Wasteful Afghan projects: Where does the buck stop?

McClatchy NewspapersJune 30, 2011 

WASHINGTON — Inefficient and unsustainable construction projects in Afghanistan have swallowed billions in American taxpayer dollars, and may contribute little to defeating the Taliban, but no one's certain who's to blame.

Sen. Claire McCaskill, D-Mo., questioned representatives from the Department of Defense, the U.S. Agency for International Development and contracting companies at a subcommittee hearing Thursday about who makes decisions about infrastructure projects and spending.

No one knew.

McCaskill, a former prosecutor and state auditor in Missouri, said that while some progress has been made, she still had no one to blame for myriad instances of mismanagement and otherwise questionable decision-making about Afghan construction projects.

Adding urgency to the need for answers is the fact that around $61 billion already has been spent, and President Barack Obama has requested $17.3 billion for reconstruction contracts in Afghanistan in next year's budget. The Defense Department has 90,800 contractors in Afghanistan.

"There's no one that I can really find that wants to say I'm responsible," she said. "It is time that somebody is responsible for money that is spent on roads that will not ever be sustained and for buildings and electrical power facilities that...no one there even knows how to use."

Costs for a recently completed project, the 64-mile Gardez-Khost highway between Afghanistan and Pakistan, ballooned from $69 million to $176 million. Larry Walker, the president of the Louis Berger Group, a consulting firm hired to build the highway, said the high price tag was due to the security situation rapidly degrading mid-project. The project experienced 147 direct attacks, and around 150 encounters with explosive devices. Twenty-one employees have been killed and 51 wounded.

Despite out-of-control costs, the project continued. Walker said no one person was responsible for the decision, but that it was "incumbent on all of us."

"That means none of us," McCaskill interjected.

Sen. Rob Portman, R-Ohio, criticized power plants in Afghanistan, which have turned the lights on in Kabul and Kandahar, but are too expensive for Afghans to run after Americans leave. The Kabul power plant cost $300 million, up from its $125 million original price tag.

A USAID official, Alexander Thier, said the plants were intended to be short-term and backup power sources.

Thier said the Kandahar plant was a joint decision among the U.S. government, the military, the State Department and USAID, and didn't name anyone who was in charge of making sure the Kabul plant was sustainable.

"If we're building a backup power plant for $300 million that the Afghans aren't using except for peak periods, because they can't afford the fuel, how does that make sense?" Portman said.

Officials expressed further uncertainty over who decided what projects the Defense Department and USAID would undertake, and from whose budget the money would come. McCaskill noted that the defense department is currently building provincial justice centers in Afghanistan, even though such an initiative seems more suited to USAID, an arm of the State Department.

David Sedney, the deputy assistant secretary of defense for Afghanistan, Pakistan and Central Asia, said that some urgent projects through USAID are included in the Defense Department's Afghan Infrastructure Fund even if USAID lacks the funding.

"It looks like to me that somebody in the field has said we need to do this, and so we're just trying to find the money somewhere in the budget to do it and DOD is going with it," McCaskill said. "And that is not the way that you carefully craft this expenditure of federal tax dollars."

Last year, McClatchy completed an extensive investigation of U.S. contracting in Afghanistan. Among its findings: The U.S. spent hundreds of millions of dollars on failed projects with slipshod oversight that allowed banned firms to win new U.S. contracts.

McClatchy also reported that even after a Louis Berger Group employee gave federal investigators evidence that the company was intentionally and systematically overbilling taxpayers, the U.S. government awarded the company $1.4 billion more for projects in Afghanistan.

Several other reports also have documented wasteful spending and fraud associated with reconstruction in Afghanistan.

A recent report from the congressional Commission on Wartime Contracting in Iraq and Afghanistan said the costs run into the tens of billions of dollars. The Special Inspector General for Afghanistan Reconstruction has said contracts for 900 facilities costing more than $11 billion were "at risk" because of poor planning. The Association of Certified Fraud Examiners estimates that 7 percent of all revenue is lost to fraud.

Similarly, a report from the Government Accountability Office said that while the Defense Department has improved contract oversight by training supervisors in Afghanistan, there aren't enough supervisors, and they often lack technical or engineering expertise to do the job. The State Department still has no process for vetting non-U.S. contractors.

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For more international news visit McClatchy's World page.

McClatchy Newspapers 2011

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