Chief Auditor Decries Waste, Fraud in Afghanistan Reconstruction Spending

By Dan Parsons
In 2008, the Defense Department allocated $70 million to build an Afghan National Army base in Kunduz province that when finished a year later would house 1,800 troops.
When auditors arrived in 2009, it still was not completed and what had been built was in “deplorable condition,” John Sopko, special inspector general for Afghanistan Reconstruction, said Jan. 11 in his first public remarks after taking the position.
When SIGAR auditors returned a year later, many of the buildings and electrical power transformers were sinking into the earth because of faulty foundation work, roofs were collapsing and “gaping holes” had formed in many of the walls.
While a single Afghan army base is small peanuts compared to the billions of dollars the United States and its coalition partners have spent to rebuild the country after decades of war, it is a window on widespread waste and fraud, Sopko said.
“It is indicative of problems we face and we find time and time again when we do audits and inspections [of U.S.-funded projects] in Afghanistan,” Sopko said in remarks at the Stimson Center.
The United States spends $28 million every day on construction projects in Afghanistan. A total of $90 billion has been spent or approved by Congress already to “strengthen the Afghan security forces, promote self governance and foster economic development,” Sopko said. More money has been spent on Afghanistan than the United States has ever spent on any single reconstruction effort, including Germany after World War II.
Afghanistan, meanwhile, is tied with North Korea and Somalia as the most corrupt nation in the world, he noted.
The money will likely keep flowing from U.S. coffers to Afghanistan even after the 2014 military drawdown prescribed by the Obama administration. While the Afghan government will need $4 billion to sustain its security forces after U.S. troops leave, it brings in only about $2 billion annually. In total, it costs about $10 billion per year to run the Afghan government, which is money that President Hamid Karzai, who was in Washington, D.C., during Sopko’s speech, doesn’t have.
Future investments will go to waste if U.S government agencies do not spend wisely and efficiently, he said. Foremost, officials must ask whether projects are wanted or needed before breaking ground.
“Almost always we find the answer to those questions to be ‘No,’” Sopko said. When auditors asked Afghan National Army officials whether they actually needed the Kunduz base, “all we got were blank stares,” he said.
U.S. efforts to provide Afghans with capable police and soldiers, and to build facilities and industrial infrastructure have been marred by fraud, waste and abuse, Sopko said.
Inadequate planning and poor quality assurance once construction projects begin have been a scourge of rebuilding efforts, and may in some instances have cost American lives, Sopko said. The failure to properly install protective grates over highway culverts — where insurgents often set improvised explosive devices — has sparked an ongoing criminal investigation.
Unlike in Iraq, the U.S. government took a “local-first” approach to construction projects — allowing Afghan companies and vendors to jump to the head of the line for contracts.
Prior to the formation of SIGAR, there were few if any consequences for failing to fulfill the obligations of a contract, Sopko said.
“I’d like to report that the contractors responsible for these problems were held accountable. But that is not the case. Instead, as we seem to be finding time and time again, for some inexplicable reason .. the Defense Department released the contractor from all further obligations, including all warranties, then paid the contractor in full.”
Lax or non-existent U.S. government oversight has led to failures like those at the Kunduz base, which Sopko returned to repeatedly in his remarks. An audit in 2009 revealed that there was no plan for the $11.4 billion allocated to the Defense Department’s Afghanistan construction program, Sopko said. To avoid singling out the Defense Department, Sopko added that the U.S. Agency for International Development “is no better.”
Often USAID officials “do not know what they’re building and in some cases even where [their projects] are located,” he said.
“We’re missing a number of buildings we thought we built in Afghanistan,” Sopko said. “I’m not even sure if they ever were built.”
With all the fraud and waste, Sopko still declared himself an optimist. When he took the job as SIGAR six months ago, he approached the job with “fire in the belly,” he said. His office has the most aggressive suspension and debarment program of all the special inspector generals with 206 entities and individuals punished. SIGAR has also prosecuted 43 individuals and companies known to have actively supported insurgent groups. They are also working with Afghan officials to charge, try and convict Afghan contractors in Afghan courts.
“My team and I are committed to ensuring that taxpayer dollars are spent wisely and are protected from waste, fraud and abuse,” Sopko said. “If we don’t get it right then those lives and that treasure that we have spent over the last 11 years will have been wasted; will have been spent in vain. I and my staff will do everything in our power to make sure that doesn’t happen.”
Photo Credit: Army

Topics: Defense Contracting, Defense Department

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