House Wants Answers on Afghan Oil Fraud

Congress demands info on Afghan oil purchases that may have violated Iran sanctions

Afghan National Army / AP
February 20, 2013

House lawmakers are demanding to know why the Defense Department shredded financial records potentially detailing hundreds of millions of dollars in fraud, waste, and abuse relating to oil purchases in Afghanistan.

Some of this oil was potentially purchased by the U.S. from the Iran, which would constitute a violation of sanctions on Tehran.

The House Subcommittee on National Security, Homeland Defense, and Foreign Operations has asked outgoing Defense Secretary Leon Panetta to hand over detailed records accounting for how more than $1 billion in taxpayer funds were spent on oil purchases for the Afghan National Army, according to a letter sent Tuesday.

It is suspected that large amounts on this money were wasted, lost, or stolen by the Afghan government and that a portion may have been used to purchase Iranian oil.

"We request a briefing to learn more about the potential that the lack of [oil funding] accountability measures may have heightened the risk U.S. taxpayers could be supporting the purchase of Iranian fuel," the lawmakers wrote to Panetta.

The subcommittee is asking that this briefing take place by March 1.

Additionally, the DoD has failed to turn over materials detailing precisely how U.S. funds were spent despite promises made to the subcommittee in September.

Defense Department officials had promised the subcommittee that they would turn over detailed records regarding fuel purchases in Afghanistan.

"Despite this assurance, almost six months later, SIGAR has not received any financial records from the time period March 2010 through February 2011 or received a time frame for their production," the lawmakers wrote.

The U.S. has committed to spend another $343 million in oil purchases for Afghanistan in the coming year, despite the lack of oversight, which has been heavily criticized by the Special Inspector General for Afghanistan Reconstruction (SIGAR).

The lack of oversight regarding these fuel purchases has led to much uncertainty.

It remains unclear if the government is allotting the Afghan government more money than is needed.

Lawmakers and SIGAR have been rebuffed by the Defense Department when attempting to determine "how much fuel has been lost or stolen" in Afghanistan, according to the letter.

Lawmakers on the House Oversight and Government Reform Committee have requested that the relevant materials be provided by March 5.

SIGAR’s lead inspector testified earlier this month that potentially billions of U.S. dollars have been lost in Afghanistan on ineffective and corruption-filled reconstruction projects.

As the U.S. begins to withdraw 34,000 troops from Afghanistan it continues to supply billions of dollars in direct assistance to the government, which is free to spend the money in any way it sees fit.

Published under: Afghanistan