Subject: How millions of our foreign aid is being wasted on executives



How millions of our foreign aid is being wasted on executives

By Steve Lewis and Nic Christensen

The Daily Telegraph

May 23, 2010 11:12PM


AUSTRALIA'S foreign aid program is under siege after revelations tens of millions of dollars are being wasted on mega-salaries for consultants and rich contracts for private firms.

An extensive investigation revealed a lucrative foreign aid "industry", raising questions on the Rudd Government's decision to double funding to $8 billion-plus a year.

And a high-level review has slammed the $414 million program in Papua New Guinea, claiming that $100 million is being redirected to a handful of firms while little of a lasting benefit is delivered.

Aid experts have also questioned the size of contracts paid to "briefcase" advisers flown into poor countries such as Tonga, East Timor, Vanuatu and Solomon Islands.

As Australia prepares to double its foreign aid budget, it can be revealed:

* JUST five firms - led by Coffey, GRM and Cardno ACIL - secured $1 billion in AusAID contracts;


* MORE than a dozen aid consultants earn more than Prime Minister Kevin Rudd to fly around the Pacific advising on everything from "gender integration" to sport, transport, energy and justice;

* MILLIONS of dollars are being diverted to questionable aid programs including $12 million to research the giant panda in China and $13 million to redevelop a single school in Nauru;

* AusAID, the agency in charge of foreign aid, is investigating a small number of cases of fraud and is about to undergo significant restructuring;

* MILLIONS are being spent by the AFL, Girl Guides, ACTU and other community groups on "selling" a pro-aid message to the public.

One highly paid executive, Gerald Gahima, a former justice in his native Rwanda, is no stranger to controversy. In February 2004 he suddenly left Rwanda, amid questions about personal debts of $US600,000.

The US State Department cited allegations of misuse of office in personal bank transactions against Mr Gahima.

Four years later, in February 2008, he was made "senior justice adviser" to East Timor on a two-year $757,960 tax free contract, paid by Australian taxpayers.

Consultant John Dinsdale, a former clerk of a court in Melbourne, is paid more than $500,000 a year, tax-free, as PNG Law and Justice adviser.

Nikhil Desai, whose glamour address is listed as 6850 Melrose Drive, Los Angeles, was appointed as Vanuatu Energy Adviser on a two-year contract valued at $746,730.

Around the Pacific rim, questions are being asked as to why consultants, such as Peter Kelly, who is paid $433,000 a year to supervise Vanuatu's small road system, are paid so much. Partly it is because Australia has signed up to so-called Millennium Development Goals, which includes a commitment to gender equalisation.

That helps explain why Susan Ferguson earns $293,423 tax-free a year as "Gender Integration Adviser" to PNG.

The review into the flagship PNG program is particularly embarrassing - and raises serious questions over the value of pumping billions of dollars into fragile states.

The former Howard government tightened aid to PNG in 2005 after it received secret intelligence of scams involving senior members of the then PNG administration.

AusAID will pour $415 million into PNG next year but the review - conducted by three independent experts Stephen Howes, from the Australian National University, Dr Eric Kwa from the University of PNG and Canadian Soe Lin - is scathing of the present scheme.

They found tens of millions of dollars was "wasted" on consultants and glossy reports. Money also props up bureaucracies instead of buying life- saving medicines and equipment.

The review team found Australia's financial support was "being spread too thinly" across a raft of areas - including health, education, transport, law and justice and tackling HIV Aids.

The review has criticised the amounts being spent on highly-paid advisers and called for a shake-up in how the PNG scheme is managed. It did identify some positive outcomes - particularly in health programs run by churches and other non-government organisations.

It wants a stronger focus on this sort of program -- and last night, the Foreign Minister Stephen Smith backed changes in the aid program.

"Advisers have been a feature of Australian aid over many years and, while we do not intend to pre-judge the outcome of the [PNG] review, it may be that there is an over-reliance on advisers in some countries," the Minister's spokesperson said.

The aid agency's new head, Peter Baxter, is vowing to crack down on highly paid consultants.

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