Russian AID for the USA

By Silverstein, Ken | Multinational Monitor, January-February 1997 | Go to article overview

Russian AID for the USA


Silverstein, Ken, Multinational Monitor


Since 1992, the U.S. government has funneled some $4 billion to Russia, with the stated aim of promoting economic reform and modernizing the Russian economy. The real goal as with many U.S. aid programs - is to drum up business for U.S. corporations and enrich U.S. consultants, accounting firms, lawyers and others.

Well over half of Russian aid money allocated by the U.S. Agency for International Development (AID) has ended up in the pockets of U.S. contractors and consultants. The Sawyer Miller Group, a Washington PR shop, received more than $6 million to devise ads touting the joys of capitalism to the Russian public. A group of U.S. agricultural companies received $44 million to restructure Russia's food network (see "Porkbarrel Politics at U.S. AID," Multinational Monitor, September 1993).

AID set aside one of the largest chunks of money - several hundred million dollars - to privatize the Russian economy.

The privatization effort has been a dismal failure. Though the state has sold off many of its assets - mostly at cut-rate prices to well-connected insiders - little effort has been made to assist the newly privatized firms, most of which have been run no more efficiently by the new owners than they were by Soviet bureaucrats.

On the other hand, the program has been a smashing success for the U.S. companies supervising the privatization effort.

Documents I obtained show that technicians from Hagler, Bailly - a beltway "environmental consulting firm" that also has AID contracts in countries such as the Philippines, Indonesia and Egypt - received salaries of up to $1,310 per day for their noble efforts in Russia. One 1995 document, concerning a contract to promote the sell off of Russia's energy sector, showed junior lawyers earning a $1,240-a-day salary, and senior lawyer W. Harrison Wellford, counsel to the National Independent Energy Producers and the National Association of Energy Service Companies, pulling in $1,310 for a day's work.

Asked to comment on the amount of money paid to U.S. consultants in Russia, AID said in a statement: "U.S. AID seeks to secure the best technical advice possible. from U.S. consultants who are experts in their fields. ... Salary levels reflect the level of expertise demanded by the job, which, in Russia, often involves sophisticated policy or technological issues requiring senior level financial specialists, investment analysts, engineers, international law and health system experts, etc."

Hagler, Bailly plucked its munificently compensated consultants from two firms that have played a leading role in the plunder of Russia and Eastern Europe. Several came from Price Waterhouse, the accounting giant that AID lavished with taxpayer money to set up offices in Moscow and obtain private-sector business.

Another group of the consultants are employed by the Los Angeles-based law firm of Latham & Watkins. …

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