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US lost $19 billion in ‘waste, fraud and abuse’ in Afghan reconstruction, watchdog finds

U.S. Air Force 1st Lt. Graham Auten, civil engineer with the Kapisa/Parwan Provincial Reconstruction Team, speaks with Afghan construction workers at a school that's under construction in the Nijrab district of Kapisa province, Aug. 12, 2009. (Staff Sgt. Teddy Wade, U.S. Army photo/Released)
October 21, 2020

A new report by the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR) has identified billions in spending on reconstruction efforts in Afghanistan that were lost to waste, fraud, and abuse.

The 19-page SIGAR report concluded that between the 2002 fiscal year and December 31, 2019, approximately $19 billion was lost to various instances of waste, fraud, and abuse. The waste accounted for 30 percent of the $63 billion in spending that SIGAR reviewed, which is less than half of the $134 billion that Congress appropriated for reconstruction efforts in Afghanistan.

SIGAR reported 323 instances of waste, fraud, and abuse alone in the two-year period between Jan. 1, 2018, and Dec. 31, 2019, for an estimate of between $769 million and $1.8 billion in costs. SIGAR said it has already issued 209 recommendations was not offering additional recommendations to address the spending problems.

“This report summarizes the work SIGAR completed between January 1, 2018 and December 31, 2019. During that two-year period, SIGAR issued 111 reports and made 209 recommendations to address the problems we discuss in this report,” the SIGAR report said. “As a result, we are not making any additional recommendations.”

Among instances of fraud, the SIGAR report said that through a review of its past reports the spending watchdog group “examined crimes involving federal procurement fraud, contract fraud, theft, corruption, bribery of government employees and public officials, and a variety of civil matters pertaining to waste and abuse of U.S. taxpayer dollars,” and found 30 instances of procurement and contract fraud costing a total of $296,557,652.

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SIGAR reported the majority of that fraud, $183,200,000, was connected to fraudulent activity associated Asian Development Bank’s (ADB) oversight of a single road construction project in Afghanistan, for the completion of the Qeysar to Laman section of the Ring Road.

The new SIGAR report said waste account for 290 of the 323 instances of spending issues it identified, accounting for approximately 90 percent of the identified waste, fraud, and abuse it recorded.

SIGAR said it reviewed 209 instances of waste valued at approximately $1.5 billion dollars, where “programs and projects that lacked clear program goals, performance measures, and quality data to support management decisions, as well as assets that were not used, abandoned, or posed safety hazards.”

SIGAR said another 24 instances of waste included instances of theft, embezzlement, and bribery valued between $13.7 million and $14.3 million. In one case, a transport company was alleged to have cut open and removed U.S. government property from containers before resealing those containers and shipping them, for a total valued waste of $7.3 million.

In another instance, an Afghan subject stole a firetruck and a pick-up truck from a U.S. military base and sold them for an estimated loss of $801,071.

In terms of abuse, SIGAR found three instances of abuse, including one valued at $34 million. In that specific instance, the U.S. Agency for International Development had contracted out to support a mining development project, however, the contractor was unable to complete the mine because due to what SIGAR assessed as abuses of power by Afghan government officials who blocked the mine’s completion.

SIGAR said the success of the mine project was predicated on improved mining laws in the country, but, “In many cases, Afghan government officials did not want mines legalized because many illegal mining operations were in the hands of members of parliament, their families, or other powerful Afghans.”

According to SIGAR, the U.S. and other international partners have provided about 75 percent of the expenditures for Afghan reconstruction and the World Bank estimates between $4.6 billion and $8.2 billion of donor funding will be required per year through at least 2024 even if Afghanistan can establish peace.

SIGAR said, “Endemic corruption, widespread insecurity, and lack of accountability over on-budget assistance continue to make any investments made in Afghanistan vulnerable to waste, fraud, and abuse and may threaten the peace process as well as the perceived legitimacy and effectiveness of the Afghan government.”

The report comes as President Donald Trump has pushed to withdraw the U.S. presence in Afghanistan, including tweets suggesting having all remaining U.S. troops in Afghanistan back home by Christmas.