Quarterly Report - Special Inspector General for Afghanistan

189 Pages·2012·8.81 MB·English

SIGAR
Special Inspector General for JAN 30
Afghanistan Reconstruction 2012
QUARTERLY REPORT TO THE UNITED STATES CONGRESS
Cover Captions (clockwise from the left):
An Afghan girl attends a class at a camp
in Kabul on October 11. Since the Taliban
were ousted, girls’ schools have opened,
women are no longer banned from working
outside the home, and women are not
forced to wear a burqa. Increased access
to education and gender equity are major
goals of the U.S. and coalition reconstruc-
tion strategy. (© AFP 2012, Adek Berry)
A village elder watches ANA engineers and
U.S. soldiers with the 1st Stryker Brigade
Combat Team work together to improve
roads in Kandahar province on October 22.
Upgrading Afghanistan’s transportation
system is crucial to enhance security, trade,
and governance throughout the country.
(U.S. Army photo, SSG Lindsey Kibler)
Reintegrees’ surrendered weapons
are collected in Badghis province on
December 14. More than 650 insurgents
formally renounced their opposition this
quarter—mostly in the north and west.
Reintegration is a major focus of ISAF’s
counter-insurgency campaign. (ISAF photo)
SIGAR
JAN 30
Special Inspector General for
2012
Afghanistan Reconstruction
The National Defense Authorization Act for FY 2008 (P.L. 110-181)
established the Special Inspector General for Afghanistan
Reconstruction (SIGAR).
SIGAR’s oversight mission, as defined by the legislation, is to provide for the indepen-
dent and objective:
• conduct and supervision of audits and investigations relating to the programs and
operations funded with amounts appropriated or otherwise made available for the
reconstruction of Afghanistan.
• leadership and coordination of, and recommendations on, policies designed to pro-
mote economy, efficiency, and effectiveness in the administration of the programs
and operations, and to prevent and detect waste, fraud, and abuse in such programs
and operations.
• means of keeping the Secretary of State and the Secretary of Defense fully and
currently informed about problems and deficiencies relating to the administration of
such programs and operation and the necessity for and progress on corrective action.
Afghanistan reconstruction includes any major contract, grant, agreement, or other
funding mechanism entered into by any department or agency of the U.S. government
that involves the use of amounts appropriated or otherwise made available for the
reconstruction of Afghanistan.
Source: P.L. 110-181, “National Defense Authorization Act for FY 2008,” 1/28/2008.
SIGAR RESULTS TO DATE
AUDITS
• 53 reports completed, 10 audits ongoing.
• 171 recommendations made.
• up to $259.9 million identified in funds that should be returned to the U.S. government.
• 3 forensic audits under way of $39 billion in reconstruction funds managed by DoD, DoS, and USAID.
• 4 inspections initiated.
INVESTIGATIONS
• $52,014,850 recovered since November 2010.
• 125 ongoing investigations, 74 involving procurement and contract fraud.
• 17 convictions, 19 arrests, 9 indictments.
• 81 referrals for suspension or debarment that have resulted in 3 finalized debarments, 20 suspensions, and
33 proposals for debarments by the Army and USAID.
• 716 Hotline complaints received; 306 referred to SIGAR and other agency investigators.
BADAKHSHAN
JOWZJAN KUNDUZ
BALKH TAKHAR
SAMANGAN
FARYAB BAGHLAN
SAR-E PUL PANJSHIR
NURISTAN
BADGHIS
PARWAN KAPISA KUNAR
BAMYAN
LAGHMAN
KABUL
HERAT
WARDAK
NANGARHAR
GHOR LOGAR
DAYKUNDI
PAKTIYA
GHAZNI KHOWST
URUZGAN
FARAH
PAKTIKA
ZABUL
NIMROZ Current SIGAR offices
HELMAND
KANDAHAR Provinces where SIGAR has conducted
audit and investigation work
SPECIAL INSPECTOR GENERAL FOR
AFGHANISTAN RECONSTRUCTION
January 30, 2012
I am pleased to submit SIGAR’s quarterly report to the Congress on U.S. reconstruction in Afghanistan. The United
States has seen reconstruction as critical to achieving the principal U.S. objective of defeating terrorism and denying
al-Qaeda a safe haven in Afghanistan. This quarter marks 10 years since the United States and other international
donors began committing resources to rebuild the country. During this period, the Congress has appropriated more
than $85.5 billion for the reconstruction effort, an unprecedented sum for one country in such a short period of time.
This report offers a 10-year retrospective on the reconstruction effort and oversight of it. Section 1 of this report
summarizes the evolution of reconstruction over three main phases, identified on the basis of funding levels, changing
strategies, and evolving objectives: the Bonn Process (2001–2005), the Reconstruction Surge (2006–2011), and
Transition (2011–2014). The section describes achievements and persistent challenges and discusses how SIGAR
is focusing its audits and investigations on the programs most critical to the reconstruction effort. Section 1 also
provides a snapshot of the oversight community’s work in Afghanistan over the last decade.
Section 2 of this report presents details on SIGAR’s oversight work this quarter. We completed three audits,
launched a new inspections program, and led a new initiative to strengthen oversight of reconstruction in Afghanistan.
Our audit of the Department of Defense’s accountability for vehicles provided to the Afghan National Security Forces
(ANSF) resulted in about $5 million in annual savings. Through our inspections program, we will be conducting
quick-impact assessments to determine whether infrastructure projects have been properly constructed, are being
used as intended, and can be sustained. We have begun inspections of four ANSF facilities in three provinces. Also
this quarter, SIGAR and the other Inspectors General responsible for reconstruction oversight formed a new strategic
planning group to develop a more integrated audit plan for fiscal year 2013.
During this reporting period, SIGAR played a key role in investigations that resulted in two sentences and three
guilty pleas. One of the individuals sentenced was ordered to pay restitution of $115,000. SIGAR also made 40 referrals
for the suspension and debarment of individuals and companies for fraud, other illegal activity, or poor performance.
SIGAR has the largest investigative presence focused on fraud in Afghanistan; we have established strong
relationships with a wide range of U.S. agencies and Afghan law enforcement officials. Because many contractors
are not U.S. citizens, these relationships have enabled our investigators to develop a broad range of cases and hold
individuals and companies accountable.
Section 3 provides an update of the U.S. reconstruction effort in the security, governance, and development
sectors. Throughout this section, we have included some 10-year metrics to show where key areas of reconstruction
are today relative to where they were in 2002.
As this historic reconstruction effort begins its second decade, SIGAR will continue to work closely with the
Congress and other oversight agencies to provide robust and strategic oversight that deters criminal activity,
encourages efficiency, identifies waste and abuse, and evaluates program implementation to help inform the Congress
and the U.S. public about how these significant taxpayer dollars are being spent.
Very respectfully,
Steven J Trent
Acting Special Inspector General for Afghanistan Reconstruction
400 ARMY NAVY DRIVE ARLINGTON, VIRGINIA 22202
EXECUTIVE SUMMARY
SIGAR ACTIVITIES Q1, FY 2012
This quarter, SIGAR launched two new initiatives to improve oversight of Afghanistan reconstruction.
To enhance coordination and oversight of U.S. activities, it created a joint strategy group with three
other oversight agencies. To provide more timely assessments of U.S.-funded construction projects,
SIGAR also established an inspections program.
Other accomplishments during this reporting period three principal implementing agencies involved in
included the following: reconstruction in Afghanistan. In addition, SIGAR
• completed three audits, including one that pro- auditors continued to analyze forensic data from three
duced $5 million in savings; initiated 2 audits, major reconstruction funds.
bringing the number of ongoing audits to 10.
• participated in investigations that resulted in two NEW STRATEGIC PLANNING GROUP
individuals sentenced for bribery—one ordered to
This quarter, SIGAR and the other Inspectors General
pay $115,000 in restitution—and three guilty pleas.
with oversight responsibility in Afghanistan agreed
• referred 40 individuals and companies for suspen-
to form a strategic planning group that will develop a
sion and debarment.
more comprehensive and integrated audit plan for
• opened 20 new investigations, bringing the total
FY 2013. SIGAR, whose legislative mandate requires it
number of ongoing cases to 125.
to coordinate with other oversight agencies, is leading
this effort to provide the Congress with more effective
COMPLETED AUDITS
assessments of reconstruction programs.
This quarter, SIGAR completed three audit reports:
a review of the Department of Defense’s (DoD) NEW INSPECTIONS PROGRAM
accountability for vehicles provided to the Afghan
This quarter, SIGAR launched an inspections program
National Security Forces (ANSF), an evaluation of the
to assess the quality of construction of U.S.-funded
Afghan First Initiative, and one that examined a U.S.
infrastructure projects and determine if the facili-
implementing agency’s use of private security con-
ties are operated and maintained for the purposes
tractors. At the request of the agency, SIGAR is not
intended. SIGAR initiated four inspections of projects
publicly releasing the third audit report. The vehicle
contracted by the U.S. Army Corps of Engineers for
accountability audit resulted in projected savings
ANSF facilities in Kunduz, Nangarhar, and Wardak.
of $5 million a year. The audit of the Afghan First
Initiative found that since January 2008, the United
INVESTIGATIONS
States has awarded about $654 million in contracts to
During this reporting period, SIGAR’s participation in
Afghan companies, but that it is not possible to deter-
criminal investigations resulted in two sentences and
mine the degree to which this initiative is achieving
three guilty pleas. One of the sentenced was ordered
its intended objectives of creating employment and
to pay restitution of $115,000 and serve a 15-month
supporting economic growth.
sentence for soliciting bribes; the other was sen-
SIGAR also began work on two new audits, bring-
tenced to 22 months in prison. This quarter, SIGAR
ing the number of ongoing audits to 10. These audits
opened 20 new cases. It also received 37 Hotline com-
are assessing contracts and programs funded by
plaints; since 2009, the SIGAR Hotline has received
DoD, the U.S. Agency for International Development
716 complaints. SIGAR also worked with Afghan law
(USAID), and the Department of State (DoS)—the
iv
EXECUTIVE SUMMARY
enforcement entities to develop a case against Afghan in currency. This case grew out of a project SIGAR
contractors, who were convicted this quarter for started in November 2010 to assess and evaluate the
stealing fuel from a forward operating base. use of postal money orders to convert and transfer
currency from Afghanistan to the United States.
Former U.S. Army National Guard Captain Sentencing is scheduled for March 26, 2012.
Sentenced and Ordered To Pay $115,000 in
Restitution DoD Employee Pleads Guilty to Bribery
On December 12, 2011, John Mihalczo, a captain in the On December 21, 2011, Desi Wade, the former chief
Army National Guard, was sentenced to 15 months of Fire and Emergency Services with U.S. Forces -
in prison for receiving bribes from military contrac- Afghanistan, pled guilty to one count of 18 U.S.C. 201,
tors in return for the award of DoD contracts during bribery of a public official, in U.S. District Court for
his deployment to Bagram Airfield. In addition to his the Northern District of Georgia. In August 2011,
prison term, he was ordered to pay DoD $115,000 in Wade was arrested after accepting a $100,000 payoff
restitution. Mihalczo is the ninth defendant sentenced from a government contractor during a sting opera-
in this investigation, which SIGAR supported. Nine tion in an investigation supported by SIGAR.
more defendants remain to be sentenced.
Afghan Contractors Sentenced for Theft of Fuel
Australian Citizen Sentenced to 22 Months for Theft On November 29, 2011, an Afghan court convicted
and Bribery five Afghan citizens for their involvement in a scheme
On December 20, 2011, Neil Patrick Campbell, an to steal fuel from a forward operating base in Kunar
Australian citizen who formerly worked as a senior province. Two were sentenced to five years and one
construction manager for a nongovernmental orga- month in prison for stealing fuel. These convictions
nization in Afghanistan, was sentenced by the U.S. resulted from a SIGAR investigation.
District Court in the District of Columbia to 22
months of incarceration and 24 months of super- $887,835 Recovered for Afghan Company
vised release. Campbell had pled guilty to charges During this reporting period, SIGAR and the Afghan
of bribery on October 4, 2011. In July 2010, an Attorney General’s Office investigated a complaint
International Contract Corruption Task Force investi- that a U.S. company contracted by the Air Force
gation led by the USAID Office of Inspector General, Center for Engineering and the Environment to build
with assistance from SIGAR and the Federal Bureau an ANA barracks had not paid its Afghan subcontrac-
of Investigation, had developed information that tor. SIGAR helped negotiate an amicable settlement,
Campbell had solicited a bribe from a subcontractor and the Afghan subcontractor received the $887,835 it
to inappropriately award contracts funded by USAID. was owed.
U.S. Army Sergeant Pleads Guilty To Stealing More Suspensions and Debarments
than $200,000 This quarter, SIGAR made 40 referrals for suspen-
On December 13, 2011, Philip Stephen Wooten, a U.S. sion and debarment of individuals and companies
Army sergeant, pled guilty to conspiracy to commit for fraud, other illegal activity, or poor performance.
fraud and theft of approximately $210,000 in govern- SIGAR’s aggressive suspension and debarment
ment property. Wooten agreed to forfeit all assets program focuses on making all contractors—
derived from his illegal activities—jewelry with an U.S., Afghan, and third-country nationals—more
appraised value of $88,500, real property, and $62,419 accountable.
v
TABLE OF CONTENTS
SECTION 1
F RECO
O N
S S AFGHANISTAN OVERVIEW
T
R
R
A U 4 2001–2005: The Bonn Process
E C
Y OIT 10 2006–2011: The Reconstruction Surge
0 N
1 • 1 • 19 2011–2014: The Transition
2 1
001–2 0
SECTION 2
SIGAR OVERSIGHT
33 Audits
42 INVESTIGATIONS
47 Sigar Budget
47 SIGAR Staff
SECTION 3
RECONSTRUCTION UPDATE
51 Overview
55 Status Of Funds
71 Security
101 Governance
125 Economic and Social Development
TABLE OF CONTENTS
SECTION 4
OTHER AGENCY OVERSIGHT
149 Completed Oversight Activities
154 Ongoing Oversight Activities
SECTION 5
APPENDICES
166 Appendix A: Cross-Reference of Report to
Statutory Requirements
170 Appendix B: U.S. Government
Appropriated Funds
172 Appendix C: SIGAR Audits
174 Appendix D: SIGAR Investigations and Hotline
175 Appendix E: Abbreviations and Acronyms