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Home > English > Kabul Press Reveals > EXCLUSIVE INVESTIGATIVE REPORT: American corruption and mismanagement (...)

Kabulpress Reveals

EXCLUSIVE INVESTIGATIVE REPORT: American corruption and mismanagement threaten Afghanistan’s future

State Department ignores flagrant abuse and wastes billions of $$$$

Friday 11 September 2009, by Matthew J. Nasuti (Former U.S. Air Force Captain)

The author of this article, Mr. Matthew J. Nasuti was a Deputy City Attorney for Los Angeles and a U.S. Air Force Captain with Air Force Logistics Command. He helped oversee the construction of Comiso Air Station in Sicily. He served as a legal advisor on contract fraud to the Air Force Office of Special Investigations and he worked as a contracts manager and later consultant to Bechtel Corp., the world’s largest construction company. Mr. Nasuti is recognized by the U.S. State Department as an expert in reconstruction. It hired him last year as a Senior City Management Advisor to one of its Provincial Reconstruction Teams in Iraq.

The United States has committed more than $38 billion dollars in aid for Afghanistan over the past eight years. The average Afghan citizen has seen little benefit from these enormous expenditures. 54% of this total was paid to foreign security contractors or was used for other security purposes. The American effort has been plagued by fraud, laced with mismanagement and it has had no strategic focus. Rebuilding Afghanistan and defeating the Taliban requires that America fundamentally change the operations of the U.S. Embassy and the U.S. Agency for International Development (USAID).

AEY, Inc.’s provides faulty ammunition to Afghan Army

In 2007, the United States awarded a massive contract worth almost $300 million to a Miami, Florida company called AEY, Inc. to supply the Islamic Republic of Afghanistan with 52 types of ammunition, primarily 7.62 bullets for AK-47s. The U.S. Army Sustainment Command removed from the contract all requirements for safety inspections of the ammunition, which is mandatory for all ammunition being delivered to American forces. As a result, AEY, Inc. was able to shop around in Eastern Europe for the cheapest ammunition it could find.

It then began to supply Afghan forces with old Chinese ammunition manufactured in the 1960s. Millions of rounds of this ammunition were found to be substandard and dangerous. According to C.J. Chivers of the New York Times, the ammunition was actually issued to Afghan troops in the field. An investigation by the U.S. Congress uncovered the fact that the U.S. State Department was aware that this old and substandard ammunition was being delivered to Afghanistan and that it did not object to the deliveries.

U.S. Congressman Henry Waxman, in his June 23, 2008 letter to Secretary of State Rice, described how the ammunition was being shipped from Albania and that in a secret meeting on November 19, 2007, the U.S. Ambassador to Albania John Withers, Deputy Chief of Mission Stephen Cristina, Political Officer Victor Myev, Political Section Chief Paula Thiede, Commerce Chief Robert Newsome and Diplomatic Security officials Patrick Leonard and Matthew Becht were all briefed on the illegal and unsafe ammunition. All of them elected to remain silent and permit the shipments to continue. While AEY, Inc. and its officers were later indicted in the Southern District of Florida, the State Department refused to discipline any of its senior officials. John Withers remains the U.S. Ambassador in Albania. Equipping Afghan security personnel with cheap, dangerous and defective equipment is apparently not a matter which troubles the State Department.

ArmorGroup North America: sexual abuse, alcohol abuse, and breach of contracts in Kabul

A State Department Inspector General’s audit of the U.S. Embassy in Kabul in 2005 found abusive and aggressive practices and unprofessional conduct by Embassy security personnel, yet apparently nothing was done to correct the problems. Several months ago, Assistant Secretary for Logistics William Moser briefed the U.S. Senate that all the problems with the private mercenary force which guards the American Embassy in Kabul (ArmorGroup North America), had been resolved. This turned out to be false. Last month it was revealed that ArmorGroup remains under investigation for alcohol and sexual abuse in Kabul, along with breaches of its contract to provide security for the Embassy. It is also accused of abusing Afghan citizens who work at the Embassy.

Despite repeated problems with ArmorGroup, Secretary Moser has just extended ArmorGroup’s contract for another year. Secretary Moser and his supervisor Patrick F. Kennedy are at the center of numerous abuses and need to be immediately replaced, along with State Department Inspector General Harold Geisel and his counsel Erich Hart and Karen Ouzts, USAID Inspector General Donald Gambatesa, Deputy Inspector General Michael Carroll and their counsel Lisa Goldfluss.

Additional suspect American AID projects in Afghanistan

1. USAID has paid over $240 million dollars, under two contracts, to an American company called Chemonics, Inc. to provide agricultural support in Afghanistan. USAID audits in 2008 found that most of the money might have been wasted, yet it refused to terminate the contracts with Chemonics and it refused to recommend any disciplinary action against USAID officials involved in the contracts. A half dozen other audits conducted in 2008 and 2009 by the USAID inspector general reveal the same staggering scope of waste and mismanagement, also with no disciplinary action being recommended.

2. USAID has been paying substantial amounts of money to an American corporation called Checchi and Company, Consulting, Inc. to perform advisory and report-writing tasks that USAID should be doing itself. Under one recent contract, Checchi was tasked with preparing an official U.S. Government report on corruption within the Government of the Islamic Republic of Afghanistan. Issued under U.S. Government letterhead, it is entitled “Assessment of Corruption in Afghanistan” and is dated March 1, 2009. It is available on-line at the USAID’s website. Checchi and Company should not be speaking for the United States Government, nor should the American government be paying a private company to criticize the Government of Afghanistan and to publicize alleged Afghan government corruption.

3. USAID has been paying for the paving of dozens of kilometers of roads through the Panjshir Valley. In its September 1, 2006 press release, USAID stated that the reason for the project was so that (wealthy) residents of Kabul, could drive more quickly for vacations to the Panjshir Valley. American taxpayers should not be paying for the construction of vacation sites in Afghanistan. This program has no strategic value in the war against the Taliban.

4. USAID has been supporting the “Dream and Achieve” television show in Kabul. USAID’s April 4, 2009 press release claims that the show encourages the creation of small businesses, yet it does not list a single small business created due to the show.

5. USAID has been paying for the creation of a Dari/Pashto Legal Glossary. USAID’s May 5, 2009 press release states that the glossary will ease problems caused by confusing legal terms. This is a project that benefits a small number of Afghan lawyers and appears to be a poor choice for using aid money.

6. USAID, five years ago, began its “Land Titling and Economic Restructuring Program.” It was a five-year effort to assist the Afghan government in selling off unneeded government buildings. It also had a side task of reorganizing certain property title records. Now that the five years is almost up, only 305,000 sq. feet of buildings (less than 1/10th of the goal of the contract) has been sold. According to a 2008 audit report, USAID spend $56.3 in the effort, which earned the Government of Afghanistan $10.6 million. Tens of millions of dollars seem to have been wasted on this program, which, under all metrics, is a failure. The responsible USAID officials have not been either identified or apparently disciplined.

7. USAID has been paying for a program of mobile phone banking so that money can be transferred by telephone. This program benefits the rich, but will have no impact for the majority of Afghans. Francis J. Ricciardone, Deputy U.S. Ambassador to Afghanistan, was quoted in the August 11, 2009 USAID press release as stating that the project “will help all Afghans earn, save and transfer money.” It is not clear how the project will help anyone either earn or save money.” Mr. Ricciardone’s statement is simply nonsense.

Worthless Inspectors General Reports

Under American law (5 U.S.C. App. 4 and 5), American Inspectors General are supposed to identify American officials who waste funds, mismanage aid or abuse their authority, but the USAID and State Department Inspectors General virtually never do so and rarely recommend disciplinary or criminal action against corrupt or inept American officials. The culture of corruption at the State Department and the refusal to hold Embassy officials accountable for their crimes, abuses and inept management only benefits the Taliban and al-Qaeda.

The Special Inspector General for Afghanistan Reconstruction (SIGAR), Arnold Fields, has likewise produced audit reports that are virtually worthless, due to his refusal to identify responsible and culpable American officials. Weak leaders encourage corruption. Mr. Fields retired as a Marine Corps General in 2004. He needs to return to his life in retirement in the United States.

Chaotic aid programs

In a review of USAID and U.S. Embassy projects, there were few in Kandahar or Uruzgan and virtually none in Paktika or Khost, yet significant amounts of money are going to projects in Kabul and to such provinces as Badakhshan and Badghis. It is no wonder that Afghans in the south and east of the country feel detached and ignored. This trend must be reversed.

U.S. officials employ confused logic for their aid programs. They state that there must be security in order for aid projects to be effective. In fact, the reverse is true, in that the correct aid projects will help foster security. State Department fear of the Taliban has given the Taliban the authority to veto any aid projects it does not like. A side effect of the current American strategy of deferring to the Taliban was uncovered in a special investigative report published on September 2, 2009 by Jean MacKenzie of GlobalPost. It is entitled: “Are U.S. Taxpayers Funding the Taliban?” Her report describes how American contractors pay bribes to the Taliban to ensure that aid projects are not disrupted. The bribes could amount to up to 20% of the total cost of the American aid project. If true, then billions of American dollars may be flowing to the Taliban. This means that Afghanistan truly faces a war without end. Ms. MacKenzie also reveals that the Taliban have an office in Kabul that reviews all aid projects and determines the amount that must be paid to the Taliban. If all of this is true, then the United States is paying the Afghan Government to fight the Taliban but also paying the Taliban to fight the Afghan Government.

Official aid reports shrouded in confusion and secrecy

It is difficult to evaluate the confused and random patchwork of American aid programs and efforts in Afghanistan, due to the refusal of the American government to publish meaningful and comprehensive data. The American Congress, in frustration, ordered the President of the United States to submit regular reports regarding American efforts in Afghanistan. These reports, called “1230 reports,” are available for viewing on-line, however they are virtually useless. One cannot tell from the reports whether the American efforts are succeeding or failing.

For example, in the June 2009 1230 Report, it vaguely claims that the amount of electricity available in Kabul has improved over the past six months, but it provides no data and does not examine the availability of energy across the country. If there is some increase in electricity in Kabul, but some reduction in the rest of the country, then there has been no net improvement. The Pentagon has proven masterful at playing with numbers and statistics. They report indicators of success and suppress indicators of failure. In Pentagon double-talk, there are no failures, only new challenges to success. The Pentagon produces extensive reports that actually relay little or no meaningful information and perhaps misinformation. Sometimes, the Pentagon simply refuses to release any public information.

For example, a significant source of American aid funds in Afghanistan is the CERP (Commander’s Emergency Response Program). It is difficult to evaluate CERP due to a lack of published information. In July of 2009, the Congressional Research Service conducted an audit of the program, which revealed why data on CERP is kept secret. The audit found that nearly two-thirds of CERP funds are diverted and spent on road construction and repair (which aids U.S. military forces), instead of being used for local economic development projects, which was the intent of the program.

Mistreatment of Afghan civilian contractors

Another deficiency in U.S. aid programs is the lack of protection
accorded to Afghan nationals who are hired by foreign contractors.
The August 11, 2009 expose by Pratap Chatterjee of CorpWatch
documents abuses by MEP (Mission Essential Personnel), a
contractor which supplies translators to the U.S. Military in
Afghanistan. Similar tales of arbitrary firings, wages being cut
and translators being denied protection after they have been
targeted, have been heard for years in Iraq. There appears to
be no system or rules for preventing the mistreatment of local
civilians hired by Pentagon, State Department or USAID contractors.
These abuses harm the war effort, yet no audit report to-date has
recommended that they be corrected, It would be a simple matter
to include a grievance process into each aid contract, and U.S.
Government supervision of such, but it has not been done.
The worst and most abusive contractors in Afghanistan need to
be identified and the aid contracts of such companies must be cancelled.

The victims here are the average people of Afghanistan, who receive little or no benefit from these massive American aid programs and the American taxpayer, whose tax money is being stolen, squandered and wasted at unprecedented levels. The American Embassy routinely criticizes the Afghan Government for corruption, while ignoring corruption by American Embassy officials; corruption which proceeds at levels that dwarf anything being done by Afghan officials. American corruption and mismanagement threatens the future of Afghanistan and threatens any chance of success in the war against the Taliban.


Note from author:

The Senate Defense Appropriations subcommittee just approved $120B in new funding for Afghanistan and Iraq. It goes to full committee next week. The House Appropriations Committee Chairman is sitting on the fence. Contact your local senator and ask that he/she ensures more protections and oversight are included in this massive funding bill.

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Forum posts

  • Mr. Nasuti, here’s what I have been writing our government leaders.

    In Afghanistan, to contain cost, reduce corruption, reduce fatalities on our troops is to reduce the offensive attack down to 30%, let the intelligence community pick up the other 70% using a more advance and new intelligence strategy. I would like them to use what I have developed to control global terrorism. Water boarding, etc. is a clear sign of no effective intelligence strategy. I have been writing the last 5 years to no avail including lawmakers, White House, CIA, DOD. My best guess is that the fatalities on our troops will continue, the suicides in the military will keep on increasing, the corruption will just go on unabated. I am not giving up, but clearly, this is a way of life that only a few would like to see those resolved. I am planning to do a one-day presentation. Email me when you have the chance.

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