Thursday, July 19, 2018
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PolitiFact: Paul exaggerates degree of foreign aid theft

The statement

"We give (foreign aid) to developing countries, and 70 percent of it's stolen off the top."

Sen. Rand Paul, R-Ky., Jan. 11 in a Senate confirmation hearing

The ruling

There is no question that the aid bucket can leak. Sergio Gor, Paul's spokesman, told us Paul "was pointing out how often foreign aid is stolen."

But neither Paul's office nor any expert we reached could point to any study that found that 70 percent of what we give winds up stolen.

Gor sent us an article by noted aid researcher William Easterly at New York University that argued something altogether different.

Easterly wrote that as of 2008, 76 percent of all American aid went to countries judged by the private consulting group PRS to be most corrupt. Does that mean all that money was lost?

No. The corruption ranking is an indirect measure at best. It aims to help businesses figure out the risk of investing in a country and puts the most weight on patronage, nepotism and "suspiciously close ties between politics and business."

Easterly himself told us that his analysis is "suggestive" but in no way conclusive that 70 percent of aid money is stolen.

"It is inherently impossible to calculate the number 'x percent of aid is stolen' from the numbers that I use on how much aid goes to corrupt countries," Easterly said. "The actual stealing of aid happens mostly in secret, using many tricks intended to deceive any outside observers. So nobody knows how much is actually stolen."

Easterly wrote recently that in the name of fighting terrorism, the United States has "redirected aid money to some of the most autocratic, corrupt, and oppressive regimes in the world" such as Uzbekistan, Ethiopia and Uganda. He argued that this increased the risk of money going astray, but again, he said he couldn't quantify the diversion.

Morten Broberg, a law professor at Copenhagen University, focuses on corruption in development assistance and humanitarian aid.

"I do not recall coming across any detailed and convincing statistics," Broberg told us.

Broberg called the 70 percent figure incorrect.

Gor, Paul's spokesman, told us "there have been entire projects which have been fraudulently executed." He pointed to an op-ed about Nigeria that claimed, without any documentation, that hundreds of billions of dollars had been stolen from the government since 1960, an amount nearly equal to the foreign aid donors had sent.

He also cited an Economist article that said that a year after Western governments had given the African nation of Malawi $1.2 billion, "corrupt officials, businessmen and politicians pinched at least $30 million from the Malawian treasury."

If true, that would be a lot of money, but it would amount to about 2.5 percent of the total aid — not 70 percent.

Providing aid in war zones is particularly susceptible to fraud. Government auditors for the U.S. Agency for International Development investigated 25 cases of fraud and corruption within the humanitarian aid effort in Syria. In one case, a Turkish vendor had replaced lentils with salt in food ration kits for Syrians running from the fighting. Out of $835 million spent, they said their investigations "resulted in more than $11.5 million in savings."

While theft is real, and possibly extreme on individual projects, it is not on the scale Paul asserted.

We rate this claim False.

Edited for print. Read the full version at PolitiFact.com.

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