U.S. May Spend Millions for Black-Market Fuel in Haiti : Caribbean: Gasoline meant for aid agencies was seized by army. Payments for new supplies would enrich military, its allies.

The United States plans to pay millions of dollars to Haitian black marketeers violating U.S.-designed sanctions so it can replace more than half a million gallons of petroleum stocks confiscated by the military regime from humanitarian groups, U.S. and private aid officials said Tuesday.

Speaking of the humanitarian aid effort, which feeds almost 1 million Haitians and will run out of fuel within weeks, U.S. Embassy spokesman Stanley Shrager said, “We will do whatever we have to do to keep the program going.”

He told reporters this includes U.S. government financing of fuel purchases by humanitarian groups from what he referred to as “the spot market,” a diplomatic reference to the extensive black market controlled by Haitian army officers.

“We are not going to let the program die,” Shrager said when it was pointed out that such purchases would not only violate a U.S.-supported international embargo against gasoline imports but would encourage increased smuggling.

The cost of this choice could be $4.4 million at current prices, about $8 a gallon. The confiscated fuel totals 550,000 gallons.

The bitterness of this option is even sharper because almost all the gasoline brought into Haiti is in the hands of businessmen and army officers blamed by the United States for creating the current crisis; they ousted Jean-Bertrand Aristide, the country’s duly-elected president, 35 months ago.

“It’s sweet, isn’t it?” said a young businessman who smuggles gasoline from the neighboring Dominican Republic. “The Americans have made me rich with their embargo, and now they are going to make me even richer.”

The U.S. decision not only promises even greater riches to the military and its supporters, it also leaves the regime with a gasoline stockpile, allowing it to protect its strategic reserves if the fuel flow is reduced. “It’s just sitting there under their control,” said an official for one humanitarian group. “They don’t have to use it; just having it gives them more room. It’s like found money.”

The present problem surfaced a month ago when the regime refused to release 550,000 gallons of fuel permitted by the sanctions and designated for use by CARE, Catholic Relief Services and several smaller private agencies that provide food and medicine to about 960,000 of Haiti’s poorest citizens.

The supply was to last two months, but the military sealed the storage tanks and has refused to permit any distribution, demanding that high-ranking aid officials and senior U.S. diplomats negotiate with them for the fuel’s release.

But this is impossible, Shrager said, because the United States--which finances most humanitarian programs here--will not deal directly with the military or its puppet civilian government, arguing “they are both illegal and illegitimate.”

U.S. officials had expected Haitian authorities to relent this week. But Shrager said Tuesday that the optimism had faded and that there was “no indication” the fuel would be distributed. Some small groups are already out of fuel; the largest groups say their supplies will last for two or three weeks more.

The humanitarian food program, designed to offset the worst effects of the international embargo, “is crucial to us,” Shrager said, explaining the plans under way to purchase smuggled gasoline.

This is not the first time U.S. officials have dipped into the gasoline black market. The U.S. Embassy is the single largest purchaser of illicit fuel, buying thousands of gallons of gasoline, sources involved in smuggling said.

U.S. sources said that at one point earlier this year, embassy fuel purchases, made at higher-than-street prices to ensure delivery, put the mission’s budget $300,000 in the red and led to State Department threats to reduce staff and operations.

U.S. officials defend their black-market fuel purchases and the plan for helping aid agencies, noting there are no alternatives. “We have to be realistic,” Shrager said. “There is no other source.”

The inability in the last three years to stop fuel smuggling has been a major reason why the Americans have failed to drive the military from power and restore Aristide, by the accounts of most diplomats and Haitian experts. “If the Americans do this,” said one diplomat, commenting on reports of impending black-market fuel purchases, “it will guarantee the life of this regime.”

Adding to U.S. distress has been the failure to gain meaningful cooperation from the Dominican Republic in closing its border.

Despite constant pledges by the Dominicans to stop smuggling--and the deployment of a U.S.-Canadian military force to monitor the border--President Joaquin Balaguer’s government has refused to cooperate, diplomats said.

“Balaguer finds first one excuse, then another,” said a diplomat whose government is involved in the negotiations. “The fact is that his military is getting rich from the smuggling, and they aren’t ready to give it up--not now, not ever.”