Kerry and Lugar take sides in Holbrooke aid fight

Posted By Josh Rogin Friday, March 12, 2010 - 3:02 PM Share

A running dispute between Richard Holbrooke, the Obama administrion's designated point man on Afghanistan and Pakistan, and some in the development community over the dispersal of U.S. aid money in Pakistan has a new player: Congress.

Last week, Senate Foreign Relations chiefs John Kerry, D-MA, and Richard Lugar, R-IN, sent a letter to both Secretary of State Hillary Clinton and USAID Administrator Rajiv Shah, calling into question whether the administration is using congressionally authorized aid money "in a manner that most effectively improve[s] the daily lives of the people of Pakistan."

At issue are some $7.5 billion dollars of new U.S. aid to Pakistan, as granted by the Kerry-Lugar aid bill, $1.5 billion of which will be dispersed this year.

The senators' letter echoes many of the points made in a dissent memo published in October by USA Today from a USAID official to State's Policy Planning chief Anne-Marie Slaughter, criticizing Holbrooke for wanting to approve (and often disapprove) every USAID contract involving Pakistan.

"We are saying to the State Department and others that they really need to step back and take a close look at how that process could work most effectively," said Frederick Jones, spokesman for the committee.

Lugar and Kerry's letter also calls on Clinton and Shah to slow down the transition of funds away from USAID to Pakistani organizations, a policy Holbrooke has been pushing on the grounds that this could help them build capacity faster and avoid the perceived waste associated with sending funds through U.S. organizations and contractors.

"This is a very delicate balance, and some people have expressed concerns about this, but we have a very clear image of speeding up the flow of American taxpayer dollars to the people and the governments of the two countries," Holbrooke said in October, referring to Afghanistan and Pakistan. "So if it's a government contract, we want to speed it up."

Some Western development workers counter that Pakistani organizations can't handle that much cash right now, that there's no way to oversee the Pakistani groups, that Western groups have infrastructure in Pakistan that should be utilized, and that their expertise on how to spend development money trumps Holbrooke's.

"Holbrooke wants to be able to control every single dollar that goes through for Afghanistan and Pakistan.... You can't do it when you're talking about billions of dollars," one development leader in Washington said. "When you think about the amount of money you're shoving at Pakistan... it's not throwing money at the problem, it's shoveling it out the door."

The problem of accountability of funds given to Pakistani organizations could become a political issue here in Washington. Lawmakers are very concerned about making sure the funds are spent appropriately and could stall future payments if their concerns aren't met.

In another pool of funding, the Coalition Support Fund, the U.S. has already refused to reimburse Pakistan some $400 million because the accounting was not up to par.