“Institutional Amnesia”: Pentagon Agency Skewered for Waste and Fraud

The Inspector General for a government task force in Afghanistan says the agency squandered millions of taxpayer dollars on unnecessary costs

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Story Transcript

THOMAS HEDGES, TRNN: On Wednesday, Pentagon spending was in the hot seat as the Senate Armed Services Subcommittee grilled the Afghanistan reconstruction task force on waste and potential fraud.

The special inspector general for the agency told senators that small division created in 2006 called the Task Force on Business and Stability Operations, or TFBSO, had provided little to no data on its major operations.

JOHN F. SOPKO: The Department of Defense has been telling us because of legislation Congress passed they have no authority, no money, and no bodies to explain this important program to an inspector general who is required by statute to investigate the allegations of fraud, waste, and abuse.

HEDGES: At the forefront of the scandal is a $43 million compressed natural gas facility that was supposed to, quote, demonstrate the commercial viability of CNG for automobiles in Afghanistan as part of a broader effort to take advantage of Afghanistan’s domestic natural gas reserves, and reduce the country’s reliance on energy imports.

WILLIAM HARTUNG: The Task Force on Business and Stability Operations was supposed to generate economic development in Afghanistan, training people in business practices, making certain kinds of investments to generate new businesses.

HEDGES: William Hartung, a leading expert on Pentagon spending, says that the agency under fire has always had a shaky, if not flat-out fraudulent, track record.

HARTUNG: Some of the things they did, they imported nine goats from Italy to start a cashmere industry. I’m not an expert in cashmere, but that sounds like kind of a ridiculous investment, to me. They did a lot with the extractive industries, oil, gas, minerals. And that was the most corrupt department of the Afghan government. In fact, one of their officials disappeared with $35 million of Afghan government money. No other U.S. government agency was even willing to work with that department, and yet this business task force was working hand in glove with them on various projects.

HEDGES: Other failed projects include a $3 million storage facility for Afghan farmers to store their produce, as well as a $46 million Silicon Valley-like startup in Herat that, quote, did nothing.

HARTUNG: It’s quite possible it’s the biggest example of wasteful procedures in Afghanistan. It’s not the biggest amount of money involved, but it’s, you know, the mere way in which this task force operated was scandalous in its own right.

HEDGES: The U.S. has spent more than $110 billion on reconstructing Afghanistan since 2002, which is more than the U.S. spent reconstructing Europe after World War II through the Marshall Plan. But much of that spending seems either unnecessary or unaccounted for, like $486 million on planes that couldn’t be flown, or $150 million on sprawling villas and security.

HARTUNG: Basically, they don’t know how much they’re spending, who they’re spending it on, how many private contractors do they employ, how many businesses are they giving money to. So it’s almost impossible for them to protect themselves from waste, fraud, and abuse.

HEDGES: Another more largely institutional flaw is that the Pentagon has never been audited before, even though a law passed in 1990 by Congress requires all government agencies to go through one. That means that since 1996, $8.5 trillion in defense spending has simply gone unaccounted for.

HARTUNG: And they always can use an excuse like, well, we’re at war. But of course, when you’re at war, there’s even less excuse for wasting money if you’re supposed to be supporting troops in the field. So the larger scandal, beyond this $43 million gas station, is just that the Pentagon is getting away with unbelievably shoddy practices in terms of how it handles taxpayer money.

HEDGES: For the Real News, Thomas Hedges, Washington.

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