US Aid Program in Georgia Faces Criticism over Transparency

From rebuilding roads to revitalizing villages, the Millennium Challenge Corporation (MCC) in Georgia has set high expectations for its five-year program. However, just months into the project some observers claim the US-backed initiative is not meeting expectations on transparency.

The MCC operates in Tbilisi via the Millennium Challenge Georgia Fund (MCG), an entity established by the Georgian government. The flagship development program has already come under criticism from several watchdog groups, including the Berlin-based Transparency International (TI). A lack of information has both tarnished the program and frustrated civil society activists, said Mark Mullen, TI's chief in Georgia. "They are not telling anyone anything," he said.

Other NGO representatives have voiced similar concerns. Irina Lashkhi -- the rule-of-law and public administration program coordinator at the Open Society Georgia Foundation (OSGF), a founding member of the local NGO coalition For Transparency of Public Finance -- said it was "quite difficult" to get information from the MCC/MCG. "They told us our questions are welcome, but they have no policy to regulate information," she said. [OSGF and EurasiaNet both operate under the auspices of the Open Society Institute].

Colin Hugh Buckley, resident country director in Georgia for MCC, said an information policy would be implemented in the coming weeks. Up to this point, he added, there simply hasn't been much information to disseminate. "We haven't finished the first quarter yet," he said. The MCG compact went into force in early April.

However, TI's Mullen insists several decisions have already been made, emphasizing that the process has not always been transparent. He said a tender for a fiscal agent earlier this year may not have been entirely open. "After our press conference in March, we got a lot of calls from accounting firms who said they had planned to participate in the tender but it was never announced. MCC Washington picked four companies by some method nobody knows. The fact that it was not an open competition is very, very important," he said.

David Nummy, managing director of fiscal accountability at MCC, believes the selection process fully complied with international standards. MCC short listed four accounting firms after consultations with the US Embassy in Georgia, USAID and other donor organizations. Three of the four companies listed applied for the position, he said.

While not disputing the choice of Ernst & Young, Mullen said the lack of transparency had set a dangerous precedent. "Our intention is in the design process, decision-making process. We tried to influence transparency as much as possible so there could be oversight by journalists in the implementation process," Mullen said. "There is always just one more thing on the horizon,