Thank you, Ellen, for that generous introduction.
I'm honored to be here today at the Stimson Center – an institution named for and inspired by a man who helped guide the nation through some of the most difficult challenges it has ever faced, and an organization that I remember calling upon for guidance and assistance on many occasions when I was working for Senator Nunn on proliferation and terrorism issues.
Little did I know, approximately two months ago when Link and Ellen and I got together and talked about this, how good Stimson Center was. Two months ago when we picked this date out of the blue, little did I know that it would be "Afghanistan Week" in Washington, the week when a certain president from a certain country would be in town. I remember conversations along the lines of, ‘It's just going to be an informal gathering, just a few of us will get together.' " So Ellen, I knew you were good -- but I didn't know how good until today!
Henry l. Stimson accomplished much throughout a long and illustrious career of public service, and he did it in a practical, nonpartisan manner.
I think if he were alive today, he'd be taking the lead—with his trademark judicious approach—in studying and analyzing the challenges we now face in Afghanistan. He also probably would have been smart enough, if asked by the White House, to turn down the job of Special Inspector General for Afghanistan Reconstruction. But, I never said I was a Henry Stimson.
But, in all seriousness, the position of SIGAR is both the challenge and opportunity of a lifetime, and it's one I'm excited to talk to you about this afternoon.
The conflict in Afghanistan is, quite arguably, our foremost foreign policy challenge today.
The United States has spent more money to rebuild Afghanistan than it has spent on the reconstruction of any other single nation, including Germany following World War II.
In fact, we spend about $28 million every day to rebuild Afghanistan.
The nearly $90 billion appropriated for Afghanistan relief and reconstruction is designed to build and strengthen the Afghan National Security Forces, promote self-governance and foster economic development.
It is my job—and the job of my nearly 200 auditors, investigators, inspectors, and other professionals—to make sure that this money is spent effectively and efficiently and is protected from waste, fraud, and abuse.
To help you understand the challenges we face in Afghanistan, let me tell you a little story.
In the far north of Afghanistan, bordering Tajikistan, is Kunduz Province.
Although initially one of the more peaceful parts of the country, in recent years, Kunduz has seen an increase in insurgent activity. It is also the site of a major NATO supply route, so maintaining the safety and security of the province is critical.
In 2008, the Department of Defense obligated over $70 million to construct an Afghan National Army garrison there that would house 1,800 personnel and their trainers.
This multi-building garrison was supposed to be completed by June 2009. But, in April 2010, it was still unfinished.
To make matters worse, the construction that had been completed had major problems. Roofs were sagging or collapsing because the contractor had used improper welding and priming techniques. Worse yet, the site was constructed on unstable soil. And because the contractor had not adequately prepared the site to stabilize the soil and construct adequate foundations, buildings were sinking, causing structural failure and making them unusable.
In 2010, we inspected the site we told DoD to fix the problems, and it agreed to do just that.
However, last year, we returned to the site, and here's what we found:
Although some structures had been fixed, the underlying problem of the collapsible soil had not. As a result, soil instability had caused new sink holes, and more facilities faced the likelihood of structural failure. We saw gaping holes in buildings – holes in the exterior walls so big you could stick your arm through them.
The sink holes were so bad that a transformer used to provide electrical power to much of the site was at risk of failure. Moreover, even those facilities that didn't have deficiencies weren't even being used or were being used for a different purpose than was intended.
I'd like to report that the contractor responsible for these problems was held accountable. But that's not the case. Instead, DoD - for some inexplicable reason - released the contractor from all further obligations under the contract, including all warranties for future repairs, and paid the contractor in full (over $70 million).
I tell you this story not because I think the reconstruction effort will succeed or fail based on what happens with one army garrison in a remote province, but because it is indicative of problems we see time and time again. And the root cause of these problems is what I want to talk to you about today.
There are five distinct but inter-related major causes of many of the problems we see in Afghanistan:
- Inadequate planning;
- Poor quality assurance;
- Poor security;
- Questionable sustainability; and
- Corruption.
First, inadequate planning. We are at risk of wasting billions of dollars if the agencies charged with implementing new programs and constructing new facilities do not first answer some basic questions.
Are these programs and buildings needed?
Are we putting them in the right place?
Have we designed them to meet the needs of the people who will be using them?
Quite often, we find that the answer to these questions is no. For example, when we asked government officials why they had built the garrison in Kunduz and how they had determined its size, we got a blank stare. There were no planning or justification documents that could provide these answers.
In fact, as we reported in 2011 in another audit, the Department of Defense did not have a long-range construction plan for its entire $11.4 billion construction program.
Things are no better for U.S.A.I.D. – they don't even appear to have a good handle on what they have built and where many of their projects are located.
Second, poor quality assurance. It is our job, as the SIGAR, to conduct oversight of the reconstruction effort. But it is also the responsibility of the implementing agencies to monitor the progress and quality of their own programs and facilities. Unfortunately, we find that agencies often fail to fully implement their quality assurance programs. At the Kunduz garrison, for example, we found that the quality assurance process was virtually non-existent during the first nine months of the project. As a result, there was no way to verify if improper materials were substituted for the correct ones or if foundations were constructed in accordance with contract requirements.
We have seen this problem in all areas—from development programs to capacity-building initiatives to building construction. One of the worst examples we have uncovered may have resulted in American and coalition forces losing their lives. This involved a multi-million dollar program intended to protect highway culverts from improvised explosive devices. We found that no quality control was done and, as we reported recently in an emergency management alert letter, many of the grates were missing or poorly installed; they may have failed to prevent insurgents from planting explosives that killed and injured American and allied forces.
This matter is still ongoing and has grown in scope, and may involve bringing criminal charges against some of those involved.
Now, I have to give credit to General Allen and General Longo and many of the military officers who brought this to our attention because they thought it was localized. But we have since found evidence that this may be widespread throughout the country. So we don't know what the ultimate results will be, but it has been turned into a criminal investigation.
A third problem deals with security limitations. Without adequate security, reconstruction either comes to a halt or continues without the necessary oversight.
Point in fact: We were told that the reason there had been no oversight during the first nine months of the Kunduz project was that poor security prevented scheduled site visits.
This problem is not limited to just the united states. For example, we know that the World Bank has failed to properly monitor some of its key programs, such as the Afghanistan Reconstruction Trust Fund, because it has determined that sending personnel outside of Kabul is too dangerous.
As the military draws down, we, too, find that there are fewer places we can go to monitor projects. Just last week, our inspectors were prevented from visiting a site because of security limitations. We're working to find ways around this, but it's a problem. And it's not going away. If anything, it will grow over the next year as forces are withdrawn.
The fourth problem area deals with questionable sustainability. By this I mean, do the Afghans have the financial resources, technical capacity and political will to operate and maintain the facilities we've built for them and the other programs and initiatives we've instituted to strengthen their country?
The numbers tell the story: The Afghan government brings in only $2 billion in total annual revenues. It will cost approximately $4 billion just to sustain the Afghan Security Forces – and that's a conservative estimate that assumes a smaller force.
Total costs for sustaining everything could be $10 billion a year.
As we recently reported, the Afghan government will likely be incapable of fully sustaining facilities for the Afghan National Security Forces after the 2014 transition—and that includes the Kunduz Army garrison.
Moreover, the Afghan National Security Forces lack personnel with the technical skills needed to operate and maintain critical facilities, such as water supply, wastewater treatment, and power generation.
Finally, there is the problem of corruption. Corruption in Afghanistan is corrosive – eating away at its reputation in the world, and at the faith of the Afghan people in their leaders, government programs and policies.
According to Transparency International, Afghanistan is perceived as having the worst public-corruption in the world – tied for last with North Korea and Somalia.
But corruption is not just an Afghan problem. Through our investigative work, we have uncovered schemes by contractors and U.S. government officials to engage in bribery, theft, and other forms of fraud.
It's too soon to know if what happened at the Kunduz garrison involved criminal fraud and bribery. Our agents are looking into that. But, we need to acknowledge the role that corruption plays in undermining the overall reconstruction effort and the credibility of the U.S. and Afghan efforts now and for the foreseeable future -- even after the anticipated drawdown of U.S. troops in 2014.
Now, I've laid out what we see as some of the biggest problems facing reconstruction. Let me talk a bit about how we are addressing these issues and why SIGAR is in a unique position to make a real impact.
First, SIGAR is the only agency in government with the sole mission of protecting and improving reconstruction in Afghanistan. Although SIGAR is a temporary agency, it should be around beyond the 2014 troop drawdown. SIGAR is the only agency empowered by Congress to look into projects across the spectrum of reconstruction. We can cross jurisdictional boundaries in ways that the Inspectors General of Defense, State, and U.S.A.I.D. simply cannot.
We also have unique hiring authority, with the ability to quickly hire staff with the unique skills we need. We also have the single largest oversight presence of any U.S. government agency in Afghanistan. We have 57 people on the ground – including the largest cadre of auditors and criminal investigators—more than any other I.G.
But it's not just about our size, our mandate, or our unique authorities. It's about how we, as an agency, view our mission. When I first joined SIGAR, I made it clear to my staff that:
We will be fair, we will be aggressive, and we will be relevant, but we need to do so as fast as we can if we are going to make a difference. Time is of the essence.
This means that, while we will employ the traditional I.G. methods, we're not going to stop there. Instead, we are going to explore new, innovative ways of conducting oversight.
Let me give you some examples of what I'm talking about.
We have created one of the most aggressive suspension and debarment programs in the inspector general community.
Suspensions and debarments are important tools for ensuring that contracts go only to responsible companies, individuals, and organizations.
We've recommended 206 entities and individuals for suspension and debarment since this program launched two years ago—far more than any other government agency in Afghanistan.
These include 43 individuals and companies identified as having actively supported insurgent groups fighting U.S. and coalition forces, such as al Qaeda, the Taliban, and the Haqqani network.
Unfortunately, when we refer companies or individuals for suspension or debarment, these referrals are not acted on quickly.
So we've proposed granting SIGAR or the theater commander independent suspension and debarment authority that would allow us to get rid of the bad actors as soon as we spot them.
We are also working more closely than any other law enforcement agency with afghan police and prosecutors to get afghan suspects charged, tried, and convicted in afghan courts for bribery and corruption.
In Afghanistan, unlike in Iraq—where U.S. contractors were predominant—the U.S. government has promoted an "Afghan First" initiative, which emphasizes prioritizing contracting with Afghan-owned and operated companies. That's why, in order to fulfill our mission of combating fraud, in many cases we need to work through the Afghan law enforcement and legal system when we uncover criminal activities. This is challenging, but it has paid dividends.
Just recently, for example, a prominent individual in Balkh Province was convicted and sentenced to two years in jail after SIGAR agents went undercover and taped him offering bribes.
Another thing I told my staff on my first day on the job was this:
To be relevant, we need to adopt a "client approach" to our mission. In other words, we need to be relevant and responsive to our clients, who are ultimately the American taxpayers, but, more specifically, the military commanders on the ground, the embassy in Kabul, U.S.A.I.D. operations in country, as well as Congress.
Therefore, we need to identify problems early on, when the agencies or congress still have enough time to fix them. And we need to focus on the areas that are most important, most critical to the policy and decision makers who are in a position to influence the reconstruction effort.
So, the first thing I did when I started this job was to go out and talk to the people who use my products to see what they needed, what they wanted from SIGAR. I am not interested in "gotcha" politics. We want to not only catch crooks; we also want to improve the contract process.
I traveled to Afghanistan within a month of taking office – and I'll be taking my second trip soon.
I met with former and current ambassadors and military leaders - with General Allen, numerous military commanders, other IGs, the G.A.O. and the Department of Justice.
I have also reached out to my congressional clients, and I speak with the leadership of the committees of jurisdiction in the House and Senate and with their staffs on a regular basis to see if we are meeting their needs.
These are the people who read and use my reports. If, at the end of the day, our reports and investigations are not useful to them or relevant to the work they do, we have not done our job.
In addition, I have been talking to foreign policy and national security experts all over the country – including some of you in this room – to see how SIGAR can be more effective and responsive.
We at SIGAR need to get this right. My team and I are committed to ensuring that taxpayer dollars are spent wisely and are protected from waste, fraud and abuse. If we don't get it right, then those lives and treasure spent over the last 11 years may have been spent in vain – something that we at SIGAR will do everything in our power to avoid.
Thank you. I'm happy to take questions…