How to get rich pretending to help other people

Apparently the secret is to affiliate yourself with a church and then go into the international relief and development business:

In 1998, an ordained minister with the United Church of Christ and his wife from the war-wrecked region of Bosnia-Herzegovina began a humble international humanitarian effort out of a modest office in downtown Washington.

After the United States launched the wars in Iraq and Afghanistan, the mom-and-pop nonprofit corporation boldly ramped up, undertaking some of the federal government’s biggest and most ambitious projects in the battle zones, everything from building roads to funding wheat production.

During the past decade, International Relief and Development received more in grants and cooperative agreements from USAID than any other nonprofit organizations — $1.9 billion. The humanitarian group worked in Iraq and Afghanistan and provided 38 employees with $3.4 million in bonuses between 2008 and 2012. Here are the bonuses given to IRD employees compared to other nonprofits operating in hazard zones between 2010 and 2012.

In doing so, International Relief and Development increased its annual revenue from $1.2 million to $706 million, most of it from one corner of the federal government — the U.S. Agency for International Development. IRD has received more grants and cooperative agreements from USAID in recent years than any other nonprofit relief and development organization in the nation — $1.9 billion.

Along the way, the nonprofit rewarded its employees with generous salaries and millions in bonuses. Among the beneficiaries: the minister, Arthur B. Keys, and his wife, Jasna Basaric-Keys, who together earned $4.4 million in salary and bonuses between 2008 and 2012.

Boy, at around $900,000 per year, you really have to hand it to the Keyses for sacrificing so much to help other people, specifically “each other.”

This is the thing nobody likes to talk about when it comes time to hack and slash the already meager budgets for agencies like USAID: what gets cut is the oversight, not the programs themselves. It’s in the interest of the United States to project soft power into places like Afghanistan, where lawlessness and deprivation created a climate in which a serious threat to American security was able to take root, and Iraq, where we broke the whole damn country for no good reason (oh wait, we got rid of Saddam…who has been replaced by Saddam Jr.) and had to at least pretend to be helping to put it back together. So we still want to do the programs, which means paying private contractors/charities, but with those budget cuts USAID can’t actually make sure the people who run those charities aren’t taking government money and, oh, say, paying themselves a million a year with it.

The cycle eventually becomes self-sustaining, because an organization like IRD gets rich enough to buy enough goodwill at the overseeing agency and/or in Congress that, when some mid-level civil servant finally does catch them in the act, the whole thing is easily quashed:

For years, IRD has been sparring with government auditors over its performance in the field. Auditors reported that one IRD program in Iraq was “highly vulnerable to fraud and exploitation” and said the nonprofit organization neglected to provide sufficient oversight in war zones and inflated the impact of its programs. IRD and top USAID officials have consistently challenged such findings, steadfastly defending IRD’s work. They have criticized the auditors as overreaching, and in some instances flat out wrong.

As you might expect, the revolving door is a huge part of the problem:

“Most of our traditional partners would not work in those environments, either for political reasons or security reasons. I found IRD to be courageous and willing to go into harm’s way,” said James Kunder, formerly the acting deputy administrator of USAID, who retired in 2009 and is a member of the nonprofit’s advisory board.

Over time, IRD has assembled an impressive board of advisers that has also included former House majority leader Richard A. Gephardt and John D. Negroponte, who served as ambassador to several countries, including Iraq, and was the nation’s first director of national intelligence.

The company also hired an all-star cast of humanitarian officials, drafting them from the top levels of USAID. In addition to the former acting administrator, the officials have included the deputy assistant administrator, the director of contracts and a key operations officer.

It is not unusual for government officials to move into the private sector for higher salaries.

You don’t say?

As acting director of USAID, Alonzo Fulgham made $199,418. As vice president of IRD, he received $330,000. Jeffrey Grieco made $185,000 as the top public affairs official at USAID. As chief of public affairs at IRD, he received $225,000.

Huh. Weird coincidence.

Before joining IRD, the officials received letters from USAID requiring them to pledge not to take part in any programs that may conflict with the responsibilities they had at the agency. IRD officials said they hired the USAID employees for their expertise, not their connections.


Of course, IRD hides behind the same defense that bailed-out Wall Street banks used to justify continuing to pay out huge salaries and bonuses despite the fact that they were doing so with house (taxpayer) money:

In recent interviews, IRD officials defended the salaries and bonuses, saying they are designed to attract and retain talented employees, some of whom are required to work in hazardous zones. They said the salaries and bonuses are determined by a board of unpaid advisers and are based on outside compensation studies.

See? It just so happens that the minister and his wife, who own the “nonprofit,” are the two most qualified people on the entire planet for doing relief and development work in Iraq and Afghanistan. They’re so qualified that Arthur Keys pays himself a considerably higher salary than his counterparts at Catholic Relief Services and Save the Children, despite the fact that both of those organizations have higher annual revenues than IRD does.

But it’s not all high salaries with these people, oh no. They also pay big bonuses, because, as Keys says, “Bonuses are important because it links performance and compensation,” which salary totally doesn’t do for some reason. And let me tell you, there was one IRD employee, named Arthur Keys, whose performance was some A++++++++-level shit, according to his boss, Arthur Keys:

The company also paid handsome bonuses. Grieco received $56,250 in 2010. Between 2008 and 2012, Jasna Basaric-Keys collected $285,174 and Arthur Keys got $560,007 in bonuses. Keys’s brother-in-law, who served as director of information technology, received $148,472. Keys’s daughter received $27,769.

Here’s a funny story. USAID hired IRD to run their Community Stabilization project in Iraq, which was basically like something you might try in a gang-riddled area of a city. The idea is to fund projects that both improve the community and provide jobs to at-risk youth, so they have less reason to join a gang, only in this case the “gangs” were paramilitary insurgents. IRD, deliberately or not, mismanaged the program so badly that it was dumping US government money into no-show jobs that were helping to fund those very same insurgents.

Army Col. Louis Fazekas, who supervised a combat team in Baghdad, said in a recent interview that he and other U.S. officials confronted David Soroko, a USAID official supervising the program in Baghdad.

“We said our money was going into the hands of the people who were killing our soldiers,” Fazekas recalled. “He flat out denied it and said, ‘We’re not going to change anything.’”

In a recent interview, Soroko disputed the reports of fraud and money going to the insurgency.

“There was no real evidence of money going to the insurgents. The military told me that,” Soroko said. “Is it possible there were ghost employees? Yeah. How accurate were the numbers in Iraq? I have no idea. Did what we were doing actually suppress violence? I think so.”

I’ll give you three guesses where David Soroko wound up working after he left the government.

As [Jay] Rollins [USAID Inspector General] was conducting his audit, Soroko departed Baghdad. Within a year, he was working at IRD, where he created an office of economic growth and trade for the nonprofit corporation.

You didn’t actually need all three guesses, did you?

He said he did not have a job lined up with IRD while he was with USAID in Baghdad.


“I had a connection with IRD, obviously, and they contacted me with a job offer,” Soroko said. “It looks corrupt, right? It’s a revolving door, I know. But what are you supposed to do? Am I supposed to live on unemployment for the rest of my life?”

Yeah, definitely David Soroko’s choices were down to “go to work for the company that bilked the government out of millions of dollars during the period when I was supposed to be making sure they didn’t do stuff like that” or “unemployment.” Hit that one right on the nose.

Soroko said his new job at IRD included a 20 percent raise over his government salary. Before accepting, he said, he obtained a letter from USAID allowing him to take the job. He has since left IRD.

Gosh, it was nice of USAID to write him a letter like that. Maybe the person who cleared Soroko to go work for IRD despite there being no ethical way to justify that decision eventually got a gig with IRD themselves. I’d like to think so, anyway.

IRD is so good and cool that it has nothing to hide, which is why it makes former employees sign confidentiality agreements so harsh that they probably violate federal law:

Some of the people who might know the most about what has happened with IRD-run programs — former company employees — say they have been barred from speaking about their experiences. Before leaving IRD, they said, they were asked to sign confidentiality agreements.

The agreements warn employees that they could be sued for making any “derogatory, disparaging, negative, critical or defamatory statements” about IRD to anyone, including “funding agencies” or “officials of any government.” Lawyers who reviewed the agreements at the request of The Post said it appeared that they could violate federal protections afforded to whistleblowers under the False Claims Act.

[Read a copy of the confidentiality agreement.]

At first, IRD said in a statement that the agreements did not violate the law and that “none of these provisions would prevent an employee from complying with a subpoena.” After consulting with several lawyers, IRD reversed itself.

“IRD has sought the advice of three outside law firms and is changing its policy to ensure that our policies conform to the latest developments in employment law,” the nonprofit said.

The next time you hear any politician railing about “waste, fraud, and abuse” in foreign aid, or, better yet, in programs like SNAP, think about the tale of IRD and USAID and note that, irony of ironies, the closer we cut agency budgets to the bone, the greater the chance that private contractors will be able to get away with precisely the kind of fraud our political leaders claim to abhor so much.

UPDATE: In case anybody ever stumbles upon this old thing:

The U.S. Agency for International Development announced Monday that it has suspended one of its largest nonprofit contractors from federal work after investigators found “serious misconduct” in the nonprofit’s performance and management of taxpayer money.

For years, International Relief and Development, headquartered in Arlington, Va., served as one of USAID’s key contractors, undertaking ambitious humanitarian projects in some of the most dangerous places in the world.

The suspension comes after months of internal USAID reviews of IRD’s performance in the field and reports from the agency’s inspector general that the nonprofit allegedly mischarged millions of dollars in overhead costs. The Special Inspector General for Afghanistan Reconstruction and the FBI are also investigating the organization.

“The Agency’s review revealed serious misconduct in IRD’s performance, management, internal controls and present responsibility,” USAID said in a statement Monday. “USAID has a zero tolerance policy for mismanagement of American taxpayer funds and will take every measure at our disposal to recover these funds.”

Author: DWD

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