Tuesday, February 7, 2012

Corruption in Georgian NGOs, a bit of history: UNDP and UMCOR Georgia

Festival of Corruption: UMCOR’s Implementation of The 1996-1998 UNDP Income Generation Project

UMCOR, United Methodist Committee for Relief, received something like $160,000-$200,000 (this is what source remembers) from the UNDP to make a combination of grants plus no-interest loans to four separate organizations.  Each organization received $40,000-$50,000, of which $20-25 K had to be repaid; the rest was just kept as a grant by the organization.  So obviously, whoever was included in the program got a major sweetheart deal
The source is unaware what procedures were made to select the four winners, but by all accounts the process was completely dirty.  Let us look at who the winners were:

1)            The medical services/international development firm Curatio.  Curatio was created by UMCOR employees, its Board at the time consisted almost entirely of UMCOR employees, it was rumored to be owned by Georgian UMCOR employees using UMCOR grants.  When UMCOR Deputy Director Sandro Kvitashvili left UMCOR he immediately became 2-3rd ranking chief of Curatio.  Curatio got all kinds of contracts from UMCOR—for example it supplied the UMCOR health insurance until Khatuna Zaldastanishvili came in and removed them and substituted her own outfit as the health insurance provider.  Curatio stopped being important after Khatuna became chief—a new Mafia had assumed power in UMCOR.  Obviously, a fair tender process could not have considered Curatio given its ties to UMCOR—but nevertheless it won.   

2)            The second firm to win was a manufacturer of cement blocks.  The name is unknown, but the owner had very close ties (as witnessed by source) to Georgia UMCOR managers, and also probably family ties to them.

At this point it should be noted that repayments of the loan part was overall very poor, but that the two firms above were much better in this regard than the next two.

3) A glassmaker.  Source knows very little about this recipient, except that he did not pay back the loan portion.

4) The best of all the recipients was a certain project called “Underground.”  The loan/grant was meant to set up some small stores in an underground passage under a street or leading into a Metro.  The “recipients” simply took the money and ran.  They did not do absolutely anything.  No repairs, no visible sign of any work—nothing ever got started.  The feeling amidst UMCOR was that UMCOR managers had split the money with some friends and manufactured a completely fictitious project.  As easy money as one can possibly make!!  Not a single cent was ever returned. 

Everybody considered the project an unmitigated disaster, and UNDP roasted UMCOR
expatriates about this at certain heated meetings...but of course this was after the fact. 

 Where was UNDP when the crimes were being committed?

A thoroughly amusing Postscript on the project:  One would of thought that Mamuka Makhatadze, the project manager would never have been able to get another job after the disaster he presided over, especially with an international organizations in his life.  Instead, he left the project prior to its conclusion and became head of contracts for the World Bank in Tbilisi, lecturing other people and organizations about how to conduct honest fair and transparent contracting process. 

Here’s a quote: “UNDP could have contributed more to the development of Georgia if it had taken $160,000 in cash and flushed it down the toilet than by allowing this corrupt NGO to enrich its friends.  The only effect of the project was to teach all Georgians involved that corruption truly does pay and that one can take the money from international donors get away with it, and laugh at them too.  The corrupt will still get hired again by their buddies.” 

Possible source: Ia Khoperia who was Manager of the project in its final days.  Khatuna put her there to pin the blame on her and get rid of her.... she was fired with the Monetization people, USDA Food for Peace Project.  Ia hates UMCOR.
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