Tag Archives: SIGAR

Why Did the U.S Allow Massive Waste, Fraud and Abuse in Iraq?

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 By Ken Larson in Response to a Question  by  Gwydion Madawc Williams on Quora

 Quora Question

Two Major reasons:

1. The motives of the U.S. and International Military Industrial Complexes, USAID and other western USAID counterparts in fostering continued warfare during this period, netting billions in sales of weapons to the war fighters and massive construction and redevelopment dollars for international companies who often operated fraudulently and fostered waste, looting and lack of funds control.

It is common knowledge that many of these corporations spend more each year in lobbying costs than they pay in taxes and pass exorbitant overhead and executive pay cost on to the tax payer in sales, thus financing their operating personnel riches while remaining marginally profitable to their stockholders.

I watched this from the inside of many of these companies for 36 years. Here is my dissertation on that subject. You can read it on line at:

Here is an example of how the lobbying and behind the scenes string pulling worked:

2. The complete lack of cultural understanding between U.S. and Western decision makers and the middle east cultures they were trying to “Assist” by nation building.

The only real understanding that existed during the period was in the person of General Schwarzkopf who spent much of his youth in the Middle East with his father, an ambassador to Saudi Arabia. He was fascinated by the Arab culture, commended their respect and like Eisenhower led a coalition during the Gulf War. 

He then astutely recommend no occupation of Iraq, went home and stayed out of government.

Norman, like Ike, knew the power of the MIC and he wanted no part of it.

The U.S Tax payer has funded billions in USAID and construction projects in Iraq and wasted the money due to a lack of cultural understanding, fraud and abuse. POGO documents many:

There is history repeating itself here – much like Vietnam the above two factors are deeply at play with the lack of astute learning in our government as we look back over our shoulder.

We must come to the understanding, like a recent highly respected war veteran and West Point Instructor has, that military victory is dead.

“MODERN WAR INSTITUTE AT WEST POINT”

“Victory’s been defeated; it’s time we recognized that and moved on to what we actually can accomplish.”

Frank Spinney is an expert on the MIC. He spent the same time I did on the inside of the Pentagon while I worked Industry. You may find his interviews informative.

At the risk of pounding my personal perspective drum, I have hope by these remarks are of some assistance to you.

DoD Pays Premium for Gas Station in Afghanistan

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gas_station_575“POGO”

“The Department of Defense (DoD) spent nearly $43 million to build a gas station in Afghanistan that should have only cost between $200,000 and $500,000.

Incredibly, overhead costs accounted for about 70 percent ($30 million) of total project expenditures, according to the report.  DoD is unable—or unwilling—to provide a justification.

DoD’s Task Force for Business and Stability Operations spent $42.7 million between 2011 and 2014 to construct a compressed natural gas (CNG) automobile filling station in Sheberghan, Afghanistan. (You may recall Sheberghan as the site of an unfinished, hazard-filled teacher training facility built by the U.S. Army Corps of Engineers that we blogged about two years ago.) The station includes two dispensers/four hoses, one CNG trailer filling point, a car conversion center, an administrative office building, and gas compression and processing equipment. It is currently being operated by a private company, Qashqari Oil and Gas Services.

The Special Inspector General for Afghanistan Reconstruction (SIGAR). determined that the project should have only cost between $200,000 and $500,000. That means we taxpayers overpaid by as much as 10,750 percent. Incredibly, overhead costs accounted for about 70 percent ($30 million) of total project expenditures, according to the report.

According to SIGAR, the Task Force had neither considered the feasibility of the station nor the “potentially considerable obstacles to the project’s success” prior to starting construction. The report forecasts a bleak future for the station: the area lacks the infrastructure needed to transmit and distribute natural gas, and the cost of converting gasoline-powered cars to run on CNG is prohibitively expensive for average Afghanis.

DoD did not provide SIGAR with an explanation for the exorbitant cost or answer other questions concerning the project. Principal Deputy Under Secretary of Defense Brian P. McKeon told SIGAR that the March 2015 closure of the Task Force resulted in his office “no longer possessing the personnel expertise to address these questions.”

McKeon’s statement particularly rankled Special Inspector General John F. Sopko. “Frankly, I find it both shocking and incredible that DOD asserts that it no longer has any knowledge about TFBSO [the Task Force], an $800 million program that reported directly to the Office of the Secretary of Defense and only shut down a little over six months ago,” he wrote to Secretary of Defense Ashton Carter. The report calls McKeon’s claim of ignorance “unconvincing” and accuses DoD of hindering SIGAR’s investigation. Apparently, the contentious, counter-productive relationship between SIGAR and the Pentagon that we’ve blogged about before hasn’t improved.

SIGAR plans to issue additional reports on the Task Force’s activities and spending in Afghanistan. As for the gas station boondoggle, Sopko promises “to shed additional light on how this program operated, what it achieved, how this enormous amount of money was spent,” and, most ominously, “whether any conduct by TFBSO staff or contractors was criminal in nature.”

http://www.pogo.org/blog/2015/11/dod-pays-premium-for-gas-station-in-afghanistan.html

40% Drawdown in Afghanistan Reconstruction Oversight – Billions In Your Taxes Down the Drain

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Image: taxpayer.net

“THE PROJECT ON GOVERNMENT OVERSIGHT”

“The U.S. has appropriated about $110 billion over 14 years attempting to rebuild Afghanistan, and $15 billion remains unspent as of March 2015.

But there may not be enough watchdogs left in Afghanistan to adequately oversee how the remaining money is spent, according to testimony prepared by John Sopko, the Special Inspector General for Afghanistan Reconstruction (SIGAR).“[W]hile the troops may be coming home, the checks are still going over there,” he said.

Sopko warned that in-country staff from the SIGAR and other watchdogs—including the Government Accountability Office, and IG offices at the Department of Defense, State Department, and U.S. Agency for International Development—have been reduced by 45 percent, and that further cuts may be necessary as the State Department draws down its mission. In addition, Sopko said, State’s decision to “normalize” its presence in Afghanistan will force the SIGAR to reduce its deployed staff again by 40 percent, from 42 to 25 positions, by the summer of 2016.

The oversight provided by these federal watchdogs will be “lost and gone forever,” according to Sopko’s prepared remarks.

Sopko gave his testimony yesterday before the House Oversight and Government Reform Subcommittee on National Security. His remarks were spotlighted by Foreign Policy and the Washington Examiner.

In his prepared statement, Sopko described the forced staff reductions as a challenge to his office’s independence. “SIGAR was told that this 40 percent cut is non-negotiable,” he said. “This arbitrary number was developed without SIGAR’s input, and embassy officials did not provide any explanation for how they determined these cuts.”

Like all IG offices, the SIGAR had independent hiring authority, and the Departments of Defense and State are required by law to provide adequate resources for the SIGAR to carry out its mission in Afghanistan, according to Sopko’s prepared remarks. “Now we get an edict from the State Department that basically says, ‘this is your number, live with it,’” he said in response to questions at yesterday’s hearing.

A State Department official told Foreign Policy’s Situation Report that “any assertion that the Embassy Kabul unilaterally ordered SIGAR to make staffing cuts in 2016 is false. In preparation for a congressionally mandated rightsizing exercise, an embassy official in Kabul discussed staffing size with SIGAR, but underscored that the exercise was the beginning of a dialogue on what functions and positions must be kept, not a decision to cut.”

“We are happy that State is now willing to discuss SIGAR’s staffing numbers,” a SIGAR spokesperson told the Situation Report. “However, on Monday SIGAR was informed by senior US Embassy leadership not to bother challenging the staffing cuts.”

Sopko did not mince words in describing the effects of the drawdown in oversight personnel. “Too precipitous a drop in U.S. and Coalition resources to manage and oversee our 14-year investment in Afghanistan could be disastrous,” he said.

The following figure from Sopko’s testimony illustrates the reduction in investigative and law enforcement staff from the SIGAR and other offices, at a time when billions of U.S. taxpayer dollars remain unspent in Afghanistan.

Drawdown

In addition to highlighting the drawdown in oversight staff, Sopko sounded the alarm that “neither the United States nor its Afghan allies truly know how many Afghan soldiers and police are available for duty, or, by extension, the true nature of their operational capabilities.” The SIGAR and other watchdogs have identified weaknesses such as “limited U.S. and Afghan oversight of data collection processes, little or no physical verification of [Afghan National Security Forces] ANSF personnel existence and daily attendance, and lack of controls over payroll processes.” This concern is becoming increasingly urgent since, as Sopko pointed out, the U.S. government is “becoming more and more reliant on accurate and reliable data on the reconstruction effort produced by the Afghan government and other international partners.”

Exacerbating the problem is a lack of access to large swaths of the country. In recent years, Sopko has warned that many U.S.-funded projects in Afghanistan could soon be outside the U.S. government’s “oversight bubbles.” At one point, he said the U.S. government’s oversight access in Afghanistan would shrink from 68 percent of the country in 2009 to an estimated 21 percent in 2014.

Bubbles

With the drawdown of U.S. oversight personnel in Afghanistan, “SIGAR’s role becomes even more important,” Sopko said in his concluding remarks. He said his office will continue to push for more accurate data on the Afghan National Security Forces.”

http://www.pogo.org/blog/2015/04/20150430-sigar-warns-of-drastic.html

How the Pentagon Lost Track of $45 Billion

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“Recently, the Special Inspector General for Afghanistan Reconstruction asked the military to account for all that spending. It couldn’t. According to a new report from SIGAR, the Pentagon only knows how it spent a third of its reconstruction budget.

In Feb. 2013, SIGAR began to audit all the cash the U.S. military and other agencies were spending in Afghanistan. The watchdog wanted records about grants, contracts and any other agreement where money changed hands.

Two months later, the Pentagon delivered a report that accounted for a little more than $23 billion out of $66 billion. SIGAR was confused. “Obligations for the Afghan Security Forces alone totaled $44 billion,” SIGAR wrote in a March 2014 followup letter to then-Secretary of Defense Chuck Hagel.

The letter, obtained by War Is Boring, explained that SIGAR can’t do its job — detect waste, fraud and abuse — if it doesn’t have all the information.

“We have attempted to reconcile the identified discrepancy in the data provided and have been unsuccessful in accounting for this sizable gap with [the Pentagon],” SIGAR added in the letter.

Then the watchdog asked for the records — all the records  — a second time. But the Pentagon didn’t provide the information, and argued that pulling records for the unaccounted $45 billion wasn’t feasible.

“Identifying all of the contract data for obligated [security forces] is … hindered by an inability before July 2010 to connect information in contract data systems with accounting information that could connect contracts with the budget account that funded the contract,” the Pentagon wrote to SIGAR in a July 2014 response letter.

Money for the security forces made up $57 billion of the total, but the Pentagon can only account for a little more than $17 billion.”

View at Medium.com

Afghanisan – What Exactly Are We Reconstructing with $104B of Tax Payer Money?

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“DEFENSE ONE”

“If we don’t make progress on corruption and narcotics, we may lose the whole ball of wax… You’re going to end up with a narco-mafia state, and they will work with the terrorists, because they are funding the terrorists.”  – John Sopko – Special Inspector General for Afghanistan Reconstruction (SIGAR).

For now, as troops pack up and head home, after the U.S. spent 13 years fighting in Afghanistan at the cost of nearly $800 billion and more than 2,300 lives, don’t expect much action in Congress to address where all of that went, and where it’s going

America’s longest war comes to its official end on Dec. 31, but among many members of Congress—ultimately charged with oversight of the $104 billion in U.S. taxpayer money dedicated to Afghanistan’s reconstruction since 2001—political appetite has waned, especially amid a contentious midterm election and continuing budget cuts.

The U.S. will leave roughly 9,800 U.S. troops, along with about 2,700 NATO forces, for a train, advise and assist mission. But the reconstruction mission in Afghanistan is far from over—of the more than $104 billion slated for reconstruction, some $14.5 billion still awaits disbursement over the next several years, according to the Special Inspector General for Afghanistan Reconstruction’s quarterly report to Congress released Thursday.

“Just because the troops are leaving, that doesn’t mean that reconstruction is over,” Special Inspector General John Sopko told Defense One. “Now more than ever you really need to oversight over there … otherwise, you’re just going to be pouring money in and not knowing what happens to it.”

(Related: After $18M, US Halts Work on Half-Renovated Prison in Afghanistan)

When Congress returns to Washington, D.C., on Nov. 12, it will have to decide whether to pass another stop-gap measure and simply extend the level of funding, or, more likely, tuck all of the appropriations bills—including the Overseas Contingency Operation’s budget request, which funds the war in Afghanistan—into a giant, $1 trillion-plus omnibus bill to fund the government through the fiscal year until the end of next September.

Given budget constraints and the spate of foreign policy crises outside of Afghanistan, despite the worrying conclusions of the SIGAR report, there is little urgency on the Hill to address the issue of oversight on existing funding.

A group of Democratic senators is calling for sustained funding for reconstruction, but with a greater proportion of the money tied to conditions to the Afghan government, now led by newly elected President Ashraf Ghani. “Up to now we haven’t done much conditionality at all—because you’re not rewarded for conditionality, you’re not rewarded on withholding money, but on spending money,” Sopko said, “most of it has been a carrot and not a stick. Sometimes, we have to risk saying no to the Afghans.”

Others members of Congress have cautioned against perpetuating a status quo that shows no real progress.

The problem is not insufficient funding—it’s inefficient funding.

This is the Afghanistan we are leaving behind, according to SIGAR:

Opium production, which funds the Taliban and other terrorist organizations, is at an all-time high, using U.S.-sponsored irrigation projects and providing 411,000 full-time jobs—more than the Afghan National Security Forces—despite $7.8 billion spent to eradicate it.

Infrastructure projects, such as the renovation of Afghanistan’s largest prison, continue to be riddled by corruption. The renovation remains incomplete, leaving roughly 7,400 prisoners to be held in a facility with defective workmanship—some in the hallways, due to overcrowding—despite $18.5 million paid out by the State Department.

Afghanistan also remains dangerously dependent on foreign aid. According to reports, in September the Ministry of Finance was forced to ask donors for $537 million to cover government salaries until the year’s end, despite over a decade of massive foreign and American investment.

The Afghan government has estimated it will need $3.9 billion a year in development aid until 2020. Sopko says the U.S. plans to spend closer to $5 to 8 billion on Afghanistan reconstruction over the next several years in order to preserve fragile gains—with substantially less U.S. troops and personnel to oversee the spending.

Sen. Claire McCaskill, D-Mo., who chairs a subcommittee on contracting oversight, said that funding going forward should be limited to areas that can be audited, which after this year will be increasingly difficult to do.

“She’s already raised concerns about the fact that many projects will be unreachable by government oversight officials after the withdrawal, which will only further drive up the risk of waste, fraud, and abuse—which is why she’s proposed that money for those projects outside the areas of possible oversight be limited,” spokeswoman Sarah Feldman said.

Sen. Chuck Grassley, R-Iowa, a member of the Budget Committee, said, “In light of the call to further help the new Afghan government with U.S. taxpayer dollars, it’s important to note how much money already has been squandered.”

“Thanks to the aggressive oversight we’ve had on Afghanistan spending, we have some idea of how much money has been wasted, although we’ll probably never know the extent of it because the problems have been so rampant,” he said. “The waste, fraud and abuse in Afghanistan spending should give anyone pause before spending more money on aid and reconstruction.”

But given competing priorities, there is little to indicate that Congress will use this crucial moment of transition for both Afghanistan and the U.S. role there as an opportunity to mandate enforcement of oversight on the billions of dollars left to be spent.

The Democratic majority of the Senate Foreign Relations Committee echoed many of SIGAR’s concerns in its own report, released Monday.

“As we enter this new phase, it is critical that the United States re-examine its presence in Afghanistan to ensure that assistance is provided in the most efficient, cost effective, and sustainable manner possible,” Foreign Relations Committee Chair Sen. Bob Menendez, D-N.J., wrote in his introduction.

Titled “Afghanistan in Transition: U.S. Civilian Presence and Assistance Post-2014,” the report calls for renewed political attention—and sustained financial support—for Afghanistan, as well as increasing the portion of that support dependent upon the Afghan government meeting certain conditions on governance and human rights, revenue generation and collection, and development.

U.S. political support for assistance to Afghanistan has diminished in recent years, even though precipitous cuts in funding could have a destabilizing effect on the country.
Senate Foreign Relations Committee’s report, “Afghanistan in Transition: U.S. Civilian Presence and Assistance Post-2014”

U.S. political support for assistance to Afghanistan has diminished in recent years, even though precipitous cuts in funding could have a destabilizing effect on the country. To maintain support for future funding, key accountability measures must be strengthened,” the report states.

If there is not a clear plan to keep the Afghan government accountable, it should not be implemented, according to the Democratic senators. If funding cannot be sufficiently monitored, it should be terminated. The tough talk reflects the increasing challenges of oversight in Afghanistan moving forward.

As the report cautions, “With the military drawdown, it will be more difficult to monitor development projects.”

(Read More: Will Afghanistan Become the ‘Forgotten War’ Again?)

Officials and members of Congress expected the OCO to come down significantly with the drawdown in Afghanistan—the Obama administration requested $65.8 billion for fiscal year 2015, roughly a third less than the prior fiscal year. But unexpected flare-ups with the Islamic State, Russia and even the Ebola fight have prompted a reconsideration of easing the U.S. government’s reliance on OCO funding. Some lawmakers have suggested that the U.S. withdrew too quickly from Iraq, giving rise to the Islamic State, and that the administration should rethink its timeline for the drawdown in Afghanistan.

The Obama administration requested $5.8 billion for Afghanistan reconstruction efforts for FY2015, the current fiscal year, with roughly $4 billion for supporting ANSF alone. The FY2015 request is a decrease from the $6.2 billion appropriated in FY2014, but the continuing resolution funded the OCO—and thus, Afghanistan reconstruction—at last year’s higher spending levels.

By many measures, Afghanistan has made progress, according to the senators’ report. The Afghan government reports 7.3 million students are attending school—with one-third of them girls—compared only 1 million in 2001, most of who were male. Life expectancy has increased by 20 years to 60 years old, and maternal mortality rates have been halved. Since 2001, Afghanistan’s GDP has increased from $2.4 billion to more than $20 billion.”

http://www.sigar.mil/about/leadership/ig-sigar.html

Photo Credit and John Sopko Biography:  http://www.sigar.mil/about/leadership/ig-sigar.html

 

 

 

 

The Pentagon Scrapped $500 Million Worth of Afghan Planes for Pennies on the Dollar

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“DEFENSE ONE”

“After spending nearly half a billion dollars on 20 planes to outfit the Afghan Air Force, the Defense Department turned around and scrapped 16 of the aircraft for 6 cents on the pound—just $32,000, the Special Inspector General for Afghanistan Reconstruction has learned.

The Defense Logistics Agency carried out the planes’ destruction at Kabul International Airport as the SIGAR was investigating the Defense Department’s failed program to outfit the Afghans with a fleet of twin propeller military transport aircraft. The G222 aircraft, manufactured in Italy, proved impossible for the Afghan military to maintain and the Pentagon terminated the program in March 2013, three months after the SIGAR initiated its investigation. By then, the department had spent at least $486 million on the aircraft.

SIGAR determined that the aircraft flew only 234 hours out of 4,500 required from January through September 2012.

In a pointed letter to Air Force Secretary Deborah James, John Sopko requested all documentation surrounding the decision to scrap the planes along with an explanation.  Specifically, he wants to know why the planes weren’t flown out of the country to be sold elsewhere and what steps the department took to obtain a refund.

What’s more, Sopko wants to know the end use of the scrap metal sold to an Afghan company and the ultimate fate of parts that weren’t scrapped, such as engines and brass components. In a country where such materials often end up as components in weapons used against U.S. troops, the answers could prove deeply troubling to U.S. and Afghan officials.

The remaining four aircraft of the original 20 are at Ramstein Air Force Base in Germany. In a separate letter to Defense Secretary Chuck Hagel, Sopko requested advance notice before the remaining planes are moved or destroyed. ”

Photo Credit: Scrap – Kabul Afghanistan courtesy “Endofamerica.com”