White House Disputes Fraud Claims: Bosnian, Not U.S., Taxpayers Hurt

By Sammon, Bill | The Washington Times (Washington, DC), August 18, 1999 | Go to article overview

White House Disputes Fraud Claims: Bosnian, Not U.S., Taxpayers Hurt


Sammon, Bill, The Washington Times (Washington, DC)


The White House said yesterday it is "pretty confident" that U.S. aid to Bosnia-Herzegovina is not being misappropriated, but acknowledged there are "bad debts" and an ongoing corruption problem.

An international anti-fraud agency has concluded that $1 billion in public funds has been lost to fraud since the Bosnian civil war ended in 1995. But the agency, along with the White House and State Department, emphasized yesterday that nearly all of that money belonged to the taxpayers of Bosnia, not the United States and other Western nations that have poured $5.1 billion into the war-torn nation in the last four years.

"Most of the money that has been lost is local taxpayers' money," said Alexandra Stiglmayer, spokeswoman for the Office of the High Representative (OHR), which oversees the anti-fraud unit. "The money has been taken from the budgets. The figure is probably higher than $1 billion."

National Security Council spokesman David Leavy said the White House is "pretty confident" that funds from the U.S. Agency for International Development (AID) have "not been misappropriated."

"Broadly, corruption is a problem," Mr. Leavy said. "We're concerned about it and we have a plan to address it.

"I think any time AID has a program as extensive as the one in Bosnia, there are what we call bad debts," he said. "There are a certain percentage of loans that aren't repaid, are defaulted on."

State Department spokesman James P. Rubin sought to downplay the number of loans in default.

"Out of 425 loans to particular entities, 19 of these companies were unable to pay interest and were in default," he said. AID is suing the companies in Bosnian courts for repayment of the loans, which are said to be worth over $10 million.

Mr. Rubin was responding to yesterday's New York Times, which first reported the fraud after obtaining a copy of the report by the OHR, the agency responsible for instituting the civilian aspects of the Dayton peace agreement.

"We do not believe that billions of dollars of our assistance has been stolen," Mr. …

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