Washington, D.C. – Citizens Against Government Waste (CAGW), in a letter to the chief executive officer of the Millennium Challenge Corporation (MCC) today, expressed ongoing concern with the use of taxpayer dollars to fund certain foreign aid programs, particularly in Mongolia.

MCC grants are conditional on recipient nations showing progress in areas such as political and economic reforms, stopping corruption, and respecting the rule of law.  While Mongolia’s peaceful revolution in 1990 brought democracy to its citizens, it appears to be backsliding to its former communist ways.  MCC’s 2008 Indicator Scorecard shows deterioration in several areas such as controlling corruption and respecting the rule of law.  Yet, the country is scheduled to receive a $285 million MCC grant to fund railroad infrastructure improvements.  The grant also provides funds to strengthen the protection of property rights; unfortunately, the Government of Mongolia has since proposed a law that would nationalize Western assets.

“It is imperative that the United States communicate that future assistance for Mongolia will not go forward without significant reforms.  One way to do that is for the MCC to make sure Western investment is being encouraged and property rights are protected.  Until it demonstrates a commitment to reducing corruption and respecting the rule of law, Mongolia’s MCC grant should be suspended,” CAGW President Thomas A. Schatz stated. 

By ignoring its own established conditions for recipients of U.S. aid, the MCC has not differentiated itself from other programs that provide assistance, but then turn their attention elsewhere.  The MCC must take steps to eliminate corruption and enforce property rights protections in Mongolia.

“The MCC cannot miss out on a golden opportunity to send a message to all grant recipients, present and prospective, that the U.S. is serious about enforcing the terms of its aid packages,” said Schatz.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.