WASHINGTON – Senator Bob Menendez (D-N.J.), Ranking Member of the Senate Foreign Relations Committee, delivered the following opening remarks at a hearing titled: “Oversight Of The Millennium Challenge Corporation.” Testifying before the committee was Sean Cairncross, Chief Executive Officer of the Millennium Challenge Corporation.
Senator Menendez’s full remarks as delivered can be found below:
“Thank you for holding today’s Millennium Challenge Corporation oversight hearing, and thank you Mr. Cairncross for testifying before the committee.
Prior to Mr. Cairncross’s confirmation, there were several news reports about a growing toxic work cultural at MCC. Blatant cultural insensitivity and offensive communications from one of the Acting CEOs; repeated, near violations of the Hatch Act; declines in the diversity of MCC’s workforce; and concerns from development professionals that the traditionally data and results driven development organization was taking on a distinctly unproductive political mission.
Unfortunately, it seems that the White House Presidential Personnel Office’s peculiar abuse of MCC’s “Administratively Determined” hiring authorities to appoint a number of questionably qualified, but well-connected, job-seekers at MCC was primarily responsible.
In addition to our own internal information, the Washington Post diligently documented PPO’s fraught hiring decisions and MCC’s changing working environment throughout 2018. I ask unanimous consent to enter into the record the Post’s series of investigative reports.
MCC experienced several inauspicious leadership changes while the committee was vetting your nomination. While a good number of inappropriate leaders have departed MCC, including Robert Blau, the Acting CEO who infamously gave a rambling and offensive all-hands speech that sent a chilling effect through MCC’s ranks, so that their departure has actually helped restore credibility to MCC, the question remains: why were these people given leadership roles and what lasting impact will their presence have on MCC’s effectiveness?
Mr. Cairncross, you received a number of questions for the record on these issues during your confirmation. In your answers, you committed to restoring MCC’s professional culture. I appreciate that you took these concerns seriously, and I look forward to your testimony on how you are strategically working to right the ship.
Through it all, and with steady support from Congress, MCC continues to explore and execute compacts in developing countries. For 25 years, MCC has followed an innovative approach to international development by providing limited but ambitious investments in economically transformative projects in poor countries that demonstrate a willingness and capacity to meaningfully commit to specific standards of improved governance, transparency and fair competition.
MCC’s data driven approach assesses countries’ constraints to economic growth, and their needs to ensure a maximization on investments returns each countries receives. Americans benefit from these investments as strategic partner countries experience improved regional security through improved economic security, growing trade opportunities, and the ability to resist malign external influence. MCC is an important tool in the U.S. foreign policy toolbox that requires congressional support, including robust oversight to ensure the independent agency sustains its success.
In addition to discussing your efforts to restore a sound and productive work environment at MCC, I also have a number of questions about some of MCC’s active and pending compacts.
My concerns about specific compacts are rooted in wanting to ensure MCC is dutifully executing its mission. The Committee, and the American people, need assurances from you that MCC is adapting strategies to manage and resolve these concerns.
For example, as the Chairman mentioned in Ghana, MCC recently, and for good reasons, terminated $190 million of MCC’s $498 million compact with Ghana. I believe that was the right decision, based on the findings of an independent audit of fraud allegations lodged by the Ghanaian government. However, I have questions around the budget implications of these funds returning to MCC, as well as the lessons or precautions MCC may be taking with the rest of the Ghana compact.
Regarding Mongolia’s water compact, Mongolia’s dubious plan to “service” the outstanding $75 million debt its water authority has accrued by simply moving the debt to another division of the government hardly seems like a fiscally responsible plan that MCC should accept. I also have concerns about the Mongolia-Millennium Challenge Account’s lack of progress on developing a credible and sustainable revenue mechanism to pay for the long-term maintenance and operation of the project MCC is helping build.
In Sri Lanka MCC has a $480 million compact pending the approval of the Sri Lankan government. Sri Lanka, however, has just elected a suspected war criminal, Gotabaya Rajapaksa, as President. How will this affect the compact?
I also have questions about Kosovo, El Salvador, and Georgia.
I believe MCC can continue to be a positive tool of American economic leadership and I appreciate the chairman’s interest in conducting oversight of this important development agency and we look forward to your testimony.”