Published: May 20, 2004

ATLANTA—William Applegarth was packing up from vacation at his family’s 300-year-old home on Maryland’s Eastern Shore to return to Atlanta when he received a call saying he was expected to be in the East Room of the White House on May 10 at 9 a.m.

At a ceremony that Monday morning, President Bush announced Applegarth’s only son, Paul, as the chief executive officer of the new Millennium Challenge Corporation and the board of directors would be allocating funds to some of the world’s poorest countries with proven commitment to policy reform and sustainable economic growth. With these funds the total amount of core U.S. foreign aid will double by 2006, which also involves increasing aid through the U.S. Agency for International Development and to fight HIV/AIDS.

William and Alice Applegarth have been members of the Cathedral of Christ the King since 1948. Their son is a graduate of CTK School and Marist School’s class of ’64, receiving its Distinguished Alumnus Award in 2000. Most recently he had served as chief executive officer for Value Enhancement International, LLC, and had served as senior advisor to Secretary of State Colin Powell and the undersecretary for economic, business and agricultural affairs at the State Department.

Rising at 5 a.m. that Monday morning, William, Alice and Ginger (one of Paul’s three sisters) met Paul’s wife, Linda, and their daughter Katharine, at the Willard Hotel, where a White House aide took them to the White House and cleared them through security.

“It was quite an event,” Paul Applegarth said in a phone interview.

Applegarth, 58, finds his new job a “good challenge and moving” and “quite a unique opportunity” to build a government corporation. He lives in Greenwich, Conn., with his wife, who is a doctor there, but he will now rent an apartment in northern Virginia where his new office is and will return home on weekends.

“It is exciting,” he said. “I’ve spent a lot of time working in emerging markets and this is bringing it all together as a culmination of things I’ve done before.”

Particularly in this time of anti-American policy sentiment abroad, he is glad to have this opportunity to serve his country and impact the poor in such a powerful, sustainable way, giving people hope and a chance to participate in their societies.

“The Millennium Challenge Corporation is brilliant in its conception. Its approach to U.S. international development assistance brings at least six important elements together in an unprecedented way. The MCC will emphasize policy reform, focus exclusively on sustainable growth, operate in a spirit of partnership, require its partner countries to incorporate the views of broad elements of their societies, focus on results and establish outcome-based standards for success up front, and establish accountability as a key operating principle,” he said. “The core structural components of the MCC represent an unprecedented opportunity to provide incentives to countries to adopt and implement policies, to develop institutions and build capacity to govern wisely, to better invest in their own people and to promote economic freedom.”

“At the same time, these core concepts that underlie the MCC provide the clear opportunity for the United States government to demonstrate international leadership in promoting economic growth that will help reduce poverty in many of the world’s poorest countries. They articulate an international role for the United States that is a positive statement about our country and our values.”

As a member with his wife of St. Michael’s Church in Greenwich, he spoke of how his faith and Catholic education have influenced his own values and career path.

“It’s reflected in the things I do and choose to do in my career. It’s certainly manifested in what I’m doing now,” he said. “The overall sense of charity and service is an essential part of (Catholic) education. Woven into the curriculum, it’s hard to escape it.”

During the ceremony, Bush honored ambassadors and representatives of the 16 developing countries selected for eligibility to apply for aid, which are Nicaragua, Honduras, Armenia, Benin, Bolivia, Cape Verde, Georgia, Ghana, Lesotho, Madagascar, Mali, Mongolia, Mozambique, Senegal, Sri Lanka and Vanuatu.

In his remarks, Bush explained that MCC was formed to oversee this new program to manage America’s aid to developing nations and that the United States has pledged to increase its core development assistance by half, adding $5 billion annually by 2006. This also includes increasing development assistance through the U.S. Agency for International Development and combating HIV/AIDS. Congress appropriated $1 billion for MCC for the fiscal year 2004.

“To make sure that governments make the right choices for their people, we link new aid to clear standards of economic, political and social reform,” the president said. “We invited governments in developing nations to meet those standards so that they may truly serve their people …To be eligible for this new money, nations must root out corruption, respect human rights, and adhere to the rule of law. They must invest in their people by improving their health care systems and their schools. They must unleash the energy and creativity necessary for economic growth by opening up their markets, removing barriers to entrepreneurship and reducing excessive bureaucracy and regulation.”

Bush spoke of how many nations continue to suffer from chronic and desperate poverty and how half of the world’s people still live on less than $2 a day.

“This divide between wealth and poverty, between opportunity and misery, is far more than a challenge to our compassion. Persistent poverty and oppression can spread despair across an entire nation, and they can turn nations of great potential into the recruiting grounds of terrorists,” he said. “The powerful combination of trade and open markets and good government is history’s proven method to defeat poverty on a large scale, to vastly improve health and education, to build modern infrastructure while safeguarding the environment, and to spread the habits of liberty and of enterprise.”

During the ceremony, the honoree’s sister, Ginger, sat behind Powell, who is the chairman of the Millennium Challenge.

“My parents were really pretty much overcome with emotions,” she said. “I saw tears in my mom’s eyes and it made me really proud … It was just wonderful. I kept looking over at my parents and seeing their pride and joy and humbleness. I feel blessed to have been part of it as well,” she said. “A long time ago (Paul) thought about the priesthood. My parents instilled in all of us four kids a very deep commitment for (helping) others. It’s something your parents teach you at home.”

She’d never seen her brother look happier—except at his wedding.

“I was representing my two sisters … It was a big family thing. Family things are very important,” she said. “He (had) called and left a message that ‘the Senate confirmed me last night and it looks as if the ceremony will be on Monday.’ Paul is very quiet about things. I knew he was a senior advisor to Colin Powell … (but) I didn’t really realize the impact of it until I realized President Bush had taken time out of his schedule, a full half hour,” for the ceremony.

She believes her brother is right for “this new and very difficult and important job.”

“He’s going to bring the right values to this job. This isn’t an ego thing for him. He’s had plenty of success in the financial sector. He feels a responsibility to give back and this is a way for him to contribute his skills in the public sector to help developing countries. As a reporter, writer and financial advisor, I understand how these things can intersect. I really appreciate the impact of this both as his sister and as someone who’s been working in the financial sector her entire life as well,” she said. “It’s about using private sector accountability to try to do things right and get the money to the people.”

William Applegarth, 84, said that Sen. Dick Lugar, who is chairman of the Senate Foreign Relations Committee, thanked him for coming. Lugar and Rep. Tom Lantos were instrumental in making sure the MCC passed through both the Senate and House of Representatives.

“We were all really excited to sit with all the ‘big wigs.’ We talked with Condoleezza Rice and Senator Lugar,” he said. “This is going to really help the poor people. President Bush said that half the people in the world don’t even make $2 a day and that we’re trying to change that. We are going to make the developing countries really develop.”

The family went to lunch after the ceremony, and Applegarth took a call on his cell phone from his other daughter Caroline from Australia. That afternoon he held a press conference, where he said that there will be commitments of three to five years to implement an MCC compact with a country, and that $40 million has been reserved for the first year of funding for threshold countries, who did not qualify to become eligible this year but are close and may receive program assistance to improve their policies so they better qualify under the criteria. The next stage is that countries will look at their own priorities for reform promoting economic growth—engaging their civic society to determine them—and will put together proposals for how the money would be spent. MCC will work with countries on their proposals. Funding is not a guarantee, as to be awarded a grant, nations must develop proposals with clear goals and measurable benchmarks and objectives explaining how they will further address the needs of their people and increase economic growth, and have a multi-year financial plan and a plan to ensure fiscal accountability for MCC assistance.

Countries must show positive results for funding to continue, with those who “fall off track” receiving help to “get back on track,” Applegarth said. But chronic under-performers will have funding cut if necessary.

This funding is expected to be in addition to other U.S. foreign aid assistance.

“In short, MCC is investing in growth and will be asking itself: Is this a good investment for the American taxpayer? Does it provide the most benefit to the poor for the American taxpayer in terms of dollars being expended?” he continued. “…When you look at the countries and the needs … that money is needed and will be well spent and that’s what we’re all about.”

On Thursday of the same week, Applegarth gave testimony before the House Appropriations Foreign Operations Subcommittee, where he paused to emphasize that above all this initiative is about helping the poorest people in the world.

“All of us who wake up every morning in good health, turn on the lights, are warm, can run a bath and eat a plentiful breakfast can easily forget that half the human race—more than three billion people—live on less than $2 a day. More than one billion people don’t have safe water to drink. Two billion people have no electricity and another two billion people lack adequate sanitation,” he said. “When we in Washington talk about mechanisms, plans, procedures and administrative processes, we must not forget that these people are living in crushing poverty and that assisting them to escape this poverty is what MCC is all about.”

He said that MCC’s emphasis on policy reform is innovative because it provides incentives for countries to adopt or maintain policies that can help catalyze real progress that empowers the people.

“Policy reforms in these nations can provide opportunities for their citizens to also benefit from both increased international trade and private capital inflows, from the growth of their domestic economies, and from greater economic and political freedom.”

Examples of areas countries may choose to focus on include investments in agriculture, education, private sector and financial systems development, legal and regulatory reform, and enabling infrastructure.

“MCC’s exclusive mission is to focus on the long-term challenge of assisting developing countries to escape their dependency status through self-sustaining economic growth.”

Much of Applegarth’s career has been spent trying to find ways to achieve public sector objectives and goals through private sector means and tools, particularly in emerging markets.

After graduating from Marist, Applegarth earned a bachelor’s degree from Yale University, where he majored in economics and minored in corporate finance and development, and a master’s degree with high distinction from Harvard Business School. He was also a White House Fellow. This blend of disciplines is reflected throughout his career where he worked for The World Bank, the U.S. government, and in the private sector and made development grants, equity and debt investments. This path includes start-up and general management experience, involving activities in Asia, Latin America, Eastern Europe and Africa. He worked for Emerging Markets Partnership in England, Washington and Hong Kong, an asset management firm focused exclusively on international private equity and debt investments in emerging markets. He also recently oversaw the launch of the Emerging African Infrastructure Fund, a British government initiative now including several other European nations, which joins public sector monies and private sector investment skills in a public-private partnership to accomplish key development objectives in sub-Saharan Africa. Before joining EMP he had worked at Lehman Brothers/American Express, and as the chief financial officer of United Way of America as a loaned executive as a key part of the senior management team cleaning up that organization following a scandal. During his tenure UWA returned to operating profitability, eliminated its negative net worth, paid off its bank debt and won Financial World’s 1994 Charity of Choice award because of the turn-around.

He said, in other testimony before the Senate Foreign Relations Committee, that he has learned through his work the importance of working in partnership with local counterparts. For instance, as an Army officer in Vietnam, they had a development mandate to work with local community leaders to build schools, train medics and improve civic operations. And at Emerging Markets Partnership, “we were the minority partner in the companies we built, frequently relying on local entrepreneurs for leadership and implementation. I have gained a healthy respect for the ability of people in emerging markets to define and take responsibility for their own destinies.”

Applegarth’s father noted the sacrifice his son is making.

“He took a substantial reduction in his salary in order to take on this responsibility because he feels it is for the good of humanity … It is a big sacrifice for him,” William Applegarth said. “He’s always been interested in helping people. This is a chance to help them in a major way … He’s felt our funding aid was going into the wrong channels and this will give him a chance to do what he thinks is right.”

He added that his son can speak French, Spanish, Vietnamese and some Chinese and Tagalog, having lived in countries where they are spoken, and that he was only one of a few from his class at Yale to go to Vietnam. “He’s not home very much,” he said.

He added half-jokingly that his son “better be” practicing his faith.

“He’s not down on his knees every day, but he’s faithful. That’s what counts. He’s out working,” he said. “He always studied hard. He’s always been well motivated … He’s always been interested in helping people.”

Dennis Withers, his classmate at both Christ the King and Marist, recalled how Applegarth, for whom he and others held a party when he received the Marist alumnus award, was both valedictorian and a good sport.

“He was always the smartest kid in the class. He was the kind of guy who participated in a lot of different things, and he was the manager of the football team, some job that’s thankless and service-oriented,” said Withers, a football player at Marist and member of CTK. “I was always impressed with his work ethic and discipline to be an active participant in things going on. He was liked and respected. I would say you respect the guy that does that kind of work.”

Applegarth will leave this weekend to begin visiting leaders of selected countries to discuss MCC and their proposals. He also believes it’s an important part of the president’s larger national and global security strategy focusing not only on defense and diplomacy but also on development.

“The reality is it’s a good investment for America,” he said. “An ounce of prevention is worth a pound of cure.”