The Cable

Afghan Watchdog: Hundreds of Millions of Dollars Can’t Be Found

The Pentagon can’t account for several hundred million dollars’ worth of reconstruction funds paid out to dozens of contractors in Afghanistan, according to a new report from Washington’s Afghan watchdog that details $21 billion in U.S. taxpayer-funded projects in the impoverished country. The Special Inspector General for Afghan Reconstruction, or SIGAR, found that U.S. officials ...

US soldier measuring the roof of a school in Afghanistan before beginning renovations.
US soldier measuring the roof of a school in Afghanistan before beginning renovations.

The Pentagon can’t account for several hundred million dollars’ worth of reconstruction funds paid out to dozens of contractors in Afghanistan, according to a new report from Washington’s Afghan watchdog that details $21 billion in U.S. taxpayer-funded projects in the impoverished country.

The Special Inspector General for Afghan Reconstruction, or SIGAR, found that U.S. officials only had data on about 57 percent of the $795 million spent by ground commanders on the Commander’s Emergency Response Program from 2002 to 2013. The report attributes that shortfall to mismanagement, not corruption or waste, however.

The program was stood up on the fly in Iraq in 2003 to provide a ready pot of money for individual commanders to fund small-scale reconstruction projects like new schools to build popular support and provide jobs to unemployed young men so they would be less likely to fight for the insurgency because it offered a steady paycheck. Commanders were generally given quite a bit of latitude to decide what kinds of projects to fund, an approach that created friction with the State Department staffers on the ground, who complained that the projects — which rarely cost more than $500,000 at a time — weren’t tied to any longer-term development or sustainment plans. State officials also worried that the military spending at times had the effect of complicating relationships by favoring — and funding — one local power broker or tribe over another.

Still, Army and Marine Corps leaders have long praised the program for allowing them to forge alliances among the locals by doing things like repairing bridges, fixing roads, and bringing plumbing and electricity to small villages — while also pumping cash into the local economy by relying on local contractors. The program was extended to Afghanistan in 2004.

The program’s funding peaked at $1.2 billion in 2007, and has fallen to basically zero as American forces have been withdrawn from Iraq and Afghanistan.

Overall, the watchdog’s report says that Washington has spent about $104 billion between 2002 and 2014 for Afghanistan reconstruction, with $66 billion of that going to the Defense Department. But the document says the Pentagon can only account for about $21 billion of those contract awards due to some accounting issues in the pre-2010 time frame.

The mammoth reconstruction effort has been dogged by widespread reports of corruption and mismanagement, but the new report attributes much of the discrepancy in the numbers to something far more banal: changes in federal accounting systems.

John Sopko, who heads the SIGAR office and is a frequent and vocal critic of American spending in Iraq and Afghanistan, writes that the new report “does not include any recommendations. SIGAR is presenting this data here to inform Congress and the U.S. taxpayer how their reconstruction dollars are being spent in Afghanistan.”

Overall, the inspector general found that 38 different vendors each received awards of more than $100 million in Pentagon reconstruction funding between 2002 and 2013, and that these 38 accounted for approximately 58 percent of the Defense Department’s total Afghan reconstruction funding.

The biggest winners overall are two Afghanistan-based logistics companies, with Asia Global Shipping Group of Companies receiving $1.7 billion worth of contracts, and the Parwan company taking in $1.3 billion. The companies have all but cornered the lucrative market in trucking U.S. and NATO equipment in and out of Afghanistan through the few treacherous roads leading to ports in Pakistan.

As far as U.S.-based companies, Humvee maker AM General has racked up $5.5 billion in sales in Afghanistan, mostly through the sale and repair of Humvees for the Afghan army, while MRAP and heavy truck maker Navistar won $781 million worth of deals. A third company, Textron, inked another $632 million, mainly for the 400-plus armored personnel carriers it has sold for the Afghan army’s quick reaction force.

The report doesn’t touch on it, but those vehicles are likely to be put to the test in the months ahead as the new Afghan government and its enemies in the Taliban ramp up the fight for control of broad parts of southern and eastern Afghanistan.

U.S. Air Force photo

Paul McLeary is Foreign Policy’s senior reporter covering the U.S. Defense Department and national security issues. @paulmcleary

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