German development NGO suspected of embezzlement in Afghanistan | Germany| News and in-depth reporting from Berlin and beyond | DW | 21.01.2011
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German development NGO suspected of embezzlement in Afghanistan

German development agency AGEF is currently under investigation in Afghanistan for failing to pay its employees. A closer look at the company reveals a string of suspicious activity.

Afghan man saws wood

AGEF has untertaken several projects in Afghanistan

Afghan prosecutors are investigating a German company providing development services for failing to pay its Afghan employees, charges which threaten Germany's prized credibility in the country's civilian reconstruction.

AGEF, the Association of Experts in the Fields of Migration and Development Cooperation, is a non-profit limited company based in Berlin with multiple offices abroad, including one in Kabul. It specializes in the repatriation of Afghan refugees, actively sought by the German government to help rebuild the war-torn country.

But the German AGEF employees have apparently abandoned the Kabul offices, leaving behind a few Afghan employees and empty bank accounts.

Afghan investigation

Afghan refugees with carts of possessions

AGEF's speciality is returning refugees to Afghanistan

Afghanistan's attorney general, Mohammed Ishaq Aloko, has taken action, opening an official preliminary investigation into the company.

"We know thus far that several Afghan employees of AGEF have reported the company," said Amanullah Eiman, spokesman for the attorney general. "They say that AGEF isn't paying any more. The German employees are no longer there."

In AGEF’s Kabul office, the phones are ringing off the hook. Angry Afghans living in Germany are demanding to know where the money is that the German government had promised them in return for moving back to their homeland. But the few employees left at the office have no answers to give.

Ministry audits company

In 2010, AGEF received about 6.5 million euros ($8.8 million) from various ministries in the German government, predominantly for development projects in Iraq and Afghanistan.

The company was already mired in scandal last November, when a German newspaper reported that it had embezzled subsidies paid by the federal government.

German Development Minister Dirk Niebel said he took the allegations "very seriously," sending inspectors to audit the company's documents. But sources in the ministry said the audit was sluggish, as receipts and original documents appeared to be missing.

Dirk Niebel

Niebel said he took the accusations against AGEF 'very seriously'

An internal report sent to Niebel and uncovered by German journalists concluded: "There exists the lingering suspicion that AGEF diverted taxpayer money from its intended purpose."

An investigation into the government's methods of checking AGEF's progress in repatriating refugees also revealed poor oversight, according to auditing experts.

The agency responsible for the subsidies is a branch of the Federal Employment Agency, which sent a single employee to Kabul in 2006. He arrived helplessly overwhelmed, charged with inspecting three years of work and multimillion-euro budgets in a mere three days.

Scandinavians sever AGEF ties

AGEF has a troubled history with other European governments as well. Both the Swedish and Danish governments stopped working with the company in 2009.

"We felt that the progress made under the older grant and the results achieved were not fully in accordance with what we had hoped for, and no longer corresponding with the objectives for Danish assistance to northern Iraq," said Thomas Thomsen, official with the Danish Development Ministry.

A group of Danish diplomats discovered unusual bookkeeping methods on a November 2008 visit to the AGEF office in Erbil, northern Iraq. The headquarters in Berlin transferred money to only two accounts. Standard practice for aid organizations is to keep two accounts for each individual project - one in euros and one in US dollars - so that incoming and outgoing transactions are easier to track.

View of Erbil, Iraq

Danish diplomats inspected AGEF's work in Erbil, Iraq

The visit resulted in a meeting on the evening of November 20, 2008 between a representative of the Danish embassy in Iraq and the acting consul general of the German embassy's Erbil field office. The Danish representative expressed the suspicion - in diplomatic words - that AGEF may have been involved in criminal activities.

The German diplomat cabled a report on the meeting to Germany, but no consequences resulted.

Company head denies wrongdoing

AGEF chief Klaus Dünnhaupt, who is considered in the Development Ministry to be well-connected, denies any wrongdoing on behalf of the company.

"We've made clear our opinion that these accusations are not based on truth, but rather that they rely on information aimed at discrediting our company," Dünnhaupt said.

The Berlin public prosecutor's office is currently also investigating any unlawful activity done by the company.

Authors: Jürgen Webermann, Kabul; Franz Feyder, Hamburg / acb
Editor: Rob Turner

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