eligible for additional funding.
UOBDS members made clear their opposition to former
President Menem's economic policies and predicted that the
policies of the new government would not satisfy them either.
Rather, they candidly expressed their opposition to the free
market approach which has greatly improved the Argentine
economy claiming that poor people are worse off because of
these policies. Based on this short meeting, it is difficult to
understand why the Inter-American Foundation chose to provide
funding to UOBDS in the first instance and how this grant was
in any way in the interests of the United States.
(A meeting was also requested with another former Inter-
American Foundation grantee in Argentina which received at
least $404,655 in U.S. taxpayer funded grants: the Programa
Habitat in Buenos Aires. This grant was made to rehabilitate a
dilapidated building in the San Telmo district of Buenos Aires
and to convert the building, occupied by unemployed squatters,
into condominiums for the squatters that would be self-
supporting through rental income from shops that would occupy
its first floor. But after an extensive search by the Inter-
American Foundation's regional office and by the U.S. Embassy,
no one from the organization could be found. It was later
determined that Programa Habitat no longer exists. In response
to questions raised by the Foreign Relations Committee, the
Foundation stated that no improvements were ever made to the
building although $404,655 was provided to Programa Habitat.)
Haiti
Map of Haiti (Source: CIA)
Pwogram Fomasyon pou Organizasyon Dyakona (PWOFOD)
Formation Program for Organizations in Dyakona
Port-au-Prince, Haiti
Inter-American Foundation grant: $173,227
PWOFOD is a private Haitian non-government organization
which began operations during the U.S. embargo to help better
the lives of poor Haitians. It is an outgrowth of the U.S.-
based Christian Reform World Relief Committee (CRWRC), which
has operated in Haiti since 1976. PWOFOD works with church
laymen and women to improve the economic and social well being
of the poor through education and training, specifically in the
areas of adult literacy and community banking.
Inter-American Foundation funds will be used to finance a
micro-credit fund and to cover the costs of the literacy
program, local development project investment, construction,
education, and training, and program operation and
administration. The micro-credit fund made 20 loans in 1999,
will make 30 this year, and 50 in 2001. Church leaders identify
reliable and trustworthy potential borrowers who already
operate a business and wish to expand their operations.
After visiting PWOFOD headquarters the morning of Thursday,
December 9, we visited several recipients of micro-credit
loans. The first recipient was a young man who used the funds
to help market honey which his family produces in the Central
Plateau region of Haiti. That same evening, we visited a woman
who used her loan funds to help organize and operate a school
that teaches women how to cook, sew, and carry our other
similar activities. The young man is an active member of a
church whose leaders are associated with PWOFOD and the woman
was the wife of a pastor. Both were considered excellent credit
risks and they seemed to be enthusiastic about the program.
Additionally, Inter-American Foundation funds have been
used to build a second floor to PWOFOD's headquarters. CRWRC
paid for the construction of a third floor. PWOFOD intends to
rent the second and third floors of its office and use the
revenue to support its programs. They appeared to be serious
about the sustainability of their program, and the construction
project is a direct result of this approach.
PWOFOD's headquarters are well organized and its
representatives appear to be professional and motivated. Their
program objectives are understandable and there is no doubt
that the main beneficiaries of the project are poor Haitians
who are learning the skills necessary to improve their quality
of life. Of all the grassroots organizations visited, PWOFOD
seemed to understand the need to diversify its sources of
income from local and foreign contributors with the goal of
becoming sustainable and self-sufficient. If PWOFOD operations
are successful and it continues to gain additional financial
support, it may not be long before it graduates from Inter-
American Foundation assistance.
------
Fundacion La Ruche (FLR)
(The Beehive Foundation)
Port-au-Prince, Haiti
Inter-American Foundation grant: $255,940
The Beehive Foundation was founded by Edwige Balutansky,
whose father was a U.S. Marine in Haiti during the 19-year U.S.
occupation and who married and stayed in Haiti. Ms. Balutansky
is a journalist by training and traveled widely for the Reuters
News Agency before starting the Beehive Foundation in Port-au-
Prince.
According to Inter-American Foundation briefing documents,
the mission of the Beehive Foundation is to promote and make
accessible development information for socially responsible
journalism and to disseminate information on development
methods. The main focus of the program is to encourage
businesses to support development activities.
Ms. Balutansky expressed great frustration with the current
political and economic situation in Haiti and with the lack of
understanding about economic and social development among
Haitian business leaders. The Beehive Foundation established a
board of directors comprised of prominent Haitian businessmen
who appeared to support the concept of development. However,
after working with the board of directors for a year, it became
apparent to the Beehive Foundation that the businessmen wanted
to contribute only to those projects that would directly
benefit their businesses--usually as a means to publicize a
company's support for good works in poor neighborhoods.
As there is not yet a Beehive Foundation demonstration
project established as an example to the businessmen, the
Beehive Foundation, using Inter-American Foundation funding, is
starting a program in Jacmel on the southern coast of Haiti
which will assist poor farmers and fishermen to market their
goods.
The Beehive Foundation's history illustrates the many
obstacles facing organizations and individuals working on
development projects in Haiti. Ms. Balutansky candidly
discussed her problems working with businessmen who have mixed
motives concerning their involvement in development projects.
Furthermore, she found that many businessmen were cynical and
pessimistic about Haiti's economic and political future. Most
Haitian businessmen expressed the opinion that it is not worth
the money and effort to support development activities inasmuch
as they count on the political and economic conditions in Haiti
deteriorating, even if funding for these activities are not
wasted or misappropriated, which is their expectation.
The other main obstacle for the Beehive Foundation and
others is that the vast majority of grassroots organizations
have become corrupted and politicized since the return of Jean-
Bertrand Aristide and the Lavalas political party to Haiti,
according to Ms. Balutansky, who was an Aristide supporter
until he returned and the situation did not improve.
While the intentions of the Beehive Foundation are
admirable, and the sincerity of Ms. Balutansky to help Haiti is
unquestionable, there is little to show for the Inter-American
Foundation contribution thus far. Ms. Balutansky acknowledged
this fact, but stated the view that Haiti is in such a
miserable condition--economically, politically,
environmentally, and in nearly every other respect--that quick
results cannot be expected. Nevertheless, results must be
forthcoming or the Foundation should seriously consider whether
its resources could not be better used elsewhere.
------
Haitian Association of Voluntary Agencies
Port-au-Prince, Haiti
Former Inter-American Foundation grantee
In response to my request to meet with past Inter-American
Foundation grantees to access the sustainability of their
projects in the absence of Foundation funding, a meeting with
Philippe Becoulet was arranged. Mr. Becoulet is a former board
member of the Haitian Association of Voluntary Agencies (HAVA)
and is currently Director of the Intermediate Technology Group
of Haiti.
HAVA, which was an umbrella organization of Haitian non-
government organizations, carried out a variety of projects for
the Inter-American Foundation, including the provision of legal
services for poor Haitians, the operation of a credit fund, and
the management of a training program. HAVA received at least
$1,149,353 from the Inter-American Foundation between 1985 and
1995.
Rather than discuss HAVA's past and current programs, Mr.
Becoulet told me why he thought the Inter-American Foundation
and funding agencies like it are important, and lamented
various problems currently confronting the Foundation.
According to the Inter-American Foundation representative
in Haiti, HAVA only exists on paper and it is not carrying out
any projects. HAVA is an example of an unsustainable program
supported by the Inter-American Foundation, that, after
receiving an enormous amount of money (by both Haitian and
Inter-American Foundation standards), ceased to exist once
Inter-American Foundation funding ended.
------
Haitian Artisan Committee (CAH)
Port-au-Prince, Haiti
Former Inter-American Foundation grantee
The Haitian Artisan Committee is another former recipient
of Inter-American Foundation funds. From 1980 to 1983 it
received $48,500 to market handicrafts. The Committee currently
operates a well furnished arts and crafts store in Port-au-
Prince catering to tourists. It also exports its products to
the United States and Europe.
CAH is an Inter-American Foundation graduate whose
operations are demonstrably sustainable. In fact, CAH appears
to be thriving--its facility is attractive and it had an
excellent selection of handicrafts for sale. There were a
number of people on hand making purchases. Besides providing a
living for those working at the store, its operations support
many artisans who depend on CAH to sell their products. This is
an example of sustainable grassroots development that appears
to have generated tangible results.
------
Asosyasyon Transpo Ak Lojistik (ASTRAL)
(Association for Transportation and Logistics)
Papaye, Haiti,
Inter-American Foundation grant: $109,750
On Friday, December 10, I visited ASTRAL's headquarters in
Papaye, Haiti which is several miles outside of Hinche in
Haiti's Central Plateau region. ASTRAL is a cooperative that
imports bicycles and bicycle parts from Taiwan and assembles
and sells them throughout Haiti. ASTRAL's first order from
Taiwan occurred this past year and was for about 800 bicycles.
The day of our meeting, ASTRAL had placed an order for an
additional 750 bicycles.
Inter-American Foundation funds will be used to help ASTRAL
decentralize its operations, purchase tools and materials, and
provide basic training for ASTRAL's bicycle assembly
operations.
ASTRAL sells bicycles through a network of other
cooperatives in 24 locations throughout Haiti. The bicycles are
on consignment, and Jean-Baptiste Bazelais, the project
coordinator, admitted that a major problem confronting ASTRAL
is payment by the 24 affiliate cooperatives for the bicycles
that they sell. It appears that at least three people were
employed assembling bicycles at this location.
According to ASTRAL, the cooperative makes a very small
profit from the $85-$100 price of each bicycle. Many of the
bicycles are sold in large quantities to other cooperatives or
organizations, although Mr. Bazelais insisted that individuals
also make purchases (Haiti's gross domestic product per capita
is $330, according to the World Bank).
Given the small profit ASTRAL makes on each sale, and the
difficulty in obtaining payment for bicycles it does sell,
there are serious questions as to whether ASTRAL can remain in
business absent long-term Inter-American Foundation funding.
Accordingly, this is another example of the provision of
subsidies for a project that, as currently operated, cannot
function absent long-term and sustained Inter-American
Foundation financial support.
------
Sere Pou Chofe (SPC)
(Credit Cooperative Network)
Papaye, Haiti
Inter-American Foundation grant: $151,225
After visiting ASTRAL, I visited Sere Pou Chofe, a
cooperative savings and loan society also located in Papye,
Haiti. During our visit, SPC was conducting a meeting of its
members, so there was an opportunity to exchange views on its
project activities.
SPC makes loans to its members based on the amount of funds
invested in the organization by its members. Apparently, a loan
can be made for practically any purpose. As an example of the
flexibility, one member said that it helps pay for the first
communion of a child, another SPC member volunteered that it
helps cover the costs of funerals (in Haiti, a funeral may be
one of the largest single expenses incurred by a family). The
diversity of what constitutes grassroots development activities
was astonishingly broad.
Inter-American Foundation funding will pay for project
training, publication, and administrative costs. More
importantly, Foundation funds will match SPC funds on a 2:1
basis with regard to contributions made to its Capital Access
Fund. The Inter-American Foundation also intends to match
savings by members in an Investment Challenge Fund on a 1:4
basis.
SPC is a grassroots, self-help organization helping poor
people in rural Haiti. However, based on information provided
during the meeting, it is evident that not all of SPC's
activities can be considered ``self help,'' as the term is
generally defined, since some loans are made to support
nonproductive activities in which repayment is less likely and
whose purpose, from a development perspective, is questionable.
Bearing this in mind, there is a legitimate concern about the
sustainability of SPC's activities absent continued funding
from outside sources such as the Inter-American Foundation.
------
Fondasyon Enstitisyon-yo pou Devlopman ki Soti nan Baz-la (FIDEB)
(Foundation of Institutions for Development and Education at the
Grassroots)
Port-au-Prince, Haiti
Inter-American Foundation grant: $143,480
Upon returning to Port-au-Prince on Friday evening, I met
with the Foundation of Institutions for Development and
Education at the Grassroots, which dispenses grants to small
grassroots and civil society organizations in Haiti. The Inter-
American Foundation has provided $143,480 to FIDEB, which has
been operating less than two years. Over half of the
Foundation's grant is allocated to a pool of funds from which
FIDEB makes grants; the other half pays for education and
training programs. Individual members of the FIDEB board of
directors are responsible for oversight of the projects in
their respective region.
According to FIDEB representatives, small grassroots groups
present proposals to finance development projects to the FIDEB
board of directors and the best projects are selected and
funded. All of the projects are in rural areas, and no project
is larger than $1,500. Projects usually receive additional
support from the grassroots organization itself as well as from
the local authorities. Typical projects include repairing a
road or bridge, building a small school, building a public
park, or digging a well.
FIDEB will support about 20 projects annually during a
three-year period. Currently, the Inter-American Foundation is
the only source of funding for FIDEB. While the FIDEB board of
directors agreed with my recommendation that it identify
additional sources of funding, they readily admitted that they
had made no effort and there were no plans to do so.
While no FIDEB projects were actually visited, the
presentation by FIDEB's board of directors led me to believe
that its grants may have the potential to benefit poor
Haitians, although measuring results is not this organization's
strong point. There also appears to be a lack of emphasis on a
self-help component to the projects supported. Most
importantly, since FIDEB's approach to development is to
provide grants, and since the Inter-American Foundation is its
only source of funding, FIDEB's activities and the organization
itself are not sustainable. When the Inter-American Foundation
ceases its support for FIDEB, that will also be the end of
FIDEB projects and the organization will have to discontinue
operations.
A P P E N D I X
----------
A.--Inter-American Foundation Legislation
Enabling Legislation for the Inter-American Foundation [Partial text of
P.L. 91-175] (Part IV of H.R. 14480, Foreign Assistance Act of 1971)
PART IV--THE INTER-AMERICAN FOUNDATION ACT
Sec. 401 Inter-American Foundation.--(a) There is created as an
agency of the United States of America a body corporate to be known as
the Inter-American Foundation (hereinafter in this section referred to
as the ``Foundation'').
(b) The future of freedom, security, and economic development in the
Western Hemisphere rests on the realization that man is the foundation
of all human progress. It is the purpose of this section to provide
support for developmental activities designed to achieve conditions in
the Western Hemisphere under which the dignity and the worth of each
human person will be respected and under which all men will be afforded
the opportunity to develop their potential, to seek through gainful and
productive work the fulfillment of their aspirations for a better life,
and to live in justice and peace. To this end, it shall be the purpose
of the Foundation, primarily in cooperation with private, regional, and
international organizations, to--
(1) strengthen the bonds of friendship and understanding
among the peoples of this hemisphere;
(2) support self-help efforts designed to enlarge the
opportunities for individual development;
(3) stimulate and assist effective and ever wider
participation of the people in the development process;
(4) encourage the establishment and growth of democratic
institutions, private and governmental, appropriate to the
requirements of the individual sovereign nations of this
hemisphere.
In pursuing these purposes, the Foundation shall place primary emphasis
on the enlargement of educational opportunities at all levels, the
production of food and the development of agriculture, and the
improvement of environmental conditions relating to health, maternal
and child care, family planning, housing, free trade union development,
and other social and economic needs of the people.
(c) The Foundation shall carry out the purposes set forth in
subsection (b) of this section primarily through and with private
organizations, individuals, and international organizations by
undertaking or sponsoring appropriate research and by planning,
initiating, assisting, financing, administering, and executing programs
and projects designed to promote the achievement of such purposes.
(d) In carrying out its functions under this section, the Foundation
shall, to the maximum extent possible, coordinate its undertakings with
the developmental activities in the Western Hemisphere of the various
organs of the Organization of American States, the United States
Government, international organizations, and other entities engaged in
promoting social and economic development of Latin America.
(e) The Foundation, as a Corporation.--
(1) shall have perpetual succession unless sooner dissolved
by an Act of Congress;
(2) may adopt, alter, and use a corporate seal, which shall
be judicially noticed;
(3) may make and perform contracts and other agreements with
any individual, corporation, or other body of persons however
designated whether within or without the United States of
America, and with any government or governmental agency,
domestic or foreign;
(4) shall determine and prescribe the manner in which its
obligations shall be incurred and its expenses, including
expenses for representation (not to exceed $10,000 in any
fiscal year), allowed and paid;
(5) may, as necessary for the transaction of the business of
the Foundation, employ, and fix the compensation of not to
exceed one hundred persons at any one time;
(6) may acquire by purchase, devise, bequest, or gift, or
otherwise lease, hold, and improve, such real and personal
property as it. finds to be necessary to its purposes, whether
within or without the United States, and in any manner dispose
of all such real and personal property held by it and use as
general funds all receipts arising from the disposition of such
property;
(7) shall be entitled to the use of the United States mails
in the same manner and on the same conditions as the executive
departments of the Government;
(8) may, with the consent of any board, corporation,
commission, independent establishment, or executive department
of the Government, including any field service thereof, avail
itself of the use of information, services, facilities,
officers, and employees thereof in carrying out the provisions
of this section;
(9) may accept money, funds, property, and services of every
kind by gift, devise, bequest, grant, or otherwise, and make
advances, grants, and loans to any individual, corporation, or
other body of persons, whether within or without the United
States of America, or to any government or governmental agency,
domestic or foreign, when deemed advisable by the Foundation in
furtherance Of its purposes;
(10) may sue and be sued, complain, and defend, in its
corporate name in any court of competent jurisdiction; and
(11) shall have such other powers as may be necessary and
incident to carrying out its powers and duties under this
section.
(f) Upon termination of the corporate life of the Foundation all of
its assets shall be liquidated and, unless otherwise provided by
Congress, shall be transferred to the United States Treasury as the
property of the United States.
(g) The management of the Foundation shall be vested in a board of
directors: (hereafter in this section referred to as the ``Board'')
composed of 6 members appointed by the President, by and with the
advice and consent of the Senate, one of whom he shall designate to
serve as Chairman of the Board and one of whom he shall designate to
serve as Vice Chairman of the Board. Six members of the Board shall be
appointed from private life. Three members of the Board shall be
appointed from among officers or employees of agencies of the United
States concerned with inter-American affairs. Members of the Board
shall be appointed for terms of six years, except that of the members
first appointed two shall be appointed for terms of two years and two
shall be appointed for terms of four years, as designated by the
President at the time of their appointment. A member of the Board
appointed to fill a vacancy occurring prior to the expiration of the
term for which his predecessor was appointed shall be appointed only
for the remainder of such term; but upon the expiration of his term of
office a member shall continue to serve until his successor is
appointed and shall have qualified. Members of the Board shall be
eligible for reappointment. All individuals appointed to the Board
shall possess an understanding of and sensitivity to community level
development processes. No more than 5 members of the Board may be
members of any one political party.
(h) Members of the Board shall serve without additional compensation,
but shall be reimbursed for travel expenses, including per diem, in
lieu of subsistence, in accordance with section 5703 of title 5, United
States Code, while engaged in their duties on behalf of the
corporation.
(i) The Board shall direct the exercise of all the powers of the
Foundation.
(j) The Board may prescribe, amend, and repeal bylaws, rules, and
regulations governing the manner in which the business of the
Foundation may be conducted and in which the powers granted to it by
law may be exercised and enjoyed. A majority of the Board shall be
required as a quorum.
(k) In furtherance and not in limitation of the powers conferred upon
it, the Board may appoint such committees for the carrying out of the
work of the Foundation as the Board finds to be for the best interests
of the Foundation, each committee to consist of two or more members of
the Board, which committees, together with officers and agents duly
authorized by the Board and to the extent provided by the Board, shall
have and may exercise the powers of the Board in the management of the
business and affairs of the Foundation.
(l)(1) The chief executive officer of the Foundation shall be a
President who shall be appointed by the Board of Directors on such
terms as the Board may determine. The President shall receive
compensation at the rate provided for level IV of the Executive
Schedule under section 5315 of title 5, United States Code.
(2) Experts and consultants, or organizations thereof, may be
employed as authorized by section 3109 of title 5, United
States Code.
(m) In order to further the purposes of the Foundation there shall be
established a Council to be composed of such number of individuals as
may be selected by the Board from among individuals knowledgeable
concerning developmental activities in the Western Hemisphere. The
Board shall, from time to time, consult with the Council concerning the
objectives of the Foundation. Members of the Council shall receive no
compensation for their services but shall be entitled to reimbursement
in accordance with section 5703 of title 5, United States Code, for
travel and other expenses incurred by them in the performance of their
functions under this subsection.
(n) The Foundation shall be a nonprofit corporation and shall have no
capital stock. No part of its revenue, earnings, or other income or
property shall inure to the benefit of its directors, officers, and
employees and such revenue, earnings, or other income, or property
shall be used for the carrying out of the corporate purposes set forth
in this section. No director, officer, or employee of the corporation
shall in any manner directly or indirectly participate in the
deliberation upon or the determination of any question affecting his
personal interests or the interest of any corporation, partnership, or
organization in which he is directly or indirectly interested.
(o) When approved by the Foundation, in furtherance of its purpose,
the officers and employees of the Foundation may accept and hold
offices or positions to which no compensation is attached with
governments or governmental agencies of foreign countries.
(p) The Secretary of State shall have authority to detail employees
of any agency under his jurisdiction to the Foundation under such
circumstances and upon such conditions as he may determine. Any such
employee so detailed shall not lose any privileges, rights, or
seniority as an employee of any such agency by virtue of such detail.
(q) The Foundation shall maintain its principal office in the
metropolitan Washington, D.C., area. The Foundation may establish
agencies, branch offices, or other offices in any place or places
outside the United States in which the Foundation may carry on all or
any of its operations and business.
(r) The Foundation, including its franchise and income, shall be
exempt from taxation now or hereafter imposed by the United States, or
any territory or possession thereof, or by any State, county,
municipality, or local taxing authority.
(s)(1) Notwithstanding any other provision of law, not to exceed an
aggregate amount of $50,000,000 of the funds made available for the
fiscal years 1970 and 1971 to carry out part I of the Foreign
Assistance Act of 1961 shall be available to carry out the purposes of
this section. Funds made available to carry out the purposes of this
section under the preceding sentence are authorized to remain available
until expended.
(2) There are authorized to be appropriated $28,800,000 for
the fiscal year 1992 and $31,000,000 for the fiscal year 1993
to carry out this section.
For necessary expenses to carry out the provisions of sections 103
through 106, and chapter 10 of part I of the Foreign Assistance Act of
1961, title V of the International Security and Development Cooperation
Act of 1980 (Public Law 96-533) and the provisions of section 401 of
the Foreign Assistance Act of 1969, $1,225,000,000, to remain available
until September 30, 2000: Provided, That of the amount appropriated
under this heading, up to $20,000,000 may be made available for the
Inter-American Foundation and shall be apportioned directly to that
Agency: * * *''.
(t) The Foundation shall be subject to the provisions of the
Government Corporation Control Act.
(u) When, with the permission of the Foundation, funds made available
to a grantee under this section are invested pending disbursement, the
resulting interest is not required to be deposited in the United States
Treasury if the grantee uses the resulting interest for the purposes
for which the grant was made. This subsection applies with respect to
both interest earned before and interest earned after the enactment of
this subsection.
(v) Funds made available to the Foundation may be used for the
expenses described in section 1345 of title 31 of the United States
Code (relating to travel, transportation, and subsistence expenses for
meetings).
(w) Funds made available to the Foundation may be used for printing
and binding without regard to section 501 of title 44, United States
Code.
__________
Authority to Abolish Inter-American Foundation [Sec. 586 of H.R. 3422]
(Appropriations for Foreign Operations, Export Financing, and Related
Programs for the Fiscal Year Ending September 30, 2000, and for Other
Purposes)
ABOLITION OF THE INTER-AMERICAN FOUNDATION
SEC. 586. (A) DEFINITIONS--IN THIS SECTION:
(1) Director.--The term ``Director'' means the Director of
the Office of Management and Budget.
(2) Foundation.--The term ``Foundation'' means the Inter-
American Foundation.
(3) Function.--The term ``function'' means any duty,
obligation, power, authority, responsibility, right,
privilege,activity, or program.
(b) Abolition of Inter-American Foundation.--During fiscal year 2000,
the President is authorized to abolish the Inter-American Foundation.
The provisions of this section shall only be effective upon the
effective date of the abolition of the Inter-American Foundation.
(c) Termination of Functions.--
(1) Except as provided in subsection (d)(2), there are
terminated upon the abolition of the Foundation all functions
vested in, or exercised by, the Foundation or any official
thereof, under any statute, reorganization plan, Executive
order, or other provisions of law, as of the day before the
effective date of this section.
(2) Repeal.--Section 401 of the Foreign Assistance Act of
1969 (22 U.S.C. 6290f) is repealed upon the effective date
specified in subsection (j).
(3) Final disposition of funds.--Upon the date of transmittal
to Congress of the certification described in subsection
(d)(4), all unexpended balances of appropriations of the
Foundation shall be deposited in the miscellaneous receipts
account of the Treasury of the United States.
(d) Responsibilities of the Director of the Office of Management and
Budget.--
(1) In general.--The Director of the Office of Management and
Budget shall be responsible for--
(A) the administration and wind-up of any outstanding
obligation of the Federal Government under any contract
or agreement entered into by the Foundation before the
date of the enactment of the Foreign Operations, Export
Financing, and Related Programs Appropriations Act,
2000, except that the authority of this subparagraph
does not include the renewal or extension of any such
contract or agreement; and
(B) taking such other actions as may be necessary to
wind-up any outstanding affairs of the Foundation.
(2) Transfer of functions to the director.--There are
transferred to the Director such functions of the Foundation
under any statute, reorganization plan, Executive order, or
other provision of law, as of the day before the date of the
enactment of this section, as may be necessary to carry out the
responsibilities of the Director under paragraph (1).
(3) Authorities of the director.--For purposes of performing
the functions of the Director under paragraph (1) and subject
to the availability of appropriations, the Director may--
(A) enter into contracts;
(B) employ experts and consultants in accordance with
section 3109 of title 5, United States Code, at rates
for individuals not to exceed the per diem rate
equivalent to the rate for level IV of the Executive
Schedule; and
(C) utilize, on a reimbursable basis, the services,
facilities, and personnel of other Federal agencies.
(4) Certification required.--Whenever the Director determines
that the responsibilities described in paragraph (1) have been
fully discharged, the Director shall so certify to the
appropriate congressional committees.
(e) Report to Congress.--The Director of the Office of Management and
Budget shall submit to the appropriate congressional committees a
detailed report in writing regarding all matters relating to the
abolition and termination of the Foundation. The report shall be
submitted not later than 90 days after the termination of the
Foundation.
(f) Transfer and Allocation of Appropriations.--Except as otherwise
provided in this section, the assets, liabilities (including contingent
liabilities arising from suits continued with a substitution or
addition of parties under subsection (g)(3)), contracts, property,
records, and unexpended balance of appropriations, authorizations,
allocations, and other funds employed, held, used, arising from,
available to, or to be made available in connection with the functions,
terminated by subsection (c)(1) or transferred by subsection (d)(2)
shall be transferred to the Director for purposes of carrying out the
responsibilities described in subsection (d)(1).
(g) Savings Provisions.--
(1) Continuing legal force and effect.--All orders,
determinations, rules, regulations, permits, agreements,
grants, contracts, certificates, licenses, registrations,
privileges, and other administrative actions--
(A) that have been issued, made, granted, or allowed
to become effective by the Foundation in the
performance of functions that are terminated or
transferred under this section; and
(B) that are in effect as of the date of the
abolition of the Foundation, or were final before such
date and are to become effective on or after such date,
shall continue in effect according to their terms until
modified, terminated, superseded, set aside, or revoked
in accordance with law by the President, the Director,
or other authorized official, a court of competent
jurisdiction, or by operation of law.
(2) No effect on judicial or administrative proceedings.--
Except as otherwise provided in this section--
(A) the provisions of this section shall not affect
suits commenced prior to the date of the abolition of
the Foundation; and
(B) in all such suits, proceedings shall be had,
appeals taken, and judgments rendered in the same
manner and effect as if this section had not been
enacted.
(3) Nonabatement of proceedings.--No suit, action, or other
proceeding commenced by or against any officer in the official
capacity of such individual as an officer of the Foundation
shall abate by reason of the enactment of this section. No
cause of action by or against the Foundation, or by or against
any officer thereof in the official capacity of such officer,
shall abate by reason of the enactment of this section.
(4) Continuation of proceeding with substitution of
parties.--If, before the date of the abolition of the
Foundation, the Foundation, or officer thereof in the official
capacity of such officer, is a party to a suit, then effective
on such date such suit shall be continued with the Director
substituted or added as a party.
(5) Reviewability of orders and actions under transferred
functions.--Orders and actions of the Director in the exercise
of functions terminated or transferred under this section shall
be subject to judicial review to the same extent and in the
same manner as if such orders and actions had been taken by the
Foundation immediately preceding their termination or transfer.
Any statutory requirements relating to notice, hearings, action
upon the record, or administrative review that apply to any
function transferred by this section shall apply to the
exercise of such function by the Director.
(h) Conforming Amendments.--
(1) African development foundation.--Section 502 of the
International Security and Development Cooperation Act of 1980
(22 U.S.C. 290h) is amended--
(A) by inserting ``and'' at the end of paragraph (2);
(B) by striking the semicolon at the end of paragraph
(3) and inserting a period; and
(C) by striking paragraphs (4) and (5).
(2) Social progress trust fund agreement.--Section 36 of the
Foreign Assistance Act of 1973 is amended--
(A) in subsection (a)--
(i) by striking ``provide for'' and all that
follows through ``(2) utilization'' and
inserting ``provide for the utilization''; and
(ii) by striking ``member countries;'' and
all that follows through ``paragraph (2)'' and
inserting ``member countries.'';
(B) in subsection (b), by striking ``transfer or'';
(C) by striking subsection (c);
(D) by redesignating subsection (d) as subsection
(c); and
(E) in subsection (c) (as so redesignated), by
striking ``transfer or''.
(3) Foreign assistance act of 1961.--Section 222A(d) of the
Foreign Assistance Act of 1961 (22 U.S.C. 2182a(d)) is
repealed.
(i) Definition.--In this section, the term ``appropriate
congressional committees'' means the Committee on Appropriations and
the Committee on Foreign Relations of the Senate and the Committee on
Appropriations and the Committee on International Relations of the
House of Representatives.
(j) Effective Dates.--The repeal made by subsection (c)(2) and the
amendments made by subsection (h) shall take effect upon the date of
transmittal to Congress of the certification described in subsection
(d)(4).
__________
B.--Correspondence Between Chairman Helms and Inter-American Foundation
june 15, 1998 letter from chairman helms to maria otero, former
chairman of the board of directors
June 15, 1998.
The Honorable Maria Otero,
Chairman, Inter-American Foundation,
733 15th Street, N.W., Suite 700.
Washington, D.C. 20005.
Dear Ms. Otero: As you will recall, several staff members of the
Inter-American Foundation came by on April 14 to give us the facts
about the embarrassing spectacle of the Inter-American Foundation's
actually providing cash grants--underwritten by the U.S. taxpayers--to
groups in Ecuador clearly identified by the U.S. State Department to be
terrorist organizations.
I am fully aware that these organizations kidnapped Americans and
threatened their lives, as well as the lives and safety of other U.S.
citizens while extorting money from them. I am confident that the able
staff of the Foreign Relations Committee conveyed my profound concern
about such outrageous abuse and misuse of U.S. taxpayers' money.
Needless to say, it is inexcusable that these groups received IAF
funding in the first place. And it is an outrage that one of the groups
continued, to receive funds after the U.S. Embassy in Quito determined
that these were terrorist groups. The funding, I understand, continued
until my associates strenuously objected to it on April 14.
I have been assured that steps are being taken to prevent this sort
of outrage from reoccurring. To this end, the U.S. Senate Foreign
Relations Committee will appreciate receiving from you a detailed
report of your new guidelines and procedures as well as the findings of
any review.
I trust you will undertake to make certain that no other terrorist
or subversive groups are now, nor will in the future, receive U.S.
taxpayer funds via the Inter-American Foundation.
Sincerely,
Jesse Helms.
cc: The Honorable Mitch McConnell
The Honorable Sonny Callahan
The Honorable Madeleine Albright
The Honorable Neil Offen
The Honorable Harriet Babbitt
The Honorable Jeffrey Davidow
The Honorable Nancy Dorn
The Honorable Mark Schneider
The Honorable Patricia Hill Williams
The Honorable Frank Yturria
______
June 29, 1998 Reply of Maria Otero, Former Chairman of the Board of
Directors of the Inter-American Foundation to June 15, 1998 Letter From
Chairman Helms, With Enclosures
Inter-American Foundation,
June 29, 1998.
The Honorable Jesse Helms,
Chairman, Senate Foreign Relations Committee,
SD-450 Dirksen Senate Office Building,
Washington, DC 20515.
Dear Mr. Chairman: I have reviewed your letter of June 15, 1998,
concerning the financial support that the Inter-American Foundation
provided to the Coordinadora de Organizaciones Indigenas de the Cuenca
Amazonica (COICA), the Confederacion de Nacionalidades Indigenas de la
Amazonia Ecuatoriana (CONFENAIE), and the Organizacion de Pueblos
Indigenas de la Pastaza (OPIP).
As expressed to your staff by the President of the Inter-American
Foundation on April 14, 1998, the Inter-American Foundation regrets
that these former Inter-American Foundation grantee organizations
engaged in activities that are abhorrent to the values of the American
people. To that end, when the management of the Inter-American
Foundation became aware of these organizations' activities, with the
endorsement of the Board of Directors of the Inter-American Foundation,
the management of the Inter-American Foundation undertook immediate and
prudent measures to cease support to these organizations and to convey
the displeasure of the Inter-American Foundation. I have enclosed, for
your information, a copy of a public statement issued by the Inter-
American Foundation on this matter on April 14, 1998. In addition, on
June 8, 1998, the Board of Directors also ratified the course of action
undertaken by the management of the Inter-American Foundation
concerning this matter. I have also attached a copy of this resolution
for your review.
I regret that the Inter-American Foundation grantees engaged in
these activities and can assure you that measures have been employed to
ensure that similar incidents are not repeated in the future. To that
end, the Inter-American Foundation has revised its grant approval
process and will coordinate more closely with the Embassies of the
United States throughout Latin America and the Caribbean. In addition,
the President of the Inter-American Foundation recently wrote to each
United States Ambassador in Latin America and the Caribbean to furnish
detailed and current information on the grant portfolio and activities
of the Inter-American Foundation.
I have also requested that the President of the Inter-American
Foundation review the procedures through which the Inter-American
Foundation seeks cross-reference and background information about grant
proponents and report his recommendations to me. I would be pleased to
share these findings with you when this exercise is completed.
Please know that I share your concerns fully, and will work to
ensure that incidences such as those which transpired in Ecuador are
not repeated.
Sincerely,
Maria Otero,
Chair.
Enclosure
cc: The Honorable Madeleine Albright
The Honorable Mitch McConnell
The Honorable Sonny Callahan
Board of Directors of the Inter-American Foundation
Enclosure 1
resolution of the board of directors of the inter-american foundation
june 8, 1998
WHEREAS the Inter-American Foundation, an agency of the United
States Government, is committed to the promotion of peaceful,
equitable, and self-help development efforts within a civil society
framework;
WHEREAS the Inter-American Foundation opposes any threatening
tactics, intimidation, threats, or violence as legitimate means of any
organization to achieve its institutional objectives;
WHEREAS the Inter-American Foundation considered wholly
unacceptable the use of intimidation by the Coordinadora de
Organizaciones Indigenas de the Cuenca Amazonica (COICA), and violence
by the Confederacion de Nacionalidades Indigenas de la Amazonia
Ecuatoriana (CONFENAIE), and the Organizacion de Pueblos Indigenas de
la Pastaza (OPIP);
WHEREAS the Inter-American Foundation determined that all Inter-
American Foundation financial support to these organizations should
cease;
WHEREAS the Board of Directors ratifies that the management of the
Inter-American Foundation acted in an appropriate and professional
manner by ceasing financial support to Inter-American Foundation
grantees COICA, CONFENIAE, and OPIP;
WHEREAS the Embassy of the United States in Quito, Ecuador, fully
supports the decision of the Inter-American Foundation to cease
financial support to COICA, CONFENIAE, and OPIP in the wake of the use
of intimidation by COICA against a U.S. citizen and because of the
support for the abduction of two Americans by members of CONFENIAE and
OPIP;
NOW, THEREFORE, be it resolved that the Board of Directors
unanimously supports the actions undertaken by the management of the
Inter-American Foundation to cease financial support of its former
grantees COICA, CONFENIAE, and OPIP and reaffirms that the Inter-
American Foundation should cease any financial support of organizations
that engage in intimidation threats of violence, or violence to
accomplish their institutional objectives regardless of the merits of
those goals.
Enclosure 2
statement by the inter-american foundation
On June 27, 1996, the Coordinadora de Organizaciones Indigenas de
la Cuenca Amazonica (COICA), which at that time was a grantee of the
Inter-American Foundation, issued a press release which states that:
The Coordinative Council of COICA declares Mr. Loren Miller to
be an enemy of indigenous peoples in the nine states of the
Amazon Basin and prohibits his entrance or that of any official
or technical assistant of the International Plant Medicine
Corporation to any Amazonian indigenous community, and will not
be responsible for the consequences to their physical safety
should they choose to ignore this resolution.
In February 1997, the Confederacion de Nacionalidades Indigenas de
la Amazonia Ecuatoriana (CONFENIAE), which at that time was a grantee
of the Inter-American Foundation, and which is a member of COICA ,
participated in the armed kidnapping of two American citizens among
several others in Ecuador who were held captive for a two million
dollar ransom.
The Inter-American Foundation learned of these events in early
1998. Shortly after, Inter-American Foundation officials met with
representatives of COICA and CONFENIAE on February 2 and 3, 1998, to
request a clarification of the threatening language set forth in
COICA's June 27, 1996 press release and a subsequent resolution adopted
by COICA members during a conference held in Guyana in May of 1997.
Officials of both COICA and CONFENIAE described the language of the
June 1996 press release as ``excessive'' and agreed to the
inappropriateness of these statements. However, both organizations have
failed to clarify these offensive statements.
In March 1998, the United States Embassy in Quito issued a public
statement which declares the threats in the press release issued by
COICA to be ``a repugnant, illegal action'' and a ``terrorist threat.''
The U.S. Embassy also has condemned the participation of organizations
affiliated with COICA, including CONFENIAE, in the kidnapping of two
Americans in Ecuador.
The Inter-American Foundation did not terminate funding to COICA or
CONFENIAE. Rather, the grants to these organizations expired as
scheduled on December 31, 1997, before the Inter-American Foundation
was informed of COICA's resolution or CONFENIAE's involvement in the
kidnapping of Americans in 1997.
The Inter-American Foundation does not have, and has at no time
expressed, an opinion regarding COICA's dispute with the U.S. citizen
regarding his acquisition of a U.S. patent on the Ayahuasca plant.
Moreover, the Inter-American Foundation does not represent this U.S.
citizen or any private party with regard to patent issues in Ecuador.
As an agency of the Government of the United States, the Inter-
American Foundation is committed to the promotion of peaceful,
equitable, and self-help development efforts within a civil society
framework. Accordingly, the Inter-American Foundation opposes any
threatening tactics, intimidation, or threats of violence as a
legitimate means for any organization to achieve its institutional
objectives.
______
april 20, 1999 letter from chairman helms, senator chuck hagel, and
senator paul coverdell to maria otero, former chairman of the board of
directors
April 20, 1999.
The Honorable Maria Otero,
Chairman, Inter-American Foundation,
733 15th Street, N.W., Suite 700.
Washington, D.C. 20005.
Dear Madam Chairman: We genuinely appreciate your staff's efforts
to attempt to rectify the intolerable situation of the Inter-American
Foundation funding groups designated by the U.S. State Department as
terrorists. Unfortunately, more needs to be done to assure that this
never happens again.
(Enclosed is an April 12, Washington Times article disclosing the
fact that the terrorists kidnappers who received Inter-American
Foundation funds were trained in Cuba.)
Obviously, the Foundation's current grant approval and notification
procedures are inadequate and must be strengthened.
To ensure that terrorists, subversive and anti-American groups are
not provided with U.S. taxpayers' dollars again, we are considering
introducing legislation to require the Foundation to have the U.S.
Ambassador or his designee review and approve proposed Inter-American
Foundation grants. If it becomes necessary that we proceed with such
legislation, we trust that you and the Foundation's board will strongly
support it.
Virtually all of the Inter-American Foundation's funding has been
provided throughout its history by U.S. taxpayers. It therefore goes
without saying that the Foundation's activities must be consistent
with, and supportive of, America's foreign policy objectives.
Please let us hear from you whether the Foundation is willing to
work with us in strengthening its procedures, thereby protecting U.S.
citizens and promoting American interests in Latin America.
Sincerely,
Jesse Helms,
Paul Coverdell,
Chuck Hagel.
Enclosure
cc: Board of Directors, Inter-American Foundation
Board of Directors, African Development Foundation
The Honorable Bill Frist
Enclosure
Kidnapping Threat Deters Few
by tom carter
the washington times
americans turn to fbi for help freeing hostages
Every issue of Conde Naste Traveler, Outside magazine and the
Sunday travel section carries dozens of slick enticements for Americans
to visit the world's most exotic--and dangerous--places.
The publications bring full-color advertisements for African
safaris, mountain climbing, rafting and bird watching in Central and
South America, trips to Russia and its former republics, hiking in the
Middle East, and trekking in Asia--all regions where unsuspecting
American travelers have been kidnapped and, in some cases, killed.
But the upscale magazines, which thrive on fantasy, holiday
adventure and good times, rarely carry a cautionary tale on the
possibility one might become a crime victim. There are no instructions
on what family members back home should do if a loved one is grabbed.
Travel industry experts say that even with the well-publicized
abductions and killings in Uganda last month, adventure travel bookings
are up.
``Overall, our Africa trips are up about 20 percent,'' said Tom
Stanley, director of Africa operations for the Mountain Travel/Sobek
adventure travel company.
Exotic destinations abound
Mountain Travel/Sobek took nearly 5,000 people to remote
destinations all over the world last year. In 20 years of operations,
it has never had a kidnapping. Mr. Stanley said that since the Uganda
killings, trips there have been suspended, but climbers traveling to
Mount Kilimanjaro in nearby Tanzania have increased.
He said trips are also on hold to Yemen, after four foreign
tourists were killed and two were wounded during a botched government
rescue attempt in December.
Mr. Stanley said his company suspended travel to Egypt and
Cambodia--both of which have suffered attacks on tourists--but is
preparing to resume excursions to both.
``The people who travel with us are fairly sophisticated. They know
there are risks. I don't know if adventure travel is any riskier than
living in America,'' he said. ``As far as I'm concerned, the riskiest
thing we do overseas is drive.''
Claudia and James Thurber of the District were thrust into the
emotionally wrenching world of international kidnapping and foreign
intrigue two years ago.
It was 10:45 p.m., Feb. 15, 1997, when the phone rang and they
learned of their son's kidnapping in Ecuador.
``It was Mark's girlfriend. She said he wouldn't be coming [to a
planned family reunion],'' said Mr. Thurber, Mark's father and a
professor at American University.
Tip: Involve the FBI
Mark Thurber, 34, is an expert climber, guidebook author and
geologist. He and four of his colleagues were being held for $3 million
ransom along the Peru-Ecuador border by an ``anti-development''
splinter group of Cuban-trained Achuar Indians.
What the Thurbers did over the next few days ultimately led to
their son's release eight days later, according to professional hostage
negotiators and Ann Hagedorn Auerbach, author of ``Ransom: The Untold
Story of International Kidnapping.''
Without private insurance to pay the $2,500 a day from private
hostage negotiators, most families acquiesce to the State Department.
Experts say that instead, while working with the State Department,
the family should insist on bringing in the FBI.
``The Thurbers did it right. Most important, they got the FBI
invited in. That was critical,'' said Mrs. Hagedorn Auerbach, a former
Wall Street Journal reporter who spent three years researching the
clandestine world of international kidnapping.
Since 1984 and the passage of the Hostage Taking Statute, the FBI
has been responsible for negotiating for the release of American
kidnapping victims anywhere on the planet. It is widely accepted that
the FBI has the best hostage negotiators in the business. And the
service is free to American citizens.
Abductions on the rise
``Unfortunately, kidnapping is a growth business. It is not going
to go away,'' said Gary Noesner, unit chief of the FBI's crisis
negotiation unit in Quantico, Va. ``There is the expectation that every
American tourist is a millionaire. . . . I don't think you'll see any
of my children going off to the rain forest with my permission anytime
soon.''
Bringing the FBI in on the kidnapping of an American is not
automatic. It is a two-step process.
First, the host country must agree to allow U.S. law enforcement
officers to operate in the country. Mr. Noesner said this has never
been a problem.
``We bring in experts in negotiation and resources, secure radios
and other equipment, and we work with the local law enforcement,'' he
said. ``There may be dozens of other kidnappings they are working on.
They are glad to have us.''
Somewhat trickier is step two, which is securing an invitation from
the State Department. The FBI can move only after the local U.S.
Embassy ``invites'' the FBI in.
Generally, this is pro forma, but there have been cases in which
embassy personnel were reluctant to allow the FBI entry. Mr. Noesner
would not comment on this, except to say his unit's relations with the
State Department are ``good and getting better.''
Diplomats' other priorities
But others note the State Department's primary responsibility is
U.S. foreign relations, not the release of an American crime victim.
If there is a turf issue, and the ambassador forbids FBI
involvement, as has happened in a few cases, the family can appeal to
their congressional representatives, said several experts.
This was echoed by the Thurbers and Mrs. Hagedorn Auerbach, who
advised families with out high-level contacts to call their
representative or senator immediately and politely insist that they
speak with the representative directly.
``A call from a congressman to the State Department usually gets
their attention,'' she said.
When the Thurbers son was kidnapped, even with numerous high-level
contact in Washington, the Thurbers spent frustrating hours trying to
break through the wall of Washington's diplomatic bureaucracy.
Eventually, they were directed to the FBI.
Mr. Noesner said that after a negotiating team is dispatched, the
first job is to persuade the kidnappers of reality.
He said the American hostage is often not wealthy, but someone who
saved for years to take a once-in-a-lifetime vacation. But kidnappers,
whose families can be abysmally poor by U.S. standards, generally view
every American ``as a walking bank account.''
Team has won 60 releases
``It is our job to convince the bad guys the [victim] is not
wealthy. How do you convince the kidnapper [the victim] does not have
deep pockets?'' he asked.
Since its creation in 1990, Mr. Noesner's specialized team has
secured the release of more than 60 victims, two as recently as
February.
One was an 11-year old boy with dual U.S. and Colombian citizenship
who was held for three months in Colombia. The second case was similar,
a 6-year-old child with dual U.S.-Honduran citizenship, who was held in
Honduras.``As a father, I take these thing personally,'' Mr. Noesner
said.
The FBI negotiated the release of both children unharmed. Neither
case was publicized.
``We don't recommend contacting the news media. The bad guys watch
TV. If CNN is interviewing a family member in front of a middle class
house, maybe with two cars in the driveway, to the kidnapper this guy's
rich,'' Mr. Noesner said.
Private negotiators offered similar counsel
Family should shun publicity
``We are not going to recommend that a client of ours go to the
media,'' said Bob Hoffman, the operations director of the Washington
office of Control Risks Group. ``If publicity is what the group wants,
it is possible that publicity will cause a group to hold the hostage
longer. Publicity can make the hostage more valuable, and they might
raise the ransom.''
The Thurbers persuaded friends in the Washington media to suppress
reports of their son's kidnapping.
Although the U.S. government has a policy against negotiating with
kidnappers, Mr. Noesner said the FBI will do whatever it can to secure
the release of a hostage.
``The U.S. government will not pay ransom, effect policy change or
release prisoners,'' said Mr. Noesner. ``We agree with that policy, but
without negotiation there is no way to get someone released.
Negotiation means dealing with someone, not giving concessions.''
He said if the kidnappers want something inconsequential, like
food, the FBI will turn it over.
``If some sandwiches will keep these guys talking, and get the
release of your daughter, you bet I'm going to give it to them,'' he
said.
Ransom left up to family
As for ransom, he said that is the family's decision.
``FBI policy is that to pay ransom or not is a decision for the
family. . . . But we tell them the prognosis for release without some
payment is not good,'' Mr. Noesner said.
He said the FBI advises ``the least amount paid, in the shortest
period of time to effect the release of the victim.''
What finally brought the release of Mark Thurber is unknown. At one
point, the Ecuadorian military issued a stark warning to the group.
``We don't know everything that went on behind closed doors. We
don't even know if a ransom was paid, but I think the credible threat
of military action played a role,'' said Mr. Thurber.
The FBI also will not comment on the Thurber case or the specifics
of any other kidnapping. But Mr. Noesner relishes his team's successes.
``Typically our presence will not be known,'' he said. ``We like to
be the masked men riding off into the sunset,'' he said.
______
april 23 reply of maria otero, former chairman of the board of
directors of the inter-american foundation to april 20, 1999 letter
from chairman helms
Inter-American Foundation,
April 23, 1999.
The Honorable Jesse Helms,
Chairman, Senate Foreign Relations Committee,
SD-450 Dirksen Senate Office Building,
Washington, DC 20515.
Dear Mr. Chairman:
My fellow directors and I have reviewed your letter of April 20,
1999, regarding your concerns about the grant approval and notification
procedures employed by the Inter-American Foundation.
As noted in my previous correspondence to you on this matter, the
Board of Directors of the Inter-American Foundation also considers the
kidnapping incidents that transpired in Ecuador in 1997 to be
intolerable and inconsistent with the important grassroots development
work carried out by the Inter-American Foundation and the values of the
American people. To that end, the Board of Directors adopted a
resolution condemning these activities and took corrective measures to
ensure that similar occurrences are not repeated in the future.
Specifically, prior to the receipt of your letter of April 20,
1999, the management of the Inter-American Foundation, pursuant to the
Board of Directors' instructions, provided the U.S. Ambassador in every
country in which the Inter-American Foundation operates with detailed
information on currently supported grantee organizations in their
respective country of assignment. In addition, Inter-American
Foundation staff have been instructed to consult with U.S. Embassy
personnel on every field visit made to Latin America and the Caribbean
to confer on prospective grant proponents. I also wish for you to know
that the Inter-American Foundation provides a summary of every grant it
awards to U.S. and host country Ambassadors.
Nevertheless, the Board of Directors concurs with your
recommendation that more can be done to strengthen the grant review and
approval process of the Inter-American Foundation to avoid unfortunate
and isolated, incidents similar to those that occurred in Ecuador in
1997. Accordingly, the Board of Directors has directed that the
management of the Inter-American Foundation develop refined grant
review procedures for consideration by the Board of Directors that
include enhanced consultation with State Department and U.S. embassy
personnel.
My fellow directors and I. also plan to consult with you, other
interested Members of Congress, and State Department officials on the
written procedures to be implemented by the Inter-American Foundation.
These procedures will permit the State Department, prior to the award
of any Inter-American Foundation grant, to review the character of
grant proponent organizations and to ascertain whether proposed grant
activities are consistent with the foreign policy objectives of the
United States. In addition, these procedures should enhance
coordination among U.S. Government agencies working in the region
without affecting the valuable work of the Inter-American Foundation to
provide sustainable development assistance to the neediest populations
of Latin America and the Caribbean.
Please know that, this matter is a priority for the Inter-American
Foundation and that it will be addressed expeditiously. In closing, I
wish to thank you and your colleagues for the offer to work closely
with the Board of Directors of the Inter-American Foundation to address
this concern.
Sincerely,
Maria Otero,
Chair.
cc: Board of Directors
______
july 14, 1999 letter from chairman helms to maria otero, former
chairman of the board of directors
July 14, 1999.
The Honorable Maria Otero,
Chairman, Inter-American Foundation,
733 15th Street, N.W., Suite 700.
Washington, D.C. 20005.
Dear Madam Chairman: I hope that you recall my mounting concern
expressed last year to you regarding the Inter-American Foundation when
I learned that it had supported organizations in Equador that (1)
kidnaped Americans and (2) advocated violence as a means to achieve
their objectives.
I have recently learned that the program officer in charge of these
grants approached the World Bank seeking support for one of the
terrorist groups after the Foundation had suspended its funding!
On July 8, the Foundation confirmed to us that it also supported an
organization in Argentina that had used illegal and violent tactics to
advance its political agenda. Press articles reported, and Foundation
management confirmed, that the Union de Organizaciones de Base por los
Derechos Sociales organized illegal demonstrations, disrupted
transportation in the city of Cordoba, Argentina, and commandeered
Cordoba's Catholic Cathedral building as its site to protest the
policies of the democratically elected local government. (These
terrorist activities were being perpetrated by UOBDS at the same time
that the Inter-American Foundation was providing them $256,476 in
American taxpayer's money!)
You are aware that my representatives met with the President and
General Counsel of the Inter-American Foundation to discuss
strengthening your grant review and approval process after learning
about the Foundation's activities in Ecuador.
Several weeks ago, Frank Yturria and I met to discuss the troubles
at the Foundation. On June 22, Senator McCain included in the State
Department authorization bill language to make A.I.D.'s Inspector
General also the Inspector General of the Foundation.
On June 24, less than three weeks ago, Senator Hagel and I
requested that the General Accounting Office conduct a review of the
Foundation's activities and management. All of this occurred before it
was disclosed that the Foundation had supported yet another terrorist
organization in another country.
Despite the significant and highly commendable efforts by the
Foundation's President and General Counsel to reform practices of the
Foundation, it is becoming disturbingly apparent that the Foundation's
problems are endemic and may be impervious to reform.
In lieu of my seeking a permanent suspension of funding for the
Inter-American Foundation, I request that all organizations currently
receiving funds, directly or indirectly, from the Foundation, and that
all proposed grantees, be vetted by the Central Intelligence Agency to
insure that terrorist, communist or subversive organizations never
again receive Foundation funding.
Additionally, the Committee will appreciate your directing the
management to conduct a thorough review of the performance of the
Foundation's program officers, including whether any of them have meet
with, or sought support for, terrorist, communist or subversive
organizations, and if so, why.
It is very important that you keep me fully apprised of the board's
efforts to reform the grant review and approval process.
Sincerely,
Jesse Helms.
cc: The Honorable Paul Coverdell
The Honorable Chuck Hagel
The Honorable Madeleine Albright
The Honorable George Tenet
Board of Directors
______
july 30, 1999 reply of maria otero, former chairman of the board of
directors of the inter-american foundation to july 14, 1999 letter from
chairman helms
July 30, 1999.
The Honorable Jesse Helms,
Chairman, Senate Foreign Relations Committee,
SD-450 Dirksen Senate Office Building,
Washington, DC 20515.
Dear Mr. Chairman: I have reviewed your letter of July 14, 1999,
concerning matters related to the administration of the grantmaking
program of the Inter-American Foundation.
As you know, the Board of Directors of the Inter-American
Foundation was gravely concerned about past Inter-American Foundation
support for organizations in Ecuador that engaged in illegal and
inappropriate activities. As a consequence, the Inter-American
Foundation revised and implemented grant review and approval procedures
to ensure that organizations that engage in these types of activities
are not supported in the future. Specifically, all Inter-American
Foundation grants and grant supplements will be reviewed by the
Department of State and the U.S. embassies in which the Inter-American
Foundation operates before these grants and grant supplements are
awarded by the Inter-American Foundation.
I wish to underscore that the management of the Inter-American
Foundation has taken decisive and appropriate action with respect to
any grantees that have engaged in any illegal or inappropriate
activities. I am, therefore, appreciative of your commendation of the
President and the General Counsel of the Inter-American Foundation for
their efforts in this regard. It is also my hope that Frank Yturria,
the Chairman of the Audit Committee of the Inter-American Foundation,
will continue to discuss with you the many recent important
enhancements that have been implemented to better administer the
grantmaking program of the Inter-American Foundation.
With regard to your specific request that all organizations which
currently receive funds from the Inter-American Foundation, directly or
indirectly, and all proponent grantee organizations, be vetted by the
Central Intelligence Agency, I respectfully request that you permit the
Board of Directors the opportunity to review the implications of such a
procedure and to respond to you in writing in the near future. I also
request additional time to examine ways in which Inter-American
Foundation management can prudently conduct a thorough review of the
performance of the Inter-American Foundation's program officers and
ascertain whether staff have met with or sought to support subversive
organizations.
Please know that the Board of Directors and I share your objective
of supporting only those initiatives in Latin America and Caribbean
that further the interests of the United States. Moreover, I wish to
reassure you that the Board of Directors and management of the Inter-
American Foundation shall continue to make necessary operational and
grantmaking improvements.
I look forward to providing you with additional information and
recommendations on the specific matters set forth in your letter of
July 14, 1999. I will also keep you fully apprised of the continued
efforts of the Board of Directors to reform the grant review and
approval process employed by the Inter-American Foundation.
Sincerely,
Maria Otero,
Chair.
cc: The Honorable Paul Coverdell
The Honorable Chuck Hagel
The Honorable Madeleine Albright
The Honorable George Tenet
Board of Directors of the Inter-American Foundation
______
september 32, 1999 letter from chairman helms to frank yturria, member
of the board of directors of the inter-american foundation
September 23, 1999.
The Honorable Frank Yturria,
3201 Central Boulevard, Suite 200,
Brownsville, TX 75580.
Dear Frank: I hope your health continues to improve. (You certainly
looked fit when we got together on June 22.) Please take care of
yourself.
Frank, I need your help regarding a critical situation at the
Inter-American Foundation:
On July 14, after learning that the Foundation had financed another
terrorist organization--this time in Argentina--I wrote to Maria Otero
requesting that the Central Intelligence Agency investigate all
organizations currently receiving funding directly or indirectly from
the Foundation to make certain that terrorist, communist or subversives
never again receive Foundation funding.
Chairman Otero replied to my letter on July 30 and met with the
Foreign Relations Committee staff on September 15 to discuss further my
request. Not only has she not agreed to my request, she strongly
opposes it. She claims it would destroy the Foundation.
Her fear that the continued existence of the Inter-American
Foundation is threatened as a result of the CIA's being asked to
disclose whether any terrorists, communists or subversives currently
receive taxpayers money is inconceivable. But if I am wrong, and the
Foundation finds itself unable to give away money to Latin American
non-government organizations because of our efforts to protect American
citizens and U.S. interests, then I suggest that the Foundation is not
worth saving--and non-government organizations rejecting funding do not
deserve U.S. taxpayers' money.
As Chairman of the Foreign Relations Committee it would be
irresponsible for me to agree to anything less than conferring with our
government's most comprehensive intelligence organization--the Central
Intelligence Agency--in response to the kidnapping of Americans in
Ecuador and the terrorist activities of a Foundation grantee in
Argentina. I will be surprised if any Senator, or a majority of the IAF
board, disagrees with me.
Therefore, since I have failed to receive timely action on this
matter, I will genuinely appreciate your making a motion at the next
board meeting incorporating my original request and insisting on a
recorded vote.
Please let me hear from you in this regard.
My best to you and your lovely bride.
Sincerely,
Jesse Helms.
______
october 12, 1999 reply of frank yturria, member of the board of
directors of the inter-american foundationto september 14, 1999 letter
from chairman helms, with enclosure.
Frank D. Yturria,
3201 Central Boulevard, Suite 200,
Brownsville, Texas, 78520.
October 12, 1999.
The Honorable Jesse Helms,
Chairman, Senate Foreign Relations Committee,
SD-450, Dirksen Senate Office Building,
Washington, DC 20515.
Dear Mr. Chairman: I received your kind letter of September 23, and
hope that you are well. Both Mary and I were delighted to have had the
opportunity to meet with you during our visit to Washington in June. I
hope that we will be able to have lunch together when we are next in
Washington.
Mr. Chairman, regarding your request for my assistance, I stand
ready to present a resolution to the Board of Directors of the Inter-
American Foundation to insist that all current and former organizations
that have received, directly or indirectly, funds from the Inter-
American Foundation be vetted by the Central Intelligence Agency.
I fully share your outrage that the Inter-American Foundation had
supported organizations in South America that kidnapped Americans and
held them at gunpoint in the jungle. In addition, I was equally
appalled to learn that the Inter-American Foundation had supported an
organization in Cordoba, Argentina, which organized civil disturbances,
blockaded highways, and occupied the city's cathedral.
In light of these disturbing and wholly inappropriate activities, I
concur with you, Mr. Chairman, that organizations currently or formerly
supported by the Inter-American Foundation should be vetted through
theCentral Intelligence Agency to ensure that the outrageous activities
you cite in your letter are never repeated. If the Inter-American
Foundation is unwilling to conduct a review of its grant portfolio by
competent intelligence Professionals of the Government of the United
States, then I questions whether it should continue to receive the
American taxpayers' resources.
I regret that you have failed to receive a timely response to your
sensible proposal and will do everything possible to correct this
situation.
Mary joins me in sending you our very best wishes for continued
good health.
Sincerely,
Frank D. Yturria.
Enclosure:
Letter from Frank Yturria to Maria Otero
Frank D. Yturria,
3201 Central Boulevard, Suite 200,
Brownsville, Texas, 78520.
October 12, 1999.
Ms. Maria Otero,
Executive Vice President, ACCION INTERNATIONAL,
733 15th Street, NW, Suite 700,
Washington, D. C. 20005.
Dear Maria: On my return from Europe this past weekend I found a
letter from Senator Jesse Helms dated September 23, 1999. I enclose a
copy of his letter which is self-explanatory.
For the Board to take a position opposed to the Chairman of the
Foreign Relations Committee would simply assure the end of the Inter-
American Foundation as it presently exists.
Foundation staff's lack of supervision and accountability of grants
has resulted in funding of organizations engaged in terrorist
activities. The Board of Directors cannot, and must not, appear to wash
this under the table and continue business as usual.
The Board has now come to a point where we have no alternative but
to agree with the Chairman's call for a complete investigation by the
C.I.A. of all organizations currently being funded directly or
indirectly by the Foundation. I believe such a review is absolutely
necessary. I have been asking for this type of accountability for the
past nine years and it is long overdue.
As you might recall, Vice Chairman Neil Offen also called for a
comprehensive review of grantees by the intelligence community to
ensure that incidents such as those that occurred in Ecuador and
Argentina are not repeated. I have to believe that you and the other
members of the Board would like to know more about the organizations
that the Foundation supports and whether anti-American activities are
being supported with U.S. taxpayer funds.
For these reasons, I would like the Board to be polled immediately
on this matter for I know that any further delay in responding to
Senator Helm's request will surely result in the demise of the
Foundation.
I hope to hear from you on this matter very soon.
Sincerely,
Frank D. Yturria.
cc: The Honorable Jesse Helms
Board of Directors
__________
C.--Letter of December 2, 1999 from Chairman Helms to President Clinton
December 2, 1999
The President,
The White House,
Washington, D.C. 20500.
Dear Mr. President: The across the board spending cut agreed upon
before the adjournment of Congress will cost the Agency for
International Development approximately $28.5 million. I strongly
recommend using the flexibility provided under the Development
Assistance account of Title II of H.R. 4322 to find the $28.5 million
savings within A.I.D.'s budget.
Specifically, I recommend that you withhold $5 million for
theInter-American Foundation and use it to pay part of the $28.5
million reduction. You can do this by taking advantage of the language
stating that, ``up to $5,000,000 may be made available for and
apportioned directly to the Inter-American Foundation . . .''
The Foundation currently has $7.2 million in prior-year unspent
appropriations plus nearly $15 million in off-budget resources for FY
2000. The Foundation's FY 2000 budget request was $22.3 million. So,
even if the Foundation is not provided another dime, it already has as
much money in the bank as it requested for FY 2000.
In addition, I suggest that the Office of Personnel Management
review staffing positions and grade levels at the Foundation. This is
important since most, if not all, of the $5 million proposed to be
transferred to the Foundation would be used for salaries. I find this
troublesome since the Foundation's administrative expenses are 25
percent of its operating budget (compared to 6.95 percent for A.I.D.
for FY 1999).
I am certain you will agree, upon investigation, that the
Foundation's payroll is bloated and that most of its employees are
overpaid for the work they are asked to perform.
I have every confidence that, after studying O.P.M.'s report, you
will agree that the money the Inter-American Foundation lavishes on
itself is totally out of proportion to what it spends on programs to
help poor people.
Sincerely,
Jesse Helms.
cc: The Honorable Brady Anderson