Thursday, December 2, 2010

Corruption in Afghanistan

On my way home today, I was reading this article (NYT) about how some of the infamous cables discuss the scope of corruption in Afghanistan. The article annoyed me for a couple reasons. I'm just going to start with the second and third paragraphs, because, as I'm writing, I'm realizing dealing with that will suffice for this evening. I think I need to start a series--Lil's Afghanistan corruption vignettes or something--...but only if you people are interested.

Back to my second paragraph, where,
One Afghan official helpfully explained to diplomats the “four stages” at which his colleagues skimmed money from American development projects: “When contractors bid on a project, at application for building permits, during construction, and at the ribbon-cutting ceremony.”
The article is describing how contractors (we don't know what kind, Afghans? foreigners? that's detail that matters don't you think?) skim off money at these four project phases. Let's go through the phases.

First phase, umm, isn't that a phase where we could do something about it? We're the ones with the cash. Not only that but who are we relying upon to publicize bids, make sure businesses know how to bid etc? No, this is not something that small to medium businesses know how to do, that's why organizations like Peace Dividend Trust are on the ground.

Second phase, ok, that's an internal problem but that seems to be something that donors could work on (ie support the relevant ministry office). Don't you find it crazy that nine years into this thing we're still not sure how ministries work and we still don't know how corruption happens for things like applying for a building permit? Really, that's reminds me that it took an Integrity Watch Afghanistan Survey for us to find out that it takes 20 steps to get a driver's license (and seriously plenty of donor country officials found out through the survey).

Third phase, now this is an interesting one. One of the crazy things I've learned is that we don't really monitor projects. No, really, we don't. Why? Well, outside of Kabul, the auditors we've hired (and it's not just us, other donors too) just won't go, it's not safe. The quote in the graph talks about US money. Fear not, it's not better when it's (donor) money funneled through the World Bank's Afghanistan Reconstruction Trust Fund (ARTF), which, as I've repeatedly been told, is "not designed to detect fraud." The ARTF is how most donors provide direct budget support. Its recurring window operates on a reimbursement basis so the auditors get receipts (yes receipts, they won't go out and make sure the school was actually built) and give the Afghan authorities the money for the projects. I get that in some places Westerners really can't go the school but why the hell can't we help civil society organizations do this kind of monitoring, pay their transportation costs, provide them with a GPS equipped camera and get them to take pictures every week and keep doing it for a year after the project is done? It would be pretty easy to tell whether the school is being built where the people said it would and whether we should keep paying for teachers and books.

Fourth phase, the ribbon cutting ceremony. This is something where we should be putting out foot down. No, we won't cover that expense. This is like donors getting played by senior Afghan officials on salary top ups. "What do you mean you didn't know that X just had a meeting with another donor who said "no" to a top up yesterday"? And now we're saying yes because we don't want to lose their "support." We've been at this nine years and we're still surprised about this kind of thing?

Ok, third paragraph:

"It is hardly news that predatory corruption, fueled by a booming illicit narcotics industry, is rampant at every level of Afghan society." And then a trite reminder about Transparency International's latest ranking on corruption perception.

The first sentence annoyed me. First of all, when is corruption ("the abuse of entrusted office for private gain") not predatory? I'm trying to think of an example but I'm drawing a blank. Second, "fueled by a booming narcotics industry"? In the preceding graph you said it was fueled by American money. Now I'm not saying it can't be both, because it certainly is both but why do you now focus on the latter?

So I would ask you to consider this: in 2001, the international community provided Afghanistan with $250 million in assistance money (I know it was under the Taliban, still it's an interesting baseline). Yes, you read that right, $250 million dollars (I got that from the World Bank's fast facts page on Afghanistan).

What kind of impact do you think the cash we're pouring in now is going to have? In 2008 (the last year for which I could find figures), the drug trade represented about $3.4 billion while US assistance alone that same year was $5.7 billion. In a country where we just figured out it takes 20 steps to get a driver's license (even though we've been there nine years), those numbers are really alarming so let's not boil down corruption like this. The rest of the article goes on to explain more local dynamics but I think we need to keep in mind that we have a role a responsibility here as well and that it's a big one.

9 comments:

  1. I don't know very much about this subject, so maybe you and MK and whoever else can chime in here: Recognizing that we have a responsibility for ineffective aid, and that we play some part in facilitating corruption, and that there are probably some measures we could take to change that... why aren't we doing those things?

    You make the good point that corruption in Afghanistan isn't really breaking news. U.S. (and international donors') complicity in that corruption isn't exactly breaking news, either. (Many people -- most notably Andrew Wilder -- have been making the point for a while that international development aid seems to fuel the insurgency rather than helping to combat it.)

    So what does it mean to "keep in mind that we have a role [and] a responsibility here... and that it's a big one"? The individuals who fail to enact the procedures and methods of operation that you think might be helpful in preventing all of this -- are you suggesting that this failure is driven by ignorance of what's going on in the field, by a lack of awareness that the way they operate is fueling corruption? Or is it that they face legitimate barriers to effective operation, or that they've probably tried these sorts of simplistic changes and found them either unsustainable or ineffective?

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  2. Gulliver, those are good questions. I'll try for some answers (based on what I was told in interviews in the last few months). First, we really are just starting to fight corruption. Until early 2009, to the degree that assistance programs contained specific anticorruption components, it was accidental and part of broader efforts to support governance and the rule of law. Yes the London conference contained some anticorruption benchmarks but if you line them up with the Kabul conference benchmarks, they're basically identical.

    So, while we helped to create a Major Crimes Task Force (with FBI and UK SOCA mentors), and a small anticorruption unit within the Attorney General's office, encouraged the establishment of an Anticorruption Commission (the High Office of Oversight--whose predecessor had to be dismantled because, you guessed it, its official were corrupt), and an anticorruption tribunal, these efforts have been plagued with problems and political interference. More,these initiatives were largely divorced from efforts to stem corruption in the line ministries (not just within the ministries themselves but also in areas within the ministries' purview). In fact, support to the line ministries has remained extremely limited on anticorruption.

    To answer you final questions. A lot of these things haven't been tried. The Bank began this year a pilot project in three districts to improve their monitoring and auditing. If it goes well (they decide in January), they'll expand the pilot program, but only to safe districts.

    Many donors are, in fact, stuck in their compounds, and they rely on contractors to administer and monitor projects. I was told that a USAID contractor used to go to a governor, ask him what was needed in terms of projects and then ask him again which of the projects he had proposed should be sampled for monitoring! In short, independent monitoring hasn't really been happening.

    All this to say, I think it's a combination of ignorance of what's going on in the field (ISAF is just starting to work on identifying criminal networks (because we "don't know who we're working with), significant barriers to effective operations (security concerns, lack of qualified personnel and knowledge about appropriate monitoring and evaluation procedures), and only recently getting the resources they need (though they don't have all of them) to curb the ways in which they are themselves fueling corruption.

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  3. Great post. I’ll just illustrate what contracting and project implementation looks like on ground in Afghanistan for the U.S. military. Looking just at the that role, we should start off by distinguishing between three different types of contracting involving the U.S. government in Afghanistan, each with their own levels and manifestation of corruption.

    1. Sustainment contracts for FOB/COPs. Few realize the substantial contracting requirements to construct and maintain a FOB or COP in Afghanistan. Looking back at my records from my last deployment, my Battalion’s medium-sized FOB had no fewer than 15 contacts to local “businesses” that sustained operations on the FOB in the following areas (among others).

    a. Several contracts for “Material Handling Equipment” to move stuff around and expand the FOB
    b. Water contract to fill showers/latrine/washing facilities
    c. Grey water contract to remove and dispose of used shower/washing water
    d. Portapotty rent/cleaning contract
    e. Afghan security guard contract
    f. Barber contract (seriously)
    g. Multiple gravel contracts
    h. Local day labor
    i. Radio station DJ contract
    j. Trash removal contract
    k. Non-tactical vehicle rental
    l. Host-national “jingle” trucking contract to distribute supplies to smaller COPs

    It goes on, totaling several millions of dollars annually all going to Afghan-run businesses. Multiple this by at least 100 to account for all medium FOBs, smaller numbers of mega-FOBs, and at 100+ additional smaller outposts across the country, each with varying local contract requirements. The management requirements for these contracts are daunting and are largely executed by Sergeant First Class/Lieutenant-level personnel designated as “contracting officer’s representatives” (CORs) with about four hours of training overseen by career Acquisitions Officers at the larger FOBs. As with larger trends of a lack of local knowledge, contracting officers and their representatives have little knowledge about each business, its ownership or even contract execution history, not do they have any perspective about what a service should cost in Afghanistan. Often several or even all bids are offered by the same company under different names. Needless to say, this is a breeding ground for corruption. Though the primary impact is to the American taxpayer, Afghans are well aware of this corruption and the often intimate involvement of the provincial government.

    2. Development Projects (USAID, CERP, etc). At the tactical level, until recently, the pressure to execute projects was huge regardless of capacity, corruption susceptibility or sustainability. As a Battalion Civil Affairs officer, I inherited 24 million dollars in road construction projects along with a dozen or so other smaller projects funded through CERP. I had very limited capability to monitor and evaluate given the size of my province (larger than Connecticut) and my lack of mobility to remote locations. I would have never executed any of the road projects had it been my decision and my bi-weekly monitoring meetings with the contractors were often recounts of the bribes paid in the previous week to various GIRoA officials and the “Taliban.” USAID does a better job of project monitoring with local staff dedicated to monitoring and their implementing partners tend to work even more locally. I attempted to hire local staff of my own, but was unable before I redeployed.

    cont...

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  4. I made great effort to visually inspect all of my projects, but sometimes had to resort to the “photographic evidence” method described in the post. However, as a hypothetical example, a photo of segment of road in Daymirdad, doesn’t look much different than a previously constructed segment in a completely different district and regardless doesn’t allow me to really evaluate the quality of the base, sub-base, and thickness/quality of asphalt. As the COR, I could withhold partial payment for the project until definitive proof of quality was presented. However, because of poor due diligence by the original contracting officer, the delay of payment will bankrupt the road construction company since their financial means were likely too limited to execute the project in the first place.
    Corruption in the CERP and other development program implementation process is the most visible manifestation to the Afghan public of contracting graft and harms our mission immeasurably. I attempted to counter perceived corruption through regular radio messages with project information (including cost, contractor, timeline, etc) and other measures, but years of coalition and Afghan government failures are difficult to overcome. Indeed, I regularly argued to my command that doing nothing was often preferred to executing a large project tainted by corruption. Thankfully, early 2010 changes to ISAF/RC-East policy have greatly discouraged the conduct of large projects, instead encouraging the more sustainable and easily monitored and evaluated projects under the cost of $5000.

    3. Mega State-Building/Long-term Military Infrastructure Projects.
    Primarily managed by the Army Corps of Engineers Afghanistan District, these projects are multi-million dollar infrastructure projects focused on Afghan government facility construction. In Wardak Province alone, ~$167 million dollars in these projects were ongoing when I left earlier this year. While I had little contact with these projects, my impression was they too were poorly monitored with the ACoE flying in monthly for a very brief visit. These projects seemed to be marked by construction of large facilities that the Afghan government will likely have neither the budget nor capability to maintain after our departure.

    The corruption problem is far too large to be addressed by a small Kabul-based Major Crimes Task Force with little enforcement capability. With the most visible manifestation of contracting corruption occurring at the tactical level, efforts to combat this and most other forms of corruption must be focused at the lowest level. Unfortunately, infantry battalions are poorly trained and insufficiently empowered to directly address corruption and the strong push to “do something” regardless of its second and third order effects.

    Nick

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  5. Lil,

    I was partially thinking of this post when I wrote the following at SWJ:

    1. Mission-creep seems to perenially infest large parts of our foreign policy apparatus. We enter a system previously closed to us, introduce what we will, and then orient our responses to the irritants produced. Can't be helped, I suppose. Or can it?

    Specifically, I am talking about large sums of money and the resulting complaints of corruption. What did we think would happen? It happens here in the States, too. Look at your local papers: block grants and TIFs and all that.


    Agree that this is an astute post and appreciate the comments above dealing with specifics!

    Now back to nursing my horrific cold....and the heats not working! Aargh!

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  6. ...the strong push to “do something” regardless of its second and third order effects.

    Is this about meeting certain goals or metrics that have been set by decision makers?

    You see this a lot in medicine. Someone notes that X is a problem, then decides Y is the solution and that Z is the metric to keep track of it all. Eventually, all efforts morph into keeping track of Z and the original problem is forgotten.

    Okay, now back to nursing the horrific cold!

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  7. All of these reports about corruption seem to overlook the fact that we are the biggest source of corruption in Afghanistan. The figure of $5.7 billion in annual assistance doesn't take into account the sustainment costs associated with over 100,000 troops in country.

    As another poster pointed out, these sustainment costs entail multiple contracts for each FOB in Afghanistan, and for a major base such as Kandahar Air Field these contracts probably run into the hundreds of millions of dollars. Another cost is the contract for Afghan security guards to guard FOBs; I personally know of one FOB that has a million dollar a year contract for guards who wear ANP uniforms but are actually private security. Add to this the transportation contracts to move all of the fuel, food, water, etc. to various FOBs - I don't recall the figure for the consolidated DoD trucking contract but I believe it is also in the hundreds of millions of dollars.

    So the total figure for money that we are injecting into Afghanistan must be at least somewhere in the 15-20 billion dollars a year range. Taking into account that Afghanistan has traditionally had a rentier economy and possesses a political elite with a cargo cult mentality, is it any surprise that chasing international money becomes the primary activity of everyone with any access to power and privilege in Afghanistan? Nor should it be a surprise that such large financial injections create major inflationary effects that are destroying the livelihoods of less-privileged persons in Afghanistan.

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  8. Nick--thank you so much for chiming in. Your experience is both encouraging and disheartening (four hours of training?!). Is there a way we could talk offline in more detail? I completely agree on working at the local level and in conversations I had recently, things seem to be moving in that direction (at least for now).

    Monitoring implementation is a huge challenge. Yes, of course, you could be given fake/not that place pictures. It does seem though that we have technology that would allow us to see if the right bit of road has been built (however well--which as you say is a whole other problem). I mean can't drones take perfectly nice pictures if you have the coordinates? At least we'd know if the person was lying to us about building in the right place and we could call them on it. In interviews I've done, I was stunned at how many people (civilians) said they had no way of knowing. All this to say, do you know if we're using that kind of technology for those kinds of purposes?

    As to the MCTF, agreed, that will help identify some big shots but it won't do much beyond Kabul. The High Office of Oversight could (if it ever really gets off the ground) get to the point where it could have provincial offices (or maybe even district offices) but given the fact that governors don't all have vehicles and offices, I'm not holding my breath. Maybe the Ministry of Finance could expand its presence too but that's a long term goal.

    This is depressing...This thing is getting long so continuing in the next one.

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  9. Madhu--hope you're feeling better. Yes, this is largely about meeting certain policy/ expenditure goals. In this case spending the money Congress gave you to (re)build and not really caring how it's spent. If you don't spend it, you run the risk of Congress not giving you as much the following year because you didn't need it.

    In an interview with an Afghan official at a ministry, I was told the following story. He explained how a donor had come to him and said "we can built X "wells" (it wasn't wells but if I say what it was, he's in trouble) for Y per well in region Z." So he called around in that area and found that the going price for a well wasn't Y but only half that price. So he went back to the donor and said, "ok but let's only pay the price I was given, then you donors can find something else to do." Well, the donors weren't happy, they wanted to have that money spent so they went to his boss. The boss calls him into his office and says "Are you crazy, we could have just pocketed the rest of it and they would have had their wells." But now the donors had been called on it, the boss knew about it, and they had to actually spend the leftover money the "right" way. He said they build more "wells" than planned but seriously, the donors were put out? What the hell? Shouldn't they have been ecstatic?

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