Global Policy Forum

By Paul Richter

Washington works to improve and broaden the democracy program, which has been criticized as wasteful and corrupt.

The Bush administration is overhauling a controversial democracy-promotion program for Cuba in hopes of tightening financial controls and broadening the effort beyond the anti-Castro groups in Florida that have dominated it.

The program's goal is to help Cuban dissidents and spread ideas to hasten a shift away from the Castro government. But critics have charged that the 12-year-old program has been wasteful and done less for those in Cuba than for the Cuban American-led groups around Miami that receive most of the grant money.

Now the U.S. Agency for International Development, which oversees the program, is trying to persuade Central European and Latin American nongovernmental groups to join U.S. organizations in applying for its grants. A chief goal, officials say, is to spend most of the $45-million budget on communications equipment, such as cellphones and Internet gear, that possibly could be smuggled into Cuba to increase its people's exposure to the outside world.

The transition from Fidel Castro's leadership to that of his brother Raul "is a unique moment" for Cubans, said Jose Cardenas, who heads the USAID program for the island nation. "We think it presents an opportunity for real, profound change in Cuba. "Frankly, there's a risk that the regime will confiscate a lot of the stuff. But that's a risk we're willing to take," Cardenas said, because of the importance of trying to influence public opinion at a crucial point.

Some critics, though welcoming change, remain skeptical that the program can bring much to the Caribbean island. The program was criticized in a November 2006 Government Accountability Office report that found it lacked proper oversight. Groups funded by the program made questionable purchases, including cashmere sweaters and Godiva chocolates, and 92% of its grants had been awarded without competitive bids, evidence of "internal control deficiencies," the GAO found.

In March, the Cuban American National Foundation, a longtime anti-Castro group, reported that four of the program's largest grant recipients used only 17% of the money in direct assistance to Cubans. The remainder went to salaries, research, travel and other operating expenses. The foundation urged in its report that the program spend more on direct aid, including cash assistance. It also recommended that groups receiving grants be required to have other sources of revenue, to avoid the appearance of being a creature of the U.S. government.

The effort suffered a further blow in March when a White House aide resigned after the disclosure that the FBI was investigating him for allegedly misusing funds intended to promote democracy in Cuba. Felipe Sixto, who was special assistant to President Bush for intergovernmental affairs, formerly worked with the Center for a Free Cuba, a recipient of USAID grants.

Cardenas, of USAID, said that the agency reviewed its procedures in light of the GAO report, and will rely on competitive bids and increase financial monitoring of the grants. USAID is hoping to receive bids from Central European and Latin American nongovernmental groups that have experience with dissidents in authoritarian societies, Cardenas said. "They know how to evade the authoritarian governments' efforts to control your behavior," he said.

And because they are not U.S. organizations, it will be easier for their staff members to enter Cuba and make contact with people, he said. He acknowledged that these groups face serious obstacles in trying to smuggle gear to Cubans when intelligence officials are watching. Cardenas also hinted that USAID may change its policy against distributing cash to Cubans, which was based on concern over accountability. Despite criticism, Congress has tripled the budget of the democracy promotion program, Cardenas noted.

Francisco J. Hernandez, president of the Cuban American National Foundation, said in an interview that his group was "quite positive" about USAID's planned changes. But others have misgivings. Rep. Jeff Flake (R-Ariz.), a leading advocate of expanded contacts with Cuba, praised the use of competitive bidding, but remained skeptical overall. Lifting travel restrictions would be more effective, he said.