Key South East Asia Grants — Part 1: PREDICT-2 (USAID) and the U.S. Sanctions over Myanmar and Laos
This article is one of three in the series reviewing key South East Asia grants, with a particular focus over Myanmar, Laos and Vietnam:
1. PREDICT-2 (USAID) and the U.S. Sanctions over Myanmar and Laos
2. Oddities in EHA R01 grant AI110964 (NIH)
3. High stakes sampling in Myanmar, Laos and Vietnam
Findings:
- In January 2018, USAID signed a Contracting Agreement with LBVD (Livestock Breeding and Veterinary Department), a Myanmar government entity, for testing of animal samples collected by the Smithsonian Institution in that country, to be completed by March 2019.
- Shortly after, it became quickly clear that direct payment to LBVD may be impossible under the then applicable US sanctions over Myanmar and the particular attention paid by the White House to these.
- This triggered the discussion and risk-evaluation, by PREDICT legal counsel and PREDICT head-office (UC Davis), of what appears to be US sanctions avoidance schemes.
- Eventually the scheme retained by April 2018 was one of those discussed, whereby an inflated salary was to be paid to an employee of LBVD, seemingly off-boarded to USAID, who would work within LBVD lab and would share her salary with other LBVD employees involved in testing.
- At the same time, all necessary equipments and materials for testing (freezers, reagent, etc) were to be paid for under the USAID grant and given to LBVD.
- The final scheme did raise concerns within PREDICT, but was retained in the absence of any better option.
- Testing of the Smithsonian animal samples did happen at LBVD in 2018/19, exactly as planned.
- In the same way, human samples were tested at the Department of Medical Research (DMR) laboratory under the Myanmar Ministry of Health and Sports (MOHS). This involved buying equipment and reagents for the laboratory, plus what looks like a salary.
- Additionally, various carry-overs of unrelated non-disbursed FY 2017 funds from the Global Virome Project and Metabiota were used by USAID to maintain the PREDICT-2 disbursement of funds to another TVPA country, Laos, to the desired level in FY 2018.
As such, various aspects may be worth investigating in relation to PREDICT-2 activities in 2018/19 in TVPA level-3 countries, normally subject to US Sanctions:
- Myanmar: LBVD Laboratory
(1) Possible false representations (i) in the Contracting Agreement with LBVD and (ii) in an associated ‘letter of assurance’ signed by LBVD and exhibited by Jonna Mazet in support of the retained avoidance scheme (the ‘agreeable solution’).
(2) Contemplated and actual payment schemes possibly in violation of US special sanctions on Burma.
(3) Contemplated and actual payment schemes possibly in violation of PREDICT-2 regulations. - Myanmar: DMR Laboratory
(1) Payments possibly in violation of US special sanctions on Burma.
(2) Payments possibly in violation of PREDICT-2 regulations. - Laos: FY 2018 payments:
Possible avoidance of US sanctions by transferring supposedly exempt carry-over of FY 2017 funds from different programs (GVP) and different entities (Metabiota) towards PREDICT activities in Laos.
Last, there is some intriguing UC Davis/USAID discussion, in response to concerns expressed by the Defense Threat Reduction Agency (DoD), as to whether samples should be kept or destroyed in those foreign labs that may not be able to maintain acceptable biosafety standards after the planned end of the cooperation under the PREDICT-2 program in 2019/20. That discussion includes a recommendation to ‘destroy name or identifying information’. The exact meaning of that recommendation should also be clarified.
1. Introduction: PREDICT-2
1.1 PREDICT-2 timeline and its ramping-down
PREDICT-2 was a 5-year USAID program that was started in September 2014 and was supposed to end in September 2019. It received a first 6-month extension for some winding down work, followed by a second 6-month extension to help with COVID frontline response, taking the program to a full close in September 2020.
The predecessor to PREDICT-2 was PREDICT-1, which stretched from 2009 to 2014 [item 1].
PREDICT-1 was funded by a $138mln grant from USAID. PREDICT-2 received another $70mln, for a total of $210mln. PREDICT worked through core implementing partners, with UC Davis responsible for the supervision and administration, and various US organisations active in specific countries, such as the Smithsonian Institution in Myanmar, or EcoHealth (EHA) Alliance in China and Thailand (amongst others).
Specific work in these countries by entities such as the Smithsonian, EHA or the Wildlife Conservation Society (WCS) may receive funding not only from PREDICT, but also from some grants from the NIH or from other institutions or fundations.
While PREDICT-1 included countries on North and South Americas, PREDICT-2 was focussed mostly on Africa and Asia:
The last year of the funded sampling and lab work under PREDICT-2 stretched from September 2018 to September 2019, even after the 2020 extensions, as any extension is meant for mostly administrative work and not core ‘wet work’. So, as it prepared to wind down, the PREDICT-2 managers had to make sure that all samples accumulated were tested, preferably before March 2019, giving another 6 months to process the results before the initially scheduled end of Sep 2019.
Practically, it meant that the last 18 months or so to September 2019 were very much focussed on delivering local testing capabilities in many countries, so as to be able to first test all samples accumulated over years of field work a bit ahead of the programmed end of laboratory work in September 2019, but also as part of the legacy of PREDICT.
Delivering local testing capabilities was also essential for the larger objectives and the legacy of the PREDICT program after termination. By training local people and actively developing local testing capabilities, these countries should be able to rely on their own capacities once PREDICT-2 had ran its term. As part of that plan, all equipments for instance were meant to vest (stay) with the in-country partners, unless explicitly recommended otherwise, instead of remaining the property of USAID [item 2].
1.2 PREDICT-2 as springboard for the GVP
Towards the end of PREDICT-2, in 2017–19, USAID and the agencies involved with PREDICT-2 were advocating a very ambitious $1.2 bln 10-year successor to PREDICT-2, the Global Virome Project (GVP).
In that context, PREDICT-2 was recast as a proof-of-concept of viral-discovery in the wild that the GVP would take to a truly industrialised stage. The first roll out of the GVP was supposed to happen in China (in truth, playing a catch-up game in that country as China was anyway forging ahead with its own systematic sampling / sequencing) and Thailand [item 3].
Dennis Carroll (head of the Emerging Threats Division of USAID who helped create PREDICT), Jonna Mazet (UC Davis, P.I. on PREDICT-2) and Peter Daszak (EcoHealth Alliance, P.I. on a PREDICT-2 subcontract in China) were the main initiators and proponents of the GVP.
The GVP stakes were enormous: should they be able to get it implemented, the $210 mln of PREDICT would pale in comparison. In particular this would be a total game-changer for EcoHealth Alliance and Peter Daszak, which by 2018 was facing a funding gap with the programmed end of PREDICT.
Daszak, Carroll and Mazet first tried to raise interest for the GVP in the US (including from the DoD to which they tried to sell the potential capacity of the GVP to help detect man-made pathogens), as well as from international partners. The GVP marketing eventually culminated with an article in Science in February 2018, just after its official launch, extolling the supposed benefits of the GVP [footnote 1].
1.3 PREDICT-2 activities in Myanmar
In the case of Myanmar, the Smithsonian Institution is the institution managing PREDICT-2 project there, having been active in the country for more than 20 years.
The PREDICT web site, in a write-up written in late 2018 (start of the 5th year of PREDICT-2), explains that:
‘The Myanmar government has been a critical partner throughout the [PREDICT] project, working directly with the Smithsonian team to conduct field surveillance, train scientists and analyze samples in-country’:
One main focus of these studies was the bat populations of the various karstic cave systems in Myanmar (Hpa-An, North Yangon and Schwebo) [items 4, 5].
1.4 Development of local capacity in Myanmar:
As part of of its programs, PREDICT tried as much as it could to develop local capacities with regards to sample testing for all the target ‘viral families’.
The Oct 2017 semi-annual report of PREDICT-2 shows that such collaboration with Myanmar was still in the initial training phase at that time (the next two phases being ‘limited testing’ and ‘testing all viral families’) [item 5].
However, by 2019, 488 people had been trained in One Health skills (including 102 government employees) and the last phase of the testing capacity-building had been reached (‘Testing 4 viral families’).
2. PREDICT-2 governmental partners in Myanmar
2.1 Implementing partners in Myanmar:
As of Oct 2017, PREDICT/Myanmar was working with the laboratories of two ‘implementing partners’ for specimen testing [item 6]. These two laboratories are government entities under their respective Myanmar ministries.
- The Department of Medical Research (DMR) under the Ministry of Health and Sports (MOHS), for human specimen testing.
- The Livestock Breeding and Veterinary Department (LBVD) under the Ministry of Agriculture, Livestock and Irrigation (MOALI), for wildlife and livestock specimen testing.
PREDICT was also reach out to a third ministry, the Myanmar Ministry of Natural Resources and Environmental Conservation (MONREC). In the end the PREDICT team was ‘regarded by the [three] ministries as an integral partner in developing plans for zoonotic infectious disease control and response’ [source: Final country report — Myanmar, p. 14].
2.2 Letter of Agreement with LBVD (January 2017):
In January 2017, PREDICT attended a signing ceremony for a Letter of Agreement (LoA) with LBVD, so as to start planning for viral testing of animal samples [item 7].
Such Letter of Agreement signals the intention to finalize and later sign a proper Contracting Agreement.
2.3. Contracting Agreement with LBVD (January 2018):
As of March 2017, the PREDICT activities tracker states ‘Subaward for testing in development’, meaning that no formal agreement for local testing had yet been signed yet [item 8]:
Eventually, in January 2018, a Contracting Agreement was signed with LBVD [item 9]. That agreement covers March 2018 to Sep 2018 (remaining of Year 4) and details the agreed on-boarding of LBVD employee, Dr Wai Zin, by the Smithsonian.
That agreement was ‘maintained’ in 2019, meaning that it had been extended to Year-5 and hence to the planned term of PREDICT-2:
2.4 Agreements with the Department of Medical Research (DMR) of the Ministry of Health and Sports (MOHS)
While there was a Letter of Agreement followed by a Contracting Agreement with LBVD, for the testing of animal samples, the relevant FOI’d emails do not detail any similar agreement with the Department of Medical Research of the Ministry of Health and Sports, the other ‘implementing partner’ which was designated for the testing of human samples.
It is therefore not clear whether an agreement concerning the DMR was reached or not.
3. PREDICT-2 testing in Myanmar
3.1 Samples to be tested
As of Oct 2017, about 2,000 wildlife (and livestocks) samples were waiting to be tested for viral families:
By end 2017, the number of wildlife samples had increased to around 2,400, as field sampling was still very much ongoing at that time:
“Smithsonian has drawn about 2,400 Wildlife samples, turned them over to LVBD and provided LVBD with reagents, training and TA.
LVBD has agreed to test the samples in its Yangon lab. LVBD and Smithsonian agree that the project should support LVBD’s additional workload and costs in some way.
Smithsonian understands that they are prohibited from paying LVBD because of Burma special provisions.”[item 46, dated 28 Feb 2018, typos in original: LVBD for LBVD]
On top of this, human specimens needed to be tested (by the Department of Medical Research of the Ministry of Health and Sports).
3.2 Target Timelines for Sampling and Testing
The timeline that emerges from various FOI’d documents is the following:
- Sampling started in May 2016 and closed in August 2018.
- Testing of all samples had to start in March 2018 and finish in March 2019, after which PREDICT-2 would start winding down its in-country activities
- PREDICT-2 primary award was to mature in September 2019.
“For wildlife, a total of about 4,850 PCR tests will need to be analyzed/tested by MARCH 2019, whereas all physical sample collection in the field will need to be completed no later than SEPT, 2018. As Dr. Ohnmar has mentioned, LBVD has committed to run about 2400 to 3600 PCR tests based on their current staff (originally a contracted individual) and equipment capacity. We have outlined a work-plan with LBVD input for how they may achieve this goal with our original intent to get started with analysis/testing no later than MARCH 2018.“
[item 45, dated 28 Feb 2018]
3.3 Unexpected Constraints:
3.3.a Regulatory constraints: TVPA
The Trafficking Victims Protection Act (TVPA) of year 2000 established an annual Trafficking in Persons (TIP) Report, in order to offer a status update on the state of global human trafficking. The TIP is published by the U.S. State Department’s TIP Office and is the basis of possible sanctions under the TVPA.
As soon as early 2018, just after the signature of the Contracting Agreement with LBVD, it became rather clear that TVPA restrictions soon would likely affect the ability to conduct work in some of the target countries (China, Cambodia, Laos and Myanmar) [footnote 2].
These constraints effectively came at the worst possible time for PREDICT, as 2018–19 was exactly when a large collection of samples urgently needed to be processed in Myanmar and Laos before termination of PREDICT activities there.
In Myanmar, samples were supposed to be processed by LBVD and the DMR, which were directly affected by the US special restrictions, as entities controlled by the Myanmar government (both are attached to ministries).
In Nov & Dec 2018, the threats became very clear, as USAID started circulating the latest updates on the US government position on USAID grants:
On April 14, 2019, the TVPA issue is raised urgently via Andrew P. Clement USAID) with EHA and the PREDICT-2 team for China, Laos and Myanmar:
On May 6, 2019, Andrew Clement (USAID) circulated further emails raising the strong possibility of not being able to disburse FY 2018 funds in TVPA countries:
On May 9, 2019, Elisabeth Leasure (Financial Operations Manager) reiterated to Andrew Clement the critical importance of fully-funding implementing partners in TVPA countries, despite the restrictions [item 51]:
On May 14/15, 2019, emails show that USAID is getting more and more concerned about TVPA countries, with the PREDICT Executive Board being told that one is ‘fairly certain we cannot use new money/subs on TVPA countries’ [item 16].
Peter Daszak also expressed his concerns for the conclusion of his PREDICT-2 activities in China (where he is P.I. on a subcontract), given that USAID that it does not want anybody meeting with TVPA governments or ‘doing anything to benefit TVPA listed countries’ [item 16].
3.3.b Funding constraints: The 2018–2019 shutdown
A secondary but aggravating constraint was the government shutdown (‘lapse in appropriation’), from December 22, 2018 to January 25, 2019:
That constraint was only temporary and limited, and should not be confused with the TVPA/TIP issue. However, just as with the TVPA/TIP, it came at the worst possible time, and with political connotations, when PREDICT-2 needed to urgently fund the testing of their stock of samples in many countries.
Together the TVPA and the government shutdown would have likely been the cause of some bouts of bitterness and resentment against the Republican government at the time, by US scientists involved in USAID/PREDICT-2 work.
3.4 Preparation: Training and gift of testing equipment:
As part of the standard PREDICT approach of creating a domestic ability to conduct field-sampling and then to test the samples, USAID:
- trained field samplers,
- organized for the training of LBVD and DMR lab technicians in UC Davis as well as in the Pasteur Institute of Cambodia.,
- gave LBVD and DMR ‘deep freezers, thermocyclers, gel electrophoresis units, and all of the necessary items to conduct PREDICT project testing’,
- created a supply chain which ‘benefited local local suppliers in Myanmar which continue to be used by the respective labs post-PREDICT’.
The PREDICT project enhanced Myanmar’s national laboratory systems capability to conduct zoonotic disease detection in two facilities including the Ministry of Health and Sports’ Department of Medical Research as well as the Ministry of Livestock, Agriculture, and Irrigation’s Livestock Breeding and Veterinary Department.
Scientists from both facilities were sent to the University of California, Davis as well as the Pasteur Institute in Cambodia, respectively, for advanced training in PREDICT diagnostic protocols.
Through PREDICT, both facilities received deep freezers, thermocyclers, gel electrophoresis units, and all of the necessary items to conduct PREDICT project testing. Supply chains were created that benefitted local suppliers in Myanmar which continue to be used by the respective labs post-PREDICT.
source: PREDICT Myanmar Country report (2020), p. 14
A memo dated 26 April 2018, shows that LBVD lab was then up and running, and the testing recently started (with around about 12% of samples tested by then), which is in line with the stated start date of around March 2018.
The chart below was discussed at the semi annual consortium meeting in Napa. It shows the shows the proportion of number of individuals test[s] completed / the number of individuals sampled to date to show testing progress in each country. We discussed tracking progress monthly on our join calls to assess each country’s ability to complete the testing by March 30, 2019, and to strategize and help labs that are behind.
[..]
Myanmar — Dry season sampling completed in January. Out sampling now. LVBD lab is up and running.source: PROD012.pdf, p. 216–217. Typo in original: LVBD for LBVD.
As noted before, by 2019, 488 people had been trained in One Health skills (including 102 government employees) and the last phase of the testing capacity-building had been reached [item 5b].
3.5 Actual Testing done:
3.5.a Division of work:
Some testing of animal samples was done at the UC Davis One Health Institute Laboratory in California [item below]. Practically, following standard PREDICT procedures, many samples were split up with one part going to UC Davis in the US for testing, and the other one part to be tested in Myanmar. This allowed for checks of the testing results, while fostering local capabilities and respecting local ‘ownership’ of genetic materials.
‘Bat sampling was performed by trained field personnel in collaboration with Myanmar’s Ministry of Agriculture, Livestock and Irrigation (MOALI) and Ministry of Natural Resources and Environmental Conservation (MONREC). [..]
Bats were humanely trapped, handled, and sampled from according to protocols approved by the Institutional Animal Care and Use Committee of the University of California at Davis (Protocol 19300) and Smithsonian Institution (Protocol 16–05) and with approvals from MOALI and MONREC. [..]
Sample testing was performed at the UC Davis One Health Institute Laboratory and the Veterinary Diagnostic Laboratory, Livestock, Breeding, and Veterinary Department (LBVD) in Myanmar.’
source: Detection of novel coronaviruses in bats in Myanmar, https://doi.org/10.1371/journal.pone.0230802
3.5.b Testing done in Myanmar:
Animal samples testing done by LBVD :
The 2020 country report for Myanmar gives a full summary of the testing done:
Human samples testing done by DMR
PREDICT partner laboratory MOHS’s Department of Medical Research (DMR) safely tested oral swabs from 607 people, including 20 from Hmawbi Hospital in North Yangon, and 587 from members of the community (305 Hpa-An, 280 North Yangon).
A total of 3,642 individual tests were conducted to detect priority viral families (Coronaviridae, Filoviridae, Orthomyxoviridae, and Paramyxoviridae) using consensus PCR [source: FINAL+REPORT+COUNTRY-MYANMAR-FULL.pdf, p. 10].
3.5.c Publication:
The results of the PREDICT-2 bats sampling in Myanmar were published in PLOS One in April 2020: ‘Detection of novel coronaviruses in bats in Myanmar’, Valitutto et al. Three novel alphacoronaviruses and three novel betacoronaviruses were discovered in the samples taken in 2018.
[Note: Valitutto et al. (2020) focusses purely on the bats samples, not on the other animals samples, or on human testing.]
4. Regulatory Avoidance Discussions:
4.1 What the emails show:
This section gives a summary of the findings from the FOI’d emails with regard to the proposed avoidance schemes. Annex A has a more detailed review of the key emails.
4.1.a Contracting Agreement signed in January 2018:
- A Contracting Agreement dated 17 January 2018 was signed between LBVD (Myanmar), Dr Ohnmar Aung as Country Coordinator for PREDICT Myanmar, and Marc Valitutto as Country Liaison for PREDICT Myanmar under the Smithsonian’s Global Health Program [item 9].
- The Contracting Agreement lay out the main element of a scheme:
(a) a separate contract to be signed between the Smithsonian and Dr Wai Zin Thein,
(b) Dr Wai Zin ceasing employment at LBVD for the duration of that contract,
(c) Dr Wai Zin being paid $1,400 p/m,
(d) that salary being described as consistent with other laboratory scientists at Dr. Wai’s level doing similar work.
‘SALARY AMOUNT: The salary of $1400/month is consistent with other laboratory scientists at Dr. Wai’s level and for work being performed. Dr. Wai will not be paid at a level higher than other laboratory scientists conducting similar work at LBVD.’
source: item 9
4.1.b Original scheme considered:
The emails clarify the actual scheme behind that Contracting Agreement, seemingly designed to avoid special US restrictions to Burma/Myanmar under the TVPA.
In essence the idea is to:
- Take an employee (Dr. Wai Zin) of LBVD (Livestock Breeding and Veterinary Department, Ministry of Agriculture) lab in Yangon (Myanmar) temporarily off the government paybook, to conduct sample analysis for the PREDICT Myanmar project from 1 March 2018 to 30 Sep 2018, within LBVD facilities [item 9].
- Have the Smithsonian Institution pay that employee about 5 times what he/she would normally earn in his/her government position [item 36, 9].
- Have that employee share the salary excess on the side with the employees of the government lab doing the samples analysis [item 36].
In effect, there is basically no change of lab, just a change of employer and salary, with side distribution of the salary excess to pay for other necessary human resources working in LBVD lab on the PREDICT samples testing with Dr. Wai Zin, while still officially on LBVD books.
These emails further show that:
- That all persons discussing that scheme are fully aware of the special US sanctions, and of the difficulty of justifying the abnormal salary [item 36].
- That the samples analysis by LBVD had most likely already started before that scheme was designed [item 38].
‘There is in fact some indication that sample testing has already started.’
Julie A. Southfield, USAID/Burma Resident Legal Officer, 9 Mar 2018
source: item 38
Internal discussions in the months following that Contracting Agreement further show that:
- The excess salary was explained as the result of ‘negotiations’ with LBVD that invoked a hypothetical UN-scale for the salary [item 34]. [Note: In fact there should be no need for any negotiation at all if, as stipulated by PREDICT regulations, the only relevant reference is in fact the actual salary of Ms. Wai in her position at LBVD before off-boarding].
- Jonna Mazet presented a ‘letter of assurance’ signed by LBVD in support of the salary scheme [item 40, dated 7 Mar 2018]:
‘The letter signed by LBVD addresses the specific concerns about how the technician is paid and confirms that there are no top-ups and that the salary of that technician is consistent with the other technicians in the lab — all issues that the Mission raised as concerns about our proposed mechanism (fix) for the situation.’
[item 41, dated 8 Mar 2018] - The Resident Legal Officer for USAID/Burma circulated her conclusions that:
(1) the letter at best ‘might not be untrue’ if one allows oneself to ‘speculate’ that such salary is justified by some hypothetical other donor-funded projects working with LBVD and paying in excess of government salaries, and
(2) that in any case one would still be in breach of PREDICT regulations about salary supplements
[item 36, dated 16 Mar 2018]. - In other words the Resident Legal Officer pointed out that the justification for an excess salary was artificial (an hypothetical and irrelevant scale that would deliver the required x5 increase), and in any case in breach of the PREDICT regulation that considers the actual salary before off-boarding as the relevant reference.
- The Resident Legal Officer for USAID/Burma concluded her analysis by asking ‘Are we comfortable doing that?’.
‘If a Deputy Director General makes up to 400,000 MMK (-$300 per month), we don’t believe that a laboratory technician makes S1400 per month. However, we note that the letter submitted by Smithsonian
and signed by LBVD doesn’t actually say that this person to be hired earns $1400 as her wage when she is being paid by the Government. The letter says “The salary of $1400/month is consistent with other laboratory scientists at Dr. Wai’s level and for work being performed. Dr. Wai will not be paid at a level higher than other laboratory scientists conducting similar work at LBVD.” We speculate that there may be other donor funded projects working with this laboratory and that are paying in excess of government salaries and that she is being paid consistent with wages for those projects. If that is the case, the facts in the letter might not be untrue, but we would be contributing to the same type of situation that makes us concerned about salary supplements in the first place. Are we comfortable doing that?’Julie A. Southfield, USAID/Burma Resident Legal Officer, 26 June 2017
source: item 36
4.1.c Alternative schemes discussed during review of the Contracting Agreement :
During the review, some alternative TVPA avoidance schemes were considered:
Alternative scheme 1:
‘An approach with LBVD in which receipts for testing costs would be reimbursed by Predict without an agreement between the two organizations’.
[item 43, discussed on 7 Mar 2018]
That approach was flagged down by Andrew P. Clements, Senior Scientific Advisor for USAID (US based) on the basis that ‘All agreements with foreign government organizations have to be approved by the AO.’
Alternative scheme 2:
Having the PREDICT project ‘purchase equipment for LVBD that would help them automate procedures they now must do manually if paying labor costs or service fees is not workable’.
[source:’ item 38, discussed 9 Mar 2018, typo in original: LVBD for LBVD]
In other words, the approach is to disguise the compensation for LBVD labor costs as donations of testing materials (given that there would be no need to justify donating such material to LBVD).
4.2 Potential Issues:
The discussed schemes show a clear intention to avoid TVPA and PREDICT regulations through creative accounting and/or creative contracting. The retained scheme then moved from intention to action.
Different observers may reach different conclusions as to the acceptability of such creativity, in the larger context of the PREDICT mission. It seems nevertheless amply clear that PREDICT internal counsel was aware of walking a rather fine line. Some of the difficulties of walking that line are:
4.2.a Possible false representations in Contracting Agreement
The ‘SALARY AMOUNT’ clause of the Contracting Agreement, stating that ‘Dr. Wai will not be paid at a level higher than other laboratory scientists conducting similar work at LBVD’ [item 9] is most likely a misrepresentation, and was clearly being flagged as such by the Resident Legal Officer for USAID/Burma reviewing the contract.
4.2.b Scheme may be in Violation of US special sanctions on Burma:
- Non-declared effective payments on the side to employees of a Burma government entity, so as to avoid US special sanctions.
- Artificial temporary off-boarding of an employee of a Burmese government entity, for the purpose of retributing him/her for work done within that government entity, so as to try to avoid US special sanctions.
4.2.c Possible violation of PREDICT-2 regulations:
- Possible false representations as to validity of excess salary to PREDICT [item 34]
- Possible violation as to policies regarding salary supplements or “top ups” (see example of PREDICT-2 regulations) [item 22].
5. Avoidance scheme retained for Myanmar (FY2018 and FY 2019)
5.1 LBVD:
The scheme retained is the contractual agreement with LBVD to pay Dr Wai at an inflated $1,400 a month, supposedly as a temporary employee of the Smithsonian but located within LBVD lab, supplemented by reagent costs paid also to LBVD.
Dr Wai Zin and LBVD:
Dr Wai Zin is working with LBVD Lab. In the US David PREDICT year 5 (2018/19) budget spreadsheet for TVPA countries [item 23], there is a note for Myanmar in red which clarifies that In-country staff includes LBVD lab tech paid directly by SI (Smithsonian Institution).
A similar wording, with a confirmation that the lab technician is working within LBVD lab, can be seen in another version of the spreadsheet [item 24].
Year 5 (Oct 2018 — Sep 2019):
Under ‘Contractual’, the payment for Dr Wai is itemized, at the $1,400/month ($16,800/year) agreed under the Contractual Agreement [items 9, 50].
The other lines under ‘Contractual’ relates to the Country Coordinator, Ohnmar Aung, who was then employed directly by USAID/PREDICT Myanmar, Smithsonian Global Health Program. That payment is not an issue, as not being to a government related entity.
Under ‘Diagnostics & Shipping’, there is another $20,000 for LBVD there, via the lab supplies/reagent entry. The rest is for shipping and sequencing abroad.
The ‘Viral Family Testing’ items are either directly a payment to LBVD, earmarked as ‘Assoc lab supplies/regents’, or the provision of such ‘Assoc lab supplies /regents’ in kind, which is very much equivalent to a payment (see ‘Alternative schemes’ for comparison, section 2.a.3).
Year 4 (Jul 2018 — Sep 2018):
All the entries there seem to be referring to 3 months, so more specifically Jul 2018 to Sep 2018, instead of the full year 4.
Under ‘Contractual’, we see 3 months of salaries going to USAID/PREDICT Myanmar employees, Ohnmar Aung and Kyaw Yan Naing Tun. These payments are not a problem.
There is no entry for Dr Wai’s salary, when we had one for Year 5.
Under ‘Diagnostics’, $11,635 are paid to LBVD, a Myanmar government entity, as:
- $6,000 under the LBVD Contract, listed as 300/4 = 75 items at $80 /item, over 3 months.
That item is rather odd. It refers to LBVD Contract, ex reagents. It could be that in year 4, Dr Wai’s salary under the LBVD Contract was itemized as diagnostics costs (meaning really salary costs), at $80 per test, corresponding to around $2,000 per month — which however would be above the $1,400 of the contract. - $5,625 of testing kits for animals, which would be handed over to LBVD, as 300/4*x $75.
5.2 DMR
We can see payments to DMR, a government entity, structured in a similar way.
Year 5 (Oct 2018 — Sep 2019):
Under ‘Diagnostics’, we can see a ‘Viral Family Testing — Humans (Assoc lab supplies/ reagents)’ line with no money earmarked. This would be for the DMR.
Year 4 (Jul 2018 — Sep 2018):
Under ‘Contractual’, we can see a line for Department of Medical Research (DMR), for $1,250, corresponding to 3 months of what may look like a standard $5,000 annual Myanmar salary.
Under ‘Diagnostics’, we can see $5,625 of testing kits for humans, which would be handed over to DMR, as 300/4 x $75.
5.3 Year-4 Carry-Over
The FY2018 TVPA funding restriction in Myanmar are also partly avoided via a technical argument: given the timing of TVPA restriction, it is argued that obligated undisbursed FY2017 funds (that were not yet subject o TVPA restrictions) can simply be disbursed in FY2018 without any applicable TVPA restriction [item 50].
6. TVPA Avoidance scheme retained for Laos (FY 2018)
As with Myanmar, The FY2018 TVPA funding restriction in Laos are partly avoided via via a carry-over of obligated but non-disbursed FY2017 funds [item 50].
To make this work, one had to actually mop up unallocated FY 2017 funds from other USAID projects or countries, not just from PREDICT-2! So for instance there us a reallocation of FY17 Global Virome Project carryover funds to FY18 PREDICT Laos, even if the GVP has strictly nothing to do with PREDICT (beyond being also managed by USAID):
The same creative carry-over approach is used by re-allocating Metabiota’s Global Costs FY17 carryover to FY18 PREDICT Laos:
7. Questions about PREDICT-2 handling of samples at closure
There is rather odd exchange of emails just before and just after a PREDICT Executive Board Meeting of May 2019. That exchange seems to show both genuine concerns for biosafety, some interest in shipping samples from ‘high value target labs’ instead of destroying them, some confusion and lack of coordination, and some odd remark about ‘destroying name or identifying information’.
Agenda of the call (sent the day before the call):
DTRA redux: still asking us to write down everything again and send it over; now asking which labs need samples shipped for safety vs destroying samples; JM [Jonna Mazet] instead gave them high value targets (often labs they would put on high risk list) plus labs that we don’t really think are high value targets but where samples need to be shipped for safety; DTRA has yet to respond
[…]
Sample disposition & Safety: input on this item from Jonna [Mazet], below
| 100% of labs need to be explored for maintenance [..]; Follow-up recommendations on what we believe should be priority for samples -> finalize country documents at Bali meeting -> part of long-term storage agreement on an addendum
| Best Practice: destroy name or identifying informationsource: item 31
Notes sent after the call:
Sample disposition & safety
Jonna — 100% of labs need help w/ budget, each country needs individual plan, before and post Bali meeting need samples plan, if we will not continue relationship with lab, PII [PREDICT-2] needs to be destroyed — anybody want to volunteer to leed this? radio silence, Jonna says she will reach out and assign.Tracey — each country revisit w/ each partner — June 16 deadline to reply with plan. Corina & Tracey will discuss offline
Destroying Samples: ‘Radio Silence’
Once PREDICT has reached maturity, the obvious question is of safety of these samples — safety in terms of making sure that the lab were they are stored keep working with acceptable biosafety practices, but also safety in terms of making sure that these samples cannot end up in the wrong hands, or being used for the wrong projects.
The Defense Threat Reduction Agency (DTRA), part of the US Department of Defense (DoD), is at the centre of these concerns for samples possibly left behind in labs with which USAID will not continue the relationship [footnote 3], as we can see in these echanges.
There is another aspect of the problem mentioned in these mails: a possible difference in risk-tolerance, quite well expressed by the ‘radio silence’ comment: destroying samples seems to be excessive to PREDICT, while sometimes necessary for DTRA, to which the relation is now reverting [footnote 4].
Dennis Carroll, the former director of USAID’s emerging threats division who helped design Predict, oversaw it for a decade and retired when it was shut down. The surveillance project is closing because of “the ascension of risk-averse bureaucrats,” he said. [..]
Congress, along with the administrations of George W. Bush and Barack Obama, were “enormously supportive,” said Dr. Carroll, who is now a fellow at Texas A&M’s Bush School of Government and Public Service.
“But things got complicated in the last two years, and by January, Predict was essentially collapsed into hibernation.”
The end of the program “is definitely a loss,” said Peter Daszak, president of the EcoHealth Alliance, a nonprofit global health organization that received funding from the program. [..]
Some Predict projects will be taken over by other government agencies, such as the Pentagon’s Defense Threat Reduction Agency or the National Institutes of Health. But those agencies have different missions, such as basic research or troop protection. They do not share USAID’s goal of training poor countries to do the work themselves.
As an agency that gives money to countries, USAID often has a friendlier, more cooperative relationship with governments in poor nations than, for example, Pentagon-led efforts might.
source: ‘Scientists Were Hunting for the Next Ebola. Now the U.S. Has Cut Off Their Funding’, NY Times, Oct 2019, Donald G. McNeil Jr.
Annex A: Key emails on LBVD Avoidance Schemes
Reading the email in reverse chronological order may help understand what happened:
A.1 The ‘agreeable solution’: Apr 2018
A.2 Smithsonian + LBVD scheme elaboration: Feb/Mar 2018
They picked up the option 4 [item 33a, 33b], whereby the Smithsonian Institution establishes an independent contract withy LBVD (Myanmar), with an inflated salary.
A.3 Original Scheme:
‘Thanks, Jonna. I will share this information. Will be interesting to see what the mission thinks of it if it both meets the UN standard and is more that what non-UN funded lab staff are making. Stay tuned….
Andrew’[item 34]
Justification of an inflated salary [item 35]:
For reference: MMK 320,000 per month is ~ $240 p/m [item 36]. Hence, the salary of $1,400/month should effectively cover about 5 people.
This $1,400/month, equivalent to $16,800/year, is also confirmed in the May 2019 discussion of year-5 funding issues for TVPA countries (with details of budgeted carry-over of Y4 obligated funds and donations of equipment) [item 50].
Note here the mention of unlikely salary sharing (that’s what they want to tell) [item 37]:
Note here the mention of actual salary sharing (the reality) [item 38].
Also testing has likely already started at LBVD:
Discussion of alternative scheme (payments to LBVD without any contractual agreement) [item 39]:
Mention of the letter of assurance signed by LBVD (‘LBVD Technical contract assurance.pdf’) [item 40]:
‘The letter signed by LBVD [sic] addresses the specific concerns about how the technician is paid and confirms that there are no top-ups and that the salary of that technician is consistent with the other technicians in the lab — all issues that the Mission raised as concerns about our proposed mechanism (fix) for the situation.’
Jonna Mazet, 8 Mar 2018, item 41
Mission communicating back with Washington [item 42]:
Earlier scheme being discussed (payments to LBVD without any contractual agreement) [items 43, 44]:
Early message confirming need to test samples and the exploration of a solution for payments [item 45]:
Mention of a possible fallback, with FAO happy to step in if necessary (Mar 15 deadline) [item 46]:
footnotes:
[1]: That marketing effort faced serious headwinds. First there were serious doubts about the China’s ability to truthfully share data has been raised since the very start of the GVP (see for instance Oct 2017 conversation below between the GVP initiators).
Adding to these woes, Edward Holmes took a strong public stance against the GVP in October 2017, in Open Biology (a journal of the Royal Society), then again, joining force with Rambaut and Andersen, in a very visible article in Nature in June 2018 [item 48].
Eventually, with very limited traction in the US and in developed countries, and acknowledging that China was anyway going ahead with its own sampling, the GVP initiators considered putting China in the lead of the project [item 49]. This was a rather desperate gambit that simply reflected the absence any other alternative.
By 2019 the GVP was effectively still-born, especially after the criticism from Holmes, Rambaut and Andersen in Nature in 2018.
That experience left a strong animosity between the future authors of Proximal Origin (Holmes, Andersen and Rambaut) and Peter Daszak, of EcoHealth Alliance.
That animosity is well illustrated in the Slack conversations at the time of the drafting of Proximal Origin. It also very likely played a key role in some merciless backstabbing (such as the denunciation of the four PO authors that had previously criticized the GVP, in an anonymous email to Jon Cohen at Science).
[2]: The Trafficking in Persons (TIP) Report is an annual status update on the state of global human trafficking. It is published by the U.S. State Department’s TIP Office, which was established by the Trafficking Victims Protection Act (TVPA) of 2000.
The TIP report organizes countries into tiers based on trafficking records: Tier 1 for nations that meet minimum U.S. standards; Tier 2 for those making significant efforts to meet those standards; Tier 2 ‘Watch List’ for those that deserve special scrutiny; and Tier 3 for countries that are not making significant efforts.
In 2018, the White House started paying particular attention to Myanmar, Laos (recently bumped from Tier-2 ‘Watch List’ to Tier -3), and other Tier 3 TVPA countries (‘not making significant effort’). This raised pointed concerns within USAID that the dubursing of FY 2018 grant money to government entities of Laos or Myanmar may soon become a major issue [footnote 5].
Note that, incidentally, China had been a Tier-3 country since 2017. However 2018 was the first year that China, Laos and Myanmar were all Tier-3.
[3]: As the ’GVP outreach’ spreadsheet (Nov. 2017) shows, Denis Carroll was the main GVP promoter in contact with the DTRA, helped by Peter Daszak. Denis was also in contact with DARPA to promote the GVP with them.
[4]: This did not stop Peter Daszak to try to get the DoD to back the GVP, by using precisely their concerns as a selling point:
