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Political ties open path to Pakistan aid

Kerry donor got assist with hospital project

Shahid Ahmed Khan, a Framingham businessman and fund-raiser for Senator John F. Kerry, stood in front of a drawing of his proposed hospital complex in Islamabad, Pakistan. Shahid Ahmed Khan, a Framingham businessman and fund-raiser for Senator John F. Kerry, stood in front of a drawing of his proposed hospital complex in Islamabad, Pakistan. (Mark Wilson/ Globe Staff)
By Farah Stockman
Globe Staff / June 20, 2010

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WASHINGTON — It started off as a real estate deal: A gated community outside Pakistan’s capital, luxury homes sold to well-off Pakistani-Americans, and a high-end medical center nearby.

Then housing prices plummeted. So organizers, including Shahid Ahmed Khan, a Framingham businessman who is a long-time fund-raiser for Senator John F. Kerry, developed another idea: get US foreign aid to help build a $500 million, world-class medical institute, using expertise from a subsidiary of Partners HealthCare, the company that runs Boston’s elite teaching hospitals.

At Khan’s request, a staffer for Kerry, who heads the Senate committee that oversees a new $7.5 billion aid package for Pakistan, helped set up a meeting with the US Agency for International Development. Now the project’s organizers say they believe they will receive $17 million for the first phase — a nursing school that is slated to accept students later this year.

Khan makes no secret of using political connections to seek USAID funds.

“Getting a call from a senator’s office gives some credibility,’’ he said.

Kerry’s spokesman, Frederick Jones, said Kerry had no knowledge that a staffer in his office sent an e-mail on behalf of a major campaign contributor. Jones said the staffer, whom he declined to identify, helped Khan as she would any other constituent. Furthermore, he said it is Kerry’s policy not to favor any USAID application over others.

But Khan’s apparently successful advocacy illustrates how useful political connections can be, at a time when so many organizations are jockeying for a slice of the new Pakistan funding. The attempt to build a state-of-the-art medical facility in one of the world’s most turbulent nations has also sparked a debate over what projects will offer the most benefit to ordinary Pakistanis.

“Are we building a Mayo clinic for the political elite?’’ asked Patrick Cronin, a former official for USAID who is now a senior adviser at the Center for New American Security. “Who is benefiting from it?’’

The project’s organizers counter that the patch of arid land outside Islamabad could some day be home to a medical flagship that will improve lives and reduce anti-Americanism in a crucial region.

“Health care and education, you cannot go wrong with it,’’ said Khan. “People can forget if you build a road, but people will never forget if you build an institution in their country.’’

A persuasive partner
The idea began in 2005, when the Defense Housing Authority in Islamabad — a nonprofit arm of the Pakistani military that builds and sells housing for retired army officers — sought to create a new community to lure Pakistani doctors living abroad back to the country.

Billed as “the ultimate in living,’’ early advertisements boasted of excellent schools and gardens in a new subdivision called the “Overseas Sector.’’

Profits from home sales would finance a hospital for that community, according to Dr. Mian Amer Masud, a Pakistani doctor who helped conceive of the idea and whose company, Overseas Management Group, manages the project. Demand for an advanced medical center seemed clear: Pakistan currently has only one hospital that meets the highest international standards, and it is more than 700 miles from Islamabad.

Masud said he badly wanted expertise from a Harvard-affiliated hospital, but wasn’t sure how to get it. Then, in 2006, a friend introduced him to Khan, a Pakistani-American with a thick Rolodex and a reputation for deal-making.

“He is the kind of guy you just can’t say no to,’’ said Bryan Irwin, design principal at Sasaki, a architecture firm from Watertown hired to design the project.

Khan, 53, had been in Massachusetts since the 1990s, working as a sales representative, and then a manager for pharmaceutical companies before starting his own consulting business. Over the years, he built an empire of friendships, connecting American politicians to Pakistani doctors who had never been involved in US politics before.

Jonathan Patsavos, Kerry’s New England finance director, says Khan raised more than $200,000 in New England for Kerry’s presidential bid, and threw additional fund-raisers in New York and California.

Khan said he met Kerry about 14 years ago, when he was impressed by a speech the senator gave to a local Islamic society.

Since then, the two kept in touch. Khan sends Kerry memos about his views of Pakistan’s problems. Recently, Kerry invited Khan to a gathering at his home with Senate Majority Leader Harry Reid.

Khan also raised money for Hillary Rodham Clinton and the late Senator Edward M. Kennedy.

After Masud asked for his help, Khan called Kennedy’s office and asked staffers to help him set up a meeting with Partners Harvard Medical International, a nonprofit consulting subsidiary of Partners HealthCare that has helped build hospitals and medical schools in Dubai, China, India, and elsewhere.

“Kennedy was a big health care guy,’’ Khan said. “I thought at that time, if Kennedy’s office called, it would be helpful.’’

Partners eventually signed a 10-year contract to develop a 400-bed teaching hospital. Partners also convinced the project’s organizers to expand their plans to include a medical school, dental school, pharmacy school, and a school of allied health sciences.

But most of all, Partners pushed for a nursing program that will eventually graduate up to 100 nurses a year. There are only 4 nurses per 10,000 people in Pakistan, compared with 94 nurses per 10,000 in the United States.

“When we did the needs assessment, it was quite clear that maternal-child health is crucial,’’ said Dr. H. Thomas Aretz, Partners vice president of global programs.

Partners pushed for the project to be a nonprofit venture; Khan is now president of a foundation that he helped set up to run the hospital and medical school.

“With the not-for-profit, we felt more comfortable,’’ said Aretz. “The whole idea behind the not-for-profit is that anybody will be able to walk in and get care.’’

The project has been a boon for many in Boston. Sasaki, the architecture firm, was paid roughly $1 million for two years of work, Irwin said. Partners will not discuss its fees.

Khan also declined to say how much he receives from the Overseas Management Group, which he says covers his expenses. But he says he will not receive compensation once the foundation takes over the project.

“You see my role as a citizen of the world,’’ he said. “I just want to make this thing happen, without any commercial interest.’’

A little help from friends
Initially, housing sales raised about $1 million for the new hospital, Masud said. But after Taliban attacks and the global economic crisis slashed real estate prices, project organizers began seeking USAID funding. Last year, Khan brought Aretz, the lead Partners official, to Capitol Hill.

Around that time, a staff member who works for Kerry’s Foreign Relations Committee, sent an e-mail to Robert Wilson, the mission director of USAID in Pakistan. Jones declined to release the content of the e-mail, but issued a statement: “Senator Kerry and [his] staff have absolutely no input or role in the awarding of USAID contracts and have never once advocated to USAID on behalf of a specific project.’’

Wilson said in a statement that projects are funded on their merits, and that any tie to Kerry would have no impact.

“USAID adheres to standard procedures in how it selects and awards its contracts and grants,’’ he said, adding that applications are evaluated by technical experts.

But Cronin, who served as the third-ranking official at USAID in 2001, said an e-mail introduction from Kerry’s staffer would be seen as a “tacit recommendation’’ from Kerry, whose 2009 bill tripled USAID funding for Pakistan.

Cronin said it wouldn’t be wrong for Kerry’s office to help a worthy project get its foot in the door. He said USAID officials are more likely to fund a good project they believe has political backing.

“Is that unfair influence? It might be,’’ he said. “If it is good politics and good development, it is a win-win situation.’’

It is relatively rare for unsolicited proposals to USAID to be considered for funding, because they usually don’t line up with USAID’s priorities. But USAID officials, who are scrambling to find credible Pakistani-led health projects to fund, expressed interest in three of eight proposals related to the project

USAID says no final decisions about funding have been made. But Brigadier Javed Iqbal, chief executive officer of the Defense Housing Authority, said that USAID has “principally approved’’ about $17 million for the project.

“The whole team is working with us,’’ he said of USAID staff in a telephone interview. He said other donors are also interested, and that the project will eventually be able to sustain itself through tuition.

Dr. Sania Nishtar, a health care expert who founded the Pakistan-based health care think tank, Heartfile, said Pakistan’s medical community is still debating the merits of the plan. Training nurses and midwives is crucial, she said, but much will depend on how much access the public will have to the hospital and whether graduates of the schools remain in the country.

Farah Stockman can be reached at fstockman@globe.com.

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