U.S. GOVERNMENT PUBLISHING OFFICE

31–266 PDF WASHINGTON : 2018

S. Hrg. 115–324 

AFGHANISTAN IN REVIEW: OVERSIGHT OF U.S. 

SPENDING IN AFGHANISTAN 

HEARING 

BEFORE THE

SUBCOMMITTEE ON FEDERAL SPENDING 

OVERSIGHT AND EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

MAY 9, 2018 

Available via http://www.fdsys.gov 

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs 

( 
(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

RON JOHNSON, Wisconsin, Chairman 

JOHN MCCAIN, Arizona 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

JOHN HOEVEN, North Dakota 

STEVE DAINES, Montana 

CLAIRE MCCASKILL, Missouri 

THOMAS R. CARPER, Delaware 

HEIDI HEITKAMP, North Dakota 

GARY C. PETERS, Michigan 

MAGGIE HASSAN, New Hampshire 

KAMALA D. HARRIS, California 

DOUG JONES, Alabama 

CHRISTOPHER R. HIXON, Staff Director 

MARGARET E. DAUM, Minority Staff Director 

LAURA W. KILBRIDE, Chief Clerk 

BONNI DINERSTEIN, Hearing Clerk 

SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT AND EMERGENCY 

MANAGEMENT 

RAND PAUL, Kentucky, Chairman 

JAMES LANKFORD, Oklahoma 

MICHAEL B. ENZI, Wyoming 

JOHN HOEVEN, Montana 

GARY C. PETERS, Michigan 

KAMALA D. HARRIS, California 

DOUG JONES, Alabama 

GREG MCNEILL, Staff Director 

ZACHARY SCHRAM, Minority Staff Director 

KATE KIELCESKI, Chief Clerk 
(III) 

C O N T E N T S 

Opening statement: Page 

Senator Paul ..................................................................................................... 1 

Senator Peters .................................................................................................. 2 

Senator McCaskill ............................................................................................ 8 

Senator Jones .................................................................................................... 11 

Prepared statement: 

Senator Paul ..................................................................................................... 29 

Senator Peters .................................................................................................. 31 

WITNESSES 

WEDNESDAY, MAY 9, 2018 

John F. Sopko, Special Inspector General, Special Inspector General for Afghanistan Reconstruction .................................................................................... 4 

Laurel E. Miller, Senior Political Scientist, Rand Corporation ........................... 6 

Gregory McNeill, Majority Staff Director, Subcommittee on Federal Spending 

Oversight and Emergency Management ............................................................ 21 

Sergio Gor, Deputy Chief of Staff for Communications, Office of Senator 

Rand Paul ............................................................................................................. 22 

ALPHABETICAL LIST OF WITNESSES

Gor, Sergio: 

Testimony .......................................................................................................... 22 

Prepared statement .......................................................................................... 62 

McNeill, Gregory: 

Testimony .......................................................................................................... 21 

Prepared statement .......................................................................................... 58 

Miller, Laurel E.: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 50 

Sopko, John F.: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 33 

APPENDIX 

Minority Staff Report .............................................................................................. 75 

U.S. Institute of Peace statement for the Record ................................................. 95 

Responses to post-hearing questions for the Record from: 

Ms. Miller .......................................................................................................... 98 

(1) 

1The prepared statement of Senator Paul appears in the Appendix on page 29. 

AFGHANISTAN IN REVIEW: OVERSIGHT OF 

U.S. SPENDING IN AFGHANISTAN 

WEDNESDAY, MAY 9, 2018 

U.S. SENATE, SUBCOMMITTEE ON FEDERAL SPENDING, OVERSIGHT AND EMERGENCY MANAGEMENT, OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 2:30 p.m. in room 

342, Dirksen Senate Office Building, Hon. Rand Paul, Chairman of 

the Subcommittee, presiding. 

Present: Senators Paul, Peters, Harris, Jones, and McCaskill. 

OPENING STATEMENT OF SENATOR PAUL1

Senator PAUL. Thank you for coming. I call this hearing of the 

Federal Spending Oversight (FSO) Subcommittee to order. 

Almost 17 years ago, the United States invaded Afghanistan to 

topple the Taliban regime, that provided safe harbor to perpetrators of the 9/11 terrorist attacks. I think that was the right thing 

to do at the time, but I think we have simply stayed too long. 

This is the longest military engagement in U.S. history. We have 

already been there 7 years longer than the Soviets, and their occupation is often characterized as a failure, their Vietnam. Instead of 

learning from their experience, we seem to want to duplicate it. We 

have occupied their old bases, we are trying to build the same kind 

of infrastructure, and we are fighting the same kind of guerilla 

force. 

What is more troubling is that some talk about never coming 

home. We are told our mission there is vital and that we are making a stable country in the region which will pay a peace dividend 

even if we have to stay 50 years. 

Recently, Secretary Pompeo admitted there is not a military solution to the Afghan war, and yet this Administration just upped our 

troop numbers. We build dams and electric transmission lines, and 

the Taliban blow them up, or worse, take them over and sell the 

power back to the Afghan people. And, by the way, while we are 

building infrastructure there, our infrastructure at home is aging 

and crumbling. 

The country is not safe. You cannot even leave the embassy. 

Most of the time our personnel cannot even visit many of the infra-
2 

1The prepared statement of Senator Peters appears in the Appendix on page 31. 

structure projects we pay for. Let me repeat that: we cannot even 

visit many of the projects we are paying for. 

We have an opium problem there. We have an opium problem 

here. And despite spending over $8 billion in Afghanistan, they are 

still the leading producer of poppies, as an origin of heroin, for the 

world. It is just insane. 

To top it all off, we are spending over $40 billion each year for 

this. So the purpose of this hearing is to really take a deeper dive 

and to examine that spending. We have the Special Inspector General for Afghanistan Reconstruction (SIGAR) here today to talk 

about some of his great work exposing things like the $42 million 

natural gas station, the $60 million power transmission system 

that does not work, buildings that melt in the rain, and the $80 

million consulate up in Mazar-e Sharif that was never occupied because it was not secure. We want to hear about their ongoing corruption review as well. 

Our second panel will be staff from the Subcommittee who recently returned from an oversight trip to Kabul. As mindboggling 

as the waste seems back here in Washington, I understand from 

them it is all the more galling when you are there on the ground. 

I have made it no secret I think we should come home. I think 

we went in for the right reasons but we stayed too long. It is not 

our job to build countries, and, frankly, I think we do a poor job 

of it. If you talk to our soldiers, I think they will tell you that is 

not why they enlisted. 

I think we anger as many people as we help, and that also 

makes the taxpayers back home angry. 

With that, I will recognize Ranking Member Peters for his opening statement. Senator Peters. 

OPENING STATEMENT OF SENATOR PETERS1

Senator PETERS. Thank you, Mr. Chairman, and I would like to 

join you in welcoming Inspector General Sopko and Ms. Miller to 

the Subcommittee. I look forward to both of your testimony. 

Today’s hearing is notable, not just because of its important 

topic, reconstruction spending in Afghanistan, but also because of 

its venue. Although the Senate regularly holds hearings related to 

our Nation’s efforts in Afghanistan, until now those hearings have 

generally been held before the Armed Services Committee and the 

Foreign Relations Committee. It is rare for our Oversight Committee to focus on spending in Afghanistan, but I do think we 

should. 

In the 17 years since September 11, 2001, the American taxpayer 

has been asked to bankroll hundreds of billions of dollars of spending on combat relief and reconstruction in Afghanistan. Our total 

bill is quickly approaching $900 billion, not counting what we 

spend here at home treating and caring for our veterans. More 

than $125 billion has been spent on relief and reconstruction alone, 

and even accounting for inflation, that is more than we spent on 

the Marshall Plan to rebuild Western Europe in the aftermath of 

World War II. 
3 

Frankly, calling it reconstruction is somewhat of a misnomer. 

Much of our work in Afghanistan is construction, building infrastructure and capacity where currently none exists. 

After 17 years and hundreds of billions of dollars, it is more than 

fair for taxpayers to ask, ‘‘Is it worth it?’’ ‘‘What is the return on 

our investment?’’ ‘‘Are we throwing good money after bad?’’ and 

‘‘Why are we spending hundreds of billions of dollars on infrastructure thousands of miles away when our own roads and bridges are 

crumbling right outside our doors?’’ 

What do I tell the people of Flint, Michigan, who ask me, ‘‘Why 

are my taxes paying for clean water in Kabul when I do not have 

clean water in my own home here in Flint?’’ 

These are important questions and very hard ones. Partly they 

are policy questions. Put simply, the money we spend in Afghanistan is intended to promote our national security, and thanks to 

the incredible dedication and sacrifice of our servicemembers, frontline civilians and their families, we have been successful in driving 

al-Qaeda out of Afghanistan and denying safe haven to 

transnational terrorists. We have made progress in democracy and 

development in helping to strengthen Afghan institutions. There 

are more roads and more electrical lines. Literacy is up and infant 

mortality is down. 

And yet, Afghanistan is not secure. We are constantly warned 

that chaos will follow a precipitous withdrawal of our forces and 

funding, and every year we add tens of billions of dollars to the bill. 

Taxpayers are growing weary. My constituents tell me we cannot 

afford to write a blank check. 

To draw America’s longest war to a successful conclusion, we 

must empower Afghans to achieve and sustain the peace. We must 

responsibly reduce our spending as we continue to transition military and governing capacity to Afghans. How we achieve that is as 

much about process as it is policy. The right policies do not ensure 

success on their own; in fact, far from it. When the money we 

spend in Afghanistan is wasted, stolen, or ends up in the hands of 

the very enemies we seek to defeat, it undermines our policy, however well intended. 

I hope that is what we focus on here today. How do we prevent 

waste, fraud, and abuse from our spending in Afghanistan? How do 

we ensure that each dollar is put to its highest and best use? How 

do we track it? How do we measure its effectiveness? Are the right 

oversight structures in place to provide us with the information 

that we need to make the tough decisions? 

I know from my own visit to Afghanistan, and from the visit 

made by our staffs last month, our security posture severely limits 

the ability of Americans to work outside of the wire. In many cases, 

American aid workers and auditors cannot even visit the projects 

that our taxpayers fund. What oversight options, if any, do we have 

in that kind of security environment? 

I am grateful to be here to hear from Mr. Sopko and Ms. Miller, 

who have years of experience working on these questions, inside 

and outside of Afghanistan. Between them, they can speak to the 

challenge of conducting reconstruction programs and the challenge 

of auditing and overseeing these programs, and I certainly thank 

you for your service and thank you for being here today. 
4 

1The prepared statement of Mr. Sopko appears in the Appendix on page 33. 

Members of this Subcommittee have a wide range of views about 

our Nation’s involvement in Afghanistan, but whatever your views, 

our success depends on spending money effectively, even as we 

seek to reduce our overall expenditures. Waste fuels corruption, undermines the institutions in Afghanistan that we seek to empower, 

and breaks faith with the American taxpayer. 

I hope today’s hearing will help address these issues and send a 

strong message that Congress’ role does not end when we pass a 

budget and write a check. We have an obligation to follow the 

money and ask the tough questions. 

I thank you and yield back. 

Senator PAUL. Thank you, Senator Peters. With that I will begin 

with our witness opening statements. I will remind the witnesses 

that their already-submitted written testimony will be included in 

the record and to keep their remarks to 5 minutes. 

Our first witness is Special Inspector General John Sopko of the 

Office of the Special Inspector General for Afghanistan Reconstruction. For those of you who are unaware, Special Inspector General 

Sopko worked for the Permanent Subcommittee on Investigations 

from 1982 to 1997. He assumed his role as the Special Inspector 

General in July 2012. He has an illustrious resume with more than 

30 years of experience in oversight and investigations, as a prosecutor, congressional counsel, and senior Federal Government advisor. He holds a bachelor’s degree from the University of Pennsylvania and a JD from Case Western University Law School. 

Special Inspector General Sopko, welcome back to the HSGAC 

hearing room, and I recognize you for your opening statement. 

TESTIMONY OF JOHN F. SOPKO,1 SPECIAL INSPECTOR GENERAL, SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN 

RECONSTRUCTION 

Mr. SOPKO. Thank you very much, Chairman Paul, Ranking 

Member Peters, and other Members of the Subcommittee. Thank 

you for inviting me to appear before this Subcommittee to discuss 

our oversight work in Afghanistan and the status of reconstruction 

there. Let me express my appreciation for the attention the Committee has paid to SIGAR’s work. 

As you know, Mr. Chairman, both you and Senator Lankford 

have highlighted many of SIGAR’s findings in your reports on government waste, and Senator McCaskill’s recent report, entitled 

‘‘Fast Cars, Easy Money’’ highlighted gross mismanagement of taxpayer dollars initially identified by a SIGAR audit. Likewise, I appreciate that the majority and minority staff of the Committee took 

the time to learn about our work firsthand during their recent 

travel to Afghanistan. 

Now this Committee, as you well know, is tasked with ‘‘studying 

the efficiency, economy, and effectiveness of agencies and departments of the government.’’ SIGAR is charged with a similar requirement, to look at all Federal entities involved in Afghanistan 

reconstruction. We are the only Office of Inspector General (OIG) 

authorized to examine all aspects of reconstruction, regardless of 
5 

the department or agency involved, including U.S. funds contributed to international organizations for Afghanistan. 

Now that is critical, especially critical today, because reconstruction in Afghanistan has involved many United States, foreign, and 

multinational agencies conducting an immensely wide range of activities, including building the Afghan security force, undertaking 

efforts to improve education and health care of the Afghan people, 

fighting corruption, fighting the narcotics trade, and developing the 

Afghan economy. 

We have seen much good work done, but we have also reported 

on far too many instances of poor planning, sloppy execution, theft, 

corruption, and a lack of accountability. Some of the most egregious 

examples SIGAR has identified include the Department of Defense 

(DOD’s) purchase of nearly a half billion dollars’ worth of secondhand airplanes from Italy that were unusable and later sold as 

scrap; the construction of an Afghan security forces training facility 

that literally melted in the rain; numerous schools, clinics, roads, 

and other infrastructure built dangerously unsound and with little, 

if any, concern for the costs of supplying and sustaining them; and 

a failed $8.7 billion counternarcotics effort in a country where 

poppy cultivation increased by 63 percent last year alone. 

Common problems we have identified include touting dollars 

spent as a metric of success and counting outputs, like training 

courses held, rather than outcomes of activity, such as whether 

those courses actually improved performance; poor coordination 

and parochialism among United States and foreign agencies, rather 

than an integrated whole-of-government approach; projects and 

programs developed without a metric to assess them; a failure to 

take into account the Afghans’ ability to sustain these projects; and 

a persistent lack of accountability for poor performance, whether by 

firms or individuals. Also a loss of institutional memory due to constant personnel rotations, and illegal acts, like soliciting bribes, 

taking kickbacks, or stealing money. 

Now Afghanistan reconstruction is a work in progress, and as we 

have all recognized, slow progress at that. Results to date have 

been decidedly mixed. But there has been progress, as noted by the 

members, including improvements in health and educational outcomes for the Afghan people. 

While great obstacles remain, I believe that an effective reconstruction effort in Afghanistan can support this Administration’s 

policy that the country must never again be a launching pad for 

terrorist activity. But to succeed, our government must do a better 

job of planning, overseeing, monitoring, and imposing accountability for misconduct and incompetence. 

SIGAR, as you well know, does not make or weigh in on national 

policy. As an Inspector General, we do process. We look at the process. But as long as reconstruction efforts continue, we will persist 

in our efforts to improve the work by presenting the facts, as we 

find them, and making recommendations, where appropriate. 

Thank you and I look forward to the questions. 

Senator PAUL. Thank you for your testimony. 

Our next witness is Laurel E. Miller. Ms. Miller is a Senior Political Scientist at Rand Corporation. She served as the Acting Special Representative for Afghanistan and Pakistan at the U.S. De-
6 

1The prepared statement of Ms. Miller appears in the Appendix on page 50. 

partment of State, and prior to that Principal Deputy Special Representative. She has participated in national security and foreign 

policy studies on subjects ranging from democratization to conflict 

resolution to institution-building in weak States. 

Ms. Miller holds an AB from Princeton and a JD from the University of Chicago. 

Thank you very much, Ms. Miller. 

TESTIMONY OF LAUREL E. MILLER,1 SENIOR POLITICAL 

SCIENTIST, RAND CORPORATION 

Ms. MILLER. Good afternoon, Chairman Paul, Ranking Member 

Peters, and distinguished Members of the Subcommittee, and 

thank you for having me here today. 

I have been asked to address the effectiveness of U.S. spending 

in Afghanistan. This has two main components: efficiency of how 

the dollars are spent, as Mr. Sopko was addressing, and impact of 

the spending on achieving policy goals, and I will focus mostly on 

the latter, covering three main points. First, the motivation behind 

U.S. spending, why we are doing it; second, the results achieved; 

and third, I would like to propose a path forward toward reducing 

the U.S. commitment while mitigating risk. 

First, the rationale for U.S. spending stems from the 2001 invasion. The United States ousted the Taliban regime not to improve 

conditions in Afghanistan for Afghans but to pursue U.S. national 

security interests in destroying al-Qaeda, and, because it had provided safe haven for al-Qaeda, the Taliban. The driving imperative 

of U.S. strategy since has been to prevent al-Qaeda and other international terrorist groups from regaining or gaining a foothold in Afghanistan and to prevent the return of Taliban rule. 

But the invasion created a vacuum, which then had to be filled 

by establishing a new government and by developing that government’s capabilities to provide the country’s security and to work 

with the United States in denying space to terrorist groups. 

The theory behind using taxpayer dollars to promote Afghan economic and human development, to improve public services, and to 

build institutional capabilities is that making those kinds of improvements would create a stable political and security environment. The United States has long recognized that it cannot only 

battle its way to stability in Afghanistan. 

Although, in certain areas, the improvements sought have been 

achieved, on the whole, neither political nor security conditions in 

Afghanistan are more stable now than they were prior to the surge 

in troops and spending a decade ago. In other words, there are specific spending objectives that have been achieved but the ultimate 

purpose, a stable and self-sustaining Afghanistan, has not yet been 

fulfilled. 

One possible explanation is that the theory I described of how 

this spending works is mistaken. One certain explanation is that 

achieving the kinds of impact that I have outlined, in a war-torn 

country anywhere in the world, is exceedingly difficult. For instance, creating from scratch security institutions cannot be 

achieved through quick-fix technical measures, but instead requires 
7 

broad-based improvements in governance quality and changes in 

societal norms. 

If the main stability goals have not been achieved then the question comes, what results have been produced? One way to answer 

that is to look at particular projects and whether they were competently executed and whether they produced the desired outputs. 

But using a wider lens, it is also possible to answer in terms of 

the impact of the totality of aid on Afghan society. U.S. assistance 

has clearly produced some positive development outcomes, which 

have no doubt improved the lives of many Afghans. 

A variety of statistical indicators show that health, education, access to information, and other facets of life have improved significantly, and that is a tribute to U.S. spending in the country. One 

example is the ninefold increase in the number of Afghan children 

in school, which is an important investment in future generations. 

There is, however, some doubt about the sustainability of these 

outcomes and the economic picture in Afghanistan has begun to deteriorate, together with security conditions. 

In analyzing these results and the impact they have had on 

achieving policy goals, it is also important to consider how much 

better could be expected. It is important to note that the Afghan 

context is exceptionally challenging. It is still one of the world’s 

poorest countries. It is arid, land-locked, historically has attracted 

interference by neighbors and regional powers, and it has suffered 

decades of damaging conflict. It can hardly be surprising that implementing assistance programs there is extraordinarily difficult. 

In realistically setting expectations for efficiency and impact, the 

significant limitations imposed by conditions in Afghanistan should 

be appreciated. 

The crucial question comes back to one of policy. To what extent 

do U.S. national security interests justify continuing to spend assistance dollars while accepting that, inevitably, there will be leakages, losses, and imperfections? Answering that question should 

take into account that the Afghan government and the security 

forces the United States has established, in their current forms, are 

now dependent on that financing. At the extreme end of a range 

of options, rapid elimination of U.S. assistance would likely lead to 

a steep downward slide of security and political stability. 

To conclude, I would say, in my judgment, U.S. national security 

interests could best be advanced by mounting a robust diplomatic 

initiative to negotiate a settlement of the conflict that would fold 

the Taliban into Afghan politics, enable the United States to narrow its security mission to focus on counterterrorism, and set the 

conditions for normalizing the scale of U.S. assistance. 

Current U.S. policy nominally acknowledges the need, ultimately, 

for a negotiated settlement, but actual policy execution is still very 

heavily dominated by the U.S. military effort. A concerted, 

prioritized initiative to negotiate would be a major foreign policy 

undertaking, requiring both clear political backing and substantial 

diplomatic muscle; as yet, those requirements do not appear to 

exist. 

Thank you. 

Senator PAUL. Thank you for your testimony, and if Senator Peters is OK with this, I would like to encourage participation, and 
8 

so I am going to skip myself, Senator Peters, and go to Senator 

McCaskill, unless you have a complaint. 

Senator PETERS. No. 

Senator PAUL. Is that good? All right. 

OPENING STATEMENT OF SENATOR McCASKILL 

Senator MCCASKILL. Thank you, Mr. Chairman. Thank you for 

holding this hearing and thank you for deferring your questioning. 

I wish, John, I could say to you that it looks like you are about 

out of work, that we have been at this a long time. 

I have two parts of this I want to talk about. The first part, briefly, I think it is helpful for the Committee record to get some sense 

of what has happened in regard to infrastructure projects. Correct 

me if there is anything I am saying that is wrong, John but I believe what the genesis of this was, it all started with Commander’s 

Emergency Response Program (CERP) money in Iraq. It started 

with walking-around money for sergeants and command leaders, to 

give storekeepers money for a broken window, to try to win the 

hearts and minds in a counterinsurgency fight. 

Well, before you know it, and about 14 Armed Services Committee hearings later, we realized this had morphed into a large infrastructure situation where all of a sudden you had a mixture of 

roles between the United States Agency for International Development (USAID) and DOD as to who was responsible for building infrastructure. Is that a fair assessment? 

Mr. SOPKO. That is correct. We have discussed it before, about 

the conflict between some of the agencies. 

Senator MCCASKILL. So DOD decided they were going to start 

building things like highways, and they were going to start building things like health centers, and all of that went terribly awry 

in Iraq. You would think we would have lessons learned when we 

moved into Afghanistan, but, once again, we had an Afghanistan 

Infrastructure Fund (AIF), within the Department of Defense budget. 

Now, I worked many years getting that to be gone, and am I correct now that the AIF is actually gone and the money that is currently being spent on infrastructure is only being done by USAID? 

Mr. SOPKO. Senator, let me just ask my staff. I think there still 

may be some residual funds there but let me just check. 

Senator MCCASKILL. Residual, but no new projects have been 

started with those funds in the last several years. Correct? 

Mr. SOPKO. Not that we know of. 

Senator MCCASKILL. A little bit of progress. At least there is an 

acknowledgement that we should not be having the military decide 

about natural gas stations in a country where there are no cars 

that run on natural gas. 

The main question I would like to ask you now, Inspector General, about Afghanistan, is whether we are talking about the dualfuel electric grid that never was operable, whether we are talking 

about the natural gas station, whether we are talking about the 

transmission project, whether you are talking about the highway 

that cost more to guard while we built it and there was no highway 

department in Afghanistan to maintain it, to your knowledge, has 
9 

1The Minority staff report appears in the Appendix on page 75. 

anybody been held accountable on those projects in terms of losing 

their jobs? 

Mr. SOPKO. No. No, Senator. No one is being held accountable. 

Senator MCCASKILL. If there was anything that we could agree 

on, Mr. Chairman, it would be that I would love to partner with 

you and any of my colleagues on this Committee or any other committee to speak with one voice, that we are never going to stop 

some of this nonsense if the person who decided a natural gas gas 

station was a good idea never has consequences. 

Senator PAUL. Could I interject a question and ask John why no 

one was held accountable? 

Senator MCCASKILL. It has to do with contractors. 

Mr. SOPKO. I think it is contractors. It is also the system. I would 

just add, Senator and Chairman Paul, many of the problems we see 

in Afghanistan are not unique to Afghanistan. The people we have 

sent to Afghanistan are not evil. They are not stupid. We gave our 

diplomats, our military, and our aid officials a box of broken tools. 

If you look at procurement—and I know, Senator McCaskill, you 

and I have had this conversation—DOD procurement has been on 

the Government Accountability Officer (GAO) high-risk list—— 

Senator MCCASKILL. Forever. 

Mr. SOPKO [continuing]. Since 1991, the first time they came out 

with a high-risk list, but it is not fixed. The Office of Personnel 

Management (OPM) and personnel management has not been 

fixed. We cannot hire the right person fast enough and fire the 

wrong person fast enough. 

So you go through the list. These are problems that I am certain 

the U.S. Department of Health and Human Services (HHS) IG or 

the U.S. Department of Veterans Affairs (VA) IG or anyone else 

would come in and probably tell you they see the same problems 

here in the United States. 

Senator MCCASKILL. It is exacerbated somewhat in DOD because 

of the contractor reliance and the contractor relationships that are 

built up. 

Mr. SOPKO. You are absolutely correct. 

Senator MCCASKILL. In the second part of my time I would like 

us to talk about the report that the minority staff of this Committee put out, and I would ask that the report, ‘‘Fast Cars, Easy 

Money’’ be put into the record of this hearing.1

Senator PAUL. Without objection. 

Senator MCCASKILL. I have been assured by Secretary James 

Mattis that I am going to get some answers. You were correct in 

your opening statement, John, that the genesis of this report was, 

in fact, your audit work in this area, where we discovered the legacy contract. The legacy contract is an effort to train Afghan personnel how to do intelligence gathering, and hundreds of millions 

of dollars have been spent. 

Let me ask you, first, were you able to find any metrics in your 

audit that showed that this was actually performing as advertised, 

in terms of training Afghan personnel in appropriate intelligence 

gathering? 

Mr. SOPKO. Absolutely not. 
10 

Senator MCCASKILL. And as part of this, we discovered that 

somebody shopped this contractor in DOD under a Broad Agency 

Announcement (BAA), which is a request for proposal that does not 

require competition. Basically they pretzeled this proposal to get 

the contract through without competition, and that was primarily 

done by a subcontractor who got the majority of the money and the 

legacy contract, New Century Consulting (NCC). Through the work 

of SIGAR and the work of my staff, we discovered that the United 

States of America has paid for Bentleys, for Aston Martins, for 

Porsches, all on the taxpayer dime, that the chief executive officer 

(CEO) and the chief operating officer (COO) are driving around the 

United Kingdom (UK), along with employing their spouses at average salaries of around $2-, $3-, $400,000 a year. It is my understanding that no work could be found these spouses or significant 

others had ever done. Correct? 

Mr. SOPKO. That is my knowledge. 

Senator MCCASKILL. That is what this report outlines. It is an 

egregious example of contracting gone amiss. And the whipped 

cream and cherry on top of this incredibly nasty sundae is that 

NCC is still doing business with the United States of America. 

They are still an existing contractor with the United States, as we 

speak. Their lawyer, who also happens to be the lawyer for Michael 

Cohen, which is a little interesting, wrote me a letter and said I 

need to quit bad-mouthing them. No chance. No chance am I going 

to quit bad-mouthing this company until we get to the bottom of 

what happened. 

As I said, Secretary Mattis has indicated that he is going to get 

to the bottom of it. He sent me a handwritten note after the last 

Armed Services Committee hearing, when I went off on this, and 

he says we are going to hold somebody accountable. 

I will hold my breath and hope that happens. In the meantime, 

I want to compliment the work of all the Inspectors General. When 

I first went to Iraq, after I got elected, I discovered that Inspectors 

General within the military are not like Inspectors General in the 

rest of the government. The Inspectors General in the military report to their commander. They have no obligation to report to the 

public or to Congress. They are really more about giving the commander information, and that is why SIGAR and the Special Inspectors General in places like Iraq and Afghanistan are so important. 

There have been attempts to undermine your work. We have 

tried to defend you and protect the work that you do. But I want 

to compliment you on the record, and your great staff and all the 

auditors, especially those in theater, that do the really hard work. 

Thank you. 

Thank you, Mr. Chairman. 

Senator PAUL. Explain that again. So Inspectors General typically report to—— 

Senator MCCASKILL. Within the military—— 

Senator PAUL. I was going to say, outside the military, the rest 

of the Inspectors General report to—— 

Senator MCCASKILL [continuing]. Us, and to the public. 

Senator PAUL. To each individual committee. 
11 

Senator MCCASKILL. Not to this Committee, but to the public and 

to Congress. And I got in a fight with the military when I first realized this because I was an auditor. I said, ‘‘Why are you calling 

them Inspectors General within the military?’’ because it looked 

like, to me, in Iraq, when I discovered—it looked like some of them 

were just covering their commander’s you-know-whats. And they 

said, ‘‘Well, we had the name first, so you are going to have to rename everybody else before you rename us.’’ 

Senator PAUL. Do you agree with this assessment, Mr. Sopko, 

that the chain of command is different for the Inspectors General 

in the DOD than the rest of government? 

Mr. SOPKO. Absolutely, Mr. Chairman. What Senator McCaskill 

is pointing out is that the Inspector General concept goes back to 

the beginning of the Continental Congress, and General Washington appointed the first IG. But they are service IGs. They report 

to the command, and basically are the eyes and ears of the command and improve the structure. It is a good structure but it is not 

the independent Inspectors General that you have in all the departments. 

Senator PAUL. Well, my thought would be, Senator McCaskill, if 

you do not have legislation on this, I would be interested in doing 

legislation where we change the line of command for Inspectors 

General in DOD. 

Senator MCCASKILL. There is a DOD IG that does not work within a command. In other words, we have an Inspector General at 

DOD. 

Senator PAUL. OK. 

Senator MCCASKILL. But I was taken aback, when I went to Iraq 

and I thought, OK, I am going to sit down with the Inspector General and find out what is going on in this unit because I was looking at contracting, I discovered, oh, you are not that kind of Inspector General. 

Senator PAUL. All right. I got you. Senator Jones. 

OPENING STATEMENT OF SENATOR JONES 

Senator JONES. Thank you, Mr. Chairman. Just to follow up on 

that, although I am almost inclined to yield my time since Senator 

McCaskill is on a roll—— 

Senator MCCASKILL. Do not do that. I could go all day on that. 

Senator JONES. Yes, I know. That is why I am not yielding my 

time, Senator. 

Senator MCCASKILL. Smart man. 

Senator JONES. I am a former prosecutor, former U.S. attorney, 

and I am just stunned by what I just heard, that no one is being 

referred, not to just be fired but to go prison on something like this. 

And the chain of command, what we just heard, is that the reason 

why there are no prosecutions going on here? 

Mr. SOPKO. Senator, there are some prosecutions, and I apologize 

if I misstated that. We, ourselves, have the largest law enforcement 

presence in Afghanistan, U.S. law enforcement. We have indicted 

and convicted over 100 individuals. 

Senator JONES. OK. 

Mr. SOPKO. My staff has recovered over a billion dollars in fines 

and penalties. But what I think I was responding to—and again, 
12 

I apologize if I misspoke—is that for the misdeeds—and it is not 

criminal. This is just incompetency, sloppiness, and whatever—no 

one gets fired. If you steal $20, somebody will try to indict you. But 

if you, just through gross negligence, waste $150 million, like we 

saw in some of our cases, nobody gets fired by the Department of 

Defense, USAID, or the State Department. That is what we are 

dealing with. 

Senator MCCASKILL. Right. 

Senator JONES. All right. To follow-up on that, you mentioned 

that there is a significant problem with corruption, in general. Is 

that coming from the other side? Is that coming from the Afghan 

government, and officials that you have to deal with in these reconstruction efforts? 

Mr. SOPKO. Oh, absolutely. Afghanistan is one of the most corrupt countries in the world, and it has been historically viewed 

that way, so you are dealing with a very corrupt regime to start 

with. Now, it has changed, I think for the better, and that is one 

of the improvements. With the national unity government under 

President Ghani and CEO Abdullah, they care about trying to fight 

this. 

But assume, sir, that it is almost like you are the mayor of Chicago in 1930. Every cop, every prosecutor, every judge has been 

paid for by organized crime. How do you start? And we have been 

helping. DOD has been trying to help, USAID, and everybody else, 

but it is an immense task to turn that around. 

Senator JONES. Is there anything that Congress can do, any tools 

that we can give that would assist, that you do not have now? 

Mr. SOPKO. Well, I raise it in my statement. The big issues we 

have has to do with security and the ability of, not just us, but the 

Department of Justice (DOJ) attorneys who are over there, to help 

educate and mentor the prosecutors. They have a physical problem 

with getting out. They are faced with the same economic problem 

because of those charges that the State Department imposes on us. 

It costs more money for one of my people to travel three miles to 

the Afghan international airport, than it does to fly home to Dulles, 

and that is a charge that the State Department is charging us. 

So that affects every civilian agency. There are some things, and 

I am happy to discuss, where you can help us, because pretty soon 

it is going to be impossible, financially, for us to do oversight in Afghanistan. 

Senator JONES. Well, that is where I was going next, in the security. I take it that getting out into the country, to get to the places 

that you need to go, is a major problem for security reasons. So let 

us just go there. You said you are happy to discuss. Tell us what 

we can do to help alleviate the security issues, or at least alleviate 

the cost of the security. 

Mr. SOPKO. Well, the cost of the security is one I identified. It 

is the International Cooperative Administrative Support Services 

(ICASS) costs and also the travel costs. I think somebody just 

needs to talk to the new Secretary of State and talk to him about 

these charges that they are imposing. 

The general security in Afghanistan has deteriorated, and there 

is nothing you can legislate about that. But you can talk to the 

State Department about a policy that we have seen over the last 
13 

few years—and this is not meant as a criticism of Professor Miller, 

who had nothing to do with the policy—but there has been a reluctance to taking a risk. People have thought you could do diplomacy 

and have thought, at main State, that you can do reconstruction 

risk-free. You cannot. If you want to avoid all risk then you might 

as well shut down the embassy, and shut down my office, and try 

to do it remotely from Dubai. And that is what has permeated the 

State Department. 

Now I am hoping, with the new Secretary of State—I know there 

is a new Ambassador in Afghanistan who appreciates that problem, 

who wants his people to get out, who wants the aid officials to get 

out to see those sites, but there has been this risk aversion. That 

is something that is just killing us and killing our diplomats—and 

I do not mean physically, but killing their ability to work. 

Senator JONES. How are you doing it? How are you getting out 

there? 

Mr. SOPKO. Well, we are trying to use satellites. We are trying 

to use Afghan civilians who work with us. We are trying to use 

every technique we can. But as your staff from the Committee will 

tell you, you have to go out and kick the tire. You have to put eyes 

on the Marriott Hotel. You have to go see these facilities. You have 

to take a calculated risk. 

What I am telling you, I have been doing this for 6 years. I have 

seen this over the last year. Nobody permits us to take that risk. 

And again, if we approach it that way, the bad guys have won, because we never leave the embassy, or rarely leave it. 

Senator JONES. I agree. Well, I commend you for the work that 

you have done. 

I would like to take my remaining seconds, Mr. Chairman, to 

commend my Alabama National Guard and the First Battalion of 

the 167th Infantry Regiment for all the work they have been doing, 

helping you and your security and contributing such a great deal 

to the U.S. efforts, transporting 18,000 passengers over thousands 

and thousands of miles. So just a plug for my guys. 

Mr. SOPKO. I will definitely congratulate your Guard. I actually 

sent a letter of congratulations to them. They did a wonderful job, 

because they were supporting us on a lot of our moves, and they 

did a fantastic job. And that is what we really need. We need a 

memorandum of understanding (MOU) signed and approved by the 

State Department and DOD that where State cannot provide the 

security, DOD will step in. It makes sense, financially. They are 

there. They are very well trained. But we even had a reluctance 

by the State Department to allow DOD to protect us in doing our 

job. 

Senator JONES. Well, that is something, Mr. Chairman, I think 

we should explore. 

Senator PAUL. We are going to turn to Senator Peters here in a 

second, but I just wanted to interject one thing on your point, is 

that you can do these things but the question is, yes, you should 

have oversight, but there is also a question of can we ever get to 

that point? For example, the gas station. I asked Mr. Sopko about 

the gas station. He said to see it, for an American to go see it, sure 

you can go see it, but you would have to have a couple hundred 

troops and warships and all this. You basically are going into 
14 

enemy territory. We are not talking about spending $1,000 to go 

look at it. We are talking about an enormous expense. 

So we are not winning the war, necessarily, and I do not know— 

it is not a question of—for some of it it may be better oversight, 

but some may be, is it something we should continue to do at all? 

Senator Peters. 

Senator PETERS. Thank you, Mr. Chairman, and I am going to 

want to ask some questions related to that, as far as just the overall metrics of how we measure success in Afghanistan, to ask those 

bigger questions that you just raised, Mr. Chairman. 

Before I get there, Mr. Sopko, you mentioned it in your opening 

comments too. It is an issue that just drives me crazy, especially 

given what we are facing here in the United States with the opioid 

crisis. I understand a lot of the opium from Afghanistan does not 

come to the United States. It is in Europe and other places. But 

on a recent trip that I took to Afghanistan, I was told we are just 

an illicit contract away from perhaps seeing an awful lot of Afghan 

opioids getting into the United States as well. 

And yet as you mentioned in your opening testimony, here is a 

situation where we have spent—I think this is based on your most 

recent quarterly report—we have spent $8.7 billion for counter-narcotics efforts since 2002, and what we have seen is the total area 

continues to increase for cultivation and now production has 

reached an all-time high. What is going on after spending $8.7 billion? 

Mr. SOPKO. Well, our work has shown that the programs did not 

work and they were not well coordinated. First of all, let me just 

preface this, that we understand it is difficult to fight narcotics. I 

mean, they have been doing it in Mexico for decades. They have 

been doing it in Colombia. When I first testified here for Senator 

Sam Nunn and for Carl Levin we were looking at counter-narcotics 

programs in the Andean region in Colombia back in the mid 1980s. 

It is a very difficult undertaking, so I understand it. 

But we will be issuing a lessons-learned report. As a matter of 

fact, we have already issued three, but in another month we are 

going to issue one where we actually looked at our counter-narcotics programs for the last 17 years, and tried to draw out best 

practices. Since the report is not out yet and it is still under review 

I cannot really go into the details. I am happy to come back and 

brief you on that. 

Basically we had a lot of programs but they were poorly coordinated and poorly executed. We are now faced with a situation—and 

again, I may show my age, Senator. I go back here to the Bureau 

of Narcotics and Dangerous Drugs, which was created before Afghanistan, and I remember talking to former Commissioner Harry 

Anslinger, and he said, ‘‘Look at these variables. Look at price and 

purity.’’ In this case, look at price, purity, and look at the amount 

under cultivation. Hectares under cultivation have skyrocketed. 

Opium produced, skyrocketed. Exports, skyrocketed. Price has decreased because there is just so much opium out there. 

We have interdicted more, but if you take all of the interdictions 

over the last 10 years in Afghanistan, they are equal to 0.05 percent of the production, just for this year. Just let that sink in. 

Every interdiction we have done for the last 10 years is equal to 
15 

0.05 percent of the production just for this year, and next year will 

be a bigger crop. So we have to do something, because the opium 

is funding the corruption, the opium is funding the terrorists, and 

if you want to do something about both of those, we have to come 

up with some programs and policies that actually work, and commit ourselves to them. 

Senator PETERS. Thank you. Ms. Miller, I would like to have you 

discuss a little bit about what you think would be the metrics that 

we would measure success in Afghanistan. I think in your testimony you talked about normalization, to be able to stabilize that, 

and in your oral testimony you talked about we still have not really 

achieved political and security stability there. 

But as we are spending the amount of money that we are spending in Afghanistan, I would hope that there is a set of fairly objective metrics, and not just measured in the outputs, as we heard in 

testimony as well, but what does success mean in Afghanistan? 

How do we measure that, and where are we today, in terms of 

those kinds of measurements, in your estimation? 

Ms. MILLER. Thank you, Senator. First, just to add one word on 

the counter-narcotics issue. There may well have been problems 

with the process of how the assistance was delivered, coordination 

and such. I am certain that there were. But I do not think that is 

by any means the predominant reason for failure. The incentives 

driving narcotics production and trafficking in Afghanistan, and 

the conflict dynamics that help to perpetuate it, are just far more 

powerful than United States spending in Afghanistan, than anything we could do through assistance programs there in counternarcotics. That is not to say we should not improve efforts where 

we can, but I have no expectation that U.S. Government programs 

in Afghanistan are going to materially address the narcotics problem there. 

On the question of metrics of success, the main metric of success 

should relate to the main reason why we are in Afghanistan, which 

is dealing with our counterterrorism concerns in the region. I think 

you could say that the fact that the United States has had considerable success in decimating al-Qaeda in the region is an out-andout success, in terms of what our original reasons were for invading the country. 

The second key element is are we bringing stability and sustainable stability to the country in a way that will enable the United 

States to reduce its commitment, reduce its military presence, 

which is much more expensive than any of the assistance spending 

in the country, to normal levels and a normalized assistance relationship with the country. I think that success in that sense is only 

going to come through ending the conflict, through achieving a political settlement that enables us to reduce our troop commitment 

in the country, essentially to withdraw most or all of our troops 

from the country, and to normalize our assistance levels. Until we 

do that, we may have achieved some intermediate levels of success 

on some of the more narrow objectives but we will not really have 

succeeded in fulfilling our purpose in Afghanistan. 

Senator PETERS. Yes. Mr. Chairman. 

Senator PAUL. Mr. Sopko, you mentioned the half a billion dollars in cargo planes we bought from Italy, and then I guess they 
16 

are being sold as scrap and that no one has really been held accountable for that. Correct? 

Mr. SOPKO. That is correct. 

Senator PAUL. So this is somebody in purchasing at DOD who 

made the decision to buy the airplanes? 

Mr. SOPKO. That is correct. 

Senator PAUL. OK. So when you do the analysis and you discover 

this and point out that this much money and this bad decision was 

made, you tell us or you issue reports. Do you get a time to specifically talk to commanders or people in the military about your reports? 

Mr. SOPKO. Yes, we do, and many times we do get very positive 

response on that. On the G.222, which is that military plane, just 

so you know, we do have an open criminal investigation ongoing in 

that case. 

Senator PAUL. OK. So there is a possibility that somebody will 

not be fired, that someone actually committed malfeasance in it. 

But let us say there is an example, just X example, where it is just 

a bad decision. You do go to the military and then if you indicate 

that this was just a terrible decision, that someone made an unwise 

decision, there was no malfeasance, do you get a response? Do you 

ever see anybody fired from your recommendations like that? 

Mr. SOPKO. We normally do not see anyone fired. We have actually, on a couple of cases, recommended action be taken and nothing happens. 

Senator PAUL. So you make formal recommendations sometimes 

on specific personnel that made a decision. 

Mr. SOPKO. Yes, we have, in the past. 

Senator PAUL. OK. And it is being pointed out exactly to the people who are in the chain of command of making these decisions. 

Mr. SOPKO. A classic example, sir, was we uncovered a 64,000- 

square-foot headquarters that was being built in Camp Leatherneck. I think it was $36 million, approximately. The Marine Corps 

commander down there said, ‘‘Do not build it. I do not want it. We 

will not use it.’’ His boss, General Allen, said, ‘‘Do not build it. I 

do not want it. We will not use it.’’ But somebody, a general officer 

sitting behind the lines, said, ‘‘We have to spend it. We have to 

spend it because Congress gave us the money.’’ So we wrote that 

up, we thought it was gross negligence, and the Secretary of Defense at that time, not the current Secretary of Defense, basically 

said they did not view that as an issue. 

Senator PAUL. I wonder if part of the answer might be in who 

gets your reports if you are giving it to a chain of command and 

they happen to be good friends, and they have risen through the 

ranks together, and they are unlikely to make the necessary personnel change, whether or not it is presenting the evidence, maybe, 

to a higher level, to a political appointee or to a supervisor at a two 

or three levels removed that is not working with the people involved with the decisions—does that happen also? 

Mr. SOPKO. Well, we do wide distribution, Mr. Chairman, of our 

reports, so I think politicals definitely see our reports also. 

Senator PAUL. All right. And how often are you doing these in 

person? How often would you come before, if I am the general and 

four levels beneath me made this decision on half a billion planes, 
17 

would you have a time where you are sitting face to face with a 

general or major general or an Assistant Secretary of Defense or 

a Secretary of Defense and let them know about these things? 

Mr. SOPKO. Sometimes. We try. They do not always let us come 

in to brief them on that. 

Senator PAUL. See, I am wondering if maybe that would be part 

of the solution. I cannot just say, ‘‘Let us write an edict that people 

should be fired for a bad decision and we should do that.’’ But I 

am wondering if maybe we could have legislation that some people 

have to come once a year and testify here—if, perhaps, maybe some 

of these reports need to have someone designated to listen to it in 

person, who is high up in the chain of command, making procurement decisions, making purchasing decisions. Do you think that 

would work or do you have any other suggestions on how we would 

make the system work better? 

Mr. SOPKO. Well, I think you need to change the culture and hold 

people accountable for it. If you do not hold people accountable for 

wasting money, they will continue to waste money. I think we see 

that throughout the U.S. Government. I have been looking at this 

since I started in 1982, actually, 1978—and people just are not held 

accountable for stupid decisions that waste taxpayers’ money. 

Senator PAUL. So sometimes it works but you think it works 

when we get a good person that you get to who says, ‘‘We cannot 

allow this to happen.’’ That begs the question, how do you get more 

good people in government? 

But I think in some ways we have to look at some sort of mandatory way of having people listen to your information, such that it 

gets to, and I think it has to be somewhat above the close part of 

the chain of command where you might be socially engaged with 

the people who made the decision, and unlikely to fire someone you 

are close to. 

There is another argument, as well, that Friedman always made, 

that nobody spends somebody else’s money as wisely as their own. 

That is why you have more waste in government. It is not your 

money, and so, people are never going to be as good with it. I think 

there is truth to that. Government is never going to be very good, 

but it certainly should not be as bad as we see government to be. 

Mr. SOPKO. But, Mr. Chairman, could I allude to something? In 

one case, for example, from publicly disclosing our findings—a good 

example is General Mattis, as Secretary of Defense, took one of our 

reports—it was a report on the camouflage uniforms—and basically 

sent a memo to every senior official in the Department of Defense 

saying, ‘‘See this report, read it. Do not ever do anything like this 

again.’’ And that sends a message. 

Senator PAUL. Yes, and I think so. What I am getting at is thinking of—and I do not think we have to say that the Secretary of Defense has to sit down with you or meet with you. But maybe an 

Assistant Secretary of Defense, once a year, should have to sit 

down with you, and look at you across the desk, and have a group 

of people with them, their staff and your staff, and actually listen 

to what you are saying, and maybe you will get more results if we 

mandated such a meeting. 

Mr. SOPKO. Well, there is no reason to mandate. We do that. 

Senator PAUL. OK. 
18 

Mr. SOPKO. We meet with heads of agencies and we tell them 

what we are finding, and we identify people. We do that on a regular basis. But again, I think I would clearly look at the process 

for removing people or penalizing them for these actions. I do not 

think there is something in place or a motivation to do that, in 

many cases. 

Senator PAUL. Ms. Miller, on the narcotics, I think I got your 

point but I think you could maybe expand on it a little bit. It 

seemed you were indicating that there were other forces so large 

that there was not an amount of money that would stop the growth 

and the distribution of poppy out of Afghanistan. If that is what 

you said, say yes, and expand upon what are those? I did not really 

get what those forces are that are so big that make it almost impossible to stop the narcotics trade. 

Ms. MILLER. Yes. I mean, some of it is just that the sheer scale 

of the problem is enormous. Some of it is that it is just an incredibly lucrative commodity. The economic dynamics that support the 

perpetuation of the narcotics industry in Afghanistan are very powerful and are more powerful even than the $8 billion we spent on 

programs to try to fight it. 

There is also a problem of political will on the part of the Afghan 

government. I am not saying there is no will, but it is not only the 

Taliban and other malign actors in Afghanistan who benefit from 

narcotics trafficking and production. It has also historically been 

people who are associated with the Afghan government. And so the 

political incentives, as well, to try to fight this are not as strong 

as they could be. 

Senator PAUL. Well, and I think that has been the comment by 

some that we blame it on them and we could also look in the mirror. If we did not want to buy it, they would not sell it. If there 

was not a demand, there would not be a supply. But I think it is 

important to highlight the degree of not believing that something 

will be done. This is an important one to know before, because if 

we are making policy decisions, we could spend $16 billion. This 

gets back to Senator Jones’ point a little bit on how do we do better 

oversight. Well, we could. We could spend billions of dollars more 

and we could have armed escorts to every one of the projects we 

are spending money on. So it is either we keep spending the money 

and we spend more money to send armed troops to look at it, or 

maybe we re-evaluate whether we should spend the money there 

or here at home. 

I have no more questions, and we are probably going to end the 

panel, but I wanted to go to Senator Peters and anybody else that 

has a question before we finish up the panel. 

Senator PETERS. I appreciate it, Mr. Chairman, and I will just 

pick up on the point, Ms. Miller, when it comes to the opium production in Afghanistan. You mentioned the Taliban are engaged 

but there are others. It is my recollection, in my trip to Afghanistan, that as big as the amount that the Taliban is producing—it 

is a very large amount, but it is a relatively small fraction of the 

total amount that is produced in the country. The numbers were 

overwhelming. There are folks outside the Taliban that are profiting to a considerable extent as a result of this production. 
19 

But my question is in reference to a letter that was sent to the 

Subcommittee by Andrew Wilder from the U.S. Institute of Peace. 

He references the Goldilocks approach to aid funding, and he argues, in the letter, that I would like to enter into the record, if I 

may, without objection, that too much money for civilian and military reconstruction and stabilization programs during the period of 

the troop surge was a major factor promoting waste, fraud, and 

abuse. But he goes on to argue, sharply reducing to too little assistance within too short a timeframe would likely lead to State collapse in Afghanistan in a catastrophic way. Ms. Miller, would you 

like to comment on that approach? 

Ms. MILLER. I largely agree with that. In the written testimony 

that I submitted I made the point that time is probably more valuable than money in Afghanistan. I think it is definitely a problem 

that we pushed out too much money too fast at the height of the 

surge, and that led not only to waste and abuse but it led to poor 

planning, and, really, I cannot say that I know anyone who was responsible for spending that money who did not feel that it was too 

much money, too fast, and it created bad incentives on the U.S. 

Government side, it created bad incentives on the Afghan side as 

well. 

I do think that the dollars that we are spending have been declining, and I think that is appropriate. But to go dramtically down 

from where we are now too precipitously, I think would jeopardize 

our own national security interests. 

Senator PETERS. One final question, because I know the Chairman wants to get to the second panel here. As we have discussed 

with the extent of the corruption that we see with the Afghan government in executing these contracts and not seemingly meeting 

any of the expectations that we have for them, there has been discussion of entering into contracts with the Afghan government on 

the principle of conditionality, where you do not receive funding 

unless certain conditions are met, in terms of outputs. 

I would like both of you to comment briefly. Is that something 

we should explore? What are the positives, what are the negatives, 

and what has been done currently and what should we do differently? 

Mr. SOPKO. Oh, I think that is a very important point, and we 

did not really have good conditions, and, more importantly, enforce 

those conditions until recently. 

I remember talking to General Semonite when he ran the Combined Security Transition Command (CSTC–A), 2 years ago, and he 

said DOD put no conditions up to that time. 

Senator PETERS. Wow. 

Mr. SOPKO. It was only when he took over that we started it, 

putting conditions. So that is what you have to do. If you talk to 

President Ghani—I was just there 2 weeks ago—he says, ‘‘Give me 

conditions. If you give me real conditions I can use it to enforce my 

ministers to do the right thing.’’ And I think you can see this right 

now with what you did in the appropriations bill. You basically 

passed a law ordering us to assess the Afghanistan anticorruption 

strategy and its implementation. Although I cannot tell you the results of that audit—it is going to be done in another month—we 

have seen tremendous efforts, on behalf of the Afghans, to get their 
20 

act together, because they are afraid the appropriators are going to 

cut the budget. 

That is smart conditionality. I agree wholeheartedly, Senator. We 

need to do that. We need to enforce it. We have to be able to risk 

saying no to the Afghans and cutting funds if necessary. 

Senator PETERS. Ms. Miller. 

Ms. MILLER. I hate to be even less optimistic than John 

Sopko—— [Laughter.] 

I may have lost some friends there. But, look. Conditionality is 

an important tool. It is a tool that the United States has been 

using increasingly in Afghanistan and other donors as well. But it 

is no panacea, and there are two real limitations to using conditionality. One is a practical limitation. Who are you motivating by 

imposing conditionality? If there are Afghan officials, or people connected with them, who are prepared to steal from the public coffers, they are not going to be motivated not to steal from the public 

coffers because the U.S. Government is withholding funds. You 

may be providing some motivation to some of the good actors but 

you are not incentivizing the bad actors. 

The second problem is a policy one. We have entered into a mutual dependency with the Afghan government, because of the nature of our strategy in Afghanistan. We are giving the Afghan government this money because we have judged it to be within U.S. 

national security interests to have a stable government, and it has 

been judged necessary to give them this assistance in order to promote their stability. Therefore, if we reduce that assistance, as a 

matter of conditionality, we are undermining our own security. It 

does not mean you cannot do it to some extent, but that, we have 

tied our own hands behind our back in terms of using conditionality, because of the nature of the policy and the strategy that we 

have in the country. 

Senator PETERS. Thank you. 

Senator PAUL. Thank you for your testimony. Thanks for joining 

us and keep up the good work. 

We are going to go to our second panel now. 

[Pause.] 

Thank you. I would like to welcome our second panel. Our second 

panel is Greg McNeill and Sergio Gor. At the behest of this Subcommittee, they recently participated in a bipartisan staff delegation to Afghanistan to conduct oversight of Federal spending. 

Mr. McNeill has served on the FSO Subcommittee majority staff 

since 2015, and as Staff Director for 1 year. Prior to joining the 

FSO Subcommittee, Mr. McNeill spent 8 years as a budget analyst 

on the Senate Budget Committee. Additionally, he served as the 

Minority Staff Director for the Senate Budget Committee Task 

Force on Government Performance from 2009 to 2015. He holds a 

bachelor’s degree in political science from the University of Oregon 

and a master’s of public administration from Central Michigan 

University. 

Mr. McNeill, you are recognized for your opening statement. 
21 

1The prepared statement of Mr. McNeil appears in the Appendix on page 58. 

TESTIMONY OF GREGORY McNEILL,1 MAJORITY STAFF DIRECTOR, SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT 

AND EMERGENCY MANAGEMENT 

Mr. MCNEILL. Thank you, Chairman Paul. Chairman Paul, 

Ranking Member Peters, and Members of the Committee, it is an 

honor to be here today to report on the Subcommittee’s recent bipartisan and fact-finding mission to Afghanistan. I want to thank 

all of those from the State Department, the U.S. military, and 

SIGAR for making this fact-finding mission possible. Most importantly, I want to recognize the soldiers who served and sacrificed 

in Afghanistan, particularly those that have given their lives. 

Over 21⁄2 half days, our bipartisan team participated in approximately 12 meetings with personnel on the ground and four site visits at various locations in Kabul and at Bagram Air Base. I would 

say that we barely scratched the surface. 

The first thing I want to report is that we were told repeatedly 

that this was only the second congressional oversight mission to Afghanistan, whereas appropriators and authorizers go roughly every 

10 days. If you do the math, that is 1 in about 150 trips. That 

means that congressional oversight is at a decided disadvantage to 

congressional spenders. 

I want to highlight just a few things that we saw while we were 

there. First, the U.S. efforts to provide electricity to the Afghan 

people, and second, U.S. demilitarization and disposable property. 

First, we investigated the northeast power system, and, really, 

the entire electrification effort in Afghanistan. In 2001, roughly 6 

percent of the Afghan population had power. Today that number is 

over 30 percent and we are aiming for full electrification by 2020. 

But this effort, which is expected to cost about $750 million, is 

riddled with problems. To begin with, we are building towers on 

people’s land without getting their permission first. Let me pause 

there. I should not say we are building these, because though U.S. 

dollars can go to these locations, U.S. personnel cannot because of 

safety concerns, so we are trusting contractors to do it for us. 

Nonetheless, this electric grid is being build, and though it does 

not even meet the standards of the contracts that we are writing, 

eventually it is turned over to the Afghan power authority. Last 

year, the Afghan power authority reported a net loss of $23.4 million. Now this could be for a couple of reasons. One could be that 

the Taliban keeps blowing up their transmission towers. We assume it is the Taliban and not the landowner who woke up 1 day 

to find a tower in his backyard. Nonetheless, these are getting 

blown up, sometimes dozens of times. 

Now, U.S. officials think that this is still a success because the 

Afghan power authority is now very accomplished at rebuilding 

towers and restringing line. We were told a couple of times it is 

done in hours now, whereas before it was done in days. Of course, 

this ignores the wasted money we spent building the original 

tower, and we still, through various means, provide funding to the 

Afghan electric authority. 

The end result is the same. Either the power authority eventually pays the Taliban a bribe to stop blowing up the towers or the 
22 

1The prepared statement of Mr. Gor appears in the Appendix on page 62. 

Taliban just takes over the towers and then charges the local population. This, apparently, is seen as a success. 

The other item I want to talk about is a project this Committee 

has been working on for 4 years. Several years ago, we heard from 

a whistleblower that brand-new, never-used equipment and vehicles were being destroyed in industrial shredders in Afghanistan. 

We have been asking about this for 4 years, and we keep getting 

told that either it is not happening at all or it is just extremely 

rare. 

We went to the facility at Bagram Air Base to see for ourselves, 

and we saw a lot of worn-out equipment being shredded in industrial shredders. But you can imagine how surprised we were, after 

being told that this was not happening, walking into a warehouse 

and finding three large bins full of brand-new electrical equipment—breaker boxes and breakers, still in their original packaging. 

Now we do know that during the drawdown the U.S. scrapped roughly $7 billion worth of military equipment, and we have been 

told repeatedly that there was a lot of waste during the early part 

of the war, and then, of course, during the drawdown. We heard 

that during the first panel that there was a blank check. But these 

things that I am reporting on here are not old items. Three weeks 

ago there were brand-new breaker boxes ready to be shredded in 

an industrial shredder. Right now we are building towers and they 

are being blown up. This is not a problem that has been solved. 

This gets back to my original point. Oversight in Washington is 

much different than oversight on the ground, and on-the-ground 

oversight cannot be a 1-in-150 affair. 

Let me close with this. Oversight does not compromise the mission, as some have argued, in Afghanistan or, frankly, anywhere 

else in the government. Tough questions and consequences condition and strengthen us. Moreover, they force us to assess the merits, or lack of merits, of what the government does. 

And with that I would be happy to answer any questions. 

Senator PAUL. Thank you. Our next witness is Sergio Gor. Mr. 

Gor currently serves as my Deputy Chief of Staff for Communications. In this capacity, he oversees staff and the communications 

department, coordinates on matters of foreign policy, and administers special projects for the office. 

Prior to joining my staff, Mr. Gor worked as a producer at Fox 

News Channel and as a Communications Director in the U.S. 

House of Representatives. Mr. Gor holds a double major in international affairs and political science from George Washington University. Mr. Gor. 

TESTIMONY OF SERGIO GOR,1 DEPUTY CHIEF OF STAFF FOR 

COMMUNICATIONS, OFFICE OF SENATOR RAND PAUL 

Mr. GOR. Thank you, Mr. Chairman. Thank you for holding this 

hearing. 

I would like to start by expressing our gratitude for all those that 

hosted us on the ground, to the embassy, especially Ambassador 

Bass, the Deputy Chief of Mission (DCM), all the security and per-
23 

sonnel that were involved. A specific thank you to SIGAR and IG 

Sopko for his incredible work and the work they do. 

With that I will jump straight into it, and I would like to highlight some of the things that we actually saw, and I believe we 

have some photos to go along with it. 

The first project that we visited was nicknamed the Kabul Marriott. This project was started 11 years ago, and it was initiated 

with a $60 million loan from Overseas Private Investment Corporation (OPIC). The building was supposed to be completed several 

years ago, and, unfortunately, there was almost no oversight. One 

of the things that we saw over and over again on this trip was good 

intentions gone bad. When this building started being built, the 

only oversight consisted of the contractor submitting pictures back 

to headquarters, back to the United States. 

The one thing that I must mention is this building is about 400 

feet from the U.S. Embassy. We have 7,000 personnel there. This 

was a $60 million project and nobody went over there to look at 

it, to see that it was not completed. The updates would say it is 

ready for opening in 2 months. At best, this building, in our opinion, is at 30 percent completion. 

In addition to that, because this building was going so well, they decided to fund an adjacent building for $30 more million, so now 

we are at $90 million in the hole and nothing has been completed. 

This building has become a security threat to the point where we 

must provide 24-hour service protection because it is so close to the 

embassy. The State Department indicated to us that they are now 

acquiring this land with the ultimate goal of tearing down the 

building completely, for security reasons. 

The next project I would like to highlight is the Ministry of Inte- rior, and this was a nice building from the outside. We spent $210 

million building it. One of the rumors that we persistently heard 

was that the former minister was not happy with the lack of marble that was inside of this ministry. He compared himself to the 

Defense Minister of Afghanistan, and said, ‘‘Well, if this guy has 

it, I surely want it too.’’ While we are not able to verify exactly that 

those were his words, we did find $2.6 million in a follow-up upgrade, and that specifically included marble work. 

Additionally, as you look at the line items for this building, 

$7,000 was billed for lost time, waiting for instructions. So people 

standing around, not being told what to do; $10,000 was billed for 

a car and driver, and you would think with $210 million we would 

get something that would at least function. However, when we got 

a tour of the building on the inside, from local Afghan staff that 

work there, they pointed to one thing after another, including air 

conditioning units that do not work, fire doors that do not meet certification requirements, fire sprinkler systems that are not even 

connected to anything, and one interesting thing that we found in 

the building there was actually an item listed as ‘‘disconnect the 

fire alarm system.’’ 

Those are the two main projects that I would like to highlight. 

However, there are two other points I would like to make. Corruption. Corruption is a massive problem. Every meeting that I attended, one of the points that I would ask was, ‘‘What percentage 

do you think disappears due to corruption, waste, fraud, or abuse?’’ 
24 

and that number ranged anywhere from 20 percent to as high as 

50 percent. 

Countless stories. The Kabul Bank, which was headed by former 

President Karzai’s brother, basically ran a Ponzi scheme, defrauded 

close to a billion dollars and almost no accountability. One thing 

we kept hearing over and over again, ‘‘It is part of the way things 

are here.’’ 

There is an internationally recognized group, Transparency 

International, and one of the things they put out is a Corruption 

Perception Index. In last year’s ranking, they ranked Afghanistan 

as 177th out of 180 in terms of corruption. So the only countries 

ahead of them, I believe, are Somalia and Syria. 

My last point that I will make is something we kept hearing both 

from our side and the Afghan side, and that is Afghans that are 

leaving Afghanistan. They call it a brain drain. After contacting the 

State Department here, the number that we have received is 

51,000 Afghans have moved to the United States. These are educated individuals. These are individuals that went to school, whether it is in Europe or in the United States, and they are not contributing back to their nation. Their president has actually been pretty 

good on this, and I quote, ‘‘I have no sympathy for these people. 

They should remain and join efforts in rebuilding our own home.’’ 

So with that I will take any questions. 

Senator PAUL. Well, thank you both for your testimony. 

Mr. McNeill, when you were talking about—in your testimony I 

think you were talking about oversight. When you said only 1 in 

150, you were referring to only 1 out of 150 projects have oversight, 

or what was your point? 

Mr. MCNEILL. No. One in 150 trips, either by members or staff, 

are oversight. The remainder are generally authorizers or appropriators. 

Senator PAUL. Do you have an estimate of the projects, what percentage of the projects are able to have oversight? You and the previous panel talked about, because of the safety concerns, not being 

able to actually go to the sites of some of these projects. Ten percent getting visually seen or 20 percent? 

Mr. MCNEILL. I do not have an exact number but I imagine that 

that is even probably a rosy figure. We asked to go see the gas station. We were told that was unsecure. Mr. Sopko testified to that. 

Many of these projects, U.S. personnel cannot go to when they 

are being built, let alone oversight conducted. The electric grid, I 

looked up the distances. At one point it is 13 miles from Bagram 

Air Base, where our largest U.S. presence is. We cannot go 13 

miles from there to look at a project that we are spending money 

on. 

Senator PAUL. Right. Well, in looking at how we figure out solutions, people are saying, well, we can spend more going to the sites, 

but I think that sort of begs the question. The Marriott was 400 

feet from the embassy, so, it is still within the compound, right? 

Mr. GOR. It is on the outside, so there is a wall separating it. 

Senator PAUL. You can walk across the street. 

Mr. GOR. However, there is a closed street that is not open to 

traffic. So there are different perimeters, and it is one of the outer 
25 

perimeters, but it is close enough that everybody passes it every 

day. 

Senator PAUL. Right. That sort of begs the question that that is 

not a lack of access. Everybody is, in fact, seeing it. 

Mr. GOR. Correct. 

Senator PAUL. It is sort of a big eyesore, that it has not been finished, and I believe it has been 11 years since it was started. 

Mr. GOR. Correct. 

Senator PAUL. So I think these are the bigger, broader questions 

we face in this, is that government is full of waste. Do we try to 

fix the waste? Sure. We should try to make, whether it is less 

wasteful spending. The question is, is it possible, really, to eliminate the waste or do we need to readdress where the resources are 

going, whether they should go to Afghanistan or whether they 

should remain here at home. 

With regard to the Ministry of the Interior, you said it was $210 million, and the $2 million referred to an upgrade in marble? 

Mr. GOR. Correct. So there was a refurbishment, they called it, of $2.4 million, I believe, which was in addition to the $210 million 

initial investment, to build the building from scratch. 

Senator PAUL. And do you think the contractors here are local 

or—— 

Mr. GOR. So one point to make on that refurbishment, the refurbishment was paid by NATO, with some of our funds. So while we 

paid the initial $210 million, the $2.4 million was divided, just for 

full disclosure. They would put out bids for all these projects, 

whether it is the Marriott—it varies. The Marriott was by Jordanians. We saw some contracts by Tunisians. And there were 

some local contracts also. 

Senator PAUL. With the question related to hundreds and hundreds of doors not being fireproofed, do you think that we are looking at not just waste but malfeasance, if they did not give them exactly what they ordered. 

Mr. GOR. Absolutely, and not only that, people get upcharged. 

We pay a certain amount and hundreds of dollars for a fireproof 

door that is supposed to sustain 30 or 40 minutes of a fire, so people are able to get out. Unfortunately, we get skimmed, and this 

happened not in just the Ministry of Interior but at multiple other 

locations that we heard about that we were not able to visit. But 

it is an ongoing problem. There is too much money, there is no 

oversight, and no one is held responsible. 

Senator PAUL. Mr. McNeill, we talked about having conditions in 

contracts, sort of conditions of behavior, but I guess you can also 

condition contracts based on performance. People talk about government contracts being cost-plus, and people just adding and adding and adding their costs. Is there an example of government 

where we do contract that you think works better, contracts that 

have incentives, either for completion or for quality, or for ways 

that we can have oversight to the fact that you do not get your 

money unless you do your job, etc? 

Mr. MCNEILL. Sure. It is not a Federal example but after the 

San Francisco earthquake, the Bay Bridge was rebuilt on a performance contract, and it was built ahead of schedule and under 

budget because the contractor would get an incentive for doing so. 
26 

That is something we could certainly do here in the Federal Government. 

But I wanted to point out, the projects are not meeting the 

standards of even the contracts we are writing, and what we have 

seen is they rewrite the contracts. With the fire doors, they noticed, 

these are not the right fire doors, these do not have the right labeling on them. SIGAR pointed this out to the U.S. Army Corps of Engineers (USACE) and so the Army Corps of Engineers sent an 

email to the contractor, saying, ‘‘We are accepting what you are 

doing now as meeting the terms of the contract.’’ 

Senator PAUL. Stick a different label on it? 

Mr. MCNEILL. Basically, yes. 

Senator PAUL. With the previous panel we talked a little bit 

about getting the system to work. How do you get people to be held 

accountable for their decisions? And we talked a little bit about the 

Inspectors General, there are some that DOD has and then there 

are some that are more traditional Inspectors General that report 

to Congress. 

Mr. McNeill, do you have an opinion on ways to get the advice 

to be listened or acted upon, getting rid of bad people who make 

bad decisions, how we would do that better, or whether we should 

alter the Inspector General program within DOD to make things 

better? 

Mr. MCNEILL. Well, certainly I think there should be reform with 

the Inspector General process. Inspector General Sopko does an excellent job. I have dealt with Inspectors General over my entire career and some of them are, frankly, I would say, in bed with their 

agency. 

But I think this gets to a broader problem that, I think, Inspector General Sopko talked about, it is hard to fire people in government. A lot of times it is easier to just look the other way or transfer them, or something like that, or wait for their tenure in a place 

to be over. 

I mean, our personnel policy was written in the 1880s. We are 

still basically operating off of the Pendleton Act, which was created 

in response to the assassination of President Garfield. So I think 

it is probably time to update our personnel policy, so that we can 

hold people accountable. 

Senator PAUL. SIGAR you hear about, and it has gotten notoriety 

for looking into waste in Afghanistan. I do not recall as much notoriety with the Inspector General from DOD. Are we paying the 

same amount of attention to the independent Inspector General for 

the DOD? 

Mr. MCNEILL. I would not say so. Their mission is different. Mr. 

Sopko made the point that he is the only one that has kind of 

cross-jurisdictional capabilities to look at spending elsewhere. We 

do pay attention to some of it that DOD talks about. For example, 

we have talked about the $700—was it million or billion—dollars 

in ammunition purchases. That was a DOD Inspector General report. 

Senator PAUL. Well, I think that as a future project from this is 

we ought to look at that and see how well it works, and whether 

or not having two different sets of Inspectors General, whether that 

is a problem, whether they could be consolidated, whether the one 
27 

that they have had in place that is reporting to DOD chain of command is useful or not useful, whether we should maybe have those 

resources directed more toward the Inspector General office that is 

independent or reports to Congress. 

I think there are some reforms. I think that and trying to figure 

out ways that we can waste less money within the system, and incentives that we can change. 

But with that I think we are going to close the hearing, unless 

you have a final comment, from either one of you. 

Mr. GOR. I think what Inspector General Sopko does and what 

SIGAR does, going back to your previous question, is he is not 

afraid to rock the boat, and one thing that we kept hearing over 

and over again is the SIGAR team in Kabul is not welcome, even 

among other Americans on base, because they show up and they 

do not take any prisoners. And as Mr. McNeill mentioned, some of 

the other Inspectors General, they are from that branch. They are 

from that department. They have to see these people. They have 

to live with them. So I think the more independence, the better. 

Senator PAUL. I think this makes a strong argument for looking 

at the Inspector General process within DOD, because you need to 

have independence and you need to have people who are unafraid 

to do this. 

Thank you very much for your testimony, and the hearing is adjourned. 

[Whereupon, at 3:54 p.m., the Subcommittee was adjourned.] 

(29) 

A P P E N D I X 
30 

The country isn't safe. You cannot leave the embassy and most of the time our personnel cannot 

even visit many of the infrastructure projects we pay for. Let me repeat that: We cannot even 

visit many of the projects we are paying for. 

We have an opium problem here in the U.S., and despite spending over $8 billion, Afghanistan is 

still a leading producer of poppies. 

This is just insane. And to top it all off, we are spending over $40 billion, each year for this. So this hearing is to 

really take a deeper dive to examine that spending. 

We have the Special Inspector General for Afghan Reconstruction here today, to talk about some of his 

great work exposing things like the $42 million natural gas, gas station, the $60 million power transmission 

system that doesn't work, buildings that melt in the rain, and the $80 million consulate we never occupied 

because it was not secure. We want to hear about their ongoing corruption review as well. 

Our second panel will be staff from this Subcommittee who recently returned from an oversight trip to 

Kabul. As mindboggling as the waste seems back here in Washington, !understand from them it is all the more 

galling when you are there on the ground. 

I've made it no secret I think we should come home. I think we went in for the right reasons but we 

stayed way too long. It isn't our job to build countries and frankly I think we do a poor job of it. I think we 

anger as many people as we help- and that should make the taxpayers back home angry. 

With that, I'll recognize Ranking Member Peters for his opening statement. Senator Peters. 
31 

U.S. Senate Homeland Security and Governmental Affairs Committee 

Subcommittee on Federal Spending Oversight and Emergency Management 

"Afghanistan in Review: Oversight of U.S. Spending in Afghanistan" 

May 9, 2018 

Senator Gary C. Peters, Ranking Member 

Opening Statement 

Thank you, Mr. Chairman. I would like to join you in welcoming Inspector General Sopko and 

Ms. Miller to the Subcommittee. I look forward to their testimony. 

Today's hearing is notable, not just because of its important topic-reconstruction spending in 

Afghanistan-but also because of its venue. Although the Senate regularly holds hearings 

related to our nation's efforts in Afghanistan, until now, those hearings have generally been held 

before the Armed Services and Foreign Relations Committees. It is rare for our oversight 

committees to focus on spending in Afghanistan, and we must. 

In the 17 years since September II th, the American taxpayer has been asked to bankroll 

hundreds of billions of dollars of spending on combat, relief, and reconstruction in Afghanistan. 

Our total bill is quickly approaching 900 billion dollars, not counting what we spend here at 

home treating and caring for our veterans. More than 125 billion dollars has been spent on relief 

and reconstruction alone. Even accounting for inflation, that's more than what we spent on the 

Marshall Plan to rebuild Western Europe in the aftermath of World War II. Frankly, calling it 

"reconstruction" is a bit of a misnomer. Much or our work in Afghanistan is construction, 

building infrastructure and capacity where none exist. 

After 17 years and hundreds of billions of dollars, it is more than fair for taxpayers to ask, "Is it 

worth it?'' "What is the return on our investment?" "Are we throwing good money after bad?" 

"Why are we spending hundreds of billions of dollars on infrastructure thousands of miles away, 

when roads and bridges are crumbling right outside my door?" 

What do I tell the people of Flint, Michigan who ask me, "Why are my taxes paying for clean 

water in Kabul when I don't have clean water in my own home?'' 

These are important questions, and hard ones. Partly, they are policy questions. Put simply, the 

money we spend in Afghanistan is intended to promote our national security. Thanks to the 

incredible dedication and sacrifice of our servicemembers, frontline civilians, and their families, 

we have been successful in driving al-Qaeda out of Afghanistan and denying safe haven to 
32 

transnational terrorists. We have made progress in democracy and development, and in helping 

to strengthen Afghan institutions. There are more roads, more electrical lines. Literacy is up; 

infant mortality is down. 

And yet, Afghanistan is not secure. We are constantly warned that chaos would follow a 

precipitous withdrawal of our forces and funding. Every year, we add tens of billions of dollars 

tv the bill. But taxpayers are growing weary. My constituents tell me: we can't afford to write a 

blank check. 

To draw America's longest war to a successful conclusion we must empower Afghans to achieve 

and sustain the peace. We must responsibly reduce our spending as we continue to transition 

military and governing capacity to Afghans. How we achieve that is as much about process as 

policy. The right policies don't ensure success on their ovm. Far from it. When the money we 

spend in Afghanistan is wasted, stolen, or ends up in the hands of the very enemies we seek to 

defeat, it undermines our policy, however well intended. 

And I hope that's what we focus on today. How do we prevent waste, fraud, and abuse of our 

spending in Afghanistan? How do we ensure that each dollar is put to its highest and best usc? 

How do we track it? How do we measure its effectiveness? Are the right oversight structures in 

place to provide us with the information we need to make the tough decisions? 

I know from my own visit to Afghanistan, and from the visit made by our staff last month, that 

our security posture severely limits the ability of Americans to work "outside the wire." In many 

cases American aid workers and auditors can't even visit the projects our taxpayers fund. What 

oversight options, if any, do we have in that kind of security environment? 

I'm grateful to be able to hear from Mr. Sopko and Ms. Miller, who have years of experience 

working on these questions, inside and outside of Afghanistan. Between them, they can speak to 

the challenge of conducting reconstruction programs and the challenge of auditing and 

overseeing those programs. Thank you for your service and thank you for being here today. 

Members of this Subcommittee have a wide range of views about our nation's involvement in 

Afghanistan. But whatever your views, our success depends on spending money effectively, 

even as we seek to reduce our overall expenditures. Waste fuels corruption, undermines the 

institutions in Afghanistan that we seek to empower, and breaks faith with the American 

taxpayer. I hope today's hearing will help address these issues and send a strong message that 

Congress's role doesn't end when we pass a budget and write a check. We have an obligation to 

follow the money and ask the tough questions. And with that, I yield back. 
33 

SIGAR 

Special inspector General for Afghanistan Reconstruction 

Testimony 

Before the Homeland Securtt:y and Govemmental 

Affairs Committee (HSGAC) Subcommittee on 

Federal Spending Oversight and Emergency 

Management (FSO) 

U.S. Senate 

Oversight ~f u.s. Spendimtin 

J\fghanist~l'l 

Statement of John F. Sopko, 

Special Inspector General 

for Afghanistan Reconstruction 

May9,2018 
34 

Chairman Paul, Ranking Member Peters, and Members of the Subcommittee, 

I am John Sopko, the Special Inspector General for Afghanistan Reconstruction, or SIGAR. 

Thank you for inviting me to appear before the Subcommittee today to discuss our oversight 

work in Afghanistan and to summarize our view of the status of the reconstruction effort 

there. 

To start, I would like to make four overarching observations: 

1. SIGAR has reported on many signs of progress in Afghanistan reconstruction, but 

also continues to document a disturbing amount of waste, fraud, and abuse. 

2. SIGAR and its other oversight colleagues have made a difference, identifying 

billions in potential savings, recoveries, and redirection of funds. SIGAR alone has 

identified more than $2 billion of potential savings, and nearly 80 percent of our 

recommendations for improvements have been implemented or effectively 

addressed by the federal agencies we have audited. 

3. SIGAR is working closely with the U.S. military, the U.S. Agency for International 

Development, Department of State, international donors, the Afghan government, 

and other entities to seek improvements in reconstruction. 

4. Although overall the reconstruction effort in Afghanistan has had serious flaws, it 

has not failed and has improved over time. With continued refinement and 

oversight, it should be able to do an even better job of helping the Afghan people 

while promoting U.S. security and humanitarian policy objectives. 

Costs and challenges of reconstruction 

The U.S.-Ied reconstruction effort in Afghanistan was launched shortly after our country 

overthrew the Taliban regime that had sheltered the 9/11 terror-attack mastermind Osama 

bin Laden. That effort is now in its seventeenth year. 

During this time, the human cost of the struggle against Afghan insurgents and terrorist 

groups has led to more than 2,400 American military fatalities, about 1,100 among other 

members of the NATO-led Coalition, and tens of thousands of Afghan deaths. 1 

The financial costs appear in terms of federal spending. Congress has appropriated $126 

billion for Afghanistan reconstruction since Fiscal Year 2002.2 As SIGAR reported in 2014, 

total appropriations for Afghanistan reconstruction, after adjustment for inflation, had 

1 iCasualties.org, "Operation Enduring Freedom: Coalition Military Fatalities By Year," 

http://icasualties.org/oefj, accessed 5/2/2018. 

2 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 62. 

SIGAR 18-46T Page2 
35 

already exceeded the total of U.S. aid committed to the Marshall Plan for rebuilding much of 

Europe after World War 11.3 

That vast sum does not include the more than $750 billion committed so far to U.S. military 

operations in Afghanistan.• So total financial costs for the U.S. military and reconstruction 

operations in Afghanistan are approaching $900 billion, and the common expectation is that 

the United States will be involved there for years to come. 

Reconstruction has proceeded along many lines. This has included rebuilding Afghanistan's 

national security forces, promoting the rule of law, fighting widespread corruption and the 

narcotics trade, improving public health and education, promoting respect for human rights, 

expanding electric and transportation infrastructure, and furthering economic development. 

SIGAR has examined and reported on many projects and programs in all those areas and 

more. We have seen much good work done, but we have also seen and reported on far too 

many instances of gross incompetence, poor planning, sloppy execution, lack of follow-up, 

outright theft and corruption, and a basic lack of accountability for these many failures. Our 

quarterly reports have summarized audits, inspections, and special projects that involved, 

among other outrageous misuse of U.S. taxpayers' money: 

Purchasing nearly a half-billion dollars' worth of second-hand transport planes 

that were unusable in Afghanistan and were scrapped for $32,000; 

Building a dry-fire range for Afghan security-force training that literally began 

dissolving when it rained; 

Constructing schools and clinics with unsafe walls and ceilings, unfinished and 

dangerous electrical systems, and no provision for the costs of supplying and 

sustaining them; and 

Paying for roads that soon deteriorate due to poor construction and failure to plan 

for repairs. 

In some respects. these discoveries are not surprising. SIGAR's very first quarterly report, 

written in October 2008, observed that the U.S. effort to reconstruct and develop 

Afghanistan was "exceedingly difficult and complex." SIGAR noted the country had been 

devastated by decades of war, suffered from an ongoing insurgency, and had a complex 

tribal culture, a history of foreign domination, widespread illiteracy, and porous borders.s 

More recent reports have expanded the list of challenges to include slowing economic 

3 SIGAR, Quarterly Report to the United States Congress, 7/30/2014, p. 5. 

4 DOD Comptroller, "Estimated Cost to Each U.S. Taxpayer of Each of the Wars in Afghanistan, Iraq and Syria(' 

http:/ I com ptroller.defense.gov/Portals/ 45/Docu ments; defbudget;fy2018/Section_1090 _FY17 _NDM_ Cost_ 

of_Wars_to_per_Taxpayer-July_2017.pdf, July 2017. Estimates cover FY 2001 through the FY 2018 Overseas 

Contingency Operations budget request. DOD notes that "Estimated costs for Afghanistan include related 

regional costs that support combat operations in the U.S. Central Command area of responsibility." 

5 SIGAR, Quarterly Report to the United States Congress, 10/30/2008, p. 9. 

SIGAR 1846T Page 3 
36 

growth, high unemployment, deep poverty flight of human and financial capital, constraints 

on institutional capacity and sustainability, and endemic corruption. 

All of these issues recur in our reports over our agency's decade of oversight. Because the 

challenges of the Afghan setting were known or soon foreseeable 17 years ago, their 

persistence should be deeply troubling to this Subcommittee and the American taxpayer. 

A word about SIGAR 

SIGAR's statutory mandate is to report to Congress and the Administration on the status of 

the reconstruction effort, and to offer recommendations for improvements. a Our creation in 

2008 sprang from years of mounting dissatisfaction with the pace and robustness of 

progress in Afghanistan and the ability of then existent oversight bodies to address 

problems there. 

The U.S. role in Afghanistan evolved from a purely military intervention in late 2001, to an 

international effort to provide security assistance, improve Afghan institutions, suppress 

narcotics production, offer humanitarian relief, and foster economic development, among 

other purposes. The United States threw itself into reconstruction with haste and hubris, 

with untested assumptions and unrealistic expectations, and with piles of cash and tight 

deadlines for spending it-too much, too fast, with too little oversight. The early years of the 

reconstruction effort therefore suffered from ad hoc, scantily staffed, and loosely 

coordinated initiatives with no dedicated oversight organization to watch for waste, fraud, 

and abuse. 

To improve this situation, Congress created SIGAR in 2008. This is our 10th year of 

operation, and my sixth year as I G. We employ a staff of some 190 auditors, criminal 

investigators, analysts, and engineers. Most work at our home office in Arlington, Virginia, 

with many traveling to Afghanistan and other locations as work requires. About 30 SIGAR 

staff are stationed full-time at the U.S. Embassy compound in Kabul, where in mid-April they 

briefed staff representatives of the Chairman and the Ranking Member of this 

Subcommittee. 

We welcome and encourage such visits from Members of Congress and their professional 

staff. From my personal experience as a former federal and state prosecutor, I can attest 

that first-hand observations of the daily work of federal civilian employees and military 

members, and of the Afghan setting, is the best way to support effective congressional 

oversight. The interaction with staff also helps us to improve the relevance and usefulness 

of our work and our means of reporting it. I would add that SIGAR also appreciates the 

6 Public Law 110-181, Section 1229 (2008). 

SIGAR 1846T Page4 
37 

attention that lawmakers like Senator Paul, Senator Lankford, Senator McCaskill, and others 

have given to its work in their statements and reports. 

The outcome of SIGAR audits, inspections, and investigations has been-so far-to identify 

more than $2 billion of taxpayer money that can be, and often has been, saved, recovered, 

or put to better use.? 

SIGAR and the "Whole of Governments" Phenomenon 

SIGAR's mission resembles that of this Subcommittee and of your parent Committee on 

Homeland Security and Governmental Affairs. You are tasked with "studying the efficiency, 

economy, and effectiveness of all agencies and departments of the Government."s Congress 

has directed SIGAR to do likewise for all federal entities involved in Afghanistan 

reconstruction. We are in fact the only Office of Inspector General authorized to examine all 

aspects of reconstruction, regardless of departmental or agency boundaries. 

Like you, we are empowered to look at not only individual programs or practices but also at 

the broader "whole of government" and whole of "governments" approaches to national 

problems. This broader approach is particularly relevant in Afghanistan, and also for 

potential hot spots around the world, which national security advisors note will require 

"whole of government" approaches like witnessed in Afghanistan. 

This "whole of government" phenomenon explains why during SIGAR's first decade of 

reconstruction oversight in Afghanistan, we have audited, inspected, evaluated, and 

investigated programs of the U.S. Agency for International Development (USAID), and the 

Departments of Defense, State, Justice, Treasury, Commerce, Agriculture, and others. 

It also explains why our work necessitated reviewing the use of U.S. reconstruction funds 

that are administered by international organizations such as the United Nations, NATO, the 

Asian Development Bank, and the World Bank. 

Our work with the World Bank should be of particular interest to this Subcommittee's 

hearing today due to the size of U.S. contributions involved, and also because of far-reaching 

implications for reconstruction in Afghanistan. In brief, the World Bank administers the 

multi-donor Afghanistan Reconstruction Trust Fund, or ARTF. Set up in 2002, the ARTF is a 

partnership between the United States, 33 other donors, and the Afghan government. 

Donations provide direct assistance through the fund to the Afghan government. As of 

7 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 19. 

s U.S. Senate Rule XXV. 

SIGAR 18-46T PageS 
38 

December 2017, donors had contributed over $10 billion to the ARTF; the United States has 

been the biggest donor, with $3 billion channeled to the trust fund via USAID.e 

Exactly what has been done with that $3 billion is hard to say. A SIGAR audit report released 

last month explains that the World Bank is not transparent about its uses of donors' funds, 

and may not itself have full information about how that money is being spent. One of our 

startling conclusions was that the Bank does not require its monitoring agents to verify the 

existence of Afghans who receive salaries for teaching. In the course of the audit, USAID 

advised SIGAR that the World Bank cannot provide reasonable assurance that ARTF funding, 

which covers approximately 40 percent of all Afghan civilian expenditures, is reimbursing 

only proper government expenditures. SIGAR also found that the World Bank limits donors' 

access to information on how it monitors and accounts for ARTF funding, and does not 

follow its own policy to provide donors and the public with access to certain ARTF records. 

This lack of visibility and access to records means that large amounts of U.S. directassistance money may be at risk of waste, fraud, and abuse. 

This audit further highlights the need for Congress to take a similar "whole of government" 

approach to oversight, for what we have found in Afghanistan may have implications 

elsewhere. As the United States and other donors face increasing security threats to 

development assistance around the world, there is a tendency to shift more monies to 

international organizations and trust funds such as the ARTF. SIGAR does not question that 

policy, but cautions that in doing so, federal agencies must insist on effective monitoring 

and accountability by the recipient international organizations. 

SIGAR Investigations 

Less visible than our public reports, but also vital to our mission, the agents of our 

Investigations Directorate have been instrumental in developing criminal cases and referrals 

for suspension and debarment, as well as using their law-enforcement powers to make 

arrests. During the second quarter of FY 2018, SIGAR investigations resulted in one 

indictment, a guilty plea, three sentencings, two arrests, $6,527,491 in restitutions, and 

$264,563,451 in cost avoidance and recoveries to the U.S. government. To date, SIGAR 

investigations have resulted in 124 criminal convictions. tO Cumulative criminal fines, 

restitutions, forfeitures, civil settlements, and recoveries total more $1.5 billion.11 We also 

have 199 ongoing investigati0ns.12 In addition, SIGAR investigations have supported 

9 The ARTF discussion is based on SIGAR, Afghanistan Reconstruction Trust Fund: The World Bank Needs to 

Improve How it Monitors Implementation, Shares Information, and Determines the Impact of Donor 

Contributions, SIGAR 18-42 Audit Report, 4/2018, highlights pages. 

10 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 42. 

11 SIGAR. Quarterly Report to the United States Congress, 4/30/2018, p. 42 

12 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 42. 

SIGAR 1846T Page6 
39 

referrals to proper authorities to consider suspending and debarring individuals and firms 

for fraud, corruption, and poor performance in Afghanistan. These referrals have so far led 

to 136 suspensions and 532 finalized debarments/special-entity designations of individuals 

and companies engaged in U.S.-funded reconstruction projects.13 

In one major case, SIGAR investigators uncovered a bid-rigging scheme for a $1 billion U.S.-

funded contract to supply fuel to Afghan forces. When SIGAR reported this illegal scheme to 

President Ghani, he promptly cancelled the contract, fired those involved, and rebid the 

contract, saving U.S. taxpayers about $200 million that otherwise would have accrued to the 

colluding vendors.14 

All of this work and all of these reports are aimed, as Congress intended, to provide 

accurate, objective, and useful assessments of U.S. reconstruction programs, and to point 

the way to improvements. That leads us to the central oversight concern of today's hearing: 

what is the status of the reconstruction effort in Afghanistan? 

To address that question, I will start with the issue that accounts for more than 60 percent 

of total appropriations for Afghanistan reconstruction: security. 

Security: the necessary underpinning of successful reconstruction 

Congress has appropriated some $78 billion since FY 2002 to support the security element 

of reconstruction. With a per capita income of about $612 per year, Afghanistan's ability to 

fund a modern and effective security force is severely limited.15 Therefore, U.S. funding pays 

nearly all the costs of recruiting, training, equipping, housing, transporting, and resupplying 

the Afghan National Defense and Security Forces, the ANDSF. Those forces comprise the 

Afghan National Army and Air Force, and the Afghan National Police. 

Developing an effective and sustainable ANDSF is essential for the whole reconstruction 

effort. As SIGAR observed in the October 2008 quarterly report, "Successful reconstruction 

relies on a secure environment, effective governance, and economic development."16 Unless 

the host nation can achieve and maintain a substantial level of security, insurgents and 

terrorists can degrade or neutralize improvements in other areas. They can-and have-shut 

down health clinics, interfered with schools, blocked highways, assassinated officials, blown 

13 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 46. 

14 SIGAR, Quarterly Report to the United States Congress, 1/30/2017, pp. 4-5. 

15 IMF, Staff Report For The 2017 Article IV Consultation And Second Review Under The Extended Credit 

Facility Arrangement, And Request For Modification Of Performance Criteria, 11/21/2017, p. 36. 

16 SIGAR, Quarterly Report to the United States Congress, 10/30/2008, p. 9. 

SIGAR 18-46T Page7 
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up electric-transmission towers, extorted money from citizens, and potentially weakened 

popular support for the government by staging bloody terror bombings of innocent civilians. 

The current security situation in Afghanistan is not the one envisioned by the international 

London Conference of 2006, which accepted the original version of the Afghanistan 

Compact prepared by the Afghan government. One benchmark in that compact was, "All 

illegal armed groups will be disbanded by end-2007 in all provinces."17 

That did not happen in 2007, and still has not. Taliban insurgents and assorted terrorist 

groups remain active in Afghanistan. For the past couple of years, a phrase often used to 

characterize the security situation there is "an eroding stalemate." 18 The Pentagon has told 

us that Afghan forces' battlefield performance is improving, and that Afghan and Coalition 

air strikes, augmented by special-forces operations and other support, have inflicted heavy 

losses on adversaries. But Afghan government casualties have also been large, and the 

Afghan government has recently asked DOD not to release those figures publicly.19 

Through its congressionally mandated quarterly reports, SIGAR has been able, however, to 

report some data essential for the public to understand the current security situation in 

Afghanistan and the progress of our reconstruction efforts there. One set of data involved 

government-versus-insurgent control of the Afghan population. As of January 31, 2018, 

about 65 percent of Afghanistan's estimated 32.5 million people lived in areas under 

Afghan government control or influence. Insurgents controlled or influenced areas 

containing 12 percent of the population. The remaining 23 percent of the population lived in 

contested areas. In the same period a year ago, insurgent control or influence was exerted 

over 9.2 percent of the population, so the recent increase to 12 percent may be 

significant.2o 

The other data set attracting special attention by analysts is SIGAR's reporting of a 

significant decline in the actual strength of the ANDSF over the last year. In the most recent 

unclassified figures that U.S. Forces-Afghanistan (US FOR-A) provided to SIGAR, the ANDSF 

stood at a total of 296,409, nearly 36,000 fewer personnel than reported in January 

2017.21 This is well below the 352,000-personnel goal agreed upon years ago by the 

17 Government of the Islamic Republic of Afghanistan, The Afghanistan Compact (2005), Annex I. "Benchmarks 

and Timelines," quoted in SIGAR, Quarterly Report to the United States Congress, 10/30/2008, p. 94. 

18 A 2016 Washington Post story attributed the phrase to "a senior administration official," Washington Post, 

"An 'eroding stalemate' in Afghanistan as Tali ban widens its offensive," 10/14/2016. Besides appearing in 

various commentaries, the phrase made its way into a UN report last summer: UN Secretary-General, Special 

report on the strategic review of the United Nations Assistance Mission in Afghanistan, 8/10/2017, p. 4. 

19 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 79. 

20 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 86. 

21 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, pp.93, 112. The most recent ANDSF 

figures did not include civilians, while the 2017 figures did include them. 

SIGAR 18-46T Pages 
41 

international donors-mainly the United States-who bankroll the ANDSF as part of 

reconstruction. 

Military effectiveness, of course, is not purely a matter of numbers. And as U.S. military 

officers point out, insurgents have not been able to capture and hold high-profile objectives 

like provincial or district capitals. But even a brief capture, such as the Taliban's September 

2015 taking of the northern city of Kunduz for nearly two weeks can plant doubts about the 

government's ability to maintain security.22 While government forces must defend many 

points, insurgents can pick and choose targets, avoiding pitched battles with more heavily 

armed opponents if they wish. 

Whether the current security situation in Afghanistan is in stalemate or not, the President's 

new South Asia strategy, with troop additions to bolster the train, advise, and assist mission 

in support of the ANDSF, and with the intent to pressure the Taliban to seek a political 

solution, may change that. Time will tell, and SIGAR will continue to fulfill its duties to report 

as best it can on the security situation there. 

However, I can say that insecurity in Afghanistan has definitely complicated life for USAID 

and State Department reconstruction efforts, as well as for oversight agencies like SIGAR, 

just as it has for nongovernmental organizations, international aid missions, and Afghan 

citizens. Reconstruction from severe and widespread damage is difficult even in a 

developed setting like post-hurricane New Orleans, New Jersey, or Puerto Rico. 

Reconstruction in one of the world's poorest countries is a heavier lift. And rampant violence 

that targets our reconstruction workers and projects compounds the difficulty. 

State's movement restrictions and support charges raise impediments 

It is difficult and dangerous to move around in Afghanistan, and the steep drawdown in U.S. 

forces since 2014 has sharply reduced the availability of military transport and security 

support. I have seen this problem first-hand on my 19 trips to Afghanistan over the past six 

years. 

SIGAR has responded to the security constraints on travel in several ways. We have used 

remote sensing data like satellite imagery to monitor some projects. We employ some 

Afghan nationals who can move about without attracting hostile attention. We have also 

partnered with an Afghan nongovernmental civil society organization to augment our data 

collection. 

I must tell you, however, that SIGAR and other U.S. agencies working in Afghanistan are 

increasingly restricted by the highly risk-averse policies of the State Department, which has 

statutory control over the movements of U.S. civilians overseas. Although State's own policy 

22 SIGAR, Quarterly Report to the United States Congress, 10/30/2015, pp. 86-87. 

SIGAR 18-46T Page9 
42 

requires balancing the risks and benefits of allowing movement in dangerous areas, 

department leadership adopted a deeply restrictive posture that effectively confines federal 

employees to the Embassy compound for much of the time. 

In addition, State Department policies have imposed a tremendous financial burden on 

agencies such as SIGAR that operate in Afghanistan. The burden has two parts. First, State 

is the service provider for ICASS, the International Cooperative Administrative Support 

Services system. ICASS charges for administrative and support services to agencies working 

at more than 250 U.S. embassies and consulates.23 SIGAR is billed for services it uses at 

Embassy Kabul. Unfortunately, ICASS charges have soared, even though our staff count of 

30 in Kabul is the same as it was in 2009. ICASS charges consumed 1.2 percent of SIGAR's 

budget in 2009, have risen to just under 15 percent in this fiscal year, and are expected to 

reach 18 percent in FY 2019-nearly a fifth of SIGAR's entire budget.24 

The second part of the cost burden consists of State's Embassy Air fees for every employee 

who makes the roughly three-mile trip from the Embassy to Kabul International Airport. This 

fee is for helicopter expenses since SIGAR staff, like all Embassy personnel, are forbidden to 

travel by road to the airport. This trip is a key component for anyone travelling to or from 

Afghanistan as well as elsewhere in the country or even part of Kabul city. A one-way 

Embassy Air flight, recently costing $1,350, is expected to increase to $2,252; by 

comparison, Emirates Airline will fly an economy-class passenger from Kabul to Dulles 

International and back for $1,846.25 As Embassy Air cost increases take effect, it will literally 

be cheaper to fly half-way around the world and return to Kabul than to travel three miles 

from Embassy Kabul to the Kabul airport. 

I am happy to report that Ambassador John Bass, the new ambassador in Kabul, is working 

with us on this matter. Nonetheless, SIGAR's budget, as well as budgets of other civilian 

agencies working in Kabul, is under heavy pressure from these costs, which inevitably limits 

our resources to perform oversight. 

I cannot predict when or whether success will come in Afghanistan. But I can tell you that if 

State's movement restrictions and prohibitive ICASS and air-movement charges continue on 

their recent trajectory, both the reconstruction and the oversight effort will likely suffer 

because no one will be able to afford to operate there. State is properly concerned with 

safety, but in my opinion, it is improperly weighing concern for safety above concern for 

mission success. We are cautiously optimistic that under the new Ambassador in Kabul and 

23 State, "What is ICASS?" information page at icass.govjwhat-is-icass, n.d., accessed 5/6/2018. 

24 SIGAR Management & Support Directorate, internal predecisional budget slide, 4/2018. 

25 SIGAR Management Support Directorate, email, 5/4/2018; Emirates Air, quoted price for one adult, 

economy ticket KBL-IAD-KBL round trip starting 6/1/2018, via fly4.emirates.com/CAB/IBE/SelectPrice.aspx, 

accessed 5/6/2018. 

SIGAR 18-46T Page 10 
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the new Secretary of State, this situation will improve. We deeply appreciate their 

cooperation to date and their willingness to consider our concerns. 

Bearing in mind that security remains the fundamental challenge in Afghanistan, both for 

the country's future and for the conduct of effective reconstruction oversight, I will move on 

to some other aspects of SIGAR's work. 

Common problems in reconstruction programs 

SIGAR has audited or examined scores of programs and project sites. Some keep good 

records, monitor and evaluate their progress, correct deficiencies, and meet their 

performance and budget targets. That fact testifies to America's good fortune in having 

many skilled and dedicated federal civilian employees, military personnel, NGO staff, and 

contractors working in the difficult and dangerous setting of Afghanistan. They deserve our 

thanks. 

All too often, however, SIGAR discovers problems. You will find examples of these problems 

in abundance on SIGAR's website at www.sigar.mil. Our reports have called attention to 

costly, useless, or dangerous practices including: 

Touting dollars spent as a metric of success, or counting outputs like training 

courses held or school books purchased rather than documenting actual 

outcomes of activity; 

Lack of adaptation to relevant circumstances in Afghanistan, such as ethnic 

rivalries, patronage networks, and cultural practices; 

Poor coordination among U.S. agencies, rather than a whole-of-government 

approach that avoids duplication and gaps, aligns efforts toward intended results, 

and strives for sharing information and best practices; 

Failure to specify details of required work and performance measurement; 

Failure to enforce contract terms, maintain good records, conduct site visits, and 

obtain timely defect corrections, and ensure completion before paying vendors; 

Failure to assess Afghans' ability to operate programs and sustain them after 

han doff; 

Illegal acts like soliciting bribes, taking kickbacks, or stealing money and supplies; 

and 

Failure to hold individuals or firms accountable for poor performance. 

To give you an example, in 2013, we inspected a U.S.-funded school for training teachers in 

Sheberghan, Afghanistan. The Sheberghan teacher-training facility was incomplete four 

years after construction started because two successive contractors engaged by the U.S. 

Army Corps of Engineers, USAGE, had abandoned the project. Among other problems, the 

electrical system was not finished and the wiring did not meet required code standards, 

SIGAR1846T Page 11 
44 

posing a risk of electrocution and fire. In addition, the building's well was drilled near its 

sewage system, potentially creating health risks. These concerns were not hypothetical: 

Afghans were already using the unfinished and unsafe building. Inexplicably, however, 

USACE had paid both contractors and released them from their contractual obligationseven though neither had performed the required work. SIGAR's report noted "a disturbing 

trend" of USACE failures to hold contractors accountable.2s 

Other U.S.-funded reconstruction work addresses a threat that injures and kills people in 

Afghanistan and in many other countries while also providing a major cash resource for the 

insurgency: opium-poppy cultivation. Afghanistan has long been the world's leading producer 

of opium, and since FY 2002, the United States has committed about $8.8 billion to a 

variety of counternarcotics programs there. But as SIGAR's latest quarterly report notes, the 

total area of Afghan land under opium-poppy cultivation increased by 63 percent during the 

2017 growing season from the year before, and raw opium production jumped by an 

estimated 88 percent. This might suggest some serious shortcomings in the U.S. approach 

to counternarcotics programming that need addressing. In response to a SIGAR inquiry, 

however, USAID said it will not plan, design, or implement any new programs addressing 

opium-poppy cultivation.27 I will mention here that SIGAR's Lessons Learned Program will 

soon be issuing a comprehensive review of the counternarcotics effort in Afghanistan, 

complete with findings of fact, broad-based lessons, and recommendations for the future. 

Another example involves Da Afghanistan Breshna Sherkat, or DABS, the national electric 

utility. This past fiscal quarter, USAID moved nearly $400 million of previously on-budget 

power sector funds off-budget, meaning its use would no longer be controlled by DABS. 

USAID had determined that DABS lacked the capacity to adequately manage on-budget 

assistance and oversee construction projects. In addition, USAID will not fund any DABS 

projects whose construction is not already under way, and plans to return millions to the U.S. 

Treasury. The action will, however, delay expansion of Afghanistan's power system.2a 

The expansion of the electric power grid in Afghanistan, where most people have no 

electrical service, has also been delayed due to poorly planned and executed programs by 

the U.S. Army Corps of Engineers. For example, a USACE contract awarded to an Afghan firm 

to extend the Northeast Power System, NEPS, provided for a "NEPS Ill" project to design and 

build two transmission lines and a connecting substation. SIGAR inspectors found that NEPS 

Ill has been built, but that USACE mismanagement of the contract has resulted in the U.S. 

government spending almost $60 million on a project that is not operational because land26 SIGAR, Sheberghan Teacher Training Facility: U.S. Army Corps of Engineers Paid Contractors and Released 

Them from Contractual Obligations before Construction Was Completed and without Resolving Serious Health 

and Safety Hazards, SIGAR Inspection 13·9, 7/2013, "What SIGAR Found" highlights page. 

27 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, pp. 59, 61. 

28 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 58. 

SIGAR 18-46T Page 12 
45 

acquisition and right-of-way issues have not been resolved, and because the contract did 

not provide for permanent connections to a power source. It gets worse. The NEPS Ill 

facilities may be structurally unsound and pose a risk to Afghans who live near transmission 

towers and lines, or work in the new substation.2s 

A different kind of risk and a different kind of waste sits literally across the street from the 

U.S. Embassy in Kabul. Construction of the Marriott Kabul Hotel and Kabul Grand 

Residences was supported by $85 million from the federally sponsored Overseas Private 

Investment Corporation, or OPIC. In late 2016, SIGAR issued an alert letter pointing out that 

the site appeared to be neglected and abandoned by the Afghan contractor, and that OPIC 

had not conducted direct inspections or obtained independent progress reviews before 

disbursing funds, resulting in a significant loss of U.S. taxpayer dollars. SIGAR also noted 

that an abandoned building overlooking the U.S. Embassy presented a security threat. 

Taxpayers' losses from the apparent fraud against OPIC were increased by the need for 

State to pay for guarding the empty shell across the street. 

With the unfinished building still derelict in late 2017, SIGAR issued a follow-up inquiry letter 

asking State about its plans. State replied that it had effectively taken control of the building 

and blocked access.3o As in other cases of contracting in Afghanistan, the waste of money 

and the security risk might have been avoided if the funding source, in this instance OPIC, 

had adequately monitored performance on the site and verified the contractor's invoices. I 

understand that staff members of this Subcommittee inspected the hotel-and-residence 

project during their recent trip to Afghanistan and got a first-hand look at the extent of the 

waste and fraud at that site. 

SIGAR: making a difference 

In addition to reporting on problems, investigating criminality, and proposing 

recommendations, SIGAR takes a strong proactive approach to foster improvements to the 

reconstruction effort. 

For example, concerned about the DABS electric utility's capacity to manage donor funds, 

SIGAR discussed the need for greater transparency of the utility with President Ghani in 

February 2018. As a result of that discussion, SIGAR and DABS signed a memorandum of 

understanding that allows SIGAR to review DABS's use and management of past and current 

29 SIGAR, Afghanistan's North East Power System Phase Ill: USAGE's Mismanagement Resulted in a System 

that Is Not Permanently Connected to a Power Source, Has Not Been Fully Tested, and May Not Be Safe to 

Operate, SIGAR Inspection 18-37-IP, 3/2018, "What SIGAR Found" highlight page. 

30 SIGAR, inquiry letter to Secretary of State Rex Tillerson and Ambassador John Bass, SIGAR 18-15-SP, 

12/11/2017, p. 1. A PDF of the letter and State's response are posted at www.sigar.mil. 

SIGAR 18-46T Page 13 
46 

donor funds to improve internal controls. We expect to begin that review in the summer of 

2018.31 

Likewise, SIGAR worked with President Ghani to obtain all of the bank records related to the 

2010 near-collapse of the Kabul Bank, the country's largest. Nearly a billion dollars was 

essentially stolen from the bank by its top executives.32 SIGAR investigators, along with 

Department of Justice attorneys, are currently reviewing this vast store of material to 

attempt to recover assets for the Afghan government and bring any wrongdoers to justice. 

SIGAR interacts in other ways with the government of Afghanistan. Our Investigations 

Directorate, for example, works closely with the country's attorney general on criminal cases, 

and one of our investigators has appeared as witness in an Afghan criminal trial-the only 

U.S. law enforcement agent to do so. 

SIGAR also has access, via State and USAID, to AFMIS, the Afghan Financial Management 

System. This permits us to do deep-dive analysis of budgetary operations and track the uses 

of U.S. aid dollars. 

At President Ghani's invitation, a SIGAR observer attends the weekly meetings of the 

National Procurement Council. President Ghani established the body to increase oversight of 

large contracts. Our attendance enhances our visibility into Afghan use of U.S. support 

funds, and allows our representative to answer any questions from the council on the spot. 

I and other members of SIGAR have also discussed with President Ghani his deep interest in 

tackling Afghanistan's longstanding problems with corruption. He is well aware that 

unchecked corruption undermines government legitimacy and effectiveness, and risks 

alienating the international donors who provide funds for 60 percent of the country's 

operating budget. We also maintain good relations with Chief Executive Dr. Abdullah 

Abdullah, who is also committed to improving his fellow citizens' wellbeing through reform 

and development. 

SIGAR is also working with President Ghani and with other Afghan officials to carry out a new 

oversight task assigned to us by Congress. As you know, the House and Senate 

Appropriations Committees directed SIGAR to assess the Afghan government's progress 

toward developing and implementing a whole-of-government anticorruption strategy. This 

was a requirement of the 2016 Brussels Conference on Afghanistan. SIGAR will report its 

findings in an audit report by May 31, 2018. Additionally, the Committees' FY 2018 joint 

explanatory statement calls upon SIGAR to conduct a second audit of the Afghan 

government's progress against corruption over the next year. 

31 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 170. 

32 SIGAR, Quarterly Report to the United States Congress, 4/30/2018, p. 158. 

SIGAR 1&46T Page 14 
47 

SIGAR's work has also produced helpful action by U.S. officials.33 Last summer, Secretary of 

Defense James Mattis took note of a SIGAR report that DOD had spent as much as $28 

million unnecessarily by purchasing camouflage uniforms for the ANDSF that used a 

proprietary pattern that involved extra fees, and had not been shown to be any more 

effective than standard patterns. In addition, the pattern chosen was designed for a 

woodland setting, while only about 2 percent of Afghanistan is forest.34 Secretary Mattis 

fired off a memo to his DOD under secretaries citing the SIGAR report and saying wasteful 

spending actions "connect directly to our mission and budget situation." He instructed them 

that "Cavalier and casually acquiescent decisions to spend taxpayer dollars in an ineffective 

and wasteful manner are not to recur. "3s 

We have also been encouraged by the welcoming attitude of senior U.S. military officers to 

our work. The U.S. military made use of our Lessons Learned Program report on securitysector assistance to Afghanistan in crafting the new South Asia strategy. I and my staff 

briefed General Dunford, the Chairman of the Joint Chiefs, as well as the Commandant of 

the Marine Corps, the head of Central Command, and General John Nicholson, the 

commanding general in Afghanistan, among many others. SIGAR staff were also asked to 

serve on a Joint Chiefs' panel reviewing the last 15 years of effort in Afghanistan.3s 

Another DOD response to SIGAR reports has been action by the Combined Security 

Transition Command-Afghanistan to resume control of fuel-purchase funds for the Afghan 

Ministry of Defense and to impose added conditionality on direct financial assistance to the 

ministry. 

Other encouraging steps include: 

I met recently with USAID Administrator Mark Green, who told me that USAID is 

weighing the comparative successes of its Afghanistan programs to identify areas 

for improvement and to weed out ineffective programs. SIGAR has long urged 

agencies to perform such "rack and stack" reviews. As noted earlier, USAID will 

also be pulling back on-budget assistance where the risks of mismanagement are 

too high. 

33 Unless otherwise noted, comments in the remainder of this section are based on meeting remarks by 

Special Inspector General Sopko at SIGAR headquarters, 5/3/2018. 

34 SIGAR, Afghan National Army: DOD May Have Spent Up to $28 Million More Than Needed to Procure 

Camouflage Uniforms That May Be Inappropriate for the Afghan Environment, Special Projects report SIGAR17 -48-SP, 6/2017, pp. 2-3, 8. 

35 Secretary of Defense James Mattis, "Our mission and stewardship responsibilities," memorandum to DOD 

under secretaries, 7/21/2017, pp. 1-2. 

36 John F. Sopko, "Private Sector Development and Economic Growth: Lessons from the U.S. Experience in 

Afghanistan," prepared remarks for the United States Institute of Peace, Washington, DC, 4/19/2018, p. 2. 

SIGAR 1846T Page 15 
48 

Ambassador Bass and Administrator Green are offering suggestions for new 

research studies by SIGAR's Lessons Learned Program, and DOD has 

incorporated some of SIGAR's Lessons Learned work into the new Afghanistan 

strategy. 

Senior U.S. military officers including General John Nicholson, commander of U.S. 

and NATO forces in Afghanistan, are working with SIGAR on its recommendations 

for bolstering the train, advise, assist mission there. 

All of these developments are good news for the U.S. reconstruction effort, and show that 

active oversight can do more than hold a rear-view mirror up to mistakes and failures. That 

is an important function, but it is equally important to use that learning to bring about 

change that saves money and yields better results. 

Conclusion 

The overall results of the reconstruction effort in Afghanistan have been decidedly mixed. 

But judging the effort against the unrealistic assumptions and expectations of 2002 and the 

surge of 2009 would be both harsh and unproductive. 

Afghanistan reconstruction is a work in progress-and slow progress at that. But there has 

been progress, including lower maternal and infant mortality, increased school enrollments, 

better-trained judges and judicial staff, increased opportunities for women, better tools for 

ministries' financial management, new systems to confirm identities among the security 

forces and voters, and increased attention to the aid restrictions of the Leahy Laws for 

Afghan security units that commit gross violations of human rights. 

Great obstacles remain, the insurgency standing at the forefront, accompanied by poverty, 

illiteracy, corruption, lack of capital and infrastructure, and uneven application of the rule of 

law. But I believe, on balance that the reconstruction effort in Afghanistan can provide 

genuine support of the avowed U.S. policy that the country must not again be a launching 

pad for terror attacks against the United States. 

That support requires our implementing agencies to do a better job of planning, overseeing, 

monitoring, and imposing accountability for misconduct and incompetence. Doing that job 

better requires that U.S. agencies take realistic views of the scope of possible impacts and 

the time required to achieve their goals. It is also incumbent on them to remain aware of 

and sensitive to realities on the ground, and that they are ready to be honest to Congress 

and the American taxpayer by acknowledging failures and challenges and redirecting 

resources to build on successes. All of that work requires continuing extensive oversight, for 

which SIGAR is the chief source in Afghanistan. 

SIGAR does not make national policy or advocate for changes in that policy, but we can and 

will persist to the utmost, for as long as it takes, in striving to improve the work of 

SIGAR 1846T Page 16 
49 

reconstruction, and in presenting the facts and our recommendations to Congress and the 

Executive Branch for improving reconstruction in Afghanistan. 

Thank you for your attention. I look forward to your comments and questions. 

SIGAR 18-46T Page 17 
50 

Testimony 

The Challenges and the Benefits for U.S. 

National Security of Providing Foreign 

Assistance to Afghanistan 

Laurel E. Miller 

CT-493 

Testimony presented before the Senate Homeland Security and Government Affairs Committee, Subcommittee on Federal 

Spending Oversight and Emergency Management. on May 9, 2018. 
51 

For more information on this publication, visit www.rand.org/pubs/testimonies/CT493.html 

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52 

The Challenges and the Benefits for U.S. National Security of 

Providing Foreign Assistance to Afghanistan 

Testimony of Laurel E. Miller1 

The RAND Corporation2 

Before the Committee on Homeland Security and Government Affairs 

Subcommittee on Federal Spending Oversight and Emergency Management 

United States Senate 

May9,2018 

Good afternoon, Chairman Paul, Ranking Member Peters, and distinguished members of 

the subcommittee. Thank you for the invitation to testifY at this important hearing. In 

the context of the subcommittee's oversight of U.S. government spending in 

Afghanistan, I have been asked to address the effectiveness of U.S. spending toward building a 

stable democracy in that country. I will offer the subcommittee several observations on the ways 

in which this type of spending is thought to advance U.S. national security interests and on the 

challenges that the Afghan context poses for implementation of U.S. assistance. My intent is to 

take a broadly framed approach to considering the question of effectiveness and to suggest 

factors that could be considered in setting realistic expectations for the impact of U.S. assistance 

to Afghanistan. I will conclude by recommending a path forward in Afghanistan that might 

enable the United States to continue gradually reducing the scale of its financial commitment 

while mitigating risks. U.S. assistance to Afghanistan over the past sixteen-plus years has been 

enormous in scale and enormously complex in its substantive details, with security and civilian 

assistance components and multiple U.S. agencies involved in implementation; my brief 

comments today will, therefore, necessarily be broad-brush. 

The Logic Behind U.S. Assistance to Afghanistan 

A useful starting point is to recall the rationale for U.S. government spending in Afghanistan. 

The U.S. motivation for invading Afghanistan in 2001 and ousting the Taliban regime was not, 

1 The opinions and conclusions expressed in this testimony are the author's alone and should not be interpreted as 

representing those of the RAND Corporation or any of the sponsors of its research. 

2 The RAND Corporation is a research organization that develops solutions to public policy challenges to help make 

communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, 

nonpartisan, and committed to the public interest. 
53 

of course, to make Afghanistan a nicer place for Afghans but, rather, was to pursue U.S. national 

security interests in destroying al-Qaeda and-because it had provided safe haven to al-Qaedathe Taliban. The driving imperative of the U.S. strategy thereafter has been to prevent al-Qaeda 

and other international terrorists from regaining or gaining a foothold in Afghanistan and to 

prevent the return to power of the Taliban regime. This has necessitated filling the vacuum 

created by the U.S. invasion by supporting the establishment of a government of a different 

regime type from the Taliban and by developing that government's capabilities to fight the 

Tali ban, provide for the country's security over the long-hauL and serve as a counter-terrorism 

partner for the United States. 

Focusing in on the U.S. effort to build Afghan security forces so that they can bear the main 

burden of providing security in the country, the primary challenge has been to create security 

institutions that are well led, are reasonably free of corruption, and have self-sustaining systems 

for logistics and management. Experience has shown that those institutional attributes cannot be 

manufactured through short-term or narrowly conceived technical advisory efforts; they are part 

of a broader landscape of governance and the uses and abuses of power in Afghanistan. 

Improving that landscape is a lengthy and multifaceted endeavor. Moreover, getting Afghanistan 

to a place where it can afford to pay for its own security requirements presents a further 

challenge. The Afghan government spends about a quarter of its resources on security-a huge 

proportion by international standards-but that contribution covers only about a tenth ofthe 

costs of the government's security forces; the United States and other foreign donors cover the 

rest. Without a lot of help in setting a foundation for economic growth, the Afghans will be hardpressed to even begin to close that wide gap in any foreseeable time frame. 

The basic dilemma of policy in Afghanistan-and the reason why high levels of U.S. 

spending have continued to be seen as required-remains what it has been since the Taliban 

insurgency arose in the years following the U.S. invasion and since American leaders decided 

that the United States needed to counter the insurgency: The United States cannot only battle its 

way to establishing enduring stability in Afghanistan. Decisions that the United States made in 

pursuit of its own security interests led to the adoption of an Afghanistan strategy that depends 

on producing, at American expense, sufficient political stability, government popularity, and 

economic development in a country that is still one of the world's poorest and least 

institutionalized. 

The Macro-Level Picture of Assistance Impact 

The effectiveness of U.S. assistance to Afghanistan can be examined on a project-by-project 

basis, looking at whether particular initiatives were competently executed and achieved the 

specific intended results. But using a wider lens, it is also possible to gauge effectiveness by 

examining the impact that the totality of U.S. and other international aid has had on Afghan 

society. Effectiveness in this sense is more about the achievement of broad policy goals than it is 

about questions of aid-project efficiency and waste. U.S. assistance has certainly produced 

important macro-level positive development results-although I would caution that recent dips 

in some indicators, corresponding with declines in aid levels and the U.S. and NATO troop 

drawdown, raise concerns about the sustainability of results. 

2 
54 

A variety of statistical indicators show that health, education, access to information, and 

other facets of life in Afghanistan have improved significantly, spurred largely by foreign donor 

spending. A few examples are: 

• Life expectancy has increased from 55.5 years to 63.7 since 2000.3 

• The size the economy has nearly doubled since 2008, although with a slight drop since 

2014.4 

• The number of children in school has increased from an estimated I million, mostly boys, 

in 2002, to more than 9.2 million, 39 percent of whom are girls.5 

• Mobile phone subscriptions per I 00 people have gone from 0 to over 62 since 2000.6 

Although Afghans routinely tell outside observers that their country is vastly changed since 

200 I, a characterization supported by data such as those highlighted briefly above, the economic 

picture has begun to deteriorate together with the security picture. The economic growth rate in 

2017 was 2.6 percent, well below the 9.6 percent average annual rate from 2003 to 2012, 

according to the World Bank.7 As economic growth became sluggish, the poverty rate increased 

to just above 39 percent in 2013-2014 (the latest available data), up from 36 percent in 2011-

2012, meaning that 1.3 million people fell into poverty in the intervening period. Rural areas, 

where most of the population resides, saw the biggest increase, from 38.3 to 43.6 percent. Most 

jobs created in the service sector prior to 2014 were lost.8 Adding to the mixed picture, data 

compiled by the World Bank for its Worldwide Governance Indicators show that Afghanistan 

has made modest progress in improving government effectiveness and regulatory quality, but 

none in controlling corruption.9 

Those positive development outcomes that have been achieved as a consequence of U.S. and 

other foreign donor spending in Afghanistan have no doubt improved the lives of many Afghans. 

Whether these outcomes have had an impact on the main security-oriented goals that have driven 

that spending is a separate question. Again, the theory behind using U.S. assistance to promote 

Afghan economic and human development, public service delivery, and institutional capabilities 

is that doing so will produce political stability, popular support for the government, and 

sustainable capacity for Afghans to take care of their own security and economic needs and work 

with the United States in denying space to terrorist groups that could threaten U.S. interests. 

3 World Bank, World Bank Open Data, Afgahnistan, 2018 (https://data.worldbank.org/country/afghanistan). 

4 World Bank, World Bank Open Data, Afgahnistan, 2018 (https://data.worldbank.orgicountry/afghanistan). 

5 U.S. Agency for International Development, "Afghanistan: Education," webpage, last updated April25, 2018, 

citing data from the Afghan Ministry of Education (https://www.usaid.gov/afghanistan/cducation). 

6 World Bank, World Bank Open Data, Afgahnistan, 2018 (https://data.worldbank.org/country/afghanistan). 

7 For 2017 real GOP growth rate, see World Bank, "The World Bank in Afghanistan," last updated AprillO, 2018 

(http://v.ww.worldbank.orglenlcountry/afghanistan/overview#l); for 2003-2012 average annual rate, see World 

Bank, Afghanistan Development Update, November 2017, Washington, D.C., 2017 

(https://openknowledge.worldbank.orglhandle/10986/28928). 

8 World Bank, "The World Bank in Afghanistan," last updated Apri!IO, 2018 

(http://www.worldbank.org/en/country/afghanistanloverview). 

9 World Bank, Worldwide Governance Indicators (http://info.worldbank.org/governance/wgi/#home). 

3 
55 

Reality has shown, however, that the linkage between producing development outcomes of the 

kinds cited earlier and achieving Afghan government stability, legitimacy, and sustainable 

capabilities is, at a minimum, not a straight and direct line, at least not within the time frame of a 

single generation. Although in certain areas government capabilities appear to have improved 

markedly in recent years (for instance, in public revenue collection and in some elements of the 

security forces), on the whole, neither political nor security conditions in Afghanistan are more 

stable than they were a decade ago. 

Challenges of the Afghan Context 

Despite the macro-level improvements noted earlier, Afghanistan is still one of the world's 

poorest countries. 10 It remains-as it historically has been--dependent on external financing, and 

it will forever be arid and landlocked. Moreover, several decades of conflict have helped to 

entrench predatory economic practices and have impaired the development of the country's 

human capital. And Afghanistan has long attracted interference by neighbors and regional 

powers. Against the backdrop of these fundamental conditions and, importantly, the fact that 

conflict is ongoing and intensifying, it can hardly be surprising that implementing assistance 

programs is extraordinarily difficult. Certainly, it is the case that U.S.-funded projects have not 

all been perfectly conceived, planned, and executed, and U.S. agencies should always strive to 

do better in improving the elements of assistance delivery that are within their control. But in 

realistically setting expectations and evaluating effectiveness, the significant limitations imposed 

by the conditions in Afghanistan need to be appreciated. 

The challenges posed by such conditions are not unique to Afghanistan. A RAND study 

found that even though most nation-building interventions of the last quarter century have 

resulted in improved security, economic growth, and human development, they do not rapidly 

transform societies. Even where important progress is made, the local conditions tend to limit the 

absolute outcomes of outsiders' interventions. Within a decade after such interventions, 

ineffective governments largely remained so, poor societies remained poor, and lootable 

resources continued to be looted. 11 

A particularly difficult condition to alter is corruption, and in this regard, too, Afghanistan is 

not unique. Despite burgeoning growth since the mid-1990s in anticorruption initiatives and in 

attention to the problems the initiatives are meant to solve, progress in actually reducing levels of 

corruption in countries around the world has been exceedingly limited. Success stories are few 

(and nonexistent among countries at Afghanistan's level of development), positive change is 

slow at best, and evidence of the constructive impact of external actors (aid donors and other 

10 Afghanistan is number 210 out of228 countries and territories in terms ofGDP per capita. CIA, "Country 

Comparison: GDP Per Capita," The World Factbook, 2017 (https://www.cia.gov/library/publications/the-worldfactbook/rankorder/2004rank.html). 

11 James Dobbins, Laurel E. Miller, Stephanie Pezard, Christopher S. Chivvis, Julie E. Taylor, Keith Crane, Cal in 

Trenkov-Wermuth, and Tewodaj Mengistu, Overcoming Obstacles to Peace: Local Factors in Nation-Building, 

Santa Monica, Calif.: RAND Corporation, RR-167-CC, 2013 

( https://www. rand.org/pubs/research _reports/RR 167 .html). 

4 
56 

foreign partners) is slight. In countries where corruption is endemic, it is deeply embedded in the 

social order and not susceptible to rapid correction. 12 

To be clear, I am not suggesting that the challenges of the Afghan environment, and the 

friction those challenges create for effective delivery of U.S. assistance, mean that the United 

States should not be providing any such aid. Rather, I am suggesting that expectations ofthe 

pace and scale of change that such external financing can promote should be realistic and that 

U.S. policy choices should reflect such realism. One lesson that could be drawn from U.S. 

spending in Afghanistan is that, where starting conditions are particularly difficult, time is 

probably more valuable that money. Altering those conditions cannot be greatly sped up by 

pushing out large sums of assistance quickly rather than stretching them over a longer time 

frame. 

An Alternative Way Forward 

If the record of effectiveness is mixed and the baseline conditions inhibit more-dramatic 

results, then the crucial question comes back to one of policy: To what extent do U.S. national 

security interests justify continuing to spend assistance dollars while accepting that, inevitably, 

there will be leakages, losses, and imperfections? Answering the question should take into 

account that the Afghan government and security forces that have been established with U.S. 

financing are, in their current form, dependent on the continuation of such financing. At the 

extreme end of a range of options, rapid elimination of U.S. assistance-particularly funding for 

Afghan security forces-would likely lead to a rapid downward slide of security and political 

stability. 

In my judgment, U.S. national security interests in Afghanistan could best be advanced by 

mounting a robust diplomatic initiative to negotiate a settlement of the conflict that would fold 

the Tali ban into Afghan politics, enable the United States to narrow its security mission to 

counterterrorism, and set the conditions for ultimately normalizing the scale of the U.S. 

assistance commitment. Maximizing the potential for success of this approach would require 

putting the U.S. military effort, and the assistance effort, in support of diplomacy-in particular 

to demonstrate U.S. resolve to prevent the failure of the Afghan government until a settlement is 

concluded. A political settlement would not obviate the need for some continued U.S. assistance 

to Afghanistan to support the implementation of an agreement, although aid priorities would 

probably require adjustment. Indeed, signaling that the United States would be prepared to 

marshal the international assistance needed for implementation could help to achieve a 

settlement. 

Current U.S. policy nominally acknowledges the need, ultimately, for a negotiated 

settlement, and recent statements by some senior U.S. officials suggest that the level of interest 

in pursuing a settlement may be on the rise. However, actual policy execution is still heavily 

dominated by the military effort. A concerted and prioritized initiative to negotiate would be a 

12 For an excellent exploration of the challenges of countering corruption, see Alina Mungiu-Pippidi, The Questfor 

Good Governance.· How Societies Develop Control of Corruption, Cambridge: Cambridge University Press, 2015. 

5 
57 

major foreign policy undertaking, requiring both clear political backing and significant 

diplomatic muscle. As yet, those requirements do not appear to be met. 

6 
58 

Testimony of Gregory E. McNeill 

Majority Staff Director 

Federal Spending Oversight Subcommittee 

Given Before: 

The Federal Spending Oversight Subcommittee 

Afghanistan in Review Oversight of US. Spending in Afghanistan 

5/9/2018 

Chairman Paul, Ranking Member Peters, and members of the committee. It is an honor 

to be here today to report on the FSO subcommittee's oversight trip to Afghanistan. 

Over two and a half days our bipartisan team participated in approximately 12 meetings 

with personnel on the ground, and four site visits at various locations in Kabul and at Bagram Air 

Base. 

I want to thank all those from the State Department, the U.S. Military, and SIGAR for 

making this trip possible. Most important, I want to recognize the soldiers who have served and 

sacrificed so much in Afghanistan, particularly those who have given their lives there. 

I want to focus on three overarching take away from our oversight work: 

1. We are not RE-Building in Afghanistan; for example in 200 I when we "broke it" 

as people often say, only 6 percent of the Afghan population had reliable 

electricity, today it is somewhere over 30 percent and we were told the goal is full 

electrification in the 2020. Electric power is certainly good for the Afghan 

population, but it is not something they lost as a result of the war, they never had 

it - we are not putting things "back together," we arc building new that's not 

rebuilding, that's nation building; That goes to my second point, 

2. As is often the case with government programs, we look at what "successful'' 

people have and try to give that to people we want to help. Government rarely 

asks :l:Y.hy people are successful and seeks to foster those attributes instead; and 

finally 

3. Oversight makes our efforts stronger and more effective, and cannot be done at 

arm's length and cannot be shorted. 

To the second point, economists would tell you that the fundamental building blocks of a 

successful society are, (1) rule of law, (2) free-markets, and (3) private property rights ... not 

necessarily in that order. Most importantly the Afghans are telling us that this is what they want. 

Integrity Watch Afghanistan reports that Afghans cite insecurity, unemployment, and corruption 

as the top three problems in their country. We're working on those things, but half the time we 
59 

shoot ourselves in the lCJot by focusing on other things at the expense of these attributes- rule of 

law, free-markets, and private property rights. 

l mentioned electric power earlier, let's look at that. Electricity is important, but it a 

"what," of success. not a "why" so in our quest to build a power grid, the U.S. literally built 

transmission towers on people's land without procuring it or getting permission. And the excuse 

used is that many Afghans don't have title to their land the U.S. docs not know who really 

owns it. That may be true. but I'm sure the people living on the land believe it is their land. 

So, what does it do when you build a tower on someonc's backyard without their 

permission? Well, it probably makes them unhappy: they might resort to violence. which we 

heard on the ground happened in some cases. That fosters insecurity and it also breeds a sense 

of corruption. Worse, the power itself is going to a population center miles away. not the person 

whose property has been compromised. 

You can almost hear them say, "The U.S. and Afghan governments took my land for a 

power grid and didn't even give me power. what a bunch of crooks." 

Transmission towers built in Afghan's back yards. -S!GAR Photos 

So right here, in an effort to give people a "what" that we think they need lor success, we 

have totally invalidated the underlying "whys•· of success. Can you imagine how much better it 

would have been to procure the land before building? We would have reintorccd property rights 

and just compensation. and the U.S. and Afghan governments been seen as humbled by other's 

ownership and honest brokers. 
60 

To my next point, let me switch gears a little. We had a whistleblower contact us several 

years ago describing how new goods were being vastly over ordered, shipped overseas, and then 

destroyed in Afghanistan in their original packaging, brand new. 

For almost four years we have been asking different groups to look into this, SIGAR said 

it had merit but was in the Defense Criminal Investigative Service's (DCIS) jurisdiction. We 

turned to DCIS, who told us nothing criminal was happening and it didn't warrant further 

investigation. 

GAO went pretty far digging through old records and found that about $50 million worth 

of new, in the packaging, equipment was being destroyed, but they said that was only one quarter 

of one percent of all that has been demilitarizes and disposes of. In short if it happens it is 

extremely rare. 

So, you can imagine how shocked we were when we walked into a warehouse at Bagram 

and found three large bins (out of less than ten in the warehouse at the time) full of thousands of 

dollars of brand new electrical equipment slated for disposal. 

New Breakers (in manufacturer packaging) and Conduit Connections W/Cover slated for disposal- FSO Photos 
61 

We'd been given the run-around and told this was not an issue for almost four years. 

Then, we see it right there before our eyes. This never would have happened if we hadn't gone 

and looked. 

The point is that you can only do so much from Washington. We were told our staffdel 

was only the second or third oversight trip in the past 17 years - whereas groups of appropriators 

and authorizers come about every I 0 days. That comes out to a ratio of greater than l 00 to l. 

Beyond that, SIGAR, the key oversight entity on the ground, told us every congressional group is 

invited to meet with them, but it has only happened a hand full oftimes. 

Quite simply congressional oversight is at a disadvantage against congressional spenders 

in Afghanistan. That means wasted money, but also a less effective mission. 

We clearly didn't scratch the surface. We were booked solid the whole time we were 

there, but still weren't able to investigate the U.S. taxpayer financed cricket league, or visit lTV 

whom we as taxpayers have given exclusive broadcasting rights to and even trained them on 

sports broadcasting. 

We did not get to talk about the $1 million variety show the U.S. taxpayer is paying for. 

We did not get to talk to the people in charge of $29 million in cranes and bulldozers that were 

lost And of course, we didn't get to see the $43 million natural gas, gas station. 

There is a desperate need in Afghanistan for better oversight engagement from Congress. 

I want to emphasis that is not anti-war and oversight does not compromise the mission- tough 

questions and consequences, condition us and makes us all stronger. 

With that I thank you and I'd be happy to answer questions. 
62 

Testimony of Sergio Gor, Deputy Chief of Staff, Senator Rand Paul (R-KY) 

Before the U.S. Senate Homeland Security and Governmental Affairs Committee, 

Subcommittee on Federal Spending Oversight and Emergency Management 

May 9, 2018 

Chairman Paul, Ranking Member Peters, and Members of the Subcommittee: 

Thank you for providing us with an opportunity to testifY today regarding our experiences on the 

ground in Afghanistan. 

We found it extremely valuable to visit firsthand all ofthe locations and projects that you will 

hear from us about in this hearing. Pictures, videos, and reports simply can't compare with 

directly witnessing America's massive involvement, commitment, and undertaking in 

Afghanistan. 

I would like to start by also thanking Ambassador Bass and his Deputy Chief of Mission, Annie 

Pforzheimer, for ensuring we had access and logistical support and for enabling our team to 

conduct our oversight mission. 

I would also like to mention the incredible American men and women who work on the ground 

at our embassy and various bases. These individuals risk their lives for the betterment of others. 

Unfortunately, our objectives are unclear, and our mission remains murky, difficult, and, l would 

wager, unattainable in the current situation. 

Finally, I want to acknowledge the extraordinary work the Special Inspector General for 

Afghanistan Reconstruction (SIGAR) is doing on behalf of the American taxpayer. IG Sopko 

and his entire team are performing a vital service to the American taxpayer in a very dangerous 

part of the world and have not received the level of praise their incredible efforts deserve. 

Though I could spend hours recounting our experiences, today l will focus on three distinct 

areas: 1.) Infrastructure and Accountability, 2.) Rampant Corruption, and 3.) Resettlement 

of Afghans in the United States to the Detriment of Afghanistan. 

Infrastructure and Accountability 

One of the projects we got a firsthand look at in many ways summarizes our entire nationbuilding efforts in Afghanistan. It represents a bold idea for a brighter future that fell apart along 

the way, wasting taxpayer dollars and placing Americans living in Afghanistan in even greater 

danger. 
63 

2 

You may have heard of what was to be the Marriott Hotel in Kabul. initially said by the Overseas 

Private Investment (OP!C) in 2007 to be "expected to several million 

dollars annually in exchange" and create hundreds ofjobs the Afghan people. 1 

While OPlC invested nearly $60 million in the over time, its oversight of those dollars 

was lacking, relying mostly on those the loan to provide accurate 

Even worse, a story that has become all too familiar with government projects, 

almost $30 million more to the same underpertorming developer to build an apartment 

adjacent to the hotel. 3 

Eleven years later. l walked the halls ofthis deserted, unfinished shell of a dream. Barren rooms, 

empty elevator shafts, and no electric power greeted us. Like something out of the Old West, 

both buildings in this ghost town arc uninhabited and uninhabitable. 

But we cannot simply wash our hands ofthesc Our government now spends an 

unknown amount every week to protect these buildings due to their proximity to the 

Embassy. In the end, multiple individuals advised us that the Embassy is seeking to acquire the 

land, demolish the infrastructure, and start anew. 

ln summary money wasted, and, the worst part of all, absolutely 

people squander or steal it, and no one 

pp. 2_ 

'!btJ. 2 
64 

3 

We also visited the Ministry of the Interior in Kabul. 

The United States spent $210 million on a brand-new building that was riddled with construction 

deficiencies, and before occupying the building, an additional $2.6 million was spent on 

"Ministry HQ Enhancements," including adding marble and spending $7,000 on "Lost time 

waiting for instructions" and $10,000 on a car and driver. 

Multiple individuals described the Ministry of the Interior as a "Mini-Pentagon" of Kabul. After 

passing through multiple security checkpoints, we found ourselves in a large, ornate, marblecovered lobby. We had an interesting meeting with senior officials, who discussed their mission 

in rooting out corruption but ultimately admitted that much remains to be done. 

At the time of construction, the contract mandated certain features- instructions that ultimately 

weren't followed, were ignored, or were completely passed over. For example, recent 

inspections have revealed that the doors installed are not considered "fire-rated," meaning they 

burn through much faster. According to MOl staff, the sprinkler systems and air conditioning 

systems work haphazardly. Elevator problems abound throughout the building. Unfortunately, 

this is another example of funds being squandered through corruption and lack of oversight. 

According to a recent SIGAR report: 

"Phase 2 construction of the MOl headquarters project experienced lengthy delays and 

cost increases because of the need for three contracts to complete the project, one of which 

was terminated for default for poor work that was demolished and redone by the second 

contractor. The phase 2 project was completed in November 2015, more than two and a 

half years after the originally planned completion date of May I, 2013. In addition, the 

phase 2 project's cost rose to approximately $46.2 million or $15.6 million more than 

originally planned. 

''During 13 site visits between October 2015 and August 2016, SIGARfound seven 

instances where the phase 2 contractors did not comply with contract requirements. Most 

significantly, Yuksel Insaat did not install certified fire-rated doors in the headquarters, 

communications buildings, and gatehouse, as the contract required, which raises safety 

concerns should afire occur. Due to the seriousness of this issue, on October 5, 2016, 

SIGAR sent an alert letter to USACE, CSTC-A, and other Department of Defense 

components notifYing them that none of the 153 doors installed under phase 2 were 

certified. In its May 9, 2017, response, USACE acknowledged that the doors did not meet 

certification requirements and stated that it requested corrective-action plans from Yuksel 

Insaat. USACE also stated that it was investigating the suitability of the noncertified doors 

that had been installed and the contractual issues involved, as well as developing several 

potential courses of action to address S!GAR 's concerns. USACE further noted that it was 

implementing a personnel training program that entails a detailed review of fire-door 

assemblies, to include contract requirements and referenced standards. ''4 

4 Special Inspector General for Afghamstan Reconstruction. Quarterly Report to the United States Congress, pp 37-38. Octo her 2017. 

bllps /1\v\\'W s1gar mil/pdfiquarterl_yreooJis/20! 7 .J 0-JOqr.pdf 
65 

4 

Rampant Corruption 

One of the questions which I asked every individual or group we met with was, "What part of 

funding goes to corruption, waste, fraud, and abuse?" The answers varied from a low of20% to 

a high of 50%, depending on whom I was speaking with. 

Corruption is so rampant, it has been accepted as the norm. There are efforts to root out some of 

it, but as a State Department official explained, it is also part of the culture and will never be 

eradicated. Corruption can range from literally billions of dollars disappearing, to preferential 

hiring and nepotism. Ministers tend to hire from within their own tribes, their own villages, or 

quite literally from their immediate family. 

President Ghani has attempted to spread jobs and contracts beyond his immediate circle; 

however, the practice of hiring family and tribe members has not ceased. 

Corruption is so rampant, we don't have a clue what percentage actually disappears from the top 

line. Oversight is greatly lacking. 

Some members ofSIGAR we met with described Afghanistan as the most corrupt nation in the 

world, surpassing other hot spots around the world where we are involved. Americans have an 

unrealistic view on corruption in Afghanistan. Simply put, some level of corruption will always 

exist, because it is their way of life. 

Unfortunately, it is extremely easy to scam the United States and our partners because so much 

construction occurs with ZERO supervision from our entities. The situation has gotten so 

volatile that the United States is unable to build, inspect, or certifY projects. Our government 

relies on volunteers, NGOs, or local Afghans to certifY that work has started, has been 

completed, or is up to standards. 

One of our most valuable meetings during our time in Kabul was with a watchdog group called 

Integrity Watch Afghanistan (IWA). Through various grants and funding from the United 

States, IWA is able to monitor work being carried out throughout the country that is financed by 

the United States or other international partners. 

Unfortunately, outside ofSIGAR, IWA is the closest thing the United States taxpayer has to an 

accountability monitor. They assess the work on projects funded by the U.S. taxpayer, as well as 

their progress and completion. IWA employs close to 80 staff and also has hundreds of 

volunteers who visit such sites. 

Additionally, JW A assists in trials throughout Afghanistan. In the past year, they have 

monitored nearly 1,000 trials across Afghanistan. 
66 

5 

IW A has been ignored in the past by our Embassy, with their findings discarded. However, we 

have reason to believe that Ambassador Bass aims to foster a better relationship with their 

leadership. 

While IWA is not directly involved in monitoring elections, they reaffirmed earlier statements by 

countless other individuals that election fraud was rampant and continues to be a problem. 

An interesting anecdote from our meeting with IWA concerned their belief that some localities 

have received so much money to fix their communities that they are refusing to self-improve 

their own towns for free. As one individual stated, "Why would I keep my street clean or my 

park tidy, when the United States will pay me to do it?" In this instance, our aid has had a 

detrimental impact. No longer do people care about their communities. They are trying to get 

that incentive from our funding. 

Resettlement of Afghans in the United States to the Detriment of Afghanistan 

While our oversight focused on the spending of American monies and resources, one glaring 

issue kept appearing throughout our meetings. 

Although the United States won the war in 2001, we have continued to resettle individuals who 

have assisted us on the ground through "Special Immigrant Visas" (S!Vs). These could include 

Afghan embassy staff, translators, or individuals who have assisted our armed forces. 

According to the Pew Research Center, which cited the U.S. State Department Bureau of 

Consular Affairs, 48,601 special immigrant visas have gone to Afghans between 2007-2017. 5 

From the Pew Research Center:6 

:i RadfOrd, Jynnah, and Jens Manuel Krogstad, "Afghans who worked for US. government make up growing share of special immigrant visa 

rec!pwnts." Pewrcsearchorg. December 2017 http://wwvv pcwrcscarch org/f8ct-tank/20!7il2/11/afghan~-who-workcd-f0r-u-s-governmentmake-up-grow!ng-shan:;.of-specta!-immlgmnt-vlsa-reciments/ 

6 lbid. 
67 

6 

More Afghans than Iraqis entered U.S. under special immigrant visas since 2013 

under spedal irmrdgranttrisa. prograrns, by fiscal year 

18 

16 

12 Afghans 

Afghan program begins 

6 

0 

2007 2008 2009 2011 2013 2015 2017 

PEW RESEARCH CENTER 

"More than two-thirds of special immigrant visas have gone to Afghans (48,60I) since 

fiscal 2007- the first year visas were awarded under the programs - while Iraqis have 

received 2I,96I such visas. Totals include visas issued to the principal applicants who 

worked for the US. government, as well as their spouses and unmarried children younger 

than 2I . ... " 

"A primary benefit of the programs is lawful permanent residence, which allows a person 

to live and work in the US. and offers a path to citizenship. . .. " 

"In 2009, Congress authorized special immigrant visas for Afghan citizens under what 

today is the largest of the three programs. Since fiscal 20 I 6, 7, 000 visas have been made 

available, reflecting the continued U.S. militarv presence in Af'ghaniswn. Under current 

rules, those eligible to apply must have worked on behalf of the U.S. government for at 

least two years in Afghanistan at some point since Oct. 7, 200I. Applications must be filed 

before December 2020, and the program will end when all allocated visas are taken. ... " 
68 

7 

"Recipients of these special immigrant visas can receive rejitgee resettlement benefitsfrom 

the US. government, which include 30 to_/ 20 davs otfinanciaf ass is ranee_. About 85% of 

those who have entered the US. under the special immigrant visa programs (from Oct. 1, 

2007, to Sept 30, 2017) have received refugee assistance and resettled in states across the 

country. Top resettlement states during this time include California (17,416), Texas 

(10,598), and Virginia (7,249). " 7 

Throughout our trip, we kept hearing about a "brain-drain" of Afghans that are educated, 

intellectual, entrepreneurs, or businessmen- anyone who knew how to work the system -being 

able to work for the United States and eventually obtain an SIV. 

Various State Department employees discussed the automatic incentive for coming to work at 

the Embassy or a U.S. mission. Those doing so knew that in a year or two, they could start their 

process to immigrate to the United States. 

While I agree that some individuals might have been targeted for working with the United States, 

I also strongly believe that many took advantage of this system and have resettled in America. 

Over 50,000 individuals have resettled in the United States. This number does not include many 

more Afghans who have resettled in Europe and other safer nations. 

President Ghani has not been supportive of Afghans who have felt compelled to leave 

Afghanistan. Instead, he has called for his citizens to focus on and rebuild their own nation. 

According to the BBC, "Afghanistan's President Ashraf Ghani has taken a tough stance on the 

tens of thousands of his citizens who are f1eeing the country to make the dangerous journey to 

Europe."8 

They reported the following:"'! have no sympathy,' he told the BBC's Valda Hakim, while 

calling on his countrymen to remain in the war-ravaged nation and join in the effort to rebuild 

it."9 

KEY TAKEAWAYS 

CUT AID 

The United States needs to lessen our aid dramatically to Afghanistan. So much of our aid is lost 

to waste, fraud, abuse, and corruption. Some estimate that as much as 50% of our money is 

misspent, mismanaged, or disappears entirely. According to recent testimony before the Senate 

8 Brit1sh Broadcasting Corporation. "President Ghani· 'No sympathy for Afghan migrants'" BBC.com March 2016 

https //wwv. bbc. com/JH.'\\ s/a v/world-a.sia-35932!20/president -ghan!~no-svmpath\'-fOhlfohan-mi grants 

9 lbid. 
69 

8 

Foreign Relations Committee, the United States' involvement in Afghanistan will cost taxpayers 

a whopping $45 billion in 2018. 10 

IMPLEMENT ACCOUNTABILITY 

Much more accountability is needed to root out corruption. There is virtually no 

countless projects, and there is very little accountability. Money is stolen, wasted, and 

and almost no one is held accountable. 

END THE SPECIAL IMMIGRANT VISAS 

Afghanistan will never be able to succeed if the smartest individuals are all leaving for the 

United States and Europe. Over 50,000 individuals have been resettled in the United States in 

the last ten years. 

! agree with President Donald J. Trump, who said in 20 !3: 11 

Afghan war is our 

ever-bring our 

, make 

Thank you again for this opportunity to testify, and I look forward to answering any questions 

you may have. 
70 
71 
72 
73 
74 
75 

How the Pentagon Mismanaged the 

Afghanistan Legacy Program 
76 

P a g 11 

Executive Sulnmary 

The Legacy and Afghanistan Source Operations Management {ASOM) Programs, an 

expensive American effort to build the intelligence capacity of Iraq and Afghanistan security 

forces from 2007 to 2016. have been repeatedly scrutinized by Ranking Member Claire McCaskill 

and other federal officials, including the Defense Contract Audit Agency {DCAA) and the 

Special Inspector General for Afghanistan Reconstruction (SIGAR). In August 2017, Ranking 

Member McCaskill revealed extensive financial abuses by the subcontractor on the Legacy 

Program contracts. which had spent over $51 million on, among other things, luxury cars, 

exorbitant salaries, and unallowable airfare. 

While the Army was responsible for executing the Legacy and ASOM Program contracts, 

a small office in the Pentagon, the Combating Terrorism Technical Support Office (CTTSO), 

developed the program. At the time of the Legacy Program, the Program Manager for CTTSO 

was Richard Higgins, a subsequent White House aide whose controversial statements ultimately 

resulted in his widely-publicized dismissal from the National Security Council in 2017. 

The Legacy Program was executed by a contractor named Jorge Scientific Corporation, 

later known as lmperatis Corporation (lmperatis), which has since become insolvent. This 

company first attracted the attention of Senator McCaskill in 2012, when allegations arose of 

drug and alcohol abuse and other misconduct at its compound in Kabul. Last year, Ranking 

Member McCaskill learned that at the same time lmperatis personnel were reportedly getting 

drunk and high in Afghanistan, its subcontractor was billing taxpayers for Bentleys, Porsches, and 

other luxury cars under the contract. 

At the request of Ranking Member McCaskill, minority Committee staff sought to 

determine who was responsible for the Legacy Program and how the contract was awarded. 

The investigation also sought to determine how such egregious costs could have been 

approved, whether they would be recovered, and what sort of oversight the military had over 

the effectiveness of the program. Key findings include: 

Nearly all work on the contracts passed through to the subcontractor, NCC. 

o The subcontractor, New Century Consulting (NCC), pitched the program and did the 

vast majority of the work in the Legacy and ASOM Programs-an estimated 80% on 

the Legacy Program contracts. NCC's CEO, Michael Grunberg, was previously 

involved in a scandal related to international arms deals. Mr. Grunberg has also 

been employed by private military companies involved with conflicts in Papua New 

Guinea, Sierra Leone, and Liberia, and he has connections to multiple diamond 

companies associated with nonstate activity in West Africa. 

o The Department of the Army (Army) acknowledged that if Ranking Member 

McCaskill's 2013 contracting reform legislation had been in place at the time of the 

Legacy Program contracts, then it would have at least had to justify allowing NCC to 

perform the overwhelming majority of the work, and might have disallowed it. 

HSGAC 
77 

a.~ e I 2 

The original Legacy contract was both developed by the subcontractor and steered towards it. 

o NCC, rather than the prime contractor, originally pitched the program to Mr. 

Higgins's office. 

o Though Mr. Higgins's office claimed it had no influence on NCC's pursuit of 

subcontractor work on Legacy Program, his office notified NCC that lmperatis was in 

line to win the Legacy Program contracts and made contact arrangements for NCC. 

The contract award process lacked effective competition. CTTSO and the Army relied on an 

obscure contracting vehicle to award and continue the legacy Program. 

a The Legacy Program was awarded using a "research and development" contract 

vehicle that never mentioned training or mentoring security forces, but instead called 

for research proposals in hard sciences like chemistry, electronics and physics. The 

award hinged on a passing reference to "HUMINT", human intelligence, that 

occurred once in a nearly 150-page proposal. 

o Proposals accepted under these types of contract vehicles, known as Broad Agency 

Announcements (BAAs) do not need be competitively bid, even if they are unique. 

Minority staff found no evidence that the Army received any other training and 

mentoring proposal for the Legacy Program contracts. 

o The Department of Defense (DOD) continued to use the BAA "research and 

development" vehicle to award further Legacy and ASOM Program contracts long 

after the Legacy Program had been established and was no longer new. 

The performance and financial oversight of the legacy and ASOM contracts was deficient. 

o The Legacy and ASOM Programs failed to establish adequate quantitative metrics 

measuring the programs' progress. making it difficult to identify the effectiveness of 

the programs. 

o Although the DCAA successfully identified $51 million in egregious costs under the 

Legacy Program contracts. post-performance audits are not a fully reliable method 

for preventing waste, fraud and abuse. 

o DCA A's audit only investigated costs between 2008 and 2013, and was not 

completed until 20 16-neorly three years after that period ended and almost eight 

years after the first costs were incurred. Its audit of the remainder of NCC's costs will 

not be complete until later this year. DCAA's audit backlog, a longstanding concern 

of Ranking Member McCaskill. has resulted in an audit inventory whose overage age 

is 14 months. 

o Prior to DCAA's audit. lmperatis filed for bankruptcy. meaning that the government 

may never recover its claim submitted after DCAA completed its work. 

HSGAC 
78 

Despite egregious waste and an investigation of NCC by the Army's Criminal Investigative 

::ommand (CID), the Army continues to allow NCC to receive government contracts and 

;ubcontracts. 

o In April 2016, NCC entered into a subcontract with a prime DOD contractor. 

j3 

Raytheon, that continues to this day. In December 2014, the Army awarded NCC a 

research and development contract with a ceiling of more than $83 million that 

continued through September 2017. 

o The Army has elected to delay a decision to suspend or debar NCC until after CID's 

investigation is complete. even though a CID investigation of the prime contractor 

took over two years. 

I. Legacy Program Organization and Structure 

The Legacy Program was an American effort to build the intelligence capacity of Iraq 

and Afghanistan security forces. The Legacy Program was executed by a contractor originally 

named Jorge Scientific Corporation, later known as lmperatis Corporation (lmperatis). lmperatis 

bid on the contract. was awarded the contract, and served as the prime contractor until 

September 2013, when the Legacy Program transitioned into ASOM Program and a new 

contract was awarded.' 

While the Army was responsible for executing the Legacy and ASOM Program contracts. 

a small office in the Pentagon developed the program, or "requirement," to be bid out. The 

office, Combating Terrorism Technical Support Office (CTTSO) falls under the Assistant Secretary 

of Defense for Special Operations/Low-Intensity Conflict (SOLIC). Typical CTTSO contracts are 

worth anywhere from $500,000 to $1 million, and expected to deliver within 12 to 24 months. The 

office's base budget is roughly $70 million a year.' At the time of the Legacy Program, the 

Program Manager for CTTSO was Rich Higgins. who has a history of provocative positions and 

statements, one of which resulted in his widely-publicized dismissal from the National Security 

Council last year.3 

\Special Inspector General for Afghanistan Reconstruction, Afghanistan National Defense and Security Forces: DOD 

Spent $457.7 M!!!ion on Intelligence Capacity-Building Programs, but Impact Cannot Be Fully Assessed Because of a Lack 

of Performance Metrics (July 27. 2017) (SIGAR 17-57-AR). 

2 Department of Defense, Technical Support Working Group, Technical Support Office 

(https://www.tswq.gov/'?g=vendors about) {accessed Jan. 30, 2018); Rapid Acquisition Group Touts its 

Success, National Defense {Dec. 20, 20 17) 

(http://www .nationa!defensemagazine ora /artic!es/20 17/12/20/ counterterrorism-rapid-acquisition-aroup-toufs-its-

~). 

3 Mr. Higgins authored a controversial memo entitled ''POTUS & Political Warfare" arguing that the Trump Administration is 

"suffering under withering information campaigns designed to first undermine, then delegitimlze and ultimately remove 

the President." ln the memo, Mr. Higgins names several adversaries of President Trump, including the mainstream media, 

ucademia, the "deep state", global corporations and bankers. the leadership of both political parties, and "lslamists." 

The release and circulation of Mr. Higgins's memo resulted in his dismissal from the NSC. See, e.g., An NSC Stoffer is 

Forced Out Over a Controversial Memo. The Atlantic (Aug. 2, 2017) 

(httos://www. theatlantic .com/po!itics/archive/20 17 /08/a-national-security-council-staffer-is-forced-out-over -acontroversia!-memo/535725/j; White house Aide Forced Out After Claim of Leftist Conspiracy, The New York Times (Aug. 

II. 2017) (https://nyti.ms/2u0HH4j): Memo friction within White House National Security Council, CNN (Aug. II, 

20 17) (http:l/www.cnn.com/2017/08/ 1 

HSGAC 
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p g c 14 

The Legacy Program arose from a 2007 counterinsurgency pilot program.' The Army 

awarded lmperatis a contract to address intelligence deficiencies in counterinsurgency, the 

global war on terrorism, and counter transnational threats.' Specifically, lmperatis and its 

subcontractor NCC were tasked with embedding mentors alongside select Iraqi and Afghani 

police and military intelligence to help professionalize their operations.' 

The Army applied the Legacy Program to Afghanistan through an additional four 

contracts to lmperatis valued at over $314.4 million-' Each new contract was considered a new 

"pilot," ostensibly to determine the effectiveness of the Legacy Program in a new territory. 8 The 

first, Legacy Afghanistan, was granted between April2010 to May 2012, and valued at $42.3 

million:' The second, Legacy South, was a cost-plus-fixed-fee termJO contract granted between 

July 2010 to May 2012, valued at $47.9 million: The third, Legacy Kabul was another cost-plusfixed-fee term 11 contract between September 20 I 0 and May 2012, valued at $46.6 million: The 

fvurth. Legacy East, shifted to a cost-plus-fixed-fee completion 12 contract between October 

2011 and September 2013, and was valued at $177.6 million. 

Each contract was organized into four chronological phases: First was "recruiting, 

reception and staging"-which recruited, vetted and prepared training and mentoring 

personnel: Second was "onward movement and training delivery"- which trained and 

mentored host nation security forces: Third was "integration and implementation"-which aimed 

to provide the required information, training support, and mentoring while simultaneously refining 

appropriate publications and documents for the supported command; And fourth was 

4 Special Inspector General for Afghanistan Reconstruction, Afghanistan National Defense and Security Forces: DOD 

Spent $457.7 Million on Intelligence Capacity-Building Programs, but Impact Cannot Be Fully Assessed Because of a Lock 

of Performance Metrics !July 27, 2017)(SIGAR 17-57-AR); Department ol the Army, U.S. Army Security Assistance 

Command, Statement of Work Project Legacy: Professionalization Program lnteiHgence Management Continuation 

(copy on file with Committee). 

5 Special Inspector General for Afghanistan Reconstruction, Afghanistan National Defense and Security Forces: DOD 

Spent $457.7 Million on Capacity-Building Programs. but Impact Cannot Be Fully Assessed Because of a Lack 

of Performance Metrics (July 2017)(SIGAR 17-57-AR). 

6 Department of the Army, U,S. Army Security Assistance Command, Statement of Work Project Legacy: 

rnJfessiona!lzation Program Intelligence Management Continuation (copy on file with Committee). 

7 For the purposes of this report, the four contracts will be collectively referred to as the Legacy contracts. The four 

components of the Legacy contracts were the following; ( l) Legacy Afghanistan, KabuL Legacy South, 

and { 4) legacy East. Special Inspector General for Afghanistan Reconstruction, and 

Security Forces: DOD Spent $457] Million on Intelligence Capacity-Building Programs, but Impact Cannot Be Fully 

Assessed Because of a Lack of Performance Metrics (July 27, 2017) (SIGAR 17-57-AR); Departmenl of lhe Army, U.S. 

Army Security Assistance Command, Statement of Work Project Legacy: Professionalization Program Intelligence 

Management Continuation (copy on file with Committee). 

e Office of the Special Inspector General for Afghanistan Reconstruction, Briefing with Minority Staff {Mar. 6, 2018). 

9 Minority Stott could not identify the cost reimbursement structure for the Legacy Afghanistan contract. 

1

° FAR 16.306 states that cost-plus~fixed-fee are a cost-reimbursement contract in which the contractor is paid a 

negotiated fee that is fixed at the contract's This type is preferred when the objective is geared towards 

research performance or preliminary exploration and when the level of effort required is unknown. 

1 ' FAR 16.307 describes Term forms as genera! conditions in which the contractor is obligated to devote a specified level 

of effort for a stated time. Under term forms, performance is satisfactory if the fixed fee is payable at the expiration of the 

agreed duration, and when the contractor indicates that the work speclfied has been completed. 

Com,>lelion forms require the contractor to complete and deliver a specified end product within an estimated cost, lf 

as a condition for payment of the entire fixed fee. 

HSGAC 
80 

IS 

"drawdown. transition and institutionalization"-which required the contractor or subcontractor 

to develop a logical plan for withdrawal and or transition of capabilities to host nation forces. 13 

Following the conclusion of the Legacy Program contracts in May 2012, 14 the Army 

requested competitive proposals for a new contract to provide training and mentoring services 

in Afghanistan. The resulting ASOM contract was awarded to NCC in July 2013 and ran through 

its conclusion in February 2016. 

II. Investigation by Senator McCaskill 

On March 12, 2012, two former lmperatis (then-named Jorge Scientific) employees 

working as contractors on the Legacy Program filed a complaint in the United States District 

Court for the District of Columbia, alleging that lmperatis employees engaged in "numerous 

violations of Afghan and U.S. law: international and/or bilateral agreements: and contractual 

requirernents,'' 15 Specific inappropriate activity included the possession and use of illegal 

weapons, including grenades: the possession and use of alcohol and drugs; and the intentional 

defrauding of the U.S. government by misrepresenting the location of lmperatis employees and 

by submitting forged documentation necessary to perform lmperatis's contractual duties.16 

Senator McCaskilL then-Chairman of the Senate Committee on Homeland Security and 

Governmental Affairs Subcommittee on Contracting Oversight. began an inquiry into the Army's 

management and oversight of contracts with lmperatis.'7 Following this inquiry, Army officials 

informed the Subcommittee that the individuals involved in the misconduct at issue were no 

longer employed by the company and that leadership in Kabul had been replaced recently.IB 

An initial audit of lmperatis' expenditures from October 21.2011 through March 15,2014, 

was commissioned by SIGAR and conducted by Crowe Horwath LLP. The audit, published in 

April 2015, revealed a lack of proper reporting and accounting standards, specifically as they 

related to costs billed by NCC. This resulted in the questioning of over $130 million in costs billed 

to the U.S. government. I' Alarmed by the conclusions reached in the Crowe Horwath audit and 

the large amount of money questioned, Senator McCaskilL then-Ranking Member of the Senate 

Committee on Homeland Security and Governmental Affairs Permanent Subcommittee on 

Investigations (PSI). joined by PSI Chairman Rob Portman. wrote a letter to the Commanding 

General of the Army Contracting Command (ACC), requesting a briefing on the contracts 

13 Department of the Army, u.s. Army Security Assistance Command, Statement of Work Project Legacy: 

Professionalization Program Intelligence Management Continuation (copy on fi!e with Committee). 

H Special Inspector Genera! for Afghanistan Reconstruction. Afghanistan National Defense and Security Forces: DOD 

Spent $457.7 Million on Capacity~Building Programs, but Impact Cannot Be Fully Assessed Because of a Lack 

ot Performance Metrics (July 2017) (SIGAR 17-57 Audit Report). 

''Plaintiff's Complaint tor Violations of the False Claims Acl. 31 U.S.C. §§ 3729, et seq. (March 12, 2012). United States of 

America, ex rels. John Melson & Kenneth Smith v. Jorge Scientific Corporation, D.D.C. (No. 1 :l2-cv~00389-EGS). 

16 Plaintiff's tor Violations of the False Claims Act. 31 U.S. C.§§ 3729, et seq. (March 12, 2012), United States of 

Melson & Kenneth Smith v. Jorge Scientific Corporation. D.D.C. (No. 1:12-cv-00389-EGS). 

17 Letter from Chairman Claire McCaskill. Subcommittee on Contracting Oversight, to Secretary John McHugh, 

Department of the Army (Oct. 22, 2012). 

1

B letter from Secretary John McHugh, Department of the Army, to Chairman Claire McCaskill, Subcommittee on 

Contracting Oversight (Nov. 27, 2012). 

19 Special Inspector General for Afghanistan Reconstruction. Department ot the Army's Legacy East Project: Jorge 

Scientific Corporation's Lack of Supporting Documentation Results in about $135 Million in Questionable Project Costs 

(Apr. 21, 2015) (SIGAR 15-43 Financial Audit). 

HSGAC 
81 

p il 16 

audited, any other contracts ACC had with lmperatis, and the status of any investigations into 

lmperatis-'O 

The Crowe Howarth audit led DCAA to perform its own non public audit of NCC, which it 

completed on August 31, 2016. DCAA examined NCC' s incurred costs between 2008 and 2013 

and revealed that NCC improperly incurred costs over $50 million, including exorbitant salaries, 

unallowable travel expenses, and Bentleys, Porsches and other "luxury" cars that were used by 

NCC executives and their assistants." 

In July 2017. SIGAR released a performance audit of the Legacy and ASOM Programs, 

which examined the programs from 2010 through their conclusion in 2016, questioning their 

success, effectiveness. and whether or not they were properly monitored. SIGAR concluded 

that because of a lack of metrics for the Legacy Program and a reliance on contractorprovided data for ASOM. it is almost impossible to gauge the U.S. government's return on 

investment for the $457.7 million spent on both programs." SIGAR also found that NCC's 

accounting system was so poor that the government could and should have disallowed its use, 

but the agencies responsible for contract oversight continued to permit it. Had NCC been 

required to use a satisfactory accounting system from the beginning, its unallowable costs could 

have been identified earlier and before the company was reimbursed. 

In August 2017, after DCAA's 2016 audit of NCC and SIGAR's 2017 audit report of the 

Legacy and ASOM Programs were provided to Committee staff. Ranking Member McCaskill sent 

a letter to DOD Secretary James Mattis, questioning waste of millions of taxpayer dollars spent by 

NCC.23 In response, DOD provided Committee staff with an in-person briefing with CTIS0, 24 

Army Contracting Command-Aberdeen Proving Ground (ACC-APG), the Defense Contract 

Management Agency (DCMA). the DCAA, and the Office of the Deputy Assistant Secretary of 

the Army for Procurement.25 Following this briefing Committee staff requested white papers. 

contracts, performance and compliance reports, and statements of work and training manuals 

related to the Legacy Programs. In response to these requests, DOD provided limited 

information, including the Legacy Afghanistan, Kabul. South, and East contracts and statements 

of work, two compliance reports and weekly updates for July 2011 and December 2012, two trip 

reports from December 2012 and October through November 2013, a monthly status report from 

June 2013, three Contractor Performance Assessment Reports, two of DCAA's audits of 

lmperatis, and performance assessments from Army Generals. DOD did not provide Committee 

7';, Letter from Senator Cioire McCaskill and Senator Rob Portman to MG Theodore Harrison, U.S. Army Contracting 

Command {May 12, 2015). 

?l Defense Contract Audit 

Unsettled flexibly Priced 

No. 02191-2015TIOI60001). 

Amounts on 

{Audit Report 

This letter 

" The correct average 

Office is an office within the office of the Assistant Secretary of Defense for 

HSGAC 
82 

,. c1 " I 7 

staff with any of the other information requested. In addition. SIGAR briefed minority staff 

regarding their audit of the Legacy East contracts. 

In addition to the Legacy Program contracts. minority staff also attempted 

to review other DCAA that may have identified similar waste, fraud and abuse among 

other contractors. While DCAA offered an overview of questionable costs that it had identified 

over the past two years. it refused to provide any further audits to minority staff. Senator 

McCaskill most recently access to these audits at a Senate Committee on Armed 

Services hearing earlier 

This report is a staff analysis of the information received by the Committee. 

Ill. Nearly All Work under the Contracts Passed Through to. Subcontractor NCC 

In September 2007, the Army. ACC. awarded an indefinite delivery-indefinite 

contract to develop the doctrine would become the Legacy Program to Jorge 

Corporation. Founded by Judith Hartman in 1986, Jorge Scientific Corporation. 

later rebranded as lmperatis, was a contractor the United States for decades. and was 

awarded its first contract with the Departments of Labor and Navy in 1992.'7 lmperatis has had 

1.739 contract actions with the United States government since 1992. of which 66% were with 

DOD 28 

Following the award of each Program contract. subcontracted a 

significant portion of the work to NCC. Army estimated that was responsible for 

approximately 80% of the work on the Legacy East contracJ29-but that percentage could be 

even higher. Despite numerous inquiries, minority staff was unable to identify evidence of any 

substantive work that lmperatis conducted in Afghanistan. According to monthly reports 

provided by both DOD and SIGAR, all of the mentoring and training of Afghanistan 

forces under the Legacy Program appeared to be completed by NCC. NCC takes credit 

creating and implementing the Legacy and ASOM Programs on its website30 This arrangement 

effectively made lmperatis a organization. It operated as the prime contractor in 

name only, allowing NCC to the doctrine and perform the vast majority of the work for 

the Legacy Program. 31 

Senate Committee on Armed Services, Hearing on Posture of the Department of the Army !Apr. 12. 2018). 

17 Federal Procurement Data 

3 ; Jorge Scientific Corporation, Monthly Financial Status Report: March 1'1-March 31~ 1 20 i3 (copy on file with Committee) 

HSGAC 
83 

NCC is a closely held corporation headquartered in the Channel Islands between Great 

Britain and Fronce. 32 NCC's website offers only broad of its business: "capacity 

··~n.tellraence led solutions'', "security sector , "specialist military , and 

. providing subject matter expertise. interpreters, and nrrrF•riitPri 

cultural odvisors.33 current leadership includes CEO and co-founder Michael Grunberg, 

Chairman and co-founder Colonel Tim Collins (a retired British Army officer). and CFO Guy 

Hendry.3' Prior to NCC Mr. worked closely with a series of companies 

described as private military He worked several years as a spokesman and advisor for 

Sandline International. a British private military company that was involved in conflicts in Papua 

New Guinea. Sierra Leone, and Liberia, as well as multiple diamond companies associated with 

nonstate activity in West Africa.36 In 1998, Sandline was investigated for potential sanctions 

violations related to a United Nations arms embargo that followed a 1997 coup in Sierra Leone.J? 

The company was so deeply involved in a 1997 internal conflict in Papua New GLJrnr3a-resr 

in a near military coup and the resignation of the prime minister-that the events were 

the "Sondline Affoir."38 

lmperatis continued to perform its role as prime contractor for all of the Legacy Program 

contracts, the majority of work to NCC until NCC become the prime contractor 

for the ASOM Program in lmperatis ceased all operations on May 9, 2016. '° Citing 

"financial distress," lmperotis subsequently filed for bankruptcy and is no longer a contractor with 

the U.S. government." 

Under current procurement low, lmperaiis' nfl«-thr'"' 

would hove been heavily scrutinized, if not prohibited. 

oD<,cllrcciiiY. NCC is headquartered in the Bai!iwick of in all its aspects witt1in the jurisdiction of the ComnlorlwE•allh 

arrangement to NCC likely 

Member McCaskill was the chief 

Crown. The 

New Century, Services and Expertise {http:/iwww.newcentcoro.com/servlces-and-expertisel) (accessed Oct. 24, 

2017). 

With One Foot in the Grove, lhe New York Times (May 3, 2004)(https://nyti.ms/2GWt3Tk). 

Department ot the Army, ACC· Adelphi. Afghanistan SOM Contract (W911 QX-13-C-0170)(copy on file with 

Committee). 

HSGAC 
84 

e \9 

architect of legislation in 2013 to address pass-through contracting abuses, ensuring that where 

an offeror on a DOD contract informs the agency it intends to award subcontracts for more than 

70% of the total cost of the work to be performed under the contract, the contracting officer 

must consider alternative contracting vehicles. 42 If the contracting officer determines the offeror 

who anticipates subcontracting over 70% of the contract out is the best option, it must provide 

the basis for such determination. 43 Had this reform been in effect beginning in 2007, the Army 

would have been forced to justify the need for a contracting structure in which NCC performed 

approximately 80% of the work on the Legacy Program." The Army acknowledged that had 

that requirement been in place at the time. it might have decided this pass-through contract 

was unacceptable.45 

IV. Contracts Developed by NCC, Steered to NCC 

Subcontractor NCC, rather than lmperatis. originally pitched the Legacy Program 

proposal to CTTSO. This finding further questions the need for lmperatis to have served as a 

prime contractor. In addition, CTTSO advised NCC on how to become the subcontractor for the 

Legacy Program work. Given that lmperatis became the prime contractor for the Legacy 

Program, it might be expected that lmperatis would serve as the driving force behind the 

program. Instead. NCC initially presented to CTTSO in mid-2006 the intelligence gathering and 

rnentoring program that would become the Legacy Program. 46 NCC made a subsequent 

presentation to the Marine Corps Intelligence Activity {MCIA) in February 2007." Next. Andrew 

Lomax, a CTTSO contractor supporting Mr. Higgins, the Program Director. informed NCC that 

lmperatis was in line to secure a contract to execute the Legacy Program in lraq'8 CTTSO then 

provided NCC contact arrangements with lmperatis. 49 In an interview with Committee staff, Mr. 

Lomax denied that he influenced NCC to seek out lmperatis for work on the Legacy Program. 50 

However, his disagreement conflicts with accounts provided by NCC to SIGAR.s 1 As NCC stated, 

National Defense Authorization Act for Fiscal Year 2013, Pub.l. 112-239, Sec. 802(1) (2013(. 

National Defense Authorization Act for Fiscal Year 2013. Pub. l. t 12-239. Sec. 802(3) (2013). 

44 The initial contract was awarded to lmperatis 

with NCC as subcontractor was later ln 

2007. The first task order awarded to lmperatis 

General for Afghanistan Reconstruction. 

Afghanistan Notional 

Programs, but Impact Cannot Be Fully Assessed Because 

Report). 

Million on 

45 Combating Terrorism Office, Army Contracting Command-Aberdeen 

Contract Management Agency, Contract Audit and Office of the 

with Senate Committee on Homeland Security and Affairs Staff (Oct. 4, 2017). 

Audit 

Ground, Defense 

Army Staff, Briefing 

New Century Consulting, to Office of the Special Inspector General for Afghanistan 

New Century Consulting, to Office of the Special Inspector General for Afghanistan 

New Century Consulting, to Office of the Special Inspector General for Afghanistan 

so Combating Terrorism Technical Office, Army Contracting Command-Aberdeen 

Contract Management Agency, Contract Audit and Office of the Director of 

with Senate Committee on Homeland Security and Affairs Staff (Oct. 4, 2017). 

Ground, Defense 

Army Staff. Briefing 

New Century Consulting, to Office of the Special Inspector General for Afghanistan 

HSGAC i;l 
85 

"The direction to engage with [lmperatis] was provided by the Irregular Warfare Support 

Program office within CTTS0."52 

110 

New Century Consulting, to Office of the Special !nspecfor General for Afghanistan 

HSGAC 
86 

V. Lack of Effective Competition 

CTTSO and the Army relied on an obscure contracting vehicle to award and continue 

the Legacy Program without effective competition. 

A. DOD Used a Broad Agency Announcement "Research and Development" 

Contract Vehicle for the legacy Program 

111 

In order for the Legacy Program to move forward, DOD needed a vehicle by which to 

award a contract. Such a tool was attained through a seemingly unrelated announcement by 

the Army in October 2006. The Army had publicly issued a BAA for Basic and Applied Scientific 

Research. A BAA is a procurement procedure used to seek proposals for basic and applied 

research when facing a development challenge that does not have a clear solution or shows 

an opportunity for innovation.-53 BAAs are designed for agencies to explore scientific study and 

experimentation for the purpose of advancing knowledge, rather than focusing on a specific 

system or hardware solutions." Once proposals are submitted, the agency selects one (or 

more) for an award. An advantage of BAAs is that they allow the government to solicit creative 

ideas that may be missed if an agency prescribed a specific solution. However, a disadvantage 

of BAAs is that they can allow contractors to win awards that extend far beyond the original 

purpose of the research solicitation. 

With regard to the Legacy Program, Defense officials stated that the purpose of the BAA 

was to defeat improvised explosive devices, which at the time were killing and wounding 

American service members in Iraq at alarming rates. The BAA sought research proposals from 

educational institutions, nonprofit organizations, and commercial organizations for research in 

"chemistry, electronics, environmental sciences, life sciences, materials science, mathematical 

and computer sciences, mechanical sciences, physics, computational and information 

sciences, sensors and electron devices, survivability/lethality analysis, and weapons and 

materials research."55 

Army Research Lab, Broad Page (ht!ps:/ /www.arl.army.mil/www/default.cfm?page=8J 

(accessed Feb. 15, 2018); Agency for Jnternafiona! Development, Broad Agency Announcements Page 

(htfps:/twww.usaid gov/partnership-opportunities/resoond-solicitatlon/broad-agencv-announcements) (accessed Feb. 

15, 2018). 

FAR 35.016. 

Army Research 

for Research {W91 Nc-01-~-ooo 1-031 

HSGAC 

Research Office Broad 

FY 2011] (Oct. 16, 

Announcement 
87 

e I 12 

Description of Research called for under the BAA used to award the legacy Contract: 

Research proposals are sought from educational instimtic1ns. nonprofit organizations. and 

commercial organizations fbr research in chemistry. electronics. enviromnental sciences. life 

:;cieuces. materials ~cience. mathematical and computer sciences. mechanical sciences. physics. 

co:m]:mt:ati<Glll1l and infonnation science:,. sensors and electron devkes. 

and umier;,tanding. 

r ",..""''" shall be evaluated only 

advancing the state of the art or increasing 

Research Office Brood Agency Announcement for Basic 

16. 2006){p. 5 of 147) 

The list makes no mention of Iraq or Afghanistan, let alone providing training or mentoring 

programs in those countries. However, the BAA goes on to describe in greater detail research 

that is needed. On page 78, roughly halfway through the 147 -page solicitation, under a section 

describing research proposals in "Mathematical Sciences" the BAA stated described a need for 

"Information Fusion in Complex Networks." It stated that this included not only information 

gathered through technology, using physics-based sensors, but also human intelligence. 

Portion of BAA used to award the legacy Contract: 

especially in urban conr1ict. there are on en not a lot of them in pla~es where needed. Operations 

depend not only on information from p!Jy~i.:s-bas.:d sensors bm also on signals lll'""''"'"'" 

(SIGINT -infonnation fi·om intercepted communications. mdar. and other forms of 

dectromagnetic transmissioml. corlllmmicatious imelligence mt!ssag:es 

or voice infmmationl. open-somce intelligence (0SINT -newspapers. radio and programs). 

and databases. which 1w will call "sof\ information''. E:<mactiou 

HSGAC 

Research Office Broad Agency Announcement for Basic 

16. 2006) [p. 78 of 147) 
88 

(' 113 

lmperatis and NCC would go on to make hundreds of millions of dollars on the Legacy Program. 

a proposal that hinged on the term "HUMINT" appearing only once in an approximately 150-

page BAA for basic and applied scientific research. While the BAA that was used for the Legacy 

Program has expired, earlier this month the Army posted another 122-page BAA calling for new 

research and development proposals through March 2022.'6 

2. BAAs Allow for Elimination of Competition, And DOD Continued to Award 

"Research and Development" Contracts Even After legacy Program Matured 

Once an agency collects responses to a BAA 57, it can select one or more proposals for a 

contract, without needing to conduct a standard contract competition. As a substitute. the 

Army conducts a "scientific review process" prior to selection 5 8 However, given the wide variety 

of proposals that are possible under BAAs-and certainly under the nearly 150-page BAAproposals are frequently unique. In a briefing to investigators, DOD officials acknowledged that 

BAAs allow for the possibility of unique proposals that eliminate competition. When a contractor 

submits a proposal with distinct solution, that contractor may be placed in its own. solo, 

c0tcgory-void of competition. 59 

Minority Committee staff sought the proposals. or "white papers," that the Army received 

in response to the BAA in order to examine both how many proposals were received. which 

were selected, and whether any were similar to the Legacy Program proposal. However, the 

Army never produced them. Staff was therefore unable to identify whether there was an 

effective competitive bid to provide mentoring and training services to Iraqi intelligence 

services. 

DOD also continued to use the BAA vehicle to award further "research and 

development" Legacy Program contracts long after the Legacy Program had been established 

and was no longer new. By design, the majority of research and development contracts are 

directed toward objectives for which the work or methods cannot be precisely described in 

advance.6o Legacy Afghanistan, Kabul, South and East, however, were all granted as research 

and development contracts after the original Legacy Iraq contract ended in March 2010. By 

that point. DOD had three years of experience in running the Legacy Program. Every Legacy 

Program contract in Afghanistan was considered a "pilot program." even though the only 

difference between them was geographic location61 It is unclear why DOD continued to fund 

the program through the BAA research and development vehicle, given its flaws. once the 

program matured. 

competition at least at 

oo FAR 35.002. 

(at minimum), typically through the public website, www.fbo.gov to induce 

process. 

and fund availability. 

Basic and Applied Scientific 

Army Contracting Command-Aberdeen 

Contract Audit and Office of the Director of 

Ground, Defense 

Army Staff, Briefing 

security and Affairs Staff (Oct. 4, 2017). 

&l Office of the Special Inspector General for Afghanistan Reconstruction, Briefing with Committee Staff (MaL 6, 20 18). 

HSGAC 
89 

I'" 114 

VI. Deficient Contract Management and Ovetsight 

The Army served as the projects' contracting officer's representative {COR), 62 and was 

responsible for the oversight of lmperatis and NCC's performance.63 CTTSO used "performance 

metrics for Legacy Program field work, collecting feedback from the Commands, and the 

respective Army-appointed military Technical Monitors on the ground; [CTTSO also] organized 

and managed numerous RAND Corp. third-party assessments; and conducted routine in-theater 

oversight visits,'' according to DOD.64 Finally, the Army delegated administrative contracting 

officer responsibility to DCMA, which gave them the responsibility of reviewing and approving 

invoices. DCMA delegated DCAA as its authorized representative to assist with reviewing 

contractor and subcontractor invoices.65 Despite {or perhaps because of) this delegation of 

responsibilities, there were deficiencies in the oversight of the Legacy Program and ASOM 

programs. This included both lmperatis's and NCC's performance under the contract, as well as 

financial controls. 

1, The legacy and ASOM Programs Failed to Establish Adequate Metrics Measuring 

!he Program's Effectiveness 

Performance oversight of the Legacy and ASOM Programs suffered because the 

contracts themselves lacked adequate performance metrics, and because the Army tolerated 

poor performance reporting. While each contract required regular reporting and planning, 

none of the contracts-legacy Iraq, Legacy Afghanistan or ASOM-included quantitative 

performance metrics. 66 Without quantitative metrics, it is difficult to determine the success or 

value of the Legacy and ASOM Programs. 

Minority staff sought all of the Army's monthly reports for the Legacy and ASOM Program 

contracts in order to examine the Army's oversight efforts, but the Army only provided a limited 

assortment of reports.67 In the COR monthly reports provided to minority staff by SIGAR, the 

qualitative ratings suggested a lack of robust oversight. Mostly satisfactory ratings were 

awarded in each report's and the overwhelming majority of reports did not include comments 

to support the evaluation rankings.69 The Army explained that evaluation similarities were due in 

63 FAR 1.604. 

(\~ Email from Office of Assistant Defense for Leglslatlve Aftalrs to Senate Committee on Homeland Security 

24, 2018). 

of a lack 

"'''h~'"'"'~" a December 2012 and 

November2013, a 

a 1 RAND evaluation, three Performance Assessment Reports, 

of !mperatis, and on end of course report ranging from April to May 2013. 

reviews conducted 

between January 

m Department of the Army, ACC-Adelphi, COR Monthly Report: Afghanistan {W911QX-12-C-OOII) (copy on file with 

Committee), 

HSGAC 
90 

P a e 115 

part to the operational design of the Contractor Performance Assessment Reporting System 

(CPARS)-'O The operational design, however, does not account for the lack of comments to 

support evaluation ran kings or explain why the Army could produce only 13 months of oversight 

reports for a nine year program. The Army also provided excerpts of statements and letters 

written between 2009 and 2011 by Army senior leadership advocating for the increase in Legacy 

Program training and implementation. although again, none appeared to be based on any 

quantitative performance metrics.71 

As part of its oversight responsibilities, CTTSO awarded two contracts to facilitate 

management responsibilities to Research and Development Corporation (RAND) and Man Tech 

International Corporation (ManTech).'2 RAND was responsible for six-month incremental study 

evaluations summarizing work performed and offering recommendations for the next 

period73 RAND also completed a final evaluation and compiled lessons learned throughout the 

project duration. Between RAND, and Man tech. the two firms shared a number of potential 

oversight tasks, including visits to mentoring sites in Afghanistan, reviews of NCC reports. and 

interviews of contractor and subcontractor personnel. 

DOD asserted that CTTSO collected significant, positive performance information on the 

Legacy and ASOM Programs.74 Minority staff sought to evaluate any oversight products that 

CTTSO or its contractors produced. In response, CTTSO provided RAND studies evaluating the 

Legacy Program between January 2010 and September 2012, as well as two trip reports 

completed by a Man Tech Subject Matter Expert (SME) 75 While overall characterizations of the 

Legacy and ASOM Programs were positive. these documents provided limited perspective of 

programs that spanned from 2007 to 2016. A December 2012 trip report, one of two provided 

by CTTSO, noted several deficiencies. Notably, the report questioned the ability of the Legacy 

Program to transition to a sustainable and long lasting HUMINT program in Afghanistan. The 

report noted high leader and mentor turnover which caused disruptions to program progress. At 

some sites, despite years of mentoring, Afghan mentees had only completed a few months of 

training. Some key leaders questioned the Legacy Program's effectiveness in Afghanistan due 

to possible lack of commitment by the host nation. The report's overall conclusion was that lack 

of commitment from the host nation may prove to be the overreaching factor for success of the 

co Combating Terrorism Technical Ground, Defense 

Contract Management Agency, Army Stoff. 

Senate Committee on Homeland and Gc•ve;rnnleri!OI Affairs Stoff (OcL 4, 2017). The syslem is known as 

Contractor Performance Assessment Reporting 

CTTSO, Senior Leader and Congressional Authorization Quotes on Program Effectiveness 

r>o~~·"~ont of the Army, U.S. Army Security Assistance Command, Statement of Work Project 

Prc>fR•"ionnlim!ion Program lnte!llgence Management Continuation (copy on file with 

" 4 DOD stated that the success of the validated 

continuation, and praise Committee on Services, Assistant 

Affairs to Senate Committee on Homeland Security and Governmental Affairs 

HSGAC 

(copy on file 

21, 2013 
91 

116 

Legacy Program and that host nation commitment should be reviewed before investing a similar 

program for any designated country.'' 

2. Delayed Audits of the legacy Program and Bankruptcy of Contractor Raise Risk 

that Government Will Never Fully Recover $51 Million In Questioned Costs 

Under the Legacy Program contracts, like other companies, lmperatis submitted its 

invoices to DCAA at regular intervals-typically monthly-and DCAA would make an initial 

review for questionable costs. Once DCAA approved the invoice, it sent them to DCMA to pay 

the contractors as required by the contractsn DCAA was allowed five days to review the 

invoices, which were not detailed enough to identify unallowable costs in that time. If DCAA 

had identified a "red flag," or questionable cost, DCMA would then perform an audit of that 

specific invoice to determine if the costs should be questioned. Under the Legacy Program 

contracts, no questionable costs were identified during the invoicing period7 8 

However, as with other contracts, DCAA conducted a second, more thorough review. 

After completion of the contract. DCAA performed an audit. examining the contractor's and 

subcontractor's books and records to confirm that the original costs paid were appropriate. 

Any questionable costs could be referred to DCMA. DCMA could then negotiate with the 

contractor for reimbursement, or pursue a civil action against the contractor. It was this second 

DCAA review which identified $51 million in questionable costs by NCCJ9 

According to the Army, DCAA's ultimate identification of NCC's outrageous spending 

indicated that there was adequate financial oversight of the Legacy Program contracts. The 

Army denied any officials should be held accountable for NCC's spending, because the Army 

had identified the spending and was taking action to recoup the money. ACC explained that 

future contract provisions could allow for additional scrutiny of invoices prior to payment, such as 

by requiring additional cost detail or by delaying payment to allow DCAA more time for 

examination. However, such provisions would likely reduce the number of interested bidders 

and would result in increased costs .so 

Reliance on a post-performance audit for financial oversight is not foolproof. as the 

Legacy Program itself demonstrates. Such audits need to be timely, but DCAA's audit of costs 

between 2008 and 2013 was not completed until 20 16-nearly three years after that period 

8° Combating Terrorism Technical 

Contract Management 

Army for Procurement, 

2017). 

Contracting Command-Aberdeen 

and Office of the Deputy 

Security and Governmental 

Office, Army Contracting Command~Aberdeen 

Contract Audit and Office of the Deputy 

Senate Committee on Security and Governmental Affairs Staff 

HSGAC 
92 

p il (' \17 

ended and almost eight years after the first costs were incurred. Although the Legacy 

ended two years DCAA's audit of the remainder of the program will not be rnmr,IPiiPri 

until later this This delay is not unusual. For many years, DCAA has hod a severe 

of oudits.s? This backlog has been a source of concern for Ranking Member McCaskill. A 

lost fall the Government Accountability Office prepared in port at her request. found 

that improvements in reducing the backlog, would be in eliminating 

audits more than two years old by the end of 201883 In response to a 

Member McCaskill last October, DCAA stated that the overage age of DOD incurred 

is 14.3 months.s' 

Additionally, a post-performance audit. by definition, requires that the government 

recoup money after it has already paid it to the contractor. But. as in the case of the Legacy 

if the contractor has out of business. the government may be at a loss (Although 

NCC, the con only recover money from the prime 

contractor, rather than the Because lmperotis ceased business operations in 

nnvomr~o.nt has been forced to submit its claim for reimbursement with the 

r,--,mr • .-m.v'< bankruptcy trustee. Unfortunately, lmperotis's assets amount to only $900,000. Even 

if the Army becomes the highest priority creditor, it is unlikely that it would ever recoup the full 

$51 million that DCAA questioned as 

VII. NCC.is Under Criminal Investigation But Continues to Profit from Federal Contracts 

As discussed, the Army is legally handicapped in recovering the $51 million in questioned 

NCC costs because the prime Program contractor is insolvent. However, DCMA is 

attempting to negotiate a settlement with NCC. DCMA could not say how 

much, if anything, the Army has successfully at this point in its negotiotions. 86 

Program. According 

lnvPdlnr•+lvPService (DCIS) and 

Contracting Command-Aberdeen 

and Office ol the Deputy 

Security and Governmental Affairs Stoff 

rnntc.,ct'inn· Additional Management Attention and Action Needed to 

(Sept. 20171. 

sa Letter from Anita Bales, Director, Defense Contract Audit Agency, to Senator Claire McCaskill (Nov. 13, 2017). 

HSGAC 
93 

-• [ C' j18 

U.S. Army CID investigation that began in October 2014. However, DCIS and CID closed the 

!~peralis case in January 2017, with no apparent octionY On the other hand, aCID 

investigation ol NCC is currently underway.ss 

Despite the findings a! the DCAA and SIGAR audits, the attempts by DCMA to recover 

questioned costs, and an ongoing criminal investigation. NCC apparently continues to profit 

from government contracts. In April2016, NCC entered into a subcontract with a prime DOD 

contractor. Raytheon. that continues to this day.89 In December 2014, the awarded NCC 

another research and development contract with a value ol more than million that 

continued through September 2017-'0 At a Senate on Armed Services hearing on 

April 12. 2018. Senator McCaskill asked Secretory of the Army Dr. Mark Esper for a full list of 

contracts on which NCC is a contractor or subconlroctor. 91 

Although suspension and debarment is one of the most powerful tools that ""'""'mrn<>•nt 

has to hold contractors accountable. in this case the Army has not yet chosen to it. Even 

though there is no legal requirement to wait, and even though the standard for suspension and 

debarment is far lower than for criminal liability, the Army staled that it would delay a suspension 

and debarment decision until after CID completes its investigation of NCC." Given that the CID 

investigation of lmperatis took over two years, it may be a profitable wait for NCC.93 

VIII. Conclusion 

Ranking Member McCaskill's investigation into the Legacy and ASOM Programs 

uncovered several deficiencies in the Army's contract award processes. The Army granted the 

Legacy and ASOM under a "research and development" contract vehicle. which 

allowed lmperatis to Program contracts without effective competition. The 

programs lacked effective metrics and were considered pilot programs even after 

they matured. Additionally, the Army allowed lmperatis, its prime contractor. to subcontract on 

estimated 80% of the work to NCC. The pass-through contracting between lmperatis and NCC 

would have been severely restricted had laws sponsored by Ranking Member McCaskill been in 

place at the lime of the award. This legislation requires that alternative vehicles be considered if 

>! 7 Defense Contract Audit DCAA Oversight of lmperatls (formerly Jorge Scientific Corporation) June 2017 

Update (copy on file with C:omn<itt<ePt 

sa Combating Terrorism Technical Contracting Command-Aberdeen 

Contract Management Agency, and Office of the Director of 

Ground, Defense 

Army Staff, Briefing witt\ Senate Comrnittee on Homeland Security and GC'V("·nnle<·,tal 20 17). 

1 Senate Committee on Armed Services, Hearing on Posture of the Department of the Army (Apr. 12, 2018). 

Contracting Command·Aberdeen 

and Office of the Deputy 

Security and Governmental Affairs Staff 

Defense Contract Audit DCAA Oversight of lmpcrotis (formerly Jorge Scientific Corporation) June 2017 

Update {copy on flle with rnmrnitte<>' 

HSGAC 

and 
94 

(' j19 

an offeror on o DOD contract informs the agency that it intends to award subcontracts for more 

than 70% of the total costs.94 

Minority staff also found that financial and performance oversight of the Legacy and 

ASOM programs was deficient. While DCAA's audit examined costs incurred between 2008 and 

2013, those costs incurred after 2013 have yet to be assessed. With DCAA' s audit inventory 

backlog average of 14 months, additional recovery of wasteful by Army contractors 

and subcontractors will be delayed-and even uncertain, given of lmperotis. 

Despite its history of 

to conduct business with 

waste and on ongoing CID investigation, DOD continues 

NCC is currently a subcontractor on another DOD contract. 

''National Defense Authorization Act tor fiscal Year 2013. Pub.l. 112-239, Sec. 802(1] (2013]. 
95 

UN I TED STATES INSTITUTE OF PEACE 

May 8, 2018 

The Honorable Gary Peters 

Ranking Member 

Senate Homeland Security and Governmental Affairs 

Subcommittee on Federal Spending, Oversight & Emergency Management 

432 Hart Senate Office Building 

Washington, DC 20510 

Dear Ranking Member Peters: 

At the request of the staff on the Senate Homeland Security and Government Affairs 

Subcommittee on Federal Spending Oversight and Emergency Management, I was asked to 

provide my views on U.S. government taxpayer resources spent on reconstruction and 

development efforts in Afghainstan. The views I express are my own and not those of the U.S. 

Institute of Peace. 

As has been well documented and reported on by the SIGAR office, the media and others, there 

are too many examples of waste, fraud and abuse in terms of how some of these resources were 

spent. Without seeking to minimize this problem, U.S. reconstruction and development 

assistance has also helped contribute to some tremendously positive development outcomes. 

I argue for the "goldilocks approach" that too much money for civilian and military 

reconstruction and stabilization progran1s during the period of the troop surge was a major factor 

promoting waste, fraud and abuse. But sharply reducing to too little assistance within too short a 

timeframe would likely lead to state collapse in Afghanistan, and an increase in the terrorist 

threat to the homeland. One should instead opt for moderate levels of civilian and military 

assistance that can be sustained over a longer period of time. 

The good news is that during the 10 years I spent as a humanitarian and development aid worker 

in Afghanistan during the 1980s and 1990s, I could not have imagined such dramatic 

improvements in development outcomes during the period from 2002 until today. The following 

are a few notable achievements based on World Bank data: 

• Economic growth averaged more than 9 percent per year during the decade from 2002 to 

2011, among the highest rates of increase in the world. 

• Average per-capita GDP has quintupled from $120 to around $600. 

• School enrollment has multiplied 1 0-fold from 800,000 to over 8 million, and female 

primary school enrollment increased from negligible levels to around one-third of the 

total. 
96 

Infant and child mortality (as indicated by the under-5 mortality rate) has plunged from 

137 to 55 per 1,000 live births. 

• Maternal mortality dropped from an estimated 1,100 to 396 per 100,000 live births. 

• Life expectancy at birth has risen from 44 years to 61 years. 

• Connectivity has burgeoned from none to 18 million mobile phone subscribers. 

These are impressive development success stories that often get lost in an environment where too 

often 'good news is no news.' While Afghans deserve tremendous credit for these gains, they 

would not have been possible without generous foreign assistance from donors led by the U.S. 

That said, the gains are fragile and reversible. It is also important to note that despite these and 

other major accomplishments Afghanistan remains a very poor country with low human 

development indicators. Moreover, development gains have eroded in recent years, in large part 

due to the following factors: 

• The sharp downturn in economic growth to negative per-capita GDP gro'Aih rates, 

primarily due to the sharp reduction in international troops and associated shock to 

aggregate demand; 

• The sharp deterioration in security following the withdrawal of most international forces, 

and the resulting shrinkage of government "reach", which among other things makes it 

harder to deliver government services in many parts of the country and deters private 

business activity and investment; and 

• The political problems and uncertainty caused by the disputed 2014 presidential election 

and the National Unity Government arrangement that followed (and now growing 

political uncertainty in the lead-up to parliamentary and presidential elections scheduled 

during the next year). 

As a result, poverty has increased in recent years, unemployment and underemployment have 

worsened, and primary school enrollment/attendance rates have declined slightly, with girls' 

enrollment suffering disproportionately. These trends highlight that the very real development 

improvements seen in Afghanistan since 2001 remain fragile and at risk in the current situation. 

Maintaining US and other international support, and in particular aid to the Afghan government 

budget which delivers essential services to the population, will be crucial for protecting gains 

and providing a good foundation for further progress. 

There is a destabilizing effect of too much money- and too little money. Between 2009-2013, I 

was a vocal critic of the amount of reconstruction and development assistance the U.S. was 

pouring into Afghanistan, both through civilian agencies as well as the military's Commanders 

Emergency Response Program (CERP). Based on the assumption that development assistance 

was an effective stabilization tool, or a 'weapons system' in Counterinsurgency (COIN) 

operations that could win the hearts and minds oflocal populations, vast amounts of foreign aid 

resources were poured into some of the most unstable regions of southern Afghanistan. 

Unfortunately, there was little empirical evidence to suggest that it was an effective stabilization 

tool. Instead, research I conducted in Afghanistan between 2008-2010 while at Tufts University 

suggested that assistance programs intended to promote stability often had the opposite effect. 
97 

The pressure to spend large amounts of money quickly in areas with little implementation or 

oversight capacity helped fuel the massive corruption that delegitimized the government, which 

in turn fueled the insurgency. The problem was compounded by perverse bureaucratic incentive 

structures that rewarded the quantity of money spent and the number of projects implemented 

over the quality, relevance and positive impact of projects. Many ofSIGAR's reports highlight 

the significant problems assistance programs from different agencies during that time when there 

were 100,000 U.S. troops in Afghanistan, USAID's annual budget exceeded $4 billion, and the 

military's CERP budget for COIN-related stabilization projects was around $1 billion. 

Today there are no more PRTs spending CERP money, and USAID's requested FY18 budget for 

Afghanistan was been sharply reduced during the past several years to $650 million, 

approximately 15 percent of what it was at its peak. A combination of a lot less civilian and 

military money being spent, along with stronger oversight mechanisms, means significantly 

fewer US resources are being lost to waste, fraud and abuse than before. 

My concern today is that we will go from one extreme of spending too much money in 

Afghanistan, which was destabilizing, to the other extreme of sharply reducing resources too 

quickly, which I fear will be even more destabilizing. In 1992 I was working in Peshawar for an 

American NGO managing a cross-border humanitarian and reconstruction program in 

Afghanistan, when the Soviet-backed Najibul!ah regime in Afghanistan collapsed. I witnessed 

first-hand the sharp reductions in donor funding for aid agencies when, with victory of the 

mujahideen over the communist regime achieved, the U.S. and our allies felt the mission in 

Afghanistan had been accomplished. But it was the anarchic environment that ensued that gave 

birth to the Taliban movement, which subsequently provided sanctuary to Al-Qaeda with 

devastating consequences. 

It is important to remember that our civilian assistance to Afghanistan is an integral part of our 

strategy to achieve our national security objectives. The measure of success must take into 

account the difficult context of an active war zone and a very fragile state. We should not expect 

the same levels of efficiency that domestic spending achieves. 

The Afghan state is still highly dependent on foreign assistance for its survival, and further sharp 

reductions in U.S. civilian and military assistance levels will likely once again lead to state 

collapse. Like the 1990s, this will again create ungoverned spaces that transnational terrorist 

groups will inevitably exploit. Let's learn from the lessons of the past and not repeat them. 

Andrew Wilder 

Vice President of Asia Programs 

"\VI.BIIII\\thlpnq,: 
98 

The Challenges and the Benefits for U.S. 

National Security of Providing Foreign 

Assistance to Afghanistan 

Addendum: Responses to Post-Hearing Questions for the 

Record 

Laurel E. Miller 

CT-49311 

Document submitted June 28, 2018, as an addendum to testimony before the Senate Homeland Security and Government Affairs 

Committee, Subcomm1ttee on Federal Spending Oversight and Emergency Management, on May 9, 2018. 
99 

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100 

The Challenges and the Benefits for U.S National Security of 

Providing Assistance to Afghanistan 

Testimony of Laurel E. Miller1 

The RAND Corporation2 

Addendum to testimony before the Committee on Senate Homeland Security and Government 

Affairs Committee 

Subcommittee on Spending Oversight and Emergency Management 

United States Senate 

Submitted June 28,2018 

Following the hearing on Wednesday, May 9, 2018, the congressional committee sought 

additional information and requested answers to the questions in this document. These 

answers were submitted for the record. 

Questions from Senator Gary C. Peters 

Question 1 

In the most recent Quarterly Report to Congress, SIGAR 's Lessons Learned Program states that, 

although Afghanistan was initially characterized as a "post-conflict nation" in 2002, "In 

retrospect, it was unrealistic to expect sustainable economic growth in an environment in which 

an insurgency and other forms of insecurity and uncertainty were increasingly present. " This 

touches upon the danger ofsetting expectations based on optimism rather than afrank 

assessment of conditions. This can be true when conducting oversight as well since there is risk 

in applying peacetime metrics to a wartime mission. How do you reconcile audit standards and 

mission objectives when assessing the execution of the U.S. reconstruction mission in 

Afghanistan? How do we measure success and failure? What challenges and opportunities do 

1 The opinions and conclusions expressed in this addendum are the author's alone and should not be interpreted as 

representing those of the RAND Corporation or any of the sponsors of its research. 

2 The RAND Corporation is a research organization that develops solutions to public policy challenges to help make 

communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, 

nonpartisan, and committed to the public interest. 
101 

you see in the current methodology for audits and investigations, and are there changes that 

should be made to ensure this audit methodology better supports overall oversight activities in 

Afghanistan? If taxpayers are footing the bill for programs that live on in perpetuity despite 

not achieving their stated goals, what good are metrics if no amount of realistic spending can 

achieve them? 

Answer 

Audit standards for assistance programs necessarily should focus on efficiency of execution; 

adequacy of metrics; how well programs are meeting their stated objectives; and detection of 

waste, fraud, and abuse. It is more difticult, however, for auditing to grapple with assessing the 

impact of spending on progress toward achieving broad policy goals in complex overseas 

missions-that is, in terms of mission "success" or "failure"-particularly considering that 

assistance is only one potential contributor to such outcomes. And it is also more difficult for 

auditing to grapple with questions of what should be considered "waste" in particular 

circumstances and whether some level of waste should be regarded as a tolerable transaction 

cost. This is not to say that auditing standards should be changed but, rather, that auditing results 

need to be viewed in context. Attention should be paid to the limits of what audits reveal about 

the value of assistance in missions driven by U.S. national security interests. 

For instance, in a mission like the one in Afghanistan (but not unique to that mission), there 

are times when it may be justifiable to spend funds to achieve short-term stabilization objectives, 

win the allegiance of particular individuals or groups, or support war-fighting requirements. At 

such times, there may be at least tactical value in accepting the risk or even likelihood of some 

waste because of the exigencies of the circumstances. In some situations, spending to achieve 

short-term stabilization could be a prerequisite for establishing a baseline of security sufficient to 

allow longer-term efforts to succeed. 

One lesson for oversight of future interventions may be to urge policymakers to be clearer 

about when, in their spending decisions, they are weighting short-term needs more heavily than 

longer-term impacts. Relatedly, there could be value in conducting oversight in a way that 

enables policymakers to frankly acknowledge risks and some degree of anticipated waste rather 

than claim "sustainability" and minimization of risk even when unrealistic. Frank interactions in 

this regard could put both congressional overseers and policymakers in better positions to judge 

the policy merits, or Jack thereof, of spending allocations and to set realistic benchmarks for 

progress. 

This points to another lesson from Afghanistan: Characterizing assistance programs 

conducted during conf1ict, rather than post-conf1ict, as "reconstruction" unhelpfully obscures 

clarity about mission objectives, contextual constraints, and likely results-and thus creates 

challenges for auditing and oversight. In Afghanistan, the first few years after the United States 

toppled the Tali ban regime were relatively quiescent, and U.S. spending in that period was 

relatively modest. "Reconstruction" assistance surged once the conflict intensified and the 

situation could not, in any genuine respect, be considered post-conflict. Assistance efforts in 

Afghanistan were then framed as being geared toward producing sustainable outcomes even in 

areas in which experience would have suggested that such outcomes would be exceedingly 

2 
102 

difficult to achieve on the planned timelines in a country still mired in conflict and having a very 

low baseline level of development. 

Many of the activities in Afghanistan characterized as "reconstruction," "nation-building," or 

elements of"countcrinsurgency" have actually differed little from development activitiesexcept that they were planned to achieve different (political and security-oriented) ends and to be 

accelerated beyond any normal development parameters in terms oftimelines, spending 

volumes, and achievements. One lesson that can be drawn from this experience is that money, 

donor will, and urgency are not sufficient to produce stability by speeding up development 

results. 

Development results have been achieved in Afghanistan-and at comparatively impressive 

rates until spending began to decline after 2014. As noted in my prepared testimony, assistance 

programs have resulted in important advances in socioeconomic indicators, such as health, 

education, per capita income, and life expectancy. Other areas, such as infrastructure, have seen 

mixed results, and many governance-oriented programs have produced only limited outcomes. 

But Afghanistan's continued high degree of aid dependency in both security and development is 

at odds with the inflated rhetoric, or even genuine expectations, of significant progress toward 

sclf~sufficiency, and stability remains elusive. 

Question 2 

Your testimony indicates that the Afghan government and security institutions currently 

providing a modicum ofstability in the country are in large part dependent on US. aid in its 

present form, and that the rapid elimination oft his financing would lead to a significant 

deterioration of the security situation in Afghanistan. Despite these facts on the ground, U.S. 

1axpayers cannot be expected to foot this bill in perpetuity. In your judgment, on the continuum 

of options for adjusting the longer-term U.S. presence in Afghanistan, how should we 

responsibly reduce our spending while best serving U.S. national security interests? 

Answer 

First, it should be noted that U.S. spending on civilian, nonsecurity programs has already 

been significantly reduced over the past several years. The gradualism of this change has enabled 

U.S. agencies to manage the reductions responsibly and continue to leverage U.S. spending in 

soliciting contributions from other donors. U.S. spending in support of the Afghan security 

fvrces is the far greater portion of overall spending, however, and it is the area in which the 

Afghan government's dependence on foreign financing is most acute. It has long been clear that 

the Afghan security forces built and sustained since 2002 with U.S. and NATO funding, training, 

and equipping would not be financed predominantly through Afghan government revenue in any 

foreseeable time frame. Given the role of these forces in countering the insurgency, there is no 

realistic prospect of greatly reducing U.S. spending on security in Afghanistan so long as the 

conflict with the Taliban continues-unless the United States is prepared to countenance the 

defeat of the Afghan government. 

A negotiated settlement of the conflict offers the best prospect of enabling the reduction of 

Afghan security costs and of the U.S. military presence in Afghanistan. This would entail 

3 
103 

Æ 

reaching a compromise agreement to which the Afghan government, the Taliban, and the United 

States would be parties, and which would comprise political and security elements-including, 

necessarily, a commitment by the Taliban to renounce any future links with international terrorist 

groups. Although a settlement would not erase Afghanistan's aid dependence in the near term, it 

could improve the Afghan government's revenue potential by removing security-related 

obstacles to economic growth. 

A settlement with the Tali ban ending the insurgency also would enable the United States to 

focus its continuing security activities in the region more narrowly on counterterrorism goals. It 

is likely that a negotiated settlement with the Tali ban would not lead all violent extremists in 

Afghanistan to lay down arms; there would probably be some Taliban affiliates or splinter 

elements that choose to stay outside a deal, and there would still be non-Taliban groups, such as 

the Islamic State of Iraq and Syria (ISIS), that would pose a threat to U.S. interests. But the 

residual security challenges for the Afghan state, and residual risks to U.S. national security 

interests, would likely be much smaller than they arc today. 

4