The institute subsequently turned down the award, but not before a second Russian institute offered to take over as in-country partner. Less fortunate Russian reform organizations soon realized that success in getting American assistance dollars rested less on merit and free competition, than on having a friend in the mission. This was not unique to Russia by any means. Shortly after the delegation's return, one of the non-academic participants was placed under house arrest by the Ukrainian government. The crisp bureaucratic distinction between government organization and private contractor, essential for maintaining the integrity of the grant process, has been replaced by a porous boundary across which AID personnel move effortlessly into the realm of contractors.
Assistance is most damaging .
The Foundation for the Peoples of the South Pacific, for example, sensed the change in funding patterns and underwent a quick facelift. But due to its unfamiliarity with NIS terrain, Counterpart blundered when it hired a former CIA official, thereby damaging its relations with the Ukrainian community. Assistance is most damaging, however, when it blatantly undermines the very principles the United States publicly espouses as essential for Russian society. Several Russian academics, for example, confronted with the collapse of the Soviet Union's educational system, took the bold leap into entrepreneurship by starting their own businesses in Moscow. 18 Perverse as this outcome may seem, it gets still worse, as private NIS firms are then forced to choose between producing for the market or working for foreign assistance dollars.