University spokesperson Joe Wrinn said that the University had been cooperating with USAID investigators for about six weeks.
"HIID takes extremely seriously any allegations of impropriety of any individuals associated with HIID," read a University press release. "HIID is cooperating fully and actively with USAID in their continuing investigation of this matter."
Janine R. Wedel, an associate professor at George Washington University who is working on a book about U.S. aid to Eastern Europe and Russia, said HIID has unusual influence in Russia.
"HIID is a unique position to recommend U.S. aid policy in support of reform, while at the same time being a recipient of the aid as well as overseeing other aid contracts," Wedel said.
Officials said HIID is being caught in a political showdown. Shleifer said he was being unfairly targeted, adding that he was caught "in the middle of a battle between Russian politicians."
HIID's activities are closely aligned with Anatoly Chubais, who served as Boris N. Yeltsin's first deputy prime minister until he was fired last year and placed on Harvard's payroll briefly, Wedel said.
Sachs is currently in Malawi and could not be reached for comment