Footing the Bill for Fraud

Reconstruction funds wasted, stolen in war-torn nation

Afghan National Army / AP
April 10, 2013

The Afghan government will need $70 billion in aid over the next decade in order to sustain its security forces and ensure that the war-torn nation does not backslide into terrorism, according to new estimates by the World Bank.

Much of that tab will be footed by the U.S. taxpayers, leading lawmakers on Capitol Hill to express concern that much of this money will be misspent or stolen by an Afghan government that has done little to combat corruption over the years. Afghanistan is already the most costly reconstruction effort carried out in U.S. history.

Congress allocated more than $16 billion to Afghan security forces and reconstruction projects last year, nearly twice as much as was made available for 'the next four largest foreign assistance beneficiaries—Israel, Iraq, Pakistan, and Egypt—combined," according to John Sopko, the Special Inspector for Afghanistan Reconstruction.

Billions of dollars in U.S. taxpayer aid has been stolen, wasted, or lost on projects that the Afghan government has no ability to sustain, Sopko told the House Committee on Oversight and Government Reform Wednesday during a hearing about waste in U.S. foreign aid spending.

'U.S taxpayers are essentially funding corruption," as well as terrorism and possibly al Qaeda in Afghanistan, according to Oversight Committee Chairman Darrell Issa (R., Calif.)

It 'doesn’t appear there’s much hope, in a general sense, it’s pretty much a money pit, isn’t it?" Rep. John Mica (R., Fla.) asked Sopko and other government officials who oversee how U.S. aid is spent abroad.

Afghanistan will remain the 'largest recipient of the United States for assistance for years to come," even though the government has failed to hold President Hamid Karzai accountable for the systemic theft and waste that occurs.

The United States has begun to provide Afghanistan with direct assistance, meaning that there is little oversight or control over how that money is spent. This has only facilitated theft and corruption, Sopko said.

Nearly $13 million in U.S. Defense Department-purchased equipment 'sits unused," according to Sopko’s testimony before the committee.

'I have significant concerns about the use of direct assistance" because the Afghans have failed to prove they can effectively manage the money. 'Pervasive corruption may pervert its intended use," he said.

The United States is 'wasting our hard won battles on the battle field," as well as progress made on reconstruction efforts, Sopko said.

Confusion and disarray have become hallmarks of U.S. reconstruction efforts in Afghanistan.

'With the military drawdown and transition to the Afghan security forces, it has already become harder for implementing agencies to effectively manage projects and for oversight agencies such as SIGAR to visit and inspect projects," Sopko said in submitted testimony.

'This is because U.S. forces in Afghanistan have a policy of only providing security in areas within an hour by road or air travel of a medical facility," he stated. 'For example, recently SIGAR was unable to visit $72 million in infrastructure projects in northern Afghanistan because they are located outside the security ‘bubble.’ This will only get worse as more bases close or are handed over to Afghan units."

As the United States and other nations begin to hand the Afghan government nearly $7 billion a year over the next decade there is a concern those dollars will fund projects that ultimately go to waste.

'The United States is building infrastructure and launching programs that the Afghan government has neither the financial nor technical ability to operate and maintain," Sopko said. 'The United States has provided tens of billions of dollars for infrastructure, everything from roads and electricity networks to schools, clinics, and security force facilities."

Lawmakers said it is unacceptable to allow U.S. aid to be spent in such a reckless manner.

'Here we have the single most corrupt nation on the face of the planet known as Afghanistan, tied with North Korea, and we are giving them billions and billions of dollars," Rep. Jason Chaffetz (R., Utah) said.

'What mechanisms are in place to ensure that this increasing amount of money directly to the Afghan government is not going to the Iranian government to purchase Iranian fuel?" Chaffetz asked, referring to reports that U.S. aid may have been spent on sanctions-violating oil purchases.

'The mechanisms are weak," Sopko said. 'We are going to relook at the issue. We are told they [the Afghan government] don’t have the funding an capability to follow up."

There is also evidence that the U.S. government may have contracted with Afghan nationals with ties to terrorists.

Chaffetz demanded to know if U.S. funds were going 'to the very terrorists we’re there trying to fight."

Sopko admitted that the U.S. Army denied SIGAR’s requests to sever contracts with suspect individuals.

'We have similar concerns," Sopko said. 'Every one of those proposals [to sever ties] was denied by the U.S. Army."

'It’s probably easier to use a drone strike then to stop somebody [suspect] from contracting with the U.S. government," Sopko said. 'It’s very concerning."