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Afghan war spending faces new scrutiny

By Karen DeYoung
Washington Post Staff Writer
Friday, July 30, 2010; A08

As part of its attempt to boost Afghanistan's economic and political development, the United States is paying thousands of Afghan contractors and subcontractors to perform much of the work that supports U.S. efforts there. But the "Afghan First" program could be achieving just the opposite of its intended effect, according to officials trying to figure out where the money is going.

Initial assessments by newly organized military task forces and government investigators indicate that instead of promoting new small and medium-size businesses, building trust and spreading the wealth, many of the contracts appear to have enriched Afghanistan's traditional power brokers and created new ones.

"We have the best of intentions," said Rear Adm. Kathleen Dussault, head of a new team of forensic auditors sent to examine military contracts in Afghanistan. But "we need to look at how we're doing business," she added.

Dussault's Joint Task Force 2010 is one of several new initiatives after widespread reports that U.S. spending in Afghanistan, in amounts far exceeding the country's own income, may have exacerbated some of the problems it set out to solve and is a major contributor to the corruption that has hobbled U.S. efforts. The reports have led House appropriators to hold up approval of some of the administration's new spending requests for Afghan reconstruction.

After eight years in Afghanistan and more than $50 billion spent, the United States still has "no comprehensive database on reconstruction contracts" and no integrated system to track projects that are "completed, ongoing and planned," Special Inspector General Arnold Field told Congress in mid-July. President Obama has asked for an additional $20 billion in fiscal 2011.

"It is not enough to simply conduct audits of contracts and program management after money has been spent," Field said.

In addition to Dussault's task force, the military's Criminal Investigative Division is conducting inquiries into contracts, and investigations are underway in at least three congressional committees and by the special inspector general for Afghanistan.

A separate military task force is looking at security subcontractors -- 93 percent of them Afghans -- who provide protection for U.S. installations and for military supply convoys. As the size of the U.S. military in Afghanistan approaches 100,000 troops, triple what it was when Obama took office, the number of private defense contracts -- about 40,000 this year -- has grown even faster. Those numbers do not include non-military contracts for personnel working with a commensurate expansion of U.S. civilian efforts.

Unlike in Iraq, where U.S. companies won most logistic, construction and security contracts, hiring Afghans is an integral part of U.S. counterinsurgency strategy. "COIN doctrine," Dussault said, using the military's shorthand for counterinsurgency, "says that when you do things in a battle space, you need to consider the hearts and minds of the people as much as the military kinetic aspects of what you're doing."

"Afghan First" is based on lessons learned in Iraq and predates the Obama administration by several years. But the recent spike in U.S. spending has exposed glaring flaws and contradictions.

Contracting officials, under heavy pressure to produce results, often favor efficiency over all other factors, military officials said. A recent report by a House oversight subcommittee concluded that tens of millions of dollars spent to protect U.S. military supply convoys traveling through dangerous parts of the country went to local warlords, listed as "subcontractors," in the form of protection money. Some of the funds, the report concluded, likely went to the Taliban.

In Kandahar, where 10,000 U.S. troops are in the early stages of an anti-Taliban offensive, vast sums are being spent on economic and governance development. But an internal military analysis last spring found "a significant risk . . . that the flood of additional aid dollars will fuel corruption that undermines, rather than creates, stability."

The analysis cited studies and surveys indicating that much of the money ended up under the control of local power brokers who doled out contracts, including for construction and security, to favored businesses in return for kickbacks.

"We understand that there are second- and third-order effects to picking a strategy purely because of the efficiency of it," Dussault said. The task force, she said, wants "to look much more closely at the effect of our contracting as opposed to just the efficiency" of it.

The "overarching mentality" in Afghanistan, she said, has been "to leverage the marketplace to allow the vendor to perform the contract with an outcome in mind, and we, the government, shouldn't tell them how to do their job."

In the case of the trucking contract, that mentality has allowed Afghan prime contractors to build a security component into their bids without having to include information on who will provide it.

"The prime contractors here in Afghanistan have built up some intricate, tiered subcontractor relationships which we don't have visibility over," she said. The subcontractor networks, she said, "often become pretty murky."

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