The Miami Herald
Wed, Nov. 15, 2006

Democracy money spent on cashmere, crabmeat

The congressional watchdog agency cited poor management and probable waste in Cuba democracy-assistance programs.

BY OSCAR CORRAL AND PABLO BACHELET

WASHINGTON - The U.S. Agency for International Development's Cuba democracy programs spent millions without proper oversight or competitive bidding, leading to questionable purchases like a chain saw, cashmere sweaters and Godiva chocolates, according to a congressional report.

The scathing report cites ''weaknesses in agency policies and procedures and in program office oversight'' as well as ''internal control deficiencies.'' Staffing shortages at USAID also meant long delays in conducting program reviews.

The Miami Herald obtained an advance copy of the 60-page report. It is to be issued today by the Government Accountability Office (GAO), the investigative arm of Congress.

DETAILED ACCOUNT

The report provides the most detailed account to date on $65 million worth in USAID Cuba democracy assistance in 40 programs between 1996 and 2005, of which $62 million was allotted ''in response to unsolicited proposals,'' meaning there were no competitive bids. The State Department used competitive mechanisms to award a separate $8 million to four other programs, the GAO said.

The GAO conducted ''limited testing'' of 10 programs and found ''questionable expenditures'' and ''significant control weaknesses'' in three. None of the 36 recipients of USAID and State Department grants was identified in the report.

One recipient, the GAO says, used USAID funds to purchase a chain saw, Nintendo Game Boys and Sony PlaStations, a mountain bike, leather coats, cashmere sweaters, crabmeat and Godiva chocolates.

Juan Carlos Acosta, executive director of Miami-based Acción Democrática Cubana, told The Miami Herald in an interview Tuesday that except for the chain saw, he bought the items and sent them to people in Cuba.

`NEVER GET CHOCOLATE'

He said he bought the chain saw to cut a branch that had fallen near the door of his office after a hurricane. He bought ''five or six'' cans of crabmeat and some boxes of chocolate to send to Cuba.

''These people are going hungry,'' he said. ``They never get any chocolate there.''

Acosta said he also bought about a dozen leather jackets and cashmere sweaters -- on sale at Costco -- to send to dissidents in Cuba.

''They [auditors] think it's not cold there,'' Acosta said. ``At $30, it's a bargain because cashmere is expensive. They were asking for sweaters, from Cuba.''

Acosta said USAID never told him what he could or couldn't send, and added that he had reimbursed USAID for the chain saw.

Frank Hernandez Trujillo, executive director of Grupo De Apoyo a la Democracia (Group for the Support of Democracy), which has received more than $7 million from USAID, said he sent some Nintendo games to Cuba. Acosta said his group did, too.

''I'll defend that until I die,'' Hernandez Trujillo said. ``That's part of our job, to show the people in Cuba what they could attain if they were not under that system [communism].''

The USAID Office of the Inspector General is investigating the three cases uncovered by GAO, the congressional agency noted in its report.

The study was commissioned by Reps. Jeff Flake, R-Ariz., and Bill Delahunt, D-Mass., both opponents of U.S. sanctions on Cuba. They scheduled a news conference today on the report.

The Bush administration has made additional democracy assistance to Cuba a centerpiece of its efforts to undermine the communist government of Fidel Castro, and the report is likely to fuel the debate on its effectiveness.

In a 2004 report, the Commission for Assistance to a Free Cuba recommended providing $36 million to USAID and other government agencies for Cuba. A follow-up report in July recommended an additional $80 million over two years and $20 million annually thereafter until ``the end of the Castro regime.''

`LOOSELY MANAGED'

''This program's reputation has long been that it is politically effective in Miami, low-impact in Cuba and loosely managed,'' said Philip Peters, a critic of the Bush administration's Cuba policy with the conservative Lexington Institute in Arlington, Va. ``Congressional oversight is long overdue.''

USAID spokesman David Snider declined to comment, saying the agency had not seen a final copy of the report.

GAO investigators interviewed dissidents in Havana who said they were appreciative of U.S. support and that the aid ''demonstrated the U.S. government commitment to democracy in Cuba,'' according to the report.

The GAO noted that after 2004 both USAID and the State Department used ''formal competition to select grantees'' and that the State Department and USAID had taken recent steps to improve program oversight.

The GAO report also reveals new information on the nature of U.S.-Cuba democracy programs.

Many of the materials sent to Cuba were delivered by U.S. diplomats in Havana who often did not know what was being shipped in. On some occasions, books were deemed ''inappropriate'' and were discarded, the report adds, without providing details.

CUBAN CRITICISM

The Cuban government has long criticized the U.S. diplomatic mission in Havana as bent on subverting the communist government. Under Cuban law, its citizens can be imprisoned for up to 20 years for receiving U.S. aid.

According to data provided by USAID to the GAO, the U.S. government has delivered 385,000 pounds of medicines, food and clothing and more than 23,000 shortwave radios since 1996, among other materials. The report says some material was subject to ''theft and confiscation'' by Cuban authorities.

U.S. officials said the GAO plans to issue a classified version of the report with additional information on how U.S. aid is delivered to Cuba and steps that can be taken to ``reduce losses of assistance shipped to the island.''