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Johnson's Russia List
 

 

July 30, 1997  
This Date's Issues: 1099 ē1100  ē1101  1102


Johnson's Russia List [list two]
#1100
30 July 1997
djohnson@cdi.org

************

Date: Wed, 30 Jul 1997 11:05:44 +0300
From: Matt Bivens <matt@times.spb.ru>
Organization: The St Petersburg Times
Subject: Re: Harper's B-M article

Harper's 
August 1997

Aboard the gravy train:
In Kazakhstan, the farce that is U.S. foreign aid 
By Matt Bivens
(editor, St. Petersburg Times)

Nina Timofeyeva, the sour-faced Russian woman who ran the St. Petersburg
real-estate agency Poisk ("Search"), sat behind her desk, ignoring my
accusations and cutting her fingernails. As each clipping fell, she blew
on it, sending it skittering across the desktop. Some fell onto the
dirty linoleum floor, others into my lap.

"I'm not going to talk to you anymore about the money," she said
finally. "From now on, you talk to the Boys."

The money referred to was the apparently irretrievable $7,500 that my
wife, Svetlana, and I had given Nina as a down payment on an apartment.
The Boys were the unpleasant crew-cut thugs who worked for her. Or maybe
she worked for them; such things are hard to determine. My wife and I
had long wanted to buy a modest St. Petersburg apartment, and in the
late summer of 1994 we had borrowed money and signed an agreement with
Poisk. A few days later, Svetlana was summoned to Poisk for what she
thought was a routine meeting -- something to do with the documentation
of our apartment purchase -- and instead found herself alone in a tiny
room with six large men -- the Boys -- who reminded her that they knew
where we lived and where her parents lived, then demanded that she hand
over another $7,500 or lose both the apartment and the original $7,500.

Svetlana went into hiding at her parents' summer cottage while I sought
the U.S. consulate's advice on how to deal with the situation. That
advice boiled down to two possible scenarios: 
(a) I forget about the $7,500; or
(b) I buy a gun, hire a bodyguard, check into a hotel, and then -- and
only then -- call the police.

Scenario (b) would probably unfold as follows: The cops would kick in
the door at Poisk, club the Boys into submission, and demand back my
$7,500. Then the cops would summon me to the precinct, where they would
return, oh, say, $2,000 of our money. Then the Boys would pay me a
visit.

Neither scenario appealed, so the advice I took in the end was Nina's: I
talked to the Boys. Which is to say, I performed for them. I played --
convincingly, I thought -- the dumb foreigner, so naive that he just
might pose some heretofore unthought-of threat to their operation. I
waved around a government press card, sponsored by the Los Angeles
Times. I dropped the names of big-shot cops and KGB officers. I boasted
that the U.S. consulate was already aware of their activities and would
"take steps" if my wife or I were hurt.

Soon they had warily agreed to return our money; their reasoning seemed
to be that for $7,500, it was not worth the trouble either to kill me or
to ignore me. But as the days went by, they came up with excuse after
excuse, and Svetlana and I began to accept the idea that we would never
see the money again. We sensed that we had come to the end of that happy
period during which a couple can live comfortably on the modest income
of a freelance journalist. Now we needed money.

So I turned to the Dark Side of the Force. I applied for a job in public
relations.

I had heard of an opening in Almaty, Kazakhstan, with the New York-based
Burson-Marsteller, the world's largest public relations agency, and
although I once would have scoffed at the idea of working in P.R., I
quickly convinced myself that this posting would be different:
Burson-Marsteller was working under a contract from AID -- the U.S.
Agency for International Development -- and this meant that I would be
helping the Kazakhstanis, not shilling for some corporation.

In Kazakhstan, as throughout the Soviet Union on the day in 1991 that it
collapsed, the government owned everything -- not only the telephone
system and the factories but every barbershop, every gas station, every
bakery. As if to underscore this fact, businesses did not even have
names, just numbers -- Bakery No. 1, Bakery 2, and so on. The government
of newly independent Kazakhstan vowed to put these concerns back into
private hands, and the United States Congress sent help: AID contracted
corporations such as Ernst & Young and Deloitte & Touche to offer
economic and legal advice on how, exactly, one goes about privatizing an
entire nation, and it brought in Burson-Marsteller as well. As described
in an outline of U.S. assistance programs in Kazakhstan, published by
AID in 1994, Burson-Marsteller's task was to ensure that "the
Kazakhstanis understand the privatization process and participate
actively in it." In other words, Burson-Marsteller was to sell the
notion of free-market capitalism to the people of Kazakhstan. That meant
pro-privatization TV commercials, newspaper ads, and press conferences;
it meant developing a logo -- a galloping Pegasus wrapped in the word
"privatization!" -- and plastering it on billboards and city buses; it
meant courting the local press; it meant keeping people informed about
how to buy shares in corporations and when the auctions would be held
for barbershops and bakeries. 

I knew nothing of P.R. and little of privatization. But I was an
American, I spoke good Russian, and I was willing to leave St.
Petersburg on short notice. A single phone call to Burson-Marsteller's
Washington, D.C., office landed me the job.

The next day Nina and the Boys paid me back, minus $250 for their
"services."

With the money returned, the pressure to leave journalism was off, and I
thought briefly about turning down the P.R. job. But there was really no
turning back now; Burson-Marsteller had made me an offer I couldn't
refuse: $53,518 a year after taxes, insurance benefits, free housing, a
driver, a maid, a $2,000 moving allowance, and an additional $25 per
diem ($9,000 a year) in spending money. All told, a $70,000-a-year
package; after only a few months, it would grow to $90,000. I was
twenty-six.

The main event of every day was lunch. Lunch was always at a fancy
restaurant, with your driver waiting out front. More than thirty-five
U.S. companies or organizations were on the AID payroll in Kazakhstan,
offering advice on everything from drafting laws to wearing condoms, and
every single one of them seemed to be as high on lunch as
Burson-Marsteller was. The hours before and after lunch were generally a
blur of meetings between consultants, consulting companies, consortia of
consulting companies, and groups of consortia of consulting companies.
Fridays I would retrieve a crumpled ball of business cards from my
suit-coat pocket and incorporate them into a memo summarizing my work
week: Monday met with so-and-so, discussed such-and-such. Tuesday met
with such-and-such of the this-and-that group. Mostly I was describing
lunch.

My co-workers turned out to be young Americans like myself with
humanities degrees. In the States, we would have struggled to
distinguish ourselves from thousands of applicants for entry-level jobs.
Here, we were expert consultants to a foreign government, with hefty
salaries and lofty titles. I was the National Media Coordinator. My main
duty was to run the Kazakhstan Press Club. I also administered a TV
show, a couple of radio shows, and a smaller Burson-Marsteller office
that bought newspaper and radio ads, but I was told to concentrate on
the press club.

A good part of my training consisted in looking through the files left
by my predecessors, and from those files I learned, for example, that
Burson-Marsteller had a "cost-plus" contract with AID, which was a
fairly standard deal: AID would reimburse all of the costs we incurred,
"plus" pay about 7 percent on top of that -- our profit margin. In other
words, the more we spent the more we earned. Here was a receipt for
thousands of blue shopping bags emblazoned with the yellow Pegasus logo.
(The bags themselves choked the closets and corners of our office.
Unaware of their significance -- they were, after all, a gift from the
American people to the people of Kazakhstan -- I had taken hundreds home
for use as trash-can liners.) And here were other receipts, for
billboards, key chains, and even watches, all sporting the privatization
Pegasus. Meaning that all of it was foreign aid, earnestly referred to
by Burson-Marsteller as "educational material."

Many of the files concerned the press club itself, which had opened days
before my arrival to positive coverage in the Kazakhstani press.
Burson-Marsteller had come up with the idea, then convinced AID to fund
it. I came across a pair of unusually candid internal Burson memos
discussing how to sell AID on "the Cadillac of all press clubs." One was
titled "What Makes Ed Happy," Ed being a man at AID with clout. "I think
... we can grow this to a rather pretty little business," mused a
predecessor.

AID does fund programs to help former Soviet journalists, but
Burson-Marsteller had no such contract. What it did have was a broad
mandate to build support in Kazakhstan for free markets, and so the
pitch for the press club blurred ideas such as capitalism, democracy,
and free speech into a single blotch of "good American things that good
people ought to support." It worked. Soon Burson-Marsteller was raking
in the cost-plus on a press club decked out with a computer and laser
printer, monster TV, video recorder, satellite dish, and subscriptions
to CNN, MTV, the Wall Street Journal-Europe, and the International
Herald Tribune. In addition to being a rather pretty little way to spend
U.S. tax dollars, the club provided Burson-Marsteller with ready access
to local journalists, who were taught, through the club's events and
publications, that all of the ***best*** journalists supported
privatization. The company's connection to the club was never concealed,
but neither was it volunteered or explained. [1] If Kazakhstan’s
journalists asked about the club's origins and mission, we would answer
that it was aid from America, a gift from the same friendly people who
had brought them Radio Liberty and the Voice of America.

[FOOTNOTE 1: Although Burson-Marsteller pulled out of AID’s Kazakhstan
programs sixteen months ago, the press club still exists. In October
1996, it was reregistered as an independent organization “founded” by
three young Kazakhstanis. As of this writing, the question of whether it
will shed its P.R. aspect and become a true journalists’ club remains
unanswered.]

For me, the club presented a plausible excuse to escape the main Burson
office and relax before (or after) lunch. The club's wooden chairs were
somewhat uncomfortable, though, so I sent my staff out shopping for
stuffed armchairs, which I assumed were being billed to the U.S.
government, along with everything else. I was part of the team.

Kazakhstan is an ecological disaster, with oil reserves, wedged between
Siberia and China. It is the home of the Semipalatinsk nuclear testing
range -- the Soviet answer to the Nevada flats -- and the Virgin Lands
agricultural campaign launched by Nikita Khrushchev, in which millions
of acres of pasture land were overplowed into dusty worthlessness.

National Geographic has suggested that Ust Kamenogorsk, a small city in
northern Kazakhstan, may be the most frighteningly polluted city in the
former Soviet Union. Ust, as the locals call it, is just a two-hour
drive from the Semipalatinsk nuclear test site. It is also the home of
industrial giants such as the Ublinsky Metallurgical Works, where,
according to Greenpeace, an explosion of some sort in the late 1980s
coated the city with a fine film of zinc dust. City-wide nosebleed
epidemics that stop as suddenly and inexplicably as they start are
common.

Newspapers in Ust were overcharging us for ads about privatization. This
was actually to our profit, but the naive young American stationed
there, not accustomed to Cost-Plus Think, felt it ought to change. A
seminar, we reasoned, could wow locals into a new respect for
Burson-Marsteller and the U.S. government, after which we would get
drunk together, become friends for life, and ad rates would go down.

Seminars are the bread and butter of the foreign-aid community. They can
be billed as "training," and training the locals is very fashionable at
AID. More important, seminars produce "deliverables" -- a deliverable
being any physical proof of our work. Examples of deliverables from a
seminar include written agendas and programs, local media coverage, and
carefully composed photographs: serious Kazakhstanis at desks in a
classroom: wise Americans leaning on overhead projectors; racially mixed
groups of happy Russians and ethnic Kazakhs engaged in solving happy
imaginary problems; post-seminar Americans, Russians, and Kazakhs
drinking to international friendship. All of it -- photographs, agendas,
news clippings -- goes into a box delivered to AID in Washington, D.C.
Deliverables are the sole benchmark by which AID evaluates success or
failure.

Burson-Marsteller was always rich in deliverables, but we still loved
seminars. Battling the logistics energized the whole office, and
seminars provided valuable evidence of our expertise -- for how better
to prove that someone is an expert than to feature him as a speaker?

As National Media Coordinator, I was slated to speak. This would not be
the first time. Some weeks back, my boss, George Nikolaieff, had decided
to hold a seminar at the press club for our workers in the regions
outside Almaty. I suggested a talk on journalistic ethics, which George
thought was a fine idea. Then I learned that I would be addressing,
among others, journalists paid a Burson-Marsteller salary to orchestrate
positive news coverage of privatization. When the day arrived, Almaty's
real journalists were shooed away from the press club and the doors were
locked. Introduced in glowing terms as a journalist published by the Los
Angeles Times and the Associated Press, I stood up, gave a vague,
noncommittal speech, and sat back down. I wondered briefly how I would
answer if anyone asked about the ethics of a journalist taking money
from a foreign P.R. company to praise the government, but it never came
up.

Nikolai Ushkov, the hard-drinking editor of his own newspaper in
Semipalatinsk, made the two-hour drive along snowy, decrepit roads to
witness my next attempt to hold forth on "ethics" and "integrity." He
did not think much of it. As he said at the seminar, and elaborated on
after a few shots of vodka at the evening banquet, my insistence that
journalists not take money from businessmen in return for favorable news
coverage was incorrect. "I don't like taking money for hidden
advertisements," he said. "But I need to."

The local authorities in Semipalatinsk had already crushed Ushkov's
first newspaper, Slovo ("The Word"), with an oppressive tax on
advertising. Backed by a local businessman, Ushkov launched a second
paper, Novoe Slovo ("The New Word"), but a few mornings after Ushkov
reported that modestly paid local officials were somehow able to afford
palatial homes in the suburbs, that same businessman turned up crying:
he'd been visited by the tax inspector. Ushkov had come to our seminar
with hopes of hearing how he could get financial backing; instead, he
heard me.

The morning after the banquet, as we treated our hangovers
Semipalatinsk-style -- alternating glasses of cheap red wine with
glasses of cheap instant coffee at a rate of about a glass every three
minutes -- Ushkov told me frankly what he needed: money. I gave him the
phone number for the Eurasia Foundation. The Eurasia Foundation does
what most people probably think of as foreign aid: it gives small grants
(usually less than $50,000) for concrete projects. But when I called
some days later to catch up, Ushkov told me that Novoe Slovo had been
shut down. "The [oblast governor] doesn't let me run my newspaper. He
says, 'Yes, you tell the truth, and I like that to an extent. But to
another extent...'"

"Did you call the Eurasia Foundation?" I asked.

"I got some very polite documents from them; they even sent me a
brochure. But they said that since I am a commercial newspaper, I
couldn't receive a kopeck," he said. Noting that the Eurasia Foundation
didn't seem to believe that his paper wasn't turning a profit, Ushkov
apologetically hastened to blame himself: "I probably didn't fill out
the forms correctly."

After my encounter with Ushkov, I began to look more critically at what
I was doing. I realized that for a negligible sum -- far less than half
of my yearly salary -- Ushkov could be the kind of journalist he
deserved to be and Semipalatinsk Oblast could have a real newspaper.
Instead, we wasted his time, and then bragged about it to the U.S.
government, which paid us to do it all over again.

And yet ... I was making more money, and working less, than I ever had
before. I had plenty of time to spend with Svetlana, and we had decided,
in the first flush of financial security, to have a child. And so I
resigned myself to being one of those useless yet well-paid people --
wedding coordinators, dog psychologists, and the like -- who clutter the
earth doing, well, doing nothing. I told myself I could live with that,
for now.

George asked me along to a meeting with Sarybay Kalmurzayev, the
chairman of the State Property Committee. Kalmurzayev was the
government's top privatization official, a tyrant who held the veto over
everything we did. That day we needed Kalmurzayev's approval on some
television ads.

I had hoped to see a hard sell: a team of executives oozing American
self-confidence, an exchange of business wit. Instead, Kalmurzayev
shouted and we groveled. We sat meekly through a vague tirade about our
incompetence. Then, when Kalmurzayev began ticking off demands, we
perked up and scribbled furiously on legal pads.

Demand: An end to all polling and sociological research.

Kalmurzayev had seen a newspaper poll indicating that Kazakhstanis
mistrusted privatization, so all of sociology had to go. He may have had
something there. We had spent thousands of AID dollars on polls of our
own but let no one see the results -- not even AID. Too often the
findings suggested that our propaganda campaign was failing.

Demand: A seminar for Kalmurzayev and his workers on the principles of
advertising and P.R.

"You're always holding seminars to help journalists, but what about us?"
he yelled. "We need training, too!"

Demand: Lots -- no, millions -- of pocket calendars.

When he had finished scribbling, George announced that we would be happy
to spend U.S. taxes to print pocket calendars and to teach Kalmurzayev's
Soviet-trained bureaucrats all of Madison Avenue's tricks. When
co-workers later asked in shocked if hushed tones why we were spending
$69,000 on five million pocket calendars for a country whose total
population was just seventeen million, George played what he considered
a trump card: "Kalmurzayev personally requested it."

As I considered this logic, I remembered a story about the earliest days
of the American humanitarian aid mission to Almaty. Like many of the new
post-Soviet states, Kazakhstan had gladly accepted offers of U.S. aid.
But instead of money, America sent hundreds of consultants like me.
Local officials were naturally disconcerted by the arrival of all these
well-intentioned foreigners with their fancy clothes, loud voices, and
bad Russian. So to smooth things over, a party was planned: the
Americans and Kazakhstanis would whoop it up at a water theme park.

George wore a pair of red swimming trunks that day. Those trunks caught
the eye of a local bureaucrat, who suggested a trade: his ratty
Soviet-shorts for George's snazzy red trunks. George declined. The
bureaucrat got angry: he wanted those trunks. George began to realize
that having an enemy in the local bureaucracy could jeopardize
Burson-Marsteller's lucrative U.S. government contract. There was
nothing left to do, he recounted to me sheepishly, but take off his
pants and hand them over.

Back at the press club, I popped the pilot of our soap opera, Iskateli
Schastya ("Seekers of Happiness"), into the VCR and settled into one of
my armchairs. I had once naively asked George how a soap opera could be
considered foreign aid. His answer: "It's not a soap opera, it's social
engineering."

The six-part miniseries, set and filmed in Almaty by a production
company called Ulkiza, follows two fictional families -- one Russian,
one Kazakh -- who are thrown together by circumstance, become partners,
and together achieve a certain level of economic security. Along the
way, privatization is shown in a glowing light. In the violent opening
scene, two thieves (part of an action subplot) sneak into a museum and
spray some sort of aerosol in a guard's face. When Kalmurzayev saw this
he hated it. "Why are you scaring people with your soap opera?" he
yelled.

I myself preferred earlier drafts of Ulkiza's script, as described to me
by an American colleague who had vetoed them. They featured nuclear
submarines surfacing in the ocean and fire-breathing dragons swooping
down from the skies, and were much too ambitious ever to be filmed. One
episode merits a fuller description: The Kazakh and Russian families
decide to build a simple house but can't figure out how. Suddenly a
hot-air balloon soars into view. The balloon has "Soros Foundation"
emblazoned on it. It lands. Americans leap out of the basket, build the
house, and sail away. The Kazakhstanis wave and cheer.

Anyone working for AID in Kazakhstan, directly or indirectly, was
entitled to a $94 per diem on top of his or her salary. The Latin term
is pure Duckspeak: only through euphemism can one argue that generously
paid people deserve an additional $94 every day, including weekends (or
34,310 a year) -- just for the hell of it. We at Burson, however, were
not getting the full AID-mandated $94; our per diem was a mere $25. AID
had allocated the money, but Burson-Marsteller had refused to claim it
for us.The reasoning here was that all per diems dropped to around $25
on days spent outside of Almaty, and Burson merely wanted to protect us
from the stress of an income that fluctuated with travel. In other
words, the company assumed that we would prefer to make about a fourth
of what we could in return for knowing exactly how little that amount
would be.

My fellow young Americans and I held a secret meeting. We wanted the $94
per diem. We discussed the possibility of a strike but opted instead for
a quieter barrage of memos and faxes. It succeeded, and it felt
strangely good: we had set a specific goal, worked toward it, and
achieved it in an empirically measurable way. For the first time since
my arrival, I felt like a real doer.

Then things turned ugly.

With George away on vacation, and me left in charge, a $75,000 wire
transfer from the States got lost between banks. Ad agencies came to be
paid; we asked for their patience. Newspaper ads were scheduled to go
out; we asked editors to carry the ads on credit. Then Mirhat Nigmatulin
came by. A short, dark man with a mustache, always in a black overcoat
and a black fedora, Nigmatulin was the very picture of the sleazy Soviet
bureaucrat: Boris from "Rocky and Bullwinkle." He was Kalmurzayev's
press secretary. We had dubbed him "Pig-matulin," and one of my
predecessors had placed a doll of a pig in a dress above the office door
to represent him.

Nigmatulin was furious. He stood beneath the pig in the dress and
screamed. What was this about us having no money? Did we know that we
owed the Butya ad agency -- an agency Nigmatulin had personally
recommended -- about $3,000? (How did he know this?) Or that we owed
Atamura -- the privatization-committee press -- $69,000 for the five
million pocket calendars they had printed? We owed him $69,000! Where
was it?

The Atamura contract was in the files. In addition to the printing and
paper costs, Atamura had included an author's fee, presumably for the
five-sentence text exhorting citizens to support privatization; office
rent; storage; transport; banking services; a "labor fund;" medical
insurance; "social" insurance; and a road-building fund. An additional 5
percent of this running total was added for an "investment fund." Then
an additional10 percent of the new total was added for "rush printing."
Then 10 percent of that was added as Atamura's profit margin. Grand
total: $69,000. Where was it?

Olga Kim, Burson's locally hired accountant, had been complaining for
weeks about Atamura's bizarre charges. Since when, she asked, did
printing a calendar also involve building a road, or insuring the
printer's employees, or paying their office rent? George had told her to
drop it. But, as she was quick to point out, this week George was gone,
and I was the boss.

I was still gaping at the contract when Olga laid the phone bill out in
front of me and solved a small mystery: Although we paid the bill
religiously, the phone company had briefly cut off our service in
September, October, November, and December. Why? Because we paid our
phone bills through Kalmurzayev's office, and he hadn't paid the bill.
An exasperated Olga had gone directly to the phone company with our
November bill of $6,662.40 -- only to learn that Kalmurzayev's office
had padded in $4,309.75 of fictitious charges. When Olga challenged
Kalmurzayev's accountant about this, he had sneered. "What, are you with
us or with them?"

After learning this, and in the wake of Nigmatulin's visit, the last
person I wanted to see was Kalmurzayev, but I had some more TV
commercials that needed his approval. These ads, filmed by an agency
called Charm, were silent shorts in the style of Charlie Chaplin
(Stalin's favorite), spoofing government-run businesses and then showing
those same businesses under new and idealized private ownership. In one,
a sullen woman at a Soviet dry cleaner accepts a suit coat, ditches the
cigarette dangling from her lips, dons a gas mask, and disappears for
hours. She returns with the wrong coat, and again with the wrong coat,
and again, until finally the customer gets his coat, shrugs it on, and
storms out, an iron mark burned into the back.

It was the iron mark that Kalmurzayev cited in vetoing the ad. "They
never left iron marks on your back at the Soviet dry cleaner," he said,
and then came out from behind his desk to take my arm. Examining the
sleeve of my tweed suit coat, he found a thread and began to tease it.
"No, the strings would be all loose and frayed, and they'd start coming
out, like this."

We began to argue. I noted that the ad was a farce -- no one wore gas
masks at the dry cleaner, right? -- and suddenly Kalmurzayev was
screaming that we owed Atamura $69,000 for the pocket calendars. "You
owe us $69,000!" We owed Butya, an agency he had personally recommended,
$3,000! What business did we have using an incompetent ad agency like
Charm when we hadn't even paid Butya? We should have hired Butya
instead! We were paying tens of thousands for a soap opera, but we had
hired an incompetent director! Where did we find that awful Ulkiza
company? "All of Kazakhstan is laughing at you! Why didn't you ask me?"
he said. Naming a prominent figure in Kazakhstan's film industry,
Kalmurzayev demanded that we reshoot the soap opera under that man's
direction. Moreover, Kalmurzayev stated, from now on he himself would
decide whom Burson hired to produce ads and shows. I started to reply,
but Kalmurzayev turned and left. End of interview.

Back at the office, Olga handed me Burson-Marsteller's contract with
Ulkiza. We were paying a whopping $110,000 for the soap opera, or
$18,333 per episode -- an outrageous amount. (By contrast, the economic
news program I was in charge of cost us only about $1,200 per episode.)
But Ulkiza's director was probably splitting the loot with friends in
the office of Nursultan Nazarbayev, the president of Kazakhstan. It was
thus best to let Ulkiza overcharge us, not merely for the cost-plus but
because it was worth courting the goodwill of anyone with such powerful
friends. It was a red-swimming-trunks situation.

Let us suppose that Burson's AID contract is up for extension (as it
soon would be). AID sends a man to check things out. He visits, say,
Kalmurzayev. What do they talk about? Probably the AID man asks
Kalmurzayev for an "honest assessment": Who among the Americans is doing
good work? Kalmurzayev cries, Burson-Marsteller! They are doing crucial
work, saving our economy! Give them more money!

And that is exactly what AID does.

Weeks later, when asked to document his expenses with receipts, the soap
opera director took deep offense. He would do no such thing, he said.
Fear of the tax inspector would keep his employees from admitting that
they had received such high salaries. When Olga pressed him he
grudgingly suggested that his employees might own up to having received
a tenth of their stated salaries. It was an awkward moment: the man had
effectively admitted to stealing not only from us but from his own
employees. This was later confirmed when Olga interviewed the actors,
some of whom broke into sobs when they learned how much they were
supposedly being paid.

Yes, almost everyone was winning: young Americans with fat pay-checks,
corporations with fat contracts, bureaucrats fattened by theft. Only
those involved abstractly were losing: the American taxpayer, whose
altruism had been twisted; and the Kazakhstanis, who were seeing Soviet
corruption thrive on American aid. Congress sets aside billions; AID
gives it to Americans. Proud U.S. government spokesmen inform the
Kazakhstanis that they will soon benefit from millions of dollars in
aid. Instead, they are saddled with hundreds of American "experts," and
to the humiliating injury of publicly receiving humanitarian aid is
added the insult of not even getting it. Feeling cheated, the
bureaucrats scheme, and soon they are steering what's left of the
foreign aid toward friends or relatives or themselves. [2]

[FOOTNOTE 2: In late April, President Nazarbayev dressed down Uras
Dzhandosov, head of the national bank, on television. Nazarbayev said
that some $60 million in foreign aid had been given to Kazakhstan, and
demanded of Dzhandosov, “How was this spent?” “Mostly this goes to
consultants,” Dzhandosov replied. “To what consultants?” Nazarbayev shot
back. “Sixty million?” This exchange is much discussed in Almaty today.]

I recall a grim breakfast at the home of William Courtney, the U.S.
ambassador to Kazakhstan. The Republicans had swept Congress, and Jesse
Helms was grousing about the bottomless "foreign financial rat-holes"
(e.g. my Maryland checking account) into which AID was shoveling money.
Courtney, troubled by privatization's plodding pace and low reputation,
called for radical suggestions from the sixty-odd "experts" gathered
there. We discussed, among other options, covertly lobbying the
program's opponents in Kazakhstan's parliament. At one point, Courtney
asked, "Should we shut privatization down? Or shut it down in half of
the country, as a demonstration?"

I wondered how the American ambassador would do that -- shut down
another government's number-one domestic policy.

The United States Information Service official then made an
announcement: "There's someone from ABC News in town, so please be
careful who you talk to!"

This anxious plea could be AID's motto. When senior AID staff in
Washington discussed how to fend off congressional hostility, they
concluded that dishonesty was the best policy. Notes from the meeting
describe their strategy as "delay, postpone, obfuscate, derail." Months
after that memo was made public, AID spokesman Jay Byrne still refused
to criticize it or to back away from the tactics it called for. "We have
a very clear strategy with regard to the [hostile] legislation, and that
is to defeat it," he explained to the Washington Post.

Titillating tales of foreign-aid idiocy have been trickling into
Washington for years. Lawrence Pope, the U.S. ambassador to Chad, once
intervened to keep AID from funding a study on "viability of the Chadian
State." In a State Department cable, he wondered, "What exactly would we
have done if they concluded that it wasn't [viable]?" The Moscow Times
has reported that AID spent $200,000 in 1994 to renovate an apartment
for the organization's director for Russia. It has spent money promoting
Haiti as a relocation destination for companies tired of shelling out
the U.S. minimum wage. It has used American tax dollars to build pay
toilets in Indonesia and to advertise golf courses in Ireland. Given the
ludicrous nature of such projects, it is little wonder that the
organization respects its own privacy; and Burson-Marsteller, which has
downplayed everything from the Exxon Valdez spill to the Bhopal disaster
to Argentina's Dirty War, is well equipped to serve in this regard.

Friday was dress-down day at the office, but some of us started earlier
in the week. So on the day the AID auditor arrived in a three-piece
pinstriped suit, looking serious and white and mid-fifties and
patrician, I was in jeans, and my female twenty-something colleagues
were dressed for after-work aerobics and jogging. He must have been
surprised at our youth, assuming, of course, he'd seen our salaries.

He first interviewed our business manager, Naya Kenman, a woman in her
twenties wearing a gray sweat-shirt and black shorts over tights. They
had barely begun when a co-worker strolled in, picked up the telephone,
dialed fourteen digits, and said, "Mommy? Hi, it's me!" They auditor's
eyebrows rose. Naya spoke more loudly and tried to draw his attention to
the hardships we had imposed on ourselves in the name of
cost-efficiency. She explained how Burson-Marsteller had arranged with
DHL to send a twice-monthly package from Washington, because
consolidating all mail was much cheaper than sending documents
piecemeal.

On cue, the DHL man arrived, a huge package in his arms. In his wake was
another co-worker, clapping excitedly. "It's my L.L. Bean clothes,
they're here!" she cried, tearing into the package to pull out a sweater
and a parka. Other colleagues, unaware of the auditor, rushed to see if
their orders had come in, too. I hoped our man from Ust Kamenogorsk
wouldn't start talking about the Soloflex he was planning to order from
the States, though he at least intended to pay for shipment.

George then joined the audit interview. The auditor asked about a letter
given AID contractors that allowed us to fly for reduced rates on the
government airlines. How much, he asked, was this saving taxpayers? Very
much, answered Naya, and then she put forth an illustration: "For
example, I'm taking a vacation, flying part of the distance inside
Kazakhstan on a cheap ticket, and I'm saving hundreds!" To the auditor's
queer expression, George added, "She probably shouldn't be doing that,
should she?"

No, the auditor said, she shouldn't.

Despite all this, the interview lasted only about an hour. There was no
painstaking examination of documents, no double-checking the math or the
bids. Nothing came of it, nor of the memos that I and others (including
Naya) eventually wrote to our superiors. According to a 1996 report by
JNA Associates, a consulting firm studying AID's work in the former
Soviet Union, no omnibus AID contract has ever had a full financial
audit.

Shortly thereafter, I quit. The Los Angeles Times had offered me a job
covering the war in Chechnya, for a salary that was about one-third what
I was making in Kazakhstan. Svetlana and I discussed it for all of ten
minutes before we decided. Burson-Marsteller wished me well and offered,
should I change my mind, to take me back. They have since made overtures
to hire me on three separate occasions, to work in either Almaty or
Moscow.

Those offers have not been entirely unattractive: I liked many of the
people I worked with at Burson, and the company always treated me
fairly. We made some wonderful new friends in Kazakhstan, took French
lessons and tennis lessons and drawing lessons, traveled around the
world, ate out every night, and still banked about $4,000 every month.
That's not bad.

But then there are the red swimming trunks. When I think of them I see
the American foreign-aid mission for the farce that it is, and I know
I've made the right decision. All three of the principal actors are
here, cast in truth's cruel light: the grasping bureaucrat, who can be
fun to pal around with but is usually after something; the American
consultant, whose first loyalty is to his corporation and who sees
keeping the locals fat and happy as the best measure of success. And
hovering over both is AID, ready to award its multimillions once the
swimming trunks are handed over. Foreign adviser and local bureaucrat,
American and Kazakhstani zip past each other on the water slides,
laughing and waving and pledging eternal friendship, playing nice for
befuddled old Uncle Sam, who smiles and waves back and keeps on sending
the money.

***********


 

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