USAID Nominee Fails To Explain $25 Million Shortfall In Aid To Karabakh

New Jersey Senator Robert Menendez

WASHINGTON—Written responses by a senior United States Agency for International Development nominee to a series of questions posed by Senator Robert Menendez (D-NJ) offer insight into the details of U.S. assistance programs in Nagorno Karabakh, but fail to explain the roughly $25 million shortfall between the level of aid intended by Congress and the amount that has actually been spent since this program was launched some 12-year ago, reported the Armenian National Committee of America.

The written answers were offered by Paige Eve Alexander, the White House’s nominee to serve as the Assistant Administrator of USAID, as a follow up to her November 17, 2010 appearance before the Senate Foreign Relations Committee. During the November hearing, Alexander, avoided directly responding to the Senator’s inquiries about whey only $35 million of the $60 million Congress intended for Nagorno Karabakh had been expended, choosing instead to commit, in general terms, to working to make sure that the “assistance goes to where it was intended Congressionally.”

Senator Menendez followed up, in writing, with even more specific inquiries, including the following question addressing the most recent instances of underfunding : “Starting in FY 2009, Congress allocated up to $8 million for Nagorno Karabakh, but the State Department continued to only allocate $2 million for each of these years. Please explain why USAID has not allocated the full amounts appropriated for assistance projects for Nagorno-Karabakh.” Alexander responded, in writing, that: “If confirmed, I look forward to working closely with you on this important issue. I understand from briefings that USAID assistance to Nagorno-Karabakh has remained constant since 2001 despite a sharp decline in the regional budget and a number of competing priorities. USAID is the only U.S. Government agency carrying out development projects in Nagorno-Karabakh. Funding provided by the American people has improved shelters, health facilities, schools, community centers, water systems, and loan access for microenterprises. The current identified priorities are completing the demining of Nagorno-Karabakh and providing access to potable water.”

Alexander submitted, along with her written response, two charts, including one titled: “Completed and Current USAID Programs in Nagorno-Karabakh, 1998 to date: Nov. 15, 2010.”
It can be viewed at: http://www.anca.org/assets/pdf/misc/Alexander_Karabakh_aid.pdf

NOTE: Following is an ANCA review of the shortfall in Congressionally intended aid to Nagorno Karabakh

An ANCA review, released on August of this year, revealed that successive U.S. Administrations – both Democratic and Republican – have, since Fiscal Year 1998, expended $25 million less in aid to Nagorno Karabakh than Congress intended.

The ANCA’s report – Legislative History of U.S. Assistance to Nagorno Karabakh – is available online at: http://www.anca.org/assets/pdf/misc/US_assistance_to_NKR.pdf

The decision by the U.S. Congress in 1997, over the formal objections of the State Department, to start providing aid to Nagorno Karabakh remains a constant target for vocal attacks by the Azerbaijani government, which – both directly and through its Washington lobbyists – seeks to block the appropriation of aid for this purpose. Azerbaijani officials have argued, unsuccessfully, that, as a matter of state sovereignty, any outside aid to the people of Nagorno Karabakh must be approved by the Azerbaijani government and channeled through Baku. U.S. legislators, recognizing the political and the practical weaknesses of this reasoning, sensitive to the considerable unmet needs in Karabakh, and realizing the benefits of U.S. assistance to the search for peace in the region, have, since Fiscal Year 1998, appropriated direct aid for Nagorno Karabakh.

Commenting on the August 2010 release of the ANCA report, Ken Hachikian, ANCA’s Chairman, said: “Armenian Americans are deeply appreciative to the U.S. Congress for its vision and generosity in initiating U.S. aid to Nagorno Karabakh, and for providing funding to help the people of Nagorno Karabakh emerge from the crisis created by Azerbaijan’s aggression, meet pressing humanitarian needs, and, develop as a free society. It is precisely because of our respect for the role of Congress and the vital aims that are served by this aid that we are so troubled by the failure of successive administrations to honor the clear intent of Congress that this vital assistance program be properly funded and fully implemented.”

A conservatively estimated ANCA review of Congressional appropriations legislation, reports, and legislative history from Fiscal Year 1998 through Fiscal Year 2010 demonstrates an intent on the part of U.S. House and Senate appropriators, during the history of this aid program, to provide $61 million in assistance to Nagorno Karabakh. In the interest of providing a cautious estimate, the ANCA review did not reflect the clear objective of legislators to provide additional allocations of aid to Nagorno Karabakh in fiscal years 2000, 2001, and 2002. In the first two of these three years, appropriators did not set a specific dollar amount, but did indicate that Nagorno Karabakh should receive new aid allocations based on a legislative formula that directed the Administration to set aside a certain amount of funding to address regional conflicts in the South Caucasus, “especially those in the vicinity of Abkhazia and Nagorno-Karabakh.” In 2002, appropriators, again, did not set a specific dollar amount, but did call continued assistance to Nagorno Karabakh a “high priority.” Had such funds been included, they would likely have pushed the Nagorno Karabakh aid total to more than $70 million.

In actual practice, based on figures provided by the State Department’s Office of the Coordinator of U.S. Assistance to Europe and Eurasia to the Congressional Research Service, the amount allocated by the Clinton, Bush, and Obama Administrations to Nagorno Karabakh between FY1998 and FY2010 was $35.77 million, more than 41%, or fully $25.23 million less than the intent expressed by Congress through legislation and legislative reports. (Source of actual allocations: Congressional Research Service, “Armenia, Azerbaijan, and Georgia: Political Developments and Implications for U.S. Interests: Table 2. U.S. Humanitarian Assistance to Nagorno Karabakh,” June 30, 2010.)

The Administration’s shortfall in spending on Nagorno Karabakh was acknowledged by Matthew Bryza, President Obama’s nominee to serve as U.S. Ambassador to Azerbaijan, during his July 22, 2010 confirmation hearing before the Senate Foreign Relations Committee. During this hearing, Senator Barbara Boxer (D-CA) noted that the U.S. Congress has consistently appropriated aid to Nagorno Karabakh, including $8 million in each of the past two fiscal years. She added that: “According to the Congressional Research Service, only about $2 million was spent in Nagorno Karabakh each year,” then asked: “Do you think that is accurate? And why wasn’t the full amount spent?” Bryza responded, stating: “Based on my knowledge of assistance programs, I believe it is accurate that around $2 million of the $8 million appropriated was spent.” Video of the full exchange on this matter is available on the on the ANCA website:
http://www.anca.org/press_releases/press_releases.php?prid=1913

Approximately $12 million of the $25 million shortfall in aid to Nagorno Karabakh is the result of under-spending by the Obama Administration during its first two years in office.

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