Giving Karzai Aid and a 20 Percent Profit

An auditor of the U.S. reconstruction effort in Afghanistan warned that a transition of all private security in the country to the Afghan Public Protection Force threatens to throw costs spiraling out of control and raises serious concerns about the safety of aid workers and ability for projects to continue.


President Hamid Karzai’s mandate also means his government stands to nicely profit from the “significant” cost increase by the state-owned APPF even while receiving U.S. aid, the leaders of a House subcommittee heard Thursday.

“The transition to the APPF poses one of the most significant challenges that the U.S. government and its implementing partners have faced since the beginning of the reconstruction effort in 2002,” Steven J. Trent, the acting special inspector general for Afghanistan reconstruction, told the Oversight and Government Reform National Security, Homeland Defense and Foreign Operations Subcommittee.

“I think this nation-building exercise is a huge debacle,” said Chairman Jason Chaffetz (R-Utah). “We need more exposure and oversight.”

There’s also no guarantee that rogue members of the Afghan protection forces wouldn’t harm their western clients, though USAID told the committee that “there has been a dramatic overall decrease in our need for security.”

J. Alexander Thier, assistant to the administrator for the Office of Afghanistan and Pakistan Affairs at the U.S. Agency for International Development, said that it was largely a matter of “same guards, different uniforms” in the transition, yet as the process continues “we will continue to monitor costs and seek opportunities to reduce overall expenses without sacrificing security.”


“Right now we do not have indication that there is any increase in insecurity,” even after anti-American sentiment has been stirred by incidents this year, he said. “Our reliance on armed guards has dramatically decreased.”

“I don’t have a great degree of confidence in their ability,” Ranking Member John Tierney (D-Mass.) said of the APPF, advising the optimistic USAID representative to “hope for the best but plan for the worst.”

Thier said his agency has “detailed contingency plans,” though “we continue to work in extremely dangerous locations side-by-side with their military.”

The Afghan government put a March 20 deadline on the transition that puts all security for reconstruction and aid workers in its court.

“The APPF is rapidly evolving as it hastens to build the capacity to provide security services,” Trent said, noting that by March 2011 more than one-fifth of all Department of Defense contracted personnel in Afghanistan were providing security services.

“The Afghan government’s decision in 2010 to disband PSCs has created new security challenges for U.S. agencies and their implementing partners.”

Karzai’s decree, which was ostensibly a move to fight corruption and prevent civilian casualties, ordered the dissolution of private security contractors within four months without a backup plan to provide security for reconstruction activities. The Ministry of the Interior eventually determined that the companies could see out the end of their contracts; a target date of March 2013 was then set for APPF, which aims to have 25,000 guards by then, to assume security responsibility over all coalition construction sites.


The inspector general analyzed 13 projects in which security under the APPF is expected to cost as much as 46 percent higher, an additional $3.1 million.

This includes new fees that Karzai’s rent-a-cops will rake in — a 20 percent profit to most charges associated with each guard, Trent testified.

“Shame on us,” Tienery said. “I’ve watched [Karzai’s] act for a long time… we rolled over again.”

Even while the Afghan government will be pulling in a tidy profit, it will do so while still pulling in international funds Kabul says it needs to pay for police and military past the 2014 withdrawal date.

“We’re going to spend more for the same thing,” Chaffetz said. “…We’re moving, in my estimation, in the wrong direction. We pay for everything.”

“The APPF official website acknowledges the uncertainty about how much the new arrangement is going to cost, noting that ‘while it is impossible to provide exact figures at this time before contracts have been established, we expect there will be some increase in cost for companies, particularly if they choose to use the services of a Risk Management Consultancy in addition to contracting with the APPF for guards,'” Trent said.


The inspector general was only able to provide a minimum for security costs for 29 of USAID’s largest projects from 2009-2011: $2.9 billion, in which security costs per project ranged from 14 percent to 42 percent.

“We don’t whether costs will go up, we don’t know whether costs will go down,” Thier, who estimated a 16 percent increase, said when grilled about the expenditures. “Our current indication today is that none of our programs are going to shut down.”

An industry group brought up recent violence to the committee in regard to Karzai’s new way of doing security business.

“When bidding on new work in Afghanistan, companies will need to rely for the first time on the APPF for the vetting and training of new guards,” the Professional Services Council, which represents government contractors, said in a submitted statement to the committee. “Given growing concerns about so-called ‘green on blue’ attacks by uniformed Afghans on U.S. and coalition personnel, the use of new APPF guards complicates both the risk assessment and cost projections when deciding whether, and at what price, development projects can be successfully completed in Afghanistan.”


“The Afghan government is saying you have no choice, you have to do this,” Chaffetz said. “I don’t think the State Department’s standing up enough.”



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