Good Afternoon,
Thank you Dr. McNaugher for that kind introduction. I want to thank you and your colleagues for inviting me to speak today. I’m always excited to discuss our office’s work and the U.S. reconstruction efforts in Afghanistan. But I am especially so today since many of you will become the future architects and enablers of foreign and international security policies tied to many of the lessons we have learned from Afghanistan.
Since I have the unenviable task of being the last barrier to cocktails and the weekend, I promise to be concise in describing some of the lessons my office has learned from our nation’s longest war and largest reconstruction efforts in any one country. (However, I must warn you as a former law partner, I am used to being paid by the word).
Overview of Afghanistan Reconstruction
Let me first start by stating that America’s investment in Afghanistan is unprecedented.
To date, the United States government has provided over $104 billion for Afghanistan reconstruction which has been intended: to build the Afghan government and its security forces, bolster Afghanistan’s economy, build its infrastructure, expand its health and education sectors, and improve Afghanistan’s quality of life and rule of law.
That’s an extraordinary amount of money, but in many ways it has gone unnoticed almost hidden in plain sight. When was the last time you heard mention of the massive amount of money being spent on reconstruction in Afghanistan? Or what have we gotten for the investment?
Let’s put that figure in some context and I promise I will not say how high it would be if you stacked it up and compared it to the Washington Monument. Let’s just state this simple fact that’s more money than we’ve spent on reconstruction for any one country in our nation’s entire history.
For those of you who are historians, at the end of this year we will have committed more funds to reconstruct Afghanistan, in inflation-adjusted terms, than the U.S. spent to rebuild Europe after World War II under the Marshall Plan.
In relative terms to current foreign policy hot spots, we’re spending more money just this year to rebuild Afghanistan than we will spend for the next four largest countries that receive U.S. foreign assistance, Israel, Egypt, Pakistan, and Iraq combined.
As you well know, by December of this year, the President plans to leave just 9,800 U.S. troops in Afghanistan, and by the end of 2015 just around 5,000. As a result, many people believe America’s involvement in Afghanistan will therefore end.
That is wrong. Despite the drawdown, our reconstruction mission is far from over and I would say will continue at a high tempo for some years to come if we want to keep the Afghan military and government afloat and protect our reconstruction successes.
In that regard, right now there is nearly $16 billion in the pipeline, money that Congress has appropriated, but that U.S. agencies have not yet spent.
That’s right $16 billion in the bank waiting to be pushed out the door for Afghan reconstruction projects and programs. Furthermore, it is widely believed the U.S. will continue to fund reconstruction at another $5 billion to $8 billion annually for years to come.
As an example, just last week at the NATO conference in Wales, the Coalition agreed to fund the Afghan security forces alone at the rate of $5.1 billion a year through 2017, a $1 billion commitment increase, with the U.S. shouldering the majority of that cost.
It’s a tremendous amount of money. Ensuring it’s spent correctly is not only important to American taxpayers it’s critical to advancing our foreign policy goals. That is why it’s essential that someone is tasked with overseeing these efforts and ensuring that money is being spent appropriately.
Intro to SIGAR
And that brings me to my little agency with the odd tobacco flavored acronym SIGAR.
You may not be familiar with SIGAR specifically or even inspectors general in general.
Don’t worry, you’re not alone. One of the things that has surprised me the most since I took this job is just how few people at USAID, in our Foreign Service and in the military were aware of SIGAR and more importantly the critical role of an independent inspector general as explained in the 1978 IG Act.
I was stunned when senior state department officials on my first trip to Kabul suggested how we should write our reports. They even suggested changes to our report titles and proposed that we give them our press releases in advance so they could pre-approve them. Little did they know that by law IGs are independent of the agencies and SIGAR by statute is more independent than all other IGs.
So let me take a moment now to introduce you to our agency and what makes our work so different from not only the agencies you may work for but also the 72 other statutory IGs in the federal government.
Congress created the office of the Special Inspector General for Afghanistan Reconstruction or SIGAR in 2008 to provide independent and objective oversight of the U.S. reconstruction effort in Afghanistan.
After broad and public dissatisfaction in Congress about the performance of the first appointed SIGAR, President Obama appointed me to lead the agency in July 2012. It is the job of SIGAR’s nearly 200 auditors, investigators, inspectors, and other professionals to ensure that the unprecedented $104 billion investment of U.S. taxpayer money in Afghanistan is protected from waste, fraud, and abuse.
Like any inspector general, we issue audits and reports highlighting the problems we find, make recommendations wherever we can, and arrest criminals who steal from the U.S. government.
Our mission is clearly stated in our authorizing statute to keep the President, the Administration, and Congress “fully and currently informed about problems and deficiencies” in the Afghan reconstruction efforts.
Note, nowhere in my legislation am I supposed to be a cheerleader and highlight successes of reconstruction even though we will, if we find them.
Moreover, SIGAR is different from other IG offices in four key ways:
- First, we are temporary. SIGAR’s enabling legislation requires that we start to wind down once the balance of undisbursed funds for Afghan reconstruction falls below $250 million. Accordingly, for us time is of the essence.
- Second, while IGs are an independent lot, you could say that SIGAR is “Uber” independent. That is, we’re not part of any federal agency, unlike the DOD, State and USAID IGs, and our enabling legislation is replete with language stating we must be “objective and independent” in our work.
- Third, we have a broad inter-agency mission. Congress gave SIGAR blanket authority to examine any and all Afghanistan reconstruction activities, regardless of agency ownership, and
- Fourth, SIGAR, unlike any other department or agency in the government, is mandated to specifically examine multi-jurisdictional programs, policies, and problems. This is significant because in a conflict zone like Afghanistan or any future conflict zone, federal agencies must work together to tackle key problems.
Let me be clear about this only SIGAR is mandated by statute to assess these efforts and make recommendations on the “whole of government approach” to reconstruction in a conflict environment.
Challenges Facing Afghanistan and Reconstruction
Now that you know who we are, let me focus on three major inter-agency challenges we think are critical for reconstruction success. They are sustainability, corruption, and narcotics trafficking.
Sustainability
Reconstruction programs must take into account a recipient country’s ability to operate and sustain the assistance provided. If they don’t, we put the programs and tax dollars at risk.
There’s no real benefit in setting up projects or programs that the Afghans cannot or will not sustain once international forces depart and international aid declines.
Unfortunately, Afghanistan is a case study in projects and programs set up without considering sustainability.
The sheer size of the U.S. government’s reconstruction effort has placed both a financial and operational burden on the Afghan economy and its government that it simply cannot manage by itself.
For example, last year the Afghan government raised about $2 billion in revenues. Next year, it hopes to raise $2.4 billion, although recent reports we have received put this goal in serious doubt. With stated budget needs of approximately $7.6 billion, unfortunately the Afghan government will not be able to meet its budget without continued and significant donor assistance.
Currently, the United States and other international donors fund more than 60% of the Afghan national budget, as well as countless reconstruction programs and projects that currently operate off-budget. With the troop withdrawal, greater responsibility for those off-budget programs and projects is being given to the Afghan government.
Looking at the Afghan National Security Forces or ANSF it’s clear why this problem is so immense. The latest independent assessment, by the Center for Naval Analysis, concludes that the ANSF will require a force of 373,000. This would cost roughly $5 billion to $6 billion per year, at a time when the Afghan government struggles to raise $2 billion a year.
At these levels, if the Afghan government were to dedicate all of its domestic revenue toward sustaining the Afghan army and police, it still could only pay for about a third of the cost. Moreover, all other costs from paying civil servants to maintaining all roads, schools, hospitals and other non-military infrastructure would also have to come from international donors.
While paying for Afghanistan’s security forces will be challenging, the cost of ongoing non-military development aid is also a major contributor to the ballooning expenses the Afghan government is responsible for. Each new development project that the U.S. and our allies funds, increases overall operation and maintenance costs that the Afghan government will ultimately be responsible for.
The bottom line: It appears we’ve created a government that the Afghans simply cannot afford.
Accordingly, when we build things the Afghans can’t use, and when we don’t take their resources into account, we’re not just wasting money; we’re jeopardizing our mission of creating a self-sustaining Afghanistan that can keep insurgents down and terrorists out. That’s why sustainability must be an essential factor in any decision making about projects going forward. We must make sure we are not building a system that will collapse the moment we leave.
Corruption
Corruption is another enormous inter-agency challenge facing reconstruction in Afghanistan. The consensus among everyone I speak with is that if corruption is allowed to continue unabated it will likely jeopardize every gain we’ve made so far in Afghanistan.
Corruption destroys the populace’s confidence in their elected officials, siphons off funds that would be used to combat insurgents or build infrastructure, and ultimately leads to a government that is ineffectual and distrusted.
The threat from unabated corruption is especially exemplified right now in light of the ongoing election crisis. A crisis spawned from corruption, which many fear is putting Afghanistan’s entire future in jeopardy.
However, the problem of corruption isn’t new. Experts and SIGAR have been highlighting concerns about corruption for a long time.
Top U.S. officials are very much aware of Afghan corruption. A report commissioned by General Dunford last year noted that “Corruption directly threatens the viability and legitimacy of the Afghan state.” USAID’s own assistant administrator for Afghanistan and Pakistan, Larry Sampler, told Congress that Afghanistan is “the most corrupt place I’ve ever been to.” And Retired Marine Gen. John Allen identified corruption as the biggest threat to Afghanistan’s future an even bigger threat than the Taliban.
The Afghans are also concerned with corruption. In June, Integrity Watch Afghanistan (an Afghan NGO) issued their latest national corruption survey. It found that corruption tied for second as the greatest challenge facing Afghanistan, after security. While 18% of respondents in the 2012 survey said they faced corruption within the last 12 months, 21% of respondents said they faced corruption in the 2014 survey.
The survey also noted that Afghans believe corruption in most public sectors undermined their access to services. The same services the U.S. invested billions in establishing.
For example, 28% of respondents believed that their households were deprived of access to electricity because of corruption and 18% said corruption blocked their access to higher education. The exact same areas where U.S. agencies commonly claim great success. In fact, the corruption percentages for electricity and education are not only up from 2012 but they are also higher than for justice by the courts and security by the police.
In June, the Carnegie Endowment for International Peace singled out Afghanistan as an example of a state where governing systems have been bent to benefit one or a very few networks. According to the report, President Karzai regularly calls his attorney general to influence cases or personally orders the release of suspects from pre-trial detention, quashing the cases against them.
This is the same Attorney General that recently threw a respected New York Times reporter out of the country because he didn’t like his reporting. The DOD and the State Department have repeatedly noted that the Afghan AG has deliberately avoided prosecuting either senior officials or individuals with ties to senior officials and stymied the work of the investigatory arm of his own internal-control and monitoring unit.
SIGAR has also had problems with the Attorney General. In one case, SIGAR worked to freeze and seize nearly $70 million in funds, stolen from the U.S. government, that was sitting in Afghan banks. For months we pressed the Attorney General's Office to freeze the money and begin the legal process to seize the cash. At first, we were told the bank account was frozen and the money protected. Unfortunately, as is too often the case, we later learned that the money was mysteriously unfrozen by some powerful bureaucrat in Kabul.
SIGAR has issued a number of reports on U.S. efforts to combat corruption. These reports have continually pointed out that the United States lacks a unified anti-corruption strategy in Afghanistan. This is astonishing, given that Afghanistan is one of the most corrupt countries in the world, and a country that the United States is spending billions of dollars in.
Yet there has been no progress made toward developing a unified anti-corruption strategy. In fact, things could get worse with the drawdown.
We cannot shy away from the challenge of corruption. We need a strategy, and we need to hold the Afghans feet to the fire on this issue. SIGAR will continue to point out how well or poorly not only U.S. officials but also Afghan officials perform in their promises to reduce corruption.
Counternarcotics
Directly tied to corruption is the final inter-agency challenge I wanted to talk about todaycountering the growth of the drug trade. This challenge is no secret to anyone; the U.S. has already spent nearly $7.6 billion to combat the opium industry. Yet, by every conceivable metric, we’ve failed.
Production and cultivation are up, interdiction and eradication are down, financial support to the insurgency is up, and addiction and abuse are at unprecedented levels in Afghanistan.
During my trips to Afghanistan I’ve met with U.S., Afghan and international officials involved in implementing and evaluating counternarcotics programs. In the opinion of almost everyone I’ve met, the counternarcotics situation in Afghanistan is dire, with little prospect for improvement.
As with sustainability and corruption, the expanding cultivation and trafficking of drugs puts the entire Afghan reconstruction effort at risk.
The narcotics trade poisons the Afghan financial sector and fuels a growing illicit economy. This, in turn, undermines the Afghan state’s legitimacy by stoking corruption, nourishing criminal networks and providing significant financial support to the Taliban and other insurgent groups.
There are already signs that elements within the Afghan security forces are reaching arrangements with rural communities to allow opium poppy cultivationeven encouraging productionto build local patronage networks and generate illicit income.
Given the importance of this problem, I was astonished to find that the counternarcotics effort isn’t a top priority during this critical transition period and beyond. For example, the latest U.S. Civil-Military Strategic Framework for Afghanistan, which articulates the “vision for pursing U.S. national goals in Afghanistan,” barely mentions counternarcotics. It notes that the U.S. counternarcotics strategy for 2010 “informs” the framework, but for the first time since the U.S. government began outlining its reconstruction goals, it didn’t include counternarcotics as a major focus area.
When I’ve met with Department of Justice, State Department and DOD officials, no one’s been able to convincingly explain to me how the U.S. counternarcotics efforts are making a meaningful impact on the narcotics trade or how they’ll have a significant impact after the 2014 transition. That’s troubling. Without an effective counternarcotics strategy and Afghan political will to tackle this problem, Afghanistan could well become a narco-criminal state in the near future.
Why Oversight Is and Must Be Mission-Critical
These challenges are real and I cannot deny that they are difficult to solve. But they are not insurmountable.
However, they will never be solved if we do not first expose them and make oversight “mission-critical”to use a military term for the utmost priority we must place on these efforts. That means having people at all levels working to ensure that we’re getting what we paid for, that our programs work as intended and that we’re realistically planning for the realities on the ground. By making oversight not only a component in every program and project but a “mission-critical” component we will help ensure that our efforts result in more success and less waste.
Take SIGAR’s audit of DOD’s basing plans for the Afghan National Security Forces. That one audit saved nearly a half a billion dollars for American taxpayers because SIGAR was able to identify areas where there was duplication and unnecessary expenditures. Our audit also raised awareness of the issue on the part of commanders in Afghanistan, who then diligently cut even more unnecessary basing projects and programs.
This is money that can then be put to use on other pressing issues in Afghanistan or returned to the Treasury. When we identify these sorts of mass savings, we not only ensure that tax dollars are put to the best use possible, but we also give trust to American taxpayers that someone is looking out for their hard-earned money.
Cost savings though are not the only reason oversight should be mission-critical. When we build a school with a rooftop that could collapse, or a hospital without electricity and running water, or a prison that falls apart, we’re not just wasting money we’re putting lives at risk and jeopardizing our effort to win the hearts and minds of Afghans in our war on terrorism.
It is not just the lives and well being of Afghans, though, that are on the line when oversight is not a priorityit also endangers American lives. For example, in the military’s efforts to protect our troops from IEDs, the U.S. paid a contractor to install culvert denial systems on roads, which helps to prevent the placement of IEDs under the roads. Sadly, two U.S. servicemen lost their lives as a result of an IED hidden in culvert that never had a denial system installed. Since the criminal case is still ongoing I cannot elaborate much further, but there are real concerns that a lack of oversight may have been a factor. So, oversight can’t just be a component; it must be mission-critical. Because as this case showsfraud kills.
SIGAR’s Approach
Clearly, much needs to change in our approach to Afghanistan reconstruction. The hundreds of audits, inspections and investigations of SIGAR and my oversight colleagues at GAO and agency IGs describe a litany of problems and mistakes. But how do you effect change in bureaucracies such as State, USAID, and DOD?
One thing for sure, nothing will change if you don’t publicize these problems. As I’ve learned from my 30-plus years in Washington, for change to happen problems need to be placed under the public spotlight. It’s the foundation of oversight and good governance. Remember, sunlight is the best disinfectant.
In January 2009, President Obama issued a memorandum to the heads of executive departments and agencies which said that “government should be transparent,” because “transparency promotes accountability and provides information for citizens about what their government is doing.”
We at SIGAR agree entirely with the “presumption of openness” in federal policy that flows from the President’s memo.
Accordingly, my policy on access to documents and reports is simpleunless a piece of information is legitimately classified or otherwise restricted, it ought to be publiceven if disclosure is not technically required. In my mind, the taxpayer has the right to know how his or her money is being spent.
This view is not new with President Obama but flows from the 1966 Freedom of Information Act, the 1978 Inspector General Act, and SIGAR’s own authorizing language. Transparency and openness are vital to good government. It does not take a rocket scientist to know that. Opaque surfaces polished by agency PR staff can conceal problems and provide false assurance that everything is fine. And, you don’t have to be particularly suspicious or an Inspector Clouseau to think that agency heads may not always be inclined to call attention to or take action on unwelcome reports about problems within their agencies.
Publicity is Worth Pursuing
Now you understand why many SIGAR reports have made the news since I took over the agency. This was not an accident but intentional. We publish, post, tweet, and otherwise publicize virtually everything we do.
I admit, some ambassadors and generals and nameless, faceless bureaucrats and contractors are unhappy with the fact we get press coverage, even though our two-person press shop pales in comparison to the squadrons of PR people at Embassy Kabul, ISAF, or the Pentagon. But that is the cost of transparency and open government.
Some people think we’re doing this to gratify our egos. They are mistaken. I am not angling for another government job, movie role, book advance, or trying to become the next YouTube sensation. The need to publically highlight management problems is something I learned from the great congressional oversight leaders such as Senators Sam Nunn, Bill Roth, John Glenn, Warren Rudman, and Carl Levin, as well as Congressmen John Dingell and Henry Waxman all of whom I had the great privilege of having worked for.
From these statesmen, I learned to follow the basic principles that: (1) unless it’s a security risk or classified, publish it; and (2) if it’s worth publishing, it’s worth publicizing.
SIGAR welcomes publicity because publicity gives our reports and work impact in this town and in Kabul and around the world, as indicated by the contacts we have had with our NATO allies.
I suggest to you that very few Americans have read the Health and Human Services Department IG reports on billing fraud against Medicare for motorized wheelchairs. But millions of people have had the chance to read The Washington Post’s 4,000-word story from August 16 that dramatized and humanized the problem.
That’s the kind of story that gets attention. Editorial writers, ordinary citizens, congressional staff, and think-tank researchers pick up on such revelations and weigh in. Members of Congress call hearings and draft legislation. Agency heads eagerly or reluctantly draft responses, policies, and testimony. With any luck, things get better, whether systematically or a bit at a time.
Let’s face it: No matter how good an IG audit, GAO report, commission finding, or University research study may be, if it falls into the black hole of background noise in Washington, it will go unnoticed and help no one. It will not lead to change and improvements in government programs and processes.
The widespread dissemination of IG reports promotes the following good outcomes:
- Publicity brings problems to the attention of senior leaders whose information gatekeepers may not have relayed such unwelcome news.
- Publicity motivates people to do the right thing, whether sharpening their own performance or calling out problems.
- Publicity may prompt managers to take corrective action before they get a nasty memo from the boss.
- Publicity can deter government contractors from cutting corners, using substandard materials, or tolerating unsafe practices if they fear they may not get paid, be debarred, or indicted.
- Publicity can deter fraud. When potential wrongdoers read about a federal civilian, military member, or contractor going to jail and paying big fines for taking kickbacks or bribes, or stealing, or smuggling, they may decide not to give in to temptation. As I learned as a prosecutor you get people’s attention fast once you indict them.
- Publicity can encourage people to come forward to the IG community. Some of our best tips and other information have come from senior officials, including generals and ambassadors, who approach us here or in the field, or use the SIGAR fraud hotline, after hearing about us in the press.
- Publicity that points out successes and best practices can encourage agencies to continue improving their own performance, or to follow the example others have set.
- Finally, and perhaps most importantly, publicizing our work gives American taxpayersand congressional appropriatorsconfidence that someone appointed by the President of the United States is looking out for how their money is spent.
As our friends in the armed services would say, publicity is a force multiplier.
Improving the Reconstruction Effort
So it is clear that the years ahead present real challenges. Most U.S. and coalition military personnel will be gone as we enter 2015, which is also supposed to mark Afghanistan’s “Decade of Transformation.”
But the country remains under assault by insurgents and is short of domestic revenue, plagued by corruption, afflicted by criminal elements involved in opium and smuggling, and struggling to execute basic functions of government. In fact, they haven’t even resolved their recent presidential runoff election yet.
Meanwhile, as the United States and other foreign donors move more aid onto the Afghan budget, oversight will become increasingly more challenging. As the U.S. footprint in-country declines it is estimated that more than 80 percent of the country will be effectively off-limits to U.S. civilian oversight, and in reality likely a lot more.
We are already having trouble getting out and about in Kabul. Like other U.S. agencies, we’re looking at options for remote and third-party monitoring to provide a continuing flow of information from the field.
Unfortunately, the flow of accurate information on the effectiveness of our programs in Afghanistan is less than perfect, in part because of the pressure on many agencies to show “progress.” We have repeatedly reported concerns that this pressure may result in dubious metrics and inflated reports of “accomplishments.”
For example, a number of U.S. agencies have explicitly or implicitly taken credit for the rapid growth of the telecommunications industry in Afghanistan. Yet senior executives at the largest telecom company in the country said they had received not one cent of assistance from the United States or any other government. We have an on-going audit looking into this situation.
SIGAR reports have also raised questions about the accuracy, relevance, or causality assumptions in reported progress in areas like public health, education, and security-force capabilities in Afghanistan.
Whatever the answers, it’s clear that reconstruction progress needs to be measured in realistic and useful ways. If we are going to learn anything from the reconstruction experience, we need to have accurate assessments of the proximate cause of both successes and failures.
In the same vein, we need to push for more accountability. The Afghanistan reconstruction experience is marred by many sins of commission or omission. A contractor fails to follow requirements, leaving unsafe, unfinished, unusable, or unwanted buildings but yet gets paid in full.
Someone decides to buy $500 million worth of non-airworthy planes that are later abandoned. Federal contract officials don’t bother to make site visits, fail to keep proper documentation, fail to enforce standards, and fail to ensure work is done before accepting it.
People, companies, and agencies need to be held seriously accountable for stupid decisions, dereliction of duty, corrupt behavior, and subpar performance.
Otherwise, we simply foster the expectation that additional waste, fraud, and abuse will be tolerated in the future, and only those who can shove the money out the door or meet the required “burn rate” are to be promoted and rewarded.
If that is the legacy of Afghanistan reconstruction, then I can assure you, we will have learned nothing from our experience and that the next time we do this and we will the result will be just as bad or even worse for the taxpayer and the recipient country.
Conclusion
Working toward all of these objectives in an increasingly dangerous environment will be a real challenge. But you can be sure that SIGAR will continue to audit, investigate and report on reconstruction issuesand to welcome publicity through news media, opinion leaders, social media, speaking engagements, and other channels.
We at SIGAR support our mission in Afghanistan. We all want reconstruction to succeed in creating a stable and sustainable economy and government in Afghanistan. But we at SIGAR and our other oversight colleagues have a different role in the mission than those in the implementing agencies. We are like the referee in the football game but just because we throw penalty flags doesn’t mean we don’t support the success of the sport any less than the players do.
That concludes my remarks and thank you again for the opportunity to talk with you.
I’m happy to take your questions