We know that the Agency for International Development dispatched the American development worker to Cuba on a highly sensitive mission in 2009. Cuban authorities followed his movements at first, then arrested him and deposited him in jail. Discovering how he wound up behind bars, ever so far from his home in Maryland, is a winding trail of money, bureaucracy and barely intelligible acronyms.
Below is a post aimed at answering basic questions in the case and adding context to new details that emerged this month in court records, confidential memos and other documents (see links to source material at end of post; and here's a Spanish-language translation of this post, h/t La pupila Insomne).
Who hired Alan Gross?
A global development company, Development Alternatives Inc., or DAI, based in Bethesda, Md., and with offices in London, Islamabad and other cities. The company had revenue of nearly $300 million in 2012.
What’s DAI’s connection to USAID?
DAI is one of USAID’s top contractors. USAID has awarded more than $4 billion in contracts to DAI since 2000.
On Sept. 27, 2005, USAID signed a $25,000 contract with DAI as part of the agency’s “Instability, Crisis and Recovery Programs.”
What does that stand for?
CMM refers to the Office of Conflict Management and Mitigation in USAID’s Bureau for Democracy, Conflict, and Humanitarian Assistance. The office works with USAID and its partners, along with the State Department and the Pentagon. “These new partnerships,” USAID says, have boosted the U.S. government’s ability to fight the “Global War on Terror.”
IQC is Indefinite Quantity Contract, an agreement that delivers an unspecified quantity of products or services.
What was DAI supposed to do?
USAID hired DAI to conduct “conflict and fragility” assessments, which involved:
- A review of risk factors in specific countries or regions
- The development of work plans
- Fieldwork and reports
- Planning and implementation of meetings and other duties.
Under the 2005 contract, DAI became one of USAID’s go-to contractors for a range of tasks. So when USAID wanted to assign a sensitive Cuba project in August 2008, it turned to DAI.
What was that project called?
The Cuba Democracy and Contingency Planning Program, or CDCPP.
How did Alan Gross get involved?
By 2008, Gross was in debt and had evidently been trying to land a Cuba-related contract for at least a year. He had been to the island before and knew key people who were handling U.S. government-financed projects in Cuba.
Key people? Any names?
Gross was in contact with Marc Wachtenheim, then director and founder of the Cuba Development Initiative at the Pan American Development Foundation, or PADF, another big USAID contractor.
|José Manuel Collera|
What was Gross doing in Cuba in 2004?
At his 2011 trial, Gross testified that he went to the island as a tourist in 2004. He stayed at the four-star Hotel Raquel in Havana. It’s unclear if he traveled to Cuba again before 2009. His 2006 company tax records cited ongoing humanitarian work in Cuba.
Anything special about Collera?
Collera was an important contact for Wachtenheim, but turned out to be a spy. In 2011, Collera revealed that he was a state security agent known as “Agent Gerardo.”
|Wachtenheim, left, and Collera in surveillance video.|
Cuban state security agents secretly caught Wachtenheim on surveillance video while he met with Collera and others. Presumably, agents could have detained Wachtenheim, but they did not interfere with his travels to the island.
Wachtenheim reached out to Gross again in 2007. He gave him $5,500 and asked him to buy a Hughes model 9201 satellite terminal that was to be taken to Cuba. The equipment allows users to send information over the Inmarsat Broadband Global Area Network, or BGAN, satellite network. It’s not clear who delivered it and how it was used. The equipment may have been tied to an unrelated PADF program. Raúl Capote, a Cuban professor who worked for Cuban state security, said James Benson, a U.S. official in Havana, delivered a portable BGAN terminal to him and said, "Marc Wachtenheim sends you this."
That same year, Gross pitched a Cuba proposal to Wachtenheim. He called it “Information and Communications Technology for Cuba: A Pilot Project.”
Wachtenheim didn’t bite. Cuban authorities found out about the project because information about it was on a flash drive Gross had when he was arrested in December 2009.
|A photo from Alan Gross's |
In 2008, Gross learned that DAI had received a Cuba-related contract, described as a “Washington, DC-based project focused on promoting democratic governance in Cuba.”
One version of the story is that Gross then contacted John McCarthy, chief of party for the Cuba project at DAI, and told him he wanted in. Gross told a different story at his trial, saying DAI had asked him to submit a proposal for an upcoming project that he “knew nothing about.”
Whatever the case, Gross got the job even though he didn’t speak Spanish, was not a Cuba specialist and didn’t appear to have extensive experience on the island.
What happened to McCarthy?
He was promoted. He is now DAI’s Global Practice Leader.
So why did DAI hire Gross?
Gross’s connections certainly didn’t hurt. A DAI official who recommended him to USAID on Oct. 21, 2008, wrote:
I can comment on Alan Gross as a former colleague (we overlapped at Nathan from the late 1980s to the early 1990s) and general acquaintance (we stayed in touch over the years) with whom I have exchanged insights about economic development and new business opportunities in this arena every few months.
Alan is a very conscientious and trustworthy individual. He is particularly strong in situational and issues analysis, brokering of technologies and programmatic concepts, and the identification of business opportunities (and this last is a reference to business start-ups, pilots, and innovative ways of overcoming constraints to business growth). I cannot comment on JBDC, as I have never contracted services directly from his company.Back up. What’s the reference to Nathan?
Gross was a senior partner at Robert R. Nathan Associates from 1987 to 1991.
What about JBDC?
Joint Business Development Center, Inc., was a business and economic development group that Gross founded and ran.
|Screenshot from website of the now-defunct JBDC|
The project was “based entirely” on Gross’s Dec. 29, 2008, proposal. Gross called it the “ICTs Para La Isla Project.”
|From an Alan Gross memo|
The initial phase was set for 15 weeks: Feb. 10, 2009, to June 10, 2009.
How much was Gross paid?
The original subcontract amount was $258,274. Gross asked DAI for a project extension and $332,334 in additional funds. USAID agreed and Gross signed the deal on Oct. 26, 2009, bringing the subcontract amount to $590,608.
How much did Gross actually receive?
DAI paid the original $258,274. Neither USAID nor DAI has revealed how much more he received. The contractor has said Gross was paid for the “deliverables” he completed.
Under the contract terms, Gross would have gotten $65,132.80 before departing on his last Cuba trip.
Then he would have received $21,168 after returning to the U.S. and filing a trip report with DAI, but he was arrested before he could do that. So it is quite possible he received just $65,132.80, not the full $332,334.
Did Gross have to pay his own expenses out of that budget?
Yes. His proposed $332,334 budget, for instance, included at least $167,445 in expenses. That means Gross would have taken home only $164,889 if he had completed the contract. So for every dollar he spent, he was recovering just 50 cents.
- Airfare and lodging in Havana and Miami, $40,112
- Satellite modem user charges for just four months, $68,640
What was his salary?
Gross charged DAI $620 per day. That came in just under USAID’s limit of $626.54, which was the agency’s maximum allowable salary without a waiver in 2009. Gross figured he’d collect that amount for 102 days under the contract extension, giving him $63,240.
So how could Gross have taken home $164,889?
Ah, therein lies the beauty of a federal contract. He threw in company overhead, $21,854; fringe benefits, $21,528; administrative costs, $35,081; and an expense that was simply described as his “fee,” a tidy $35,081, which may have been added to compensate for any cost overruns and other unexpected expenses.
What did Gross accomplish under the subcontract?
He installed three BGAN broadband Internet connections as part of a pilot project. The satellite modems were evidently placed at Jewish synagogues or offices in Havana, Camagüey and Santiago de Cuba. Gross wrote in a memo:
A wireless network where none previously existed was developed and made operational at 3 target group communities....The target group is now capable of receiving, transmitting, storing and conveying mass information through multi-modal means not previously available.Gross said “activities initially developed” in Havana and the two other cities now “can be expanded to other identified target groups.”
Although not part of the Contractor’s initial scope of work, basic content was provided to each of the three communities. This includes three encyclopedias, pictures and video of each other’s communities (developed during three field visits), a significant array of music, and more than a terabyte of storage capacity at each site.How many trips did Gross make to Cuba under the DAI subcontract?
Four during the initial phase, and one after the contract extension. He was arrested during the fifth trip.
Seven, which would have brought the total to 12. His goals were to:
- Beef up security at the three Internet sites he had already established because he feared they’d be detected.
- Study and monitor usage at the sites.
- Supply “up to three new beneficiaries” with telecommunications kits he called “Telco-in-a-Bag.” They were each to include a satellite modem, laptop and other equipment that would fit in a backpack.
Dec. 3, 2009.
None of Gross's Cuba contacts were reported jailed, but Wachtenheim was said to be in Cuba around that time and was forced to leave the country in a hurry.
Capote, the professor who was also known as Agent Daniel, said Wachtenheim had traveled to Havana in December 2009 and had called him to arrange a meeting, but didn't show up for their appointment.
Later he called to apologize. Capote recalled the conversation.
Wachtenheim: I had to urgently leave Cuba. Do you have your equipment with you? Do you have it?
Capote: I have it.
Wachtenheim: Make it disappear. Get rid of it quickly.
|Raúl Capote. Photo: Prensa Latina|
What were the charges against Gross?
In February 2011, Cuban authorities charged Gross with “actions against the independence or the territorial integrity of the state.” Prosecutors also accused him of taking part in a “subversive project aiming at bringing down the revolution.”
How did Gross explain his work?
In a statement given to the court, Gross said he saw the Cuba project as a way to help support his family and “pay off accumulated debts,” and improve Internet access for members of the Jewish community in Cuba.
Let me be absolutely clear and unambiguous: I have never, would never, and will never purposely or knowingly do anything personally or professionally to subvert a government or political system, or bring harm to anyone...I do deeply regret that my actions have been misinterpreted as harmful and a threat against the security and independence of Cuba. Surely, this runs counter to what I had intended.
|U.S.-government financed gear in Cuba. Photo: Prensa Latina|
On Sept. 14, 2010, USAID modified its contract with DAI. The agency made changes to the scope of work, cut the funding amount from $28,310,630 to $6,857,817, and scheduled early termination of its agreement with the contractor.
Did USAID or DAI say how the contractor spent $6,857,817? Was there any accountability to taxpayers?
No and no. USAID has not made public any reports on the outcome of the Cuba Democracy and Contingency Planning Program. The agency said “due to the sensitive nature of content,” no reports on the program would be submitted to USAID’s huge online database, the Development Experience Clearinghouse.
Have auditors examined USAID’s Cuba programs?
Yes. USAID paid the DMP Group at least $1.47 million to audit the agency’s Cuba programs in 2009 and 2010.
However, USAID has refused disclose any meaningful audit results. In response to a Freedom of Information Act request, USAID in 2011 released a 10-page heavily redacted report that contained few details.
Who used the Internet connections that Gross set up?
Neither DAI nor USAID has reported usage details. Trusted Cubans who were vetted in some way evidently managed the sites, so access was limited. Gross’s subcontract required a usage analysis, but no documents on that have been make public.
Where are the BGAN modems, laptops and other equipment now?
Cuban authorities seized the gear.
How did the project advance the democratization of Cuba?
It is not clear the project had any impact in Cuba, despite its cost and the jailing of Our Man in Havana.
- CDCCP Task Order
- DAI contract amendment
- Cuba judgment vs. Alan Gross
- DAI-CDCCP document
- DAI reply to Gross family lawsuit
- Alan Gross budget proposal
- August 2008 DAI meeting notes
- Cuba indictment vs. Alan Gross
- John McCarthy statement
- Vetting of Alan Gross
- Sept. 27 contract record
- Gross's "Para La Isla" proposal
- DAI contract modification
- USAID salary memo
Note: This article was shared with the Center for Democracy in the Americas as part of a six-month collaborative project with non-profit group. See more about our collaboration here.