The Center for Public Integrity has a 'Windfalls of War' section containing this bizarre history of CAI inc, which supposedly evolved from a day-care company. From nursery carer to international spy?


Creative Associates International Inc.
5301 Wisconsin Ave., NW
Suite 700
Washington, DC 20015
Phone: (202) 966-5804
Fax: (202) 363-4771
 http://www.caii.net

In 1979, four women—Maria Charito Kruvant, Ilda Cheryl Jones, Diane Trister Dodge and Mimi Tse—incorporated Creative Associates Inc., a private, for-profit management-consulting firm. Previously partners in a day-care business, the four started the firm in Kruvant's Washington, D.C., basement as part of the Small Business Administration's program for minority owned businesses. For its first contract with the U.S. Agency for International Development, Creative worked on a project to help poor women in Bolivia, Kruvant's native country. The company's first year revenue was less than $100,000.

According to District of Columbia incorporation records, Cheryl Jones left Creative sometime between April 1983 and April 1984. In 1986, Kruvant and her remaining co-founders changed the company's name to Creative Associates International Inc.

By 1985, Creative had become a multimillion-dollar business, with both government and private-sector contracts. According to the Washington Times, Kruvant and her co-founders started the company to move from the nonprofit sector into the business world and make "at least a little money doing development work."

Kruvant now owns 69 percent of the firm, and the only other founder still working at the company, Mimi Tse, owns 31 percent. Kruvant was born in La Paz, Bolivia. Her father was a wealthy landowner, but the Kruvant family had to flee to Argentina during a 1955 revolt. Kruvant first came to the United States in 1963 to study in New Jersey. She earned her teaching degree in Argentina, and then returned to New Jersey to work with disadvantaged children. She was involved in passing federal legislation to promote bilingual education, founded centers for bilingual education in several states and helped develop bilingual education programs in the Washington, D.C., area and New York.

From its modest founding, Creative has grown to a company that boasts offices in 11 different countries, employs more than 200 people and reports annual revenue as high as $50 million. About 90 percent of its business comes from USAID.

Creative has received and carried out more than 400 contracts since its inception. It has worked on projects in Angola, El Salvador, Haiti, Afghanistan, Jordan, Benin, Guatemala, Lebanon, Liberia, Mozambique, Nicaragua, South Africa, Peru, Serbia and Montenegro. Its clients include, among others, the government of Jordan, the U.S. Marine Corps and The World Bank.

In the late 1980s, Creative received USAID and Defense Department funding to help demobilize and provide civilian training for the Contras, anti-communist guerrillas in Nicaragua who had fought the Sandinistas. After the first Bush administration and Congress agreed to stop all military aid to the Contras in 1989, the Defense Department contracted Creative to help persuade the Contras to lay down their arms. Kruvant reportedly helped to convince the Contras that the Nicaraguan government wouldn't execute them if they surrendered. In 1989, as part of a $27 million USAID package, Creative received $1 million to train Contra rebels in skills such as road maintenance, first aid and engine repair. As part of the project, known as "Training in Delivery Systems," Creative coordinated 29 vocational courses to teach more than 600 Contras. In an April 1990 election, the Sandinistas were voted out of power and replaced by the National Opposition Union.

According to the Washington Times, Creative has contracted with two "well-known" oil companies. The Center for Public Integrity asked Creative about the identities of the oil companies, as well as about any current work with oil companies, but the company refused to answer, saying instead: "Our work for the U.S. Agency for International Development helps advance United States global interests in peace and security, and is carried out in accordance with the governing rules and regulations of the United States government."

Creative also did not answer nine other questions the Center asked in October 2003. Six months earlier Kruvant had told The Washington Post: "The issue of transparency is part of our life" and "I usually say quite comfortably that people know my shoe size."

In May 2001, Kruvant told The Washington Times that Creative was not a big money-making business. "If you're looking at the revenue side, this is not the business to be in," she said.

Creative also has a nonprofit, Washington, D.C.-based sister company called Creative Learning Inc. Creative Learning provides educational training based on the premise that learning comes from experience. Creative Learning's board of directors includes William Kruvant, Maryse Horblitt and Marta Maldonado.

Since September 2001, Creative has been working on a USAID-funded Haitian media assistance and civic education program. The program includes a radio show and is designed to provide civic education on democratic rights and strengthen the Haitian media. USAID also hired Creative to evaluate the justice system in Haiti, according to U.S. media reports.
Iraq contracts

In November 2002, Frank Dall, a senior associate at Creative and former USAID education director for the Middle East, participated in a roundtable discussion with USAID officials about Iraq's education system.

On March 4, 2003, USAID invited five pre-selected companies, including Creative, to bid on work for a project called RISE, or Revitalization of Iraqi schools and Stabilization of Education. The project included getting about 25,000 primary and secondary schools ready to open for an estimated 4.2 million students by Oct. 4, 2003.

Of the five companies invited to bid on the multi-million dollar contract, only Creative had a representative at the November meeting, and it was the only company that submitted a proposal. In a subcontracting plan dated March 7, 2003, Creative listed three of the other five companies USAID invited to bid as possible subcontractors.

On March 26, 2003, USAID awarded Creative the RISE contract, which designated Frank Dall, the senior associate who participated in the roundtable discussion, as the RISE project's director.

The up-to-three-year, "Cost-Plus-Fixed-Fee" contract is meant to cover everything from desks and textbooks to curriculum reform, academic standards and teacher training. The physical rebuilding of schools was included in Bechtel's $50 million contract.

After filing a request with USAID under the Freedom of Information Act, the Center for Public Integrity received a list that showed USAID granted Creative a $62.6 million contract for work in Iraq. However, the Center also obtained the contract itself, which shows that over three years, the contract could be worth as much as $157.1 million.

The Cost-Plus-Fixed-Fee contract not only calls for USAID to reimburse Creative for its expenses, but also allows for possible award fees and bonuses. In October 2003, Stephen Horblitt, director of external relations, told the Newhouse News Service that Creative does not disclose its fee because of the competitive bidding environment, but that it is "quite small." In April 2003, Kruvant told the Wall Street Journal that Creative's "profit margin for this sort of work is rarely over about 4 %."

According to the contract, the "total estimated cost for the performance of the work required hereunder, exclusive of fixed fee, if any, is $58,380,659. The fixed fee, if any, is $4,247,459." That translates to a possible fixed fee of 7.3 percent of the total estimated cost of the first year's work. The contract also calls for estimated fixed fees of $3.3 million in the second, optional year and $2.5 million in the third, optional year.

The contract also calls for $9.1 million of that money to be used for U.S subcontracts and $8 million for other subcontracts in the first year.

Questions concerning the procurement of the contract prompted the USAID Inspector General to conduct an internal investigation of the agency's practices, including its decision to award Creative the RISE contract.

A June 2003 USAID memorandum detailing the findings said, "The documentation is clear that only one of the five contractors that were subsequently invited by USAID to bid on the contract participated in an initial roundtable discussion. In addition, we conclude that USAID Bureau officials did not adhere to the guidance on practical steps to avoid organizational conflicts of interest."

The same month, in a response to the inspector's memorandum, USAID said the roundtable discussion meeting notes were distributed to all of the companies invited to bid on the RISE contract. The agency also said that Dall was invited based on his experience, after "an extensive search identified him as literally the only available education authority to have worked directly with the Saddam regime."

After reviewing the investigation results, Democratic Sen. Joseph Lieberman released a statement saying "the inescapable conclusion is that there was essentially no competitive bidding at all." The General Accounting Office, the investigative arm of Congress, is conducting a broad investigation of the contract-awarding process.

In April 2003, a United Kingdom education publication, the Times Educational Supplement, reported that, "Creative Associates has farmed out at least half the schools project to sub-contractors to plug expertise gaps, a source close to the bidding process told The TES."

Creative subcontracted to three of the four other companies that were invited but didn't bid on the contract, including Research Triangle Institute and DevTech Systems Inc. (Creative is also a subcontractor to RTI for work in Iraq.) Creative also hired as subcontractors American University in Washington, D.C., and the American Manufacturers Export Group, a Texas-based firm with clients such as USAID, Booz Allen Hamilton and Camp Dresser & McKee International, a contractor in Afghanistan, and to two nonprofit U.S. organizations, the American Islamic Congress and the Iraq Foundation, both of which are led by Iraqi expatriates.

American University's work included assessing the needs of Iraqi schools, and the American Islamic Congress, a Boston-based nonprofit organization, helped to recruit teachers. American Manufacturers Export Group's contract included providing school supplies. Research Triangle Institute helped to form educational policy.

Employees of the American Islamic Congress would not speak about their work on Creative's contract. An employee told the Center that USAID requires all questions about the education project in Iraq to be directed to USAID staff.

"By USAID orders, we are not allowed to disclose information to the media," the employee said. "I'm bound by what they tell us to do."

He also said the lack of information on the American Islamic Congress Web site about its work on the Iraq education project is a result of USAID orders. An employee of the Iraq Foundation told the Center that its employees working on RISE would have to obtain Creative's permission before speaking about the project.

Creative's first project on the Iraq education contract was to gather data on the student-teacher ratio. The company employed 100 of its own staff and more than 150 Iraqi citizens to conduct a census of students in Iraq. Creative then put together and distributed "student kits." The kits, which had a USAID logo on them, contained school equipment such as pens, pencils, erasers and notebooks.

Creative hired an Iraqi manufacturing firm to make chairs, cabinets, desks and other school furniture. It also distributed small grants for Iraqi citizens to create community education committees, similar to PTA organizations in the United States. Stephen Horblitt, director of External Relations, said he did not know how many of the teachers trained were women.

Creative arranged for the printing and delivery of textbooks, and USAID left the controversial process of revising them up to other organizations.

During his testimony at a State Department briefing, USAID Administrator Andrew Natsios said a group, including the Iraqi Ministry of Education, the Coalition Provisional Authority, UNESCO and United Nations Children's Fund, were working on "redoing the textbooks, which were full of vitriol and Baathist party propaganda."

By the time Iraqi schools opened in early October, Natsios said, 1,595 schools were "completely rehabilitated and reconstructed," the team had begun to train 5,000 school administrators, principals and superintendents, and teachers had begun a "master teacher program."
Afghanistan contracts

In March 2003, after receiving proposals from bidders including a consortium of NGOs and a university experienced in the area, USAID awarded Creative a three-year contract worth at least $60 million for educational reform in Afghanistan, according to the Washington Post. On its Web site, Creative listed the project as worth $16.5 million, but did not mention a time-frame attached to that amount. In a press release, USAID announced a $60 million "initiative to rebuild the educational infrastructure" over a three-year period, but did not indicate who had won the contract. The contract called for rebuilding 1,000 schools, training 30,000 teachers and providing $15 million worth of textbooks. The Center for Public Integrity filed a Freedom of Information Act request for all U.S. contracts relating to work in Afghanistan, but the list that USAID sent did not include this contract.

The University of Nebraska at Omaha's Center for Afghanistan Studies, which had been working for USAID on Afghan education for more than a decade, also bid for the contract. Under a previous USAID contract, UNO's Center for Afghanistan Studies printed 14.2 million textbooks and trained 2,740 teachers for the 2002-03 school years. Out of the teachers that UNO trained, 74 percent were women.

Raheem Yaseer, assistant director of the Center for Afghanistan Studies at UNO, said he was surprised when Creative won the 2003-04 Afghan education contract.

"Our university has been involved in Afghanistan from the early 1970s, and had offices and programs during the war years," Yaseer said. "But I think last year, AID decided to put in some new blood, and people who had experience before were not given the grants."

Creative enlisted the Afghanistan Ministry of Education to edit the textbooks and "revise the curriculum." It subcontracted the printing of the Afghan textbooks to an Indonesian company, and then airlifted them to Afghanistan. Creative also subcontracted "translation and quality control" to Baheer Printing and Computer Company Ltd., an Afghan firm.

The consortium led by Creative delivered 10 million "revised" textbooks for second through twelfth graders to Afghanistan. On its Web site, Creative says the Afghan textbook project was done "in close collaboration" with American Manufacturers Export Group and the Afghanistan Ministry of Education.

In 1992, the University of Nebraska at Omaha subcontracted Creative to provide education personnel who specialize in developing nations as a part of a $30 million grant.
Government ties

From 1996 to 2000, Kruvant served as an emergency schools trustee after the District of Columbia Financial Responsibility and Management Assistance Authority's Board took power from the elected school board. Kruvant has served as chair of the advisory board of the U.S. Small Business Administration's Washington District Office. She has held the Small Business Administration's Advisory Council public meetings at Creative's headquarters. She also has been president of the board of directors of the Society for International Development's Washington chapter, and member of the Economic Club of Washington, D.C., Kruvant has worked on the Project in Search of a National Security Strategy, and served as president of the National Association of Women Business Owners' D.C. chapter.

Kruvant's husband, William Kruvant, who is a senior adviser to Creative, is a former assistant director of financial institutions and markets issues at the General Accounting Office. In 1991, he was one of the authors of a GAO report that determined there was no price manipulation of oil prices during the Gulf War. Critics had alleged that speculators were profiting from artificially raised oil prices in the stock market. William Kruvant was one of the authors of the report that said the oil prices reflected actual changes in supply and demand and were not the result of manipulation.

In July 2002, Creative named Richard L. McCall Jr. director of its communities in transition division. Before joining Creative, McCall served as Chief of Staff at USAID. Before joining USAID, McCall was a senior policy adviser to the deputy secretary of state. He also spent many years working on Capitol Hill as a staffer to the late Sen. Gale McGee, D-Wyo.; as a foreign policy adviser and aide to the late Sen. Hubert Humphrey, D-Minn.; as an aide to Sen. John F. Kerry, D-Mass.; and as an aide to Sen. Paul Sarbanes, D-Md., former chairman of the subcommittee on International Economic Policy, Trade, Oceans and Environment. McCall also worked for the Senate Foreign Relations Committee and the Senate Democratic Policy Committee. In 1980, he served as assistant secretary of state for International Organization Affairs.

Frank Dall, director of Creative's RISE project, is a former USAID education director for the Middle East. He also previously worked as a senior education adviser for the United Nations Children's Fund in Jordan and was responsible for country based UNICEF educational programs in the Middle East.

Stephen Horblitt, director of external relations at Creative, was a high-ranking legislative aide to the District of Columbia's former delegate to Congress, Rev. Walter E. Fauntroy, in the 1980s. Horblitt is an expert on Haitian and Caribbean Basin affairs. National Journal reported that Horblitt and Fauntroy had "close ties" to the March Bazin, the prime minister of the military regime that deposed Jean-Bertrand Aristide, the country's democratically elected president. While employed by Creative, Horblitt started a "Haiti consultative group," made up of individuals from the State Department, U.S. Congress, The World Bank and private companies. The group didn't lobby and claimed to have no position on Haiti's internal politics, but Horblitt told the National Journal that they reached a consensus that the U.S. embargo of the country and its military regime was disastrous.

Jerrold Keilson, director of business development at Creative, was a foreign service officer for the State Department from June 1980 to May 1986. He received the Department of State's Meritorious Honor Award in 1982. He also previously worked for World Learning Inc. and Delphi International.

Robert Murphy, a senior adviser at Creative, was in Jamaica as one of two people representing the United States in a 2002 Global Roundtable for The World Summit on Sustainable Development. The other U.S. representative was USAID governance adviser, Thomas Johnson.

Archer Heinzen, a senior associate at Creative, worked for USAID's El Salvador bureau from 1993 to 1995. She also worked as an independent consultant on international development for five years.
Updates

On July 14, 2004, USAID awarded a second Iraqi education contract to Creative Associates International. The contract is worth $56.4 million over the next 24 months and will focus on technical assistance to the Iraqi Ministry of Education.

Two recent opinion polls, by Pew and Gallup, make for interesting reading. Given the blood enmity between Pakistan and India, the 'existential' threat that justifies two nuclear arsenals, three times as many Pakistanis see the US as a greater threat or enemy than India.


Some people believe that the (Pakistani) Taliban are the greatest threat to the country, some believe India is the greatest threat, whereas some believe US is the greatest threat. Who do you think is the greatest threat for Pakistan?

(Pakistani) Taliban 11%
India 18%
US 59%
Don't Know 12%

 http://english.aljazeera.net/focus/2009/08/2009888238994769.html


Only 22% of Pakistanis think the U.S. takes their interests into account when making foreign policy decisions, essentially unchanged from 21% since 2007. Fully 64% of the public regards the U.S. as an enemy, while only 9% describe it as a partner.

 http://pewglobal.org/reports/display.php?ReportID=265