US financed contracts sometimes end up in the wrong places

"Warlords feed on US contracts, say critics." This is the headline of an article written by Richard Shilito and Matthew Green (in Kandahar) for the Financial Times, May 11, 2010. You can find the full article at: http://freedomsyndicate.com/fairOOOO/ft05.html.

On this blog or ours, we have reprinted and/or commented on reports of corruption in the Afghan government and among warlord in provinces and districts outside of Taliban dominance. In some cases, the warlords also hold positions in the government. Since the US military has not defined the warlords as Al Qaeda or Taliban, they are implicitly considered allies of the US-led occupation and given far more trust than they deserve.

The corruption aspect has to do with how US funded contracts, or some portion of them, end up in the hands for powerful warlords and are used to consolidate their own power and serve their private interests rather than for projects in the public good for which they were intended. some of this money trickles down to various Taliban groups. The opaque networks involved in the trucking business border on the absurd.

Shilito and Green provide new details for this story.

From the article:

"...mounting evidence that a $2.16bn trucking contract is enriching Afghan warlords linked to the controversial half-brother of President Hamid Karzai."

"...congressional investigators are looking into whether millions of taxpayers' dollars are being paid to militia commanders to protect convoys ferrying supplies through Kandahar province, where US troops are preparing an offensive."

"Critics say the militias form part of a mafia-like network..."

"...in Washington, concerns are growing that inadequate oversight of Afghan expenditure is financing a heavily armed cabal that will jeopardise the broader US strategy of promoting good governance to counter the Taliban."

"John F. Tierney, a Democratic member of Congress from Massachusetts....chairs the national security and foreign affairs subcommittee, which launched the investigation, partly in response to a Financial Times report on Taliban insurgents extorting money from trucking contractors supplying Isaf, the international force in Afghanistan."

The companies on which the investigation is focusing includes "eight trucking contractors who share the US military's $2.16bn (€1.7bn, £1.5bn) two-year host nation trucking contract. The companies in-clude NCL Holdings, run by Hamed Wardak, the son of Afghanistan's defence minister, and others founded by US and Gulf investors."

Key points: "The system relies on an opaque network of sub-contractors who pay Afghan security companies to escort their trucks. Investigators suspect these companies in turn pay tolls to militia leaders with groups of hundreds of gunmen."

".... Industry insiders say militias run what amount to protection rackets on convoys passing through their territory."

"Investigators suspect that commanders controlling long stretches of highway share multi-million-dollar incomes each year by demanding $1,000-$1,200 for each of the trucks, making up to 10,000 trips a month under the contract."

"Investigators also suspect that some of the funds from the contract end up in the hands of the Taliban, either through bribes paid by sub-contractors or extortion rackets run by militia leaders colluding with insurgents."