Afghan corruption: How to follow the money?
Monday, March 29, 2010
Hamed Wardak, the soft-spoken Georgetown University-educated son of an Afghan cabinet minister, has a Defense Department contract worth up to $360 million to transport U.S. military goods through some of the most insecure territory in Afghanistan. But his company has no trucks.
Instead, Wardak sits atop a murky pyramid of Afghan subcontractors who provide the vehicles and safeguard their passage. U.S. military officials say they are satisfied with the results, but they concede that they have little knowledge or control over where the money ends up.
According to senior Obama administration officials, some of it may be going to the Taliban, as part of a protection racket in which insurgents and local warlords are paid to allow the trucks unimpeded passage, often sending their own vehicles to accompany the convoys through their areas of control.
The essential question, said an American executive whose company does significant work in Afghanistan, is "whether you'd rather pay $1,000" for Afghans to safely deliver a truck, even if part of the money goes to the insurgents, or pay 10 times that much for security provided by the U.S. military or contractors.
President Obama made a surprise trip to the country Sunday to press President Hamid Karzai to do more to clean up corruption in Afghanistan. Congress has warned repeatedly that U.S. assistance depends on progress in this area.
The likelihood that U.S. money is finding its way to the enemy as well as lining officials' pockets -- charges that Wardak says could be true for other transport contractors but not for his company -- is "one of the many very important things that came to light" during last fall's White House strategy review, an administration official said.
The problem extends beyond military supply transport to Afghan-provided security for reconstruction and other U.S.-funded projects, according to John Brummet, audit chief for the congressionally mandated special inspector general for Afghanistan reconstruction, known as SIGAR.
"If you go to the U.S. Embassy, to USAID, to the Army Corps [of Engineers] and ask if they can assure that their money is not going to the Taliban, they'd be hard-pressed to say," he said.
Prime contractors such as Wardak's NCL Holdings, Brummet said, "say that subs take care of their security," but U.S. officials "do not have visibility on who is providing it." According to SIGAR chief investigator Ray Dinunzio, "there is no database in the U.S. government" that provides reliable subcontractor information.
The U.S.-led coalition command in Afghanistan does not dispute that assessment. Although there is "rigorous" oversight of prime contracts, the command said in a statement, "the relationships between contractors and their subcontractors, as well as between subcontractors and others in their operational communities, are not entirely transparent."
Both Defense Secretary Robert M. Gates and Secretary of State Hillary Rodham Clinton raised the issue in congressional testimony explaining Obama's new strategy. Clinton called "siphoning off contractual money from the international community . . . a major source of funding for the Taliban." Corruption, she said, "frankly . . . is not all an Afghan problem."
Although security for trucks carrying U.S. military supplies around Afghanistan is considered a particularly lucrative source of extortion, the administration has not investigated it or even estimated its scope, according to several officials involved in Afghanistan policy, none of whom was authorized to discuss the issue on the record.