More foreign aid abuse revealed

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The Norwegian government has paid out tens of billions of kroner to fund foreign aid projects around the world since 2007. A new report found irregularities or malpractice in fully half the projects funded with Norwegian taxpayers’ money, but only a few cases have been prosecuted.

Norway’s foreign ministry (Utenriksdepartementet) set up its own program in 2007 to monitor the projects funded, part of an effort to ensure that Norwegian foreign aid money was being spent properly. Newspaper Aftenposten, which earlier has revealed misuse of foreign aid funds, reported this week that in 150 of 309 foreign aid projects monitored by the ministry’s own control unit, it wasn’t.

‘Fraud, theft and poor bookkeeping’
The unit was set up to be on the lookout for abuse of the enormous amounts of money sent from Norway to developing countries where both corruption and weak government authorities can pose major challenges.

“The typical cases (of abuse uncovered) involve either pure fraud and theft, or cases where poor bookkeeping make it impossible to know what the money has been used for,” Arne Sannes Bjørnstad, leader of the so-called Sentral kontrollenhet within the ministry, told Aftenposten. “We find, for example, cases where the money has been used for another project than that which was specified in the contract.”

The monitoring unit Bjørnstad leads can be contacted anonymously by whistle-blowers, and all cases reported are systematically investigated by the unit’s staff, reported Aftenposten.

Big problems in Tanzania
Some of the larger cases of abuse involved environmental and road projects in Tanzania, where as much as NOK 156 million reportedly disappeared through corruption, and an ambulance project in Kabul.

The latter was arranged through the Norwegian Red Cross, which received NOK 35 million from the government to buy equipment for the Kabul Ambulance Service. The Red Cross clamped down as soon as it heard that the money was subject to fraud and bribes, but it has only been able to repay NOK 600,000 to the ministry and the suspected parties fled the country.

Problems with the UN, too
Much of Norway’s aid money is channeled through the United Nations (UN) “and it’s seldom they tell us about problems or give us insight into their own investigations,” Bjørnstad told Aftenposten. As much as NOK 5 billion of Norwegian foreign aid is sent annually either to the UN or the World Bank, and Norway had to both accept limits on how much the government could be reimbursed in cases of fraud and agree to keep confidential the accounting reports it does receive.

Conflicts with the UN over how aid money is spent clearly exist. Norway’s ministry posted a statement on its own website just last week, in which it publicly “regretted” claims in a UN report (external link) that tied “Norwegian development efforts to commercial interests in Somalia.” The Norwegians objected to a UN Monitoring Group’s report to the Security Council for “conveying some conspiratory (sic) allegations … implying that Norwegian assistance to Somalia is a cover to promote the commercial interests of some Norwegian oil companies.” The Norwegian government called the allegations “both unfounded and untrue.”

New calls to cut funding for foreign aid
Hardly any of the foreign aid fraud that is uncovered is prosecuted. Of the NOK 170 billion paid out, with half of it subject to misuse, only NOK 35 million has been recovered. That’s generally because Norwegian embassies almost never report abuse themselves because of their immunity status abroad. “But we ask the involved organizations to report cases to the police, or present them to the authorities, so they can be investigated,” Bjørnstad told Aftenposten.

He also claims that the creation of the ministry’s monitoring unit itself has helped “change the culture” within the ministry, with more staffers at all levels more conscious of the corruption problem, and accounting competence at the embassies strengthened.

Opposition politicians in the Norwegian Parliament, though, claim the high level of irregularities uncovered in foreign aid funding indicates an ongoing lack of accountability and control. Politicians from the conservative Progress Party, which hopes to win government control along with other non-socialist parties from the current Labour-led government after national elections this fall, want to cut the amount of foreign aid that Norway sends abroad.

Views and News from Norway/Nina Berglund