Watchdog Warns Corruption in Afghanistan Could Undermine U.S. Progress

WASHINGTON – The top watchdog in Afghanistan warned Thursday that uncontrolled corruption could derail the fragile progress the United States has made in the country over the last 12 years.

John Sopko, special inspector general for Afghanistan reconstruction (SIGAR), said that 2014 will be a pivotal year for the country as a new government is selected in the April presidential election and the Afghan National Army and police will take over security responsibilities from American troops.

“The uncertainties and risks have never been greater. The security, political and economic transition is underway,” he said.

The majority of U.S. troops will leave Afghanistan at the end of 2014, which means responsibility for preserving security will fall to the nation’s army and police forces.

Since U.S. troops arrived in the country to overthrow the Taliban in 2001, Congress has provided over $102 billion to build Afghan security forces, establish governing institutions, and foster economic development.

Although U.S. military presence after this year remains uncertain, Sopko does not expect U.S. and international aid to be cut off.

“The reconstruction mission, however, is far from over,” Sopko said. “The United States and its allies agree that Afghanistan will require significant international assistance for years and years to come.”

Sopko, who just returned from his sixth tour of Afghanistan since taking the position in 2012, spoke at an event hosted by the Atlantic Council. He said that during his time in Afghanistan he learned of hospitals low on supplies, roads that were “disintegrating faster than we can build them,” and army and police garrisons “that are not usable.”

As the U.S. government’s watchdog in Afghanistan, SIGAR investigates money wasted by the Defense and State Departments and U.S. Agency for International Development (USAID) due to corruption, waste, and fiscal abuse, but does not make policy. Sopko can only make recommendations to these agencies on how to spend and oversee their reconstruction dollars. His office has a staff of more than 200 auditors, inspectors, investigators and support personnel tasked with overseeing U.S. investments in Afghanistan.

Sopko said U.S. strategy of paying and arming local warlords to fight the Taliban and then to rule it under U.S. protection allowed many of these groups to “entrench and expand patronage.” In some cases, these groups have turned into criminal networks involved “in everything from extrajudicial land seizures and extortion, to narcotics trafficking and money laundering.”

He said allowing rampant corruption to continue in Afghanistan could jeopardize every gain made in the past 12 years.

He said the billions of dollars spent on lifting up the impoverished country has contributed to burgeoning corruption amid a weak and overwhelmed government.

Congress appropriated President Obama’s request for more than $16 billion to rebuild Afghanistan in 2010, not including the money spent on military operations that year. According to the World Bank, Afghanistan’s total gross domestic product in 2010 was only $15.9 billion.

“Massive military and aid spending overwhelmed the Afghan government’s ability to absorb the assistance,” Sopko said.

He said it is not that Afghans are predisposed for corruption, but rather in an environment where there is “too much money and too little oversight” people will naturally grasp at the opportunity to line their pockets, especially if they are poor.

He criticized the agencies he oversees for lacking “a unified anti-corruption strategy in Afghanistan,” which Sopko thinks has only hindered their own efforts.

“The initial U.S. strategy in Afghanistan not only failed to recognize the significance of corruption, but may even have fostered a political climate conducive to corruption,” he said.

Sopko said the case of Kabul Bank, Afghanistan’s largest private bank, exemplifies the country’s patronage system and the government’s failure to prosecute people guilty of corruption.

A total of $395 million, more than half of the government’s revenue in 2010, was stolen from the bank before it collapsed, with almost all of the money going to 19 people or corporations.

According to a report by a local NGO, Afghans paid approximately $1.25 billion in bribes in 2012 – equivalent to half of the government’s domestic revenue. A survey by Integrity Watch Afghanistan found out that one in every seven Afghans paid at least one bribe in 2012.

Estimates of cash taken out of Afghanistan in any given year are as high as $4.5 billion. These bulk cash flows raise the risk of money laundering and cash smuggling, which are often used as tools to finance terrorism and other illicit operations.

In a 2013 International Security Assistance Force (ISAF) survey, 80 percent of Afghans identified corruption as a major problem, while 65 percent said it was worse than the previous year.

SIGAR recently released a report that determined Afghanistan’s banking system remains fragile and poorly regulated. Sopko said the country needs a reliable banking system that follows internationally accepted rules in order to attract foreign investment. If Afghanistan fails to implement banking and financial reforms, it will “remain a welfare state to the international community,” he said.

Sopko has garnered criticism from military leaders and aid agencies that see the SIGAR reports as painting an unnecessarily negative picture of the reconstruction efforts in the country.

“It’s not my job to be a cheerleader,” he said. “My job is to ferret out, identify, and report on problems.”

But Sopko said he is the “ultimate optimist” and believes the mission in Afghanistan will succeed.

He said the upcoming elections will present the new Afghan leadership with a window of opportunity to weed out corruption. Afghanistan will hold presidential and provincial elections in April.

“The new government will be dealing with an international community that has far less patience for corruption. It must act quickly to prove that it is serious about attacking the problem,” Sopko said.

He urged the U.S. and its coalition allies to set attainable conditions for their assistance.

“The costs in Afghanistan – both in lives lost and money spent – have been enormous. If we don’t take advantage of this opportunity and get serious about corruption right now, we are putting all of the fragile gains that we have achieved in this – our longest war – at risk of failure,” Sopko said.