[House Hearing, 113 Congress] [From the U.S. Government Publishing Office] AFGHANISTAN: IDENTIFYING AND ADDRESSING WASTEFUL U.S. GOVERNMENT SPENDING ======================================================================= HEARING before the SUBCOMMITTEE ON NATIONAL SECURITY of the COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED THIRTEENTH CONGRESS SECOND SESSION __________ APRIL 3, 2014 __________ Serial No. 113-108 __________ Printed for the use of the Committee on Oversight and Government Reform [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Available via the World Wide Web: http://www.fdsys.gov http://www.house.gov/reform __________ U.S. GOVERNMENT PRINTING OFFICE 88-070 PDF WASHINGTON : 2014 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800 DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM DARRELL E. ISSA, California, Chairman JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland, MICHAEL R. TURNER, Ohio Ranking Minority Member JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of JIM JORDAN, Ohio Columbia JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts TIM WALBERG, Michigan WM. LACY CLAY, Missouri JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts JUSTIN AMASH, Michigan JIM COOPER, Tennessee PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT, TREY GOWDY, South Carolina Pennsylvania BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois DOC HASTINGS, Washington ROBIN L. KELLY, Illinois CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois ROB WOODALL, Georgia TONY CARDENAS, California THOMAS MASSIE, Kentucky STEVEN A. HORSFORD, Nevada DOUG COLLINS, Georgia MICHELLE LUJAN GRISHAM, New Mexico MARK MEADOWS, North Carolina Vacancy KERRY L. BENTIVOLIO, Michigan RON DeSANTIS, Florida Lawrence J. Brady, Staff Director John D. Cuaderes, Deputy Staff Director Stephen Castor, General Counsel Linda A. Good, Chief Clerk David Rapallo, Minority Staff Director Subcommittee on National Security JASON CHAFFETZ, Utah, Chairman JOHN L. MICA, Florida JOHN F. TIERNEY, Massachusetts, JOHN J. DUNCAN, JR., Tennessee Ranking Minority Member JUSTIN AMASH, Michigan CAROLYN B. MALONEY, New York PAUL A. GOSAR, Arizona STEPHEN F. LYNCH, Massachusetts TREY GOWDY, South Carolina JACKIE SPEIER, California CYNTHIA M. LUMMIS, Wyoming PETER WELCH, Vermont ROB WOODALL, Georgia MICHELLE LUJAN GRISHAM, New Mexico KERRY L. BENTIVOLIO, Michigan C O N T E N T S ---------- Page Hearing held on April 3, 2014.................................... 1 WITNESSES Mr. Donald L. Sampler, Assistant to the Administrator, Office of Afghanistan and Pakistan Affairs, U.S. Agency for International Development Oral Statement............................................... 6 Written Statement............................................ 9 Mr. John F. Sopko, Inspector General, Special Inspector General for Afghanistan Reconstruction Oral Statement............................................... 18 Written Statement............................................ 21 APPENDIX USAID Stage 2 Risk Assessment Reports on 7 Afghan Ministries submitted by Rep. Jason Chaffetz............................... 90 AFGHANISTAN: IDENTIFYING AND ADDRESSING WASTEFUL U.S. GOVERNMENT SPENDING ---------- Thursday, April 3, 2014, House of Representatives, Subcommittee on National Security, Committee on Oversight and Government Reform, Washington, D.C. The subcommittee met, pursuant to notice, at 10:00 a.m. in room 2247, Rayburn House Office Building, the Honorable Jason Chaffetz [chairman of the subcommittee], presiding. Present: Representatives Chaffetz, Duncan, Mica, Woodall, Tierney, Maloney, Welch, Kelly. Staff Present: Andy Rezendes, Majority Counsel; Melissa Beaumont, Majority Staff Assistant; Will Boyington, Majority Deputy Press Secretary; Adam P. Fromm, Majority Director of Member Services and Committee Operations; Linda Good, Majority Chief Clerk; Tyler Grimm, Majority Senior Professional Staff Member; Mitchell S. Kominsky, Majority Counsel; Laura L. Rush, Majority Deputy Chief Clerk; Sang H. Yi, Majority Professional Staff Member; Jaron Bourke, Minority Director of Administration; Devon Hill, Minority Research Assistant; Jennifer Hoffman, Minority Communications Director; Peter Kenny, Minority Counsel; Chris Knauer, Minority Senior Investigator; Julia Krieger, Minority New Media Press Secretary. Mr. Chaffetz. This committee will come to order. I would like to begin this hearing by stating the Oversight and Government Reform Committee's mission statement. We exist to secure two fundamental principles. First, Americans have the right to know the money Washington takes from them is well spent; and second, Americans deserve an efficient and effective government that works for them. Our duty on the Oversight and Government Reform Committee is to protect these rights. Our solemn responsibility is to hold government accountable to taxpayers because taxpayers have a right to know what they get from their government. We will work tirelessly in partnership with citizen watchdogs to deliver the facts to the American people and bring genuine reform to the Federal bureaucracy. This is the mission of the Oversight and Government Reform Committee. I want to welcome you all here. This is a very important topic. We have entitled this hearing Afghanistan: Identifying and Addressing Wasteful U.S. Government Spending. I would also like to welcome Ranking Member Tierney of Massachusetts and members of the audience and thank you for being here today. I know Mr. Tierney in particular has a passion for these issues and I appreciate working with him and his staff on this topic. Today's proceedings continue the subcommittee's series of hearings designed to assess the U.S. reconstruction efforts in Afghanistan. Since 2002, the United States has directed over $102 billion toward relief and reconstruction efforts in Afghanistan. Let me say that again: $102 billion in the reconstruction effort. This does not count the war effort. This is the reconstruction effort. Afghanistan is by far the leading recipient of U.S. economic and military assistance. Meanwhile, the president intends to withdraw U.S. troops from Afghanistan, known as one of the most corrupt countries on the face of the planet. On the good side, I have recently read that there were no deaths in Afghanistan for a one-month period, and for that, we are very grateful. I think it is also appropriate that at this time we pause for a moment and thank the men and women who serve in our military, who serve in USAID and other agencies who have put their lives on the line overseas. And certainly our hearts are stricken and our prayers are with those at Fort Hood as they deal with a domestic issue here. I can't even imagine what the families are going through, but I know our hearts and prayers are with them. God bless them and Godspeed. That said, while the level of U.S. reconstruction funding has escalated every year since 2007, the areas in Afghanistan that U.S. oversight agencies are able to access in order to conduct oversight continue to shrink to small enclaves. As a result, we need to carefully examine whether the United States Government will be spending billions of dollars on this effort effectively, equipped with sufficient oversight mechanisms. Of the overall reconstruction effort, USAID has appropriated roughly $17 billion. Today I would like to hear from USAID how, $17 billion later, the agency's efforts have improved the environment in Afghanistan. I have visited Afghanistan several times and have serious concerns about the region. For example, USAID will likely spend $345 million on the Kandahar-Helmand Power Program, designed to improve the Kajaki Dam. The program was supposed to be completed in 2005, yet a decade later and hundreds of millions of dollars dedicated to the program, USAID's work on the enhanced Kajaki Dam is still plagued by sufficient problems. Even now there appear to be more challenges than there are results. This represents the epitome of the issue we face in Afghanistan reconstruction efforts and should not be acceptable to the Administration. Given these challenges, this subcommittee has been, in bipartisan fashion, working diligently to monitor the progress, challenges and successes of our reconstruction efforts. Specifically, the subcommittee has been looking at how the government is overseeing billions of dollars being given to Afghanistan. We have examined many cases where lack of transparency and accountability exist for U.S. taxpayer money. The subcommittee has investigated petroleum oil lubricants provided to the Afghan National Army by the United States, totaling nearly half a billion dollars. Meanwhile, the Defense Department failed to properly maintain receipts for these transactions. We have also investigated Dawood Hospital, where the United States provided more than $150 million in medical supplies in just an 18-month period. Unfortunately, theft, mismanagement and human suffering became rampant at Dawood. Oversight efforts are more important than ever as the United States has promised to give even more direct assistance to Afghanistan. Based on this, I would like to hear how the U.S. Government maintains visibility and control over taxpayer funding once the money goes to Afghanistan and when it is distributed through the Afghan government. This all leads to a greater need for improved accountability. The United States and other international donors have funded about 92 percent of Afghanistan's total public expenditures. Of that 92 percent, the United States has contributed roughly 62 percent. This means that the United States has made a substantial investment in Afghanistan and we need to make sure the investment has proper oversight and that this is a wise expenditures of taxpayer dollars. I commend USAID for working diligently on the Afghan reconstruction efforts and SIGAR, the Special Inspector General for Afghan Reconstruction, for working to increase accountability for that funding. I very much appreciate both of your hard work on this issue. We all recognize it is a very difficult problem. Today I would like to discuss some of SIGAR's recommendations to mitigate risks to U.S. funding and learn the status of whether those suggestions are being implemented and best practices are being implemented to enhance overall oversight in Afghanistan. Additionally, I also have some concerns about the current relationship between USAID and the Special Inspector General's office. It has been brought to my attention there are serious policy disagreements concerning the examination of documents and release of documents, prompted by FOIA requests, which is a subject matter over which the committee holds jurisdiction. To the extent of the law, taking account of certain sensitivities on a case by case basis, I support the need for maximum transparency and accountability required in order to provide oversight. I particularly want to thank Mr. Sampler and Mr. Sopko for being here today. These great patriots who care deeply about their Nation work hard in their respective fields. I have great personal respect for each of these gentlemen, and I appreciate them joining us here today. Now I would like to recognize the ranking member, the gentleman from Massachusetts, Mr. Tierney. Mr. Tierney. Thank you, Mr. Chairman. I want to thank both our witnesses for appearing here today. This is our third subcommittee hearing in this Congress on foreign assistance in Afghanistan. I want to applaud the chairman for his persistence and diligence of attention to the topic. This subcommittee has a long history of focusing on waste, fraud and abuse of taxpayer funds in Iraq and Afghanistan, including my tenure as chairman of the subcommittee when we had the investigation into the host nation trucking contract, finding the vast protection networks supported by insurgents and warlords, investigations into fuel contracts and then investigations started and continued with respect to the food contracts and much more. Today's hearing will focus on oversight and management of the U.S. Agency for International Development's projects and programs in Afghanistan. At a full committee hearing on direct assistance nearly one year, I asked Special Inspector General, Mr. Sopko, who is here today, about a set of documents that he indicated raise significant concerns about the ability of the Afghan government to manage and account for funds that the United States planned to provide directly to it. The documents at issue were USAID assessments of 13 Afghan ministries, public financial management systems performed by outside auditors. I asked whether Inspector General Sopko would be willing to provide these assessments to the committee and he told us that he had been instructed by USAID not to provide them to Congress due to their markings as sensitive but unclassified. Inspector General Sopko testified that when he asked for an explanation for why these documents were marked sensitive but unclassified, he was told by USAID officials that the materials were ``mainly embarrassing.'' Mr. Chairman, based on my concerns at that time, I asked for the committee to follow up on this matter. And consequently, we supported your request for the agency's inspector general to provide us with a set of unredacted documents. Shortly after that, USAID in coordination with the State Department did provide the 13 external assessments of Afghan ministries to the committee. In providing those documents in a redacted form, USAID indicated in an April 30th, 2013 letter that the ``public disclosure of personally identifiable information could threaten the lives and livelihoods of people named in those asesssments or their associates.'' It also cited foreign government information such as ``information that could be misused to exploit, currently or otherwise, Federal abilities identified in these assessments.'' USAID also claimed that the release of the information in totality would have a damaging effect on the United States government relations with the Afghan government. USAID also offered to provide the committee staff with the opportunity to review full, complete, unredacted copies of the 13 ministerial assessments at USAID's offices, as the agency had previously provided to the committee for other types of assessments. This January, SIGAR released a report reviewing USAID's external as well as USAID's internal assessments of the Aghan ministries' capacity to manage U.S. funds planned for direct assistance. This report found that none of the 16 Afghan ministries examined by outside auditors were able to manage U.S. funds and that the auditors issued nearly 700 recommendations for corrective action. According to the report, USAID then conducted its own risk reviews of 7 of the 13 Afghan ministries and made 333 recommendations on how to mitigate the risks to USAID funds. Yet the report goes on to state that USAID approved direct assistance at all seven Afghan ministries, while only requiring 24 of the 333 recommendations to be implemented. While the report acknowledges that it did not examine the effectiveness of the USAID safe guides that are already in place, nor did it determine whether any fraud had occurred, I look forward to a thorough discussion today of these decisions, given the identified risks. Just this week the committee received copies of the internal risk reviews of the seven Afghan ministries, documents critical to the USAID's decision to approve direct assistance. As a preliminary matter, although SIGAR appears to have redacted some information in these reviews, I have asked the chairman that before these documents are made part of any public record, a proper review by this committee can be conducted to ensure that we are not endangering the lives of anyone. And since SIGAR offered USAID the opportunity to comment on proposed redactions or other agency documents, it only seems fair to do so in this case as well. Those documents lay bare the substantial, if not seemingly insurmountable risks in providing U.S. funds directly to the Afghan government. For instance, USAID's internal risk review of the Afghan Ministry of Public Health found that the risk of diverting government resources for unintended purposes exists. Waste, fraud and abuse may go undetected as critical, the worst designation based on the likelihood and impact of the risks. Also listed as critical was manipulation of accounting information after approval and posting to hide illegal actions. It appears that USAID's risk reviews and decision memos approving direct assistance also include a number of risk mitigation recommendations. I look forward to learning more about not only the true extent of the risks to taxpayer funding, but whether and how USAID can maintain current policy and manage to oversee these programs. I think that is the crux, how are we going to manage and oversee these programs, what is the risk to taxpayer funding, and whether or not the risks outweigh any good that we perceive might come from those programs. Thank you. Mr. Chaffetz. I thank the gentleman. By mutual agreement, we are going to hold back inserting into the record some of those documents that the gentleman from Massachusetts mentioned. It is our intention of the committee to make those public and to insert those into the record. But we want to give ample time for parties on both sides of the aisle to review those documents and make sure that there is no sensitive information that would be released that would put somebody's individual life in jeopardy. Once we have completed that, again, it is the intention of the subcommittee to release those documents. Now I would like to recognize the gentleman from Florida, Mr. Mica. Mr. Mica. Thank you again, Mr. Chairman, thank you to our ranking member, for holding this important oversight subcommittee meeting. This is one of the most important responsibilities of Congress, is, in fact, going after waste, fraud and abuse. I am going to ask, and I just want to give a heads-up to Mr. Sampler and maybe Mr. Sopko, during the last hearing I had requested, and I guess it was March 13th, if you were aware of any Afghanis who had been prosecuted for missing AID funds. To my knowledge, I have not received it. My key staffer has not received it. Maybe we have gotten information with that list. But I would like that list. If you have people working with you today, I want you to find the list, get us that information. I am interested in who we have gone after and who we have prosecuted or those folks that need to be held accountable, are held accountable. I think that is an important thing that when I go back to the district, when they find that our Afghani partners are ripping us off, and this appears to be a bottomless pit for the taxpayers, and pouring money into waste, fraud and abuse on various Afghan projects, and those who have abused their responsibility, and again are not held accountable, that is the wrong thing. So I will be asking that and I want that information. Hopefully some of that information that we could submit in the record here today. And again, I thank you, Mr. Chairman, Mr. Chaffetz, for holding this hearing. We need to continue to do that and hold people accountable to go after the waste, fraud and abuse in this important area. Thank you. Mr. Chaffetz. I thank the gentleman. I remind members that they have seven days to submit opening statements for the record. I would now like to recognize our panel. Mr. Donald Sampler is the assistant to the Administrator of the Office of Afghan and Pakistan Affairs at the U.S. Agency for International Development. Mr. John Sopko is the Special Inspector General for Afghan Reconstruction. Pursuant to committee rules, all witnesses are sworn before they testify. If you would both please rise and raise your right hand. Do you solemnly swear or affirm that the testimony you are about to give will be the truth, the whole truth and nothing but the truth? [Witnesses respond in the affirmative.] Mr. Chaffetz. Thank you. Let the record reflect that both the witnesses answered in the affirmative. Again, we appreciate both of you gentlemen being here. Your full statements will be inserted into the record. But we will allow you time now to give your verbal statements. We will be fairly generous on the time. Mr. Sampler, we will start with you. WITNESS STATEMENTS STATEMENT OF DONALD L. SAMPLER Mr. Sampler. Thank you, Chairman Chaffetz, Ranking Member Tierney, members of the subcommittee. I appreciate the opportunity to testify before you today and to talk about the work of USAID in Afghanistan, and specifically the oversight measures we implement to safeguard taxpayer funds while we support U.S. national security interests in that country. I am honored to represent the 183 American citizens as well as third country and Afghan employees of USAID in Afghanistan. They implement our programs there under often very difficult and personally trying conditions, apart from their families and their homes. On Saturday, the people of Afghanistan will go to the polls to elect a new president. A successful election will be a landmark event in Afghanistan. It will be the first transition from one democratically-elected president to another. The men and women serving the U.S. government in Afghanistan, including those of USAID, are working harder than ever and often at significant personal risk, to support their Afghan colleagues in ensuring the elections are inclusive, fair and transparent. I appeared before this subcommittee just under a month ago to discuss USAID's foreign assistance program in the context of the troop withdrawal. So I will keep my opening remarks very short and focus on the subcommittee's primary topic today: oversight and accountability for U.S. taxpayer funds. USAID takes our responsibility in this regard very seriously. We work with our auditors to design very rigorous oversight and accountability measures for our programs in Afghanistan. Afghanistan is constantly changing and is constantly challenging. We have learned and implemented hard lessons from the 12 years that we have spent in that country. I welcome the opportunity to talk about that during today's hearing. In that regard, though, I feel like I need to correct the record with respect to a USA Today story that came out overnight. The story reports that USAID deliberately withheld audits from Congress showing that the Afghan government has failed to monitor the potential risks of contracting with suppliers who may have ties with terrorist organizations. That report is false. The story also reports that correspondence from the Special Inspector General's general counsel suggests that we covered up information showing some Afghan ministries lack controls for cash and can't track what they own. The allegation that we covered up information coming to Congress is false. And I find it somewhat offensive. As you know, Mr. Chairman, USAID provided to you and your staff copies of these assessments almost a year ago. This was after the request was made at a hearing. And as per the agreement, with these types of documents we offered you and your staff full access to unredacted versions of the document while providing copies in hard copy that had been lightly redacted. As you noted, these redactions blacked out the names of people whose lives could be put at risk by their exposure. Unfortunately, the USA Today story has now made public security vulnerabilities about one of the ministries, in fact, that we were concerned about. It is a ministry we chose not to work with ultimately. I have also been very direct in addressing publicly the fact that USAID does face challenges in programming direct assistance with Afghan ministries. This is hard, this is challenging for us. It has been and it will be. But we also employ rigorous risk reduction and risk mitigation measures. Again, I look froward to a chance to have a discussion about how those work. I have addressed this in writing prior to the hearings, in December 2013, before both House and Senate committees. And those statements are available for the record. In conclusion, my written testimony includes details of the remarkable progress made in Afghanistan. I will say here only that the United Nations has identified Afghanistan as among the countries participating in the human development index of having made the most progress in the past decade of any country in the world on that index. Mr. Chairman, USAID is always mindful of the enormous sacrifices made by Americans, by our allies and by our Afghan partners, to build and secure Afghanistan. We fully understand the need for constant vigilance, particularly during this delicate period of transition. Since my first visit to Afghanistan, and as recently as my visit there last week, I have served with the military in Afghanistan, the Department of State, the United Nations, a private international NGO and now USAID. And I personally lost friends and colleagues to this war. So I know first-hand the risk that we are talking about. And some of you or some in the audience may remember that it was a year ago this weekend when Foreign Service Officer Ann Smedinghoff was killed delivering USAID-funded textbooks to a school in Zabul Province. So we do understand first-hand the consequences and challenges we face. Problems of limited capacity in the government of Afghanistan, corruption, will certainly exist in Afghanistan for as long as we are engaged there. There are also problems in many of the other places where USAID operates. And they will continue to challenge us. However, these problems are not something that should cause us to walk way from the national security interests we are pursuing. They should be however, cause, for a careful and deliberate redoubling of our efforts to prevent the fraud, waste and abuse. Thank you. [Prepared statement of Mr. Sampler follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Chaffetz. Thank you. Mr. Sopko? STATEMENT OF JOHN F. SOPKO Mr. Sopko. Chairman Chaffetz, Ranking Member Tierney, and other members of the subcommittee, it is a pleasure to be here today to discuss lessons learned from the work of SIGAR and the other oversight agencies as we enter this critical year for reconstruction of Afghanistan. At the end of this year, America's longest war will come to an end. Most troops will leave by December. Perhaps only a few thousand will remain for training and quick response actions. The reconstruction mission, however, is far from over. Afghanistan will require significant international assistance for years to come. With over $20 billion of the over $100 billion appropriated by Congress still in the pipeline and billions more promised over the next decade, we must learn from the growing body of oversight work and apply our very best practices to protect the taxpayer. As you know, I could not attend our last hearing because I was in Afghanistan, where there are high hopes for a successful election, bolstered by a stronger than expected showing of the Afghan military over the last several months. Yet this optimism is tempered with depressing evidence of persistent corruption, continued wasteful spending and increased violence. I was particularly troubled with the increased violence that placed significant restraints on my ability to travel, as well as the revelation that the European Union and many of our allies no longer trust the UNDP Law and Order Trust Fund's internal controls which were designed to protect billions of dollars provided to the Afghan policemen's salaries. Added to this, I learned of industrial parks developed by USAID without affordable and sustainable power, a poorly planned and executed soybean project, an Afghan governor alleging that USAID's Kandahar food zone contractor is wasting money, a proposed new bridging solution to the current bridging solution for electricity in Kandahar, based on yet another hydroelectric plant and solar power generation, and the Afghan financial sector's recent downgrading that may eventually result in the international banking community blacklisting it in June. As in all my trips to Afghanistan, I spent as much time as I could away from the embassy and outside of Kabul. Despite the best efforts of General Dunford and Ambassador Cunningham, for security reasons I could not visit various sites, including a proposed USAID power plant in Sheberghan, a TFBSO pipeline project connecting that plant to Mazar Sharif, and the actual customs facility at Torkham Gate, which is not only our troops' main lifeline for supplies but also the most important customs post for Afghanistan. By this fall, I learned no American official will be able to inspect that important facility. Now, not only are the security bubbles collapsing, but they now look more like Swiss cheese, with numerous no-travel holes due to security threats from insurgents. The extent of insurgent control is so substantial they even tax the electricity coming from the Kajaki Dam, USAID's signature power project in Afghanistan. What I saw and heard further reinforced the lessons learned discussed in my written statement and ironically, in a 1988 USAID lessons learned report. Namely, the need to consider sustainability, risk mitigation, oversight and sound planning before embarking upon a massive reconstruction project in a country as poor as Afghanistan. Let me say, I share the committee's concerns expressed at your last hearing with USAID's current plans to manage and oversee more money with fewer people in a far more dangerous environment. Recent history warns us that too much money spent too quickly with too few safeguards is a recipe for reconstruction disaster. Now, as many of you know, in my prior life as a prosecutor, I gave many closing arguments to juries where I reminded them not to forget their prior experience and common sense before entering the jury room for deliberation. That is probably why I remained skeptical when USAID claimed at the last hearing that no U.S. funds go to the Afghan ministries when it gives direct assistance. How can this be so? Call it what you like, direct assistance in Afghanistan is risky, especially after considering USAID's own assessment of the ministries, USAID's waiver of its own internal policies and USAID's decision to not mandate 92 percent of its critical protections before providing the funds. It should be noted that USAID admitted to SIGAR auditors that Afghanistan is the only country in the world where it waived its own strict internal policies before providing such direct assistance. Now, this is in stark contrast to actions taken by our allies in Afghanistan. In discussions I had recently in Kabul with representatives of other donor countries, I learned that they were withhold direct assistance or redirecting it to off- budget programs because of concerns with internal controls and the Afghan government's commitment to the Tokyo Accords. Let me state very clearly, SIGAR does not oppose direct assistance. However, as we testified before this committee almost exactly a year ago, SIGAR believes that direct assistance must be conditioned on the Afghan government taking serious steps to reduce corruption and ensure vigorous oversight of these funds. It should be conditioned on the Afghan ministries not only meeting measurable outcomes but also providing unfettered and timely access to their books and records as well as the project offices, sites and staff. More than lip service must be given to accountability, oversight and conditionality by the U.S. Government and its allies. A system of sticks and carrots in administering direct assistance can only be effective if it is credible in the eyes of the Afghan government. We and the other donors must speak publicly and we must speak with one voice to convince the new president of Afghanistan that we mean business. We cannot say we are going to impose conditions on only a small fraction of our assistance while we continue to provide unfettered billions elsewhere. In summation, if the Afghan government fails to live up to its commitments, then we need to have the courage to say no. Anything less will fail to protect our costly investment and the hard-earned successes of this, our Country's longest war. Thank you very much, and I look forward to your questions. [Prepared statement of Mr. Sopko follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Mr. Chaffetz. Thank you. I will now recognize myself for five minutes. Mr. Sampler, on November 2nd, 2012, USAID Administrator Shaw approved a memo which waived USAID's requirements for Afghanistan to meet USAID's internal risk measures before it could be eligible for direct assistance. Why the need to waive the requirements? Mr. Sampler. Thank you for the question, Mr. Chairman, and allowing me to clear this up. Our internal mechanisms are indeed rigorous. I appreciate the recognition of that fact. The regulations we are referring to here are ADS 220. It was written as a single unified package of regulations. It consists of two stages. Stage one is a rapid assessment that is done and includes a number of very high level indicators. Mr. Chaffetz. Well, I know what it is and our time is short. I want to know why it was waived. Mr. Sampler. Because the government-to-government engagement in Afghanistan predated the creation of ADS 220. And ADS 220 was created in part based on lessons learned in Afghanistan. Mr. Chaffetz. So let me ask you, well, it seems like the oversight requirements got less, not more rigorous. So Mr. Sopko, what do you see in this situation? Mr. Sopko. We are concerned that they did waive those internal controls. But we thought they were very good internal controls. We actually are concerned for two reasons. Number one, as you said, Mr. Chairman, rather than them being more stringent, we are now less stringent. Number two, this was a tremendous opportunity that we wasted, or I should say AID did. This was a tremendous opportunity to really follow through with conditionality before we started the direct assistance. We could have required them to comply with those internal controls. We could have required the Afghans to comply with those 333 recommendations by AID to fix internal problems. It didn't. Mr. Chaffetz. Your office, Mr. Sopko, issued a report on this assessment. There were 333 recommended risk mitigation measures. USAID only required the implementation of 24 of those. And when I asked Mr. Sampler at our last hearing about this, and Mr. Sampler, your response was that the finding was ``true but inaccurate'' and I gave you an opportunity to respond. I would like to give Mr. Sopko an opportunity to provide his perspective on this. Mr. Sopko. I believe our statement is not only true, it was accurate. I think Mr. Sampler seems to think that because the funds are what he calls projectized, USAID only needs to address specific problems that it deems to be directly related to each project. USAID has got this wrong. The types of problems uncovered in the risk assessments will likely affect every project. Let me describe for you some of the findings from USAID's risk assessments. And I know you have some of them here. If you look at the one for the Ministry of Mines, funds being used for unintended purposes, that risk is being ignored. Paying higher prices for commodities and services to finance kickbacks and bribes, that is being ignored. Collusion to skirt liquid assets, such as cash, that is being ignored in the Ministry of Mines and Petroleum. The Ministry of Public Health, of which none of the recommendations were implemented by Mr. Sampler and USAID, the first one is diverting government resources for unintended purposes. That was ignored. Waste, fraud and system abuse may go undetected, that was ignored. Losing vital data and information, that was ignored. Manipulation of accounting information after approval and posting to hide illegal actions, that was ignored. Misappropriation of cash arising from payment of salaries in cash, that was ignored. Mr. Chairman, I could go through ministry after ministry. These also were the documents as far as I know were not provided to this committee in any form until we provided it to them this week. These we believe were very significant. The problem is, the reforms they have set up, the plan for reforms they have set up deal with external issues. They don't really deal with these basic, inherent problems in each of the ministries. I am happy to walk through what we have found in the Ministry of Public Health when the time allows. Mr. Chaffetz. Mr. Sampler? Mr. Sampler. Thank you. Where to begin. Nothing was ignored. Again, as the Special Inspector General has pointed out, these were our risk assessments that were done by our mission at our request and for our use. Mr. Chaffetz. This idea that you only had to implement 24 of the 333, is that accurate or inaccurate? Mr. Sampler. Over time, they will all be addressed. But to begin a project, we only addressed the ones that were necessary to safeguard taxpayer resources on that project. Mr. Chaffetz. So there were more than 300 that you didn't think were important here? The problem is, you give a waiver on the front side of it, then we go back and do an assessment, you ignore more than 300 of them. The Special Inspector General comes in to look at it, an independent third party having a look at it and says, this is a huge fundamental problem. We have billions of dollars going out the door. And you say, well, we will address it down the road. Meanwhile, we have spent over $100 billion there and don't see the results we should probably get for that money. Mr. Sampler. And Congressman, we haven't spent $100 billion going out the door on these programs. Mr. Chaffetz. We have between what USAID and the Department of Defense has done, yes, we have, and other agencies as well. Mr. Sampler. The programs that the Special Inspector General has cited are very specific programs with very specific ministries. And not a dollar flows to any of those accounts until safeguards are in place that are adequate to that. Mr. Chaffetz. Let's just take that statement. Mr. Sopko, what is your assessment of that? Mr. Sopko. Unfortunately I have to disagree. And I know my time is short. But I would like to talk about how the money flows to the Ministry of Public Health. Mr. Chaffetz. Please. In agreement here with Mr. Tierney, go ahead and let's walk through this and then I will turn the time to Mr. Tierney. Mr. Sopko. I think we have given you smaller charts, and I apologize, that is kind of small, it is hard to read. Comparing the different. Mr. Chaffetz. The graphics on those maybe that are watching on television, which one are you going to go to first? Mr. Sopko. I am looking at the PCH payment chart. Mr. Chaffetz. That is what is up on the screen. Mr. Sopko. The one to the right. That is the smaller one. We couldn't afford the big chart. [Laughter.] Mr. Sopko. That shows how the money flows. And part of it is the explanation given that no money actually goes to the Afghan ministries. Well, this is how the money flows. This is based upon our audits of the Ministry of Public Health and our criminal investigation that is ongoing right now. So let's not quibble over whether funds don't go or do go to the government. The important question is the risk here. As you can see from the chart, the Ministry of Public Health, up at the top, GCMU requests money from USAID. The Ministry of Public Health and the GCMU unit, that is their internal control unit that they are very proud of, submits a payment request to USAID every 45 days. Now, the problem is, there is no support for those advances. MOPH and GCMU does not provide any supporting documentation to USAID when it requests the advance in money. And again, just looking at that chart, we are talking about big sums of money. From 2008 to 2014, that is $236 million. And they are planning to spend $435 million. That is the estimate from 2014 and beyond. Then we go to MOPH and GCMU invoices, and what we found in our criminal investigation could well be bogus. Although the NGOs submit invoices and other supporting documentation to MOPH and GCMU, Ernst and Young, the accounting firm that AID hired, said that the MOPH does not have a strong monitoring capability. Ernst and Young also found that the Ministry of Public Health's internal audits are a critical area that needs improvement. Now, to show how bad things are, USAID has implemented a process for reconciling expenditures, not only in MOPH, but all of the ministries are giving direct assistance. The results of that internal investigation, that internal review, that they are holding you out, as protecting the U.S. taxpayer dollar. They uncovered a total of $77 in unexplained funds. Now, I don't know if Afghanistan is the most honest country in the world. But I know we do our own financial audits on U.S. firms working in there. And we have identified millions of dollars in funds that are suspicious. So I just throw that out in consideration for how adequate those reviews are done. The money then flows from USAID to a U.S. disbursing office, which sends funds to Afghanistan Central Bank. There we are, an Afghan ministry, that is the Afghan Central Bank. The account is jointly held by the Ministry of Finance, another Afghan ministry, and the Ministry of Public Health. And then the Afghan government pays the NGO. The Afghan Ministry of Finance uses the special account to pay the NGOs based on information provided by the Afghan Ministry of Public Health. Now, admittedly, USAID has the ability to monitor that. That is great. The problem is you are dealing with ministries that their own internal auditors said manipulate documents. So on the one hand, the lower part of the chart, that is the money going from AID, the U.S. disbursement office, to the Afghanistan bank, that is probably pretty safe. Our problem is the upper part of the chart and what eventually happens with the money once we give it to the ministries. Now, we have been doing a criminal investigation that we can't really discuss in great detail. But we have witnesses who have worked in their internal unit who indicate that fraudulent invoices are being used for closed health facilities, fraud is centered around rental vehicles that aren't being used properly, that GCMU officials are soliciting bribes from NGOs and they are purchasing goods from Iran with U.S. funding. The witnesses we are talking to have first-hand knowledge. They were inside the ministry. And a key witness who has met with my head of investigations, a career FBI man I met almost 30 years ago, and my deputy IG, who had 38 years of experience, all believe the allegations are credible. But what they show are weak points if we don't really fix the problem. Thank you. Mr. Chaffetz. Thank you. I now recognize the gentleman from Massachusetts, Mr. Tierney. Mr. Tierney. Thank you. Mr. Sampler, I want to start back at the very basic part of this. Can you articulate for us here, the committee, the United States national security interest in the amount of aid going to Afghanistan? Mr. Sampler. Certainly. I can speak specifically to USAID's amount of aid going to Afghanistan. Mr. Tierney. I want you to speak to the national interest. What is our national security interest in that aid going to Afghanistan? Mr. Sampler. We have invested 12 years in blood and treasure to make sure that there will never be another attack on U.S. soil from Afghanistan. Rather than perpetually police a foreign state, it is in our best interest to make sure that Afghanistan has both the wherewithal, the political will and the capacity to police itself. Mr. Tierney. Back that up. So one rationale, you are saying, is we have invested 12 years, and that is one of our national security interests to protect with that investment? Mr. Sampler. Correct. Mr. Tierney. And then you went on to say, what was the rest of that? Mr. Sampler. Rather than continue to have to police the territory of Afghanistan, it would be better if we stood up a government that could do that itself. Mr. Tierney. So what would we be policing the territory of Afghanistan for? Mr. Sampler. We won't. Mr. Tierney. But if we didn't do this, what would be being forced to police them for? Mr. Sampler. Congressman, Afghanistan is a place where it is incredibly difficult to detect and prevent organizations from setting up training camps. Mr. Tierney. Would that be similar to Yemen and Somalia and Sudan, Djibouti? Mr. Sampler. I have been to Yemen. The others I have not. The difference in Yemen, in my experience, is that the population of Yemen is spread out so much that no, there are not the same numbers of ungoverned spaces, desolate places where people just don't go. And you can get away with setting up base camps and training camps. But certainly in principle, it would be similar to those locations. Mr. Tierney. All right, I think that is the first base question we have to ask here, is why do we continue spending money. What is the proportion of total aid from foreign countries to Afghanistan, what proportion is being spent by the United States versus other nations or other international organizations? Mr. Sampler. Congressman, I don't know the answer to that. Mr. Tierney. Arguably there are some others who have a higher national security interest in Afghanistan than the United States. I would be interested to know whether or not they are paying their proportional share relative to everybody's risk and their own risk. Mr. Sampler. And I can say, we are certainly the largest donor. But I don't know the exact proportion. Mr. Tierney. Mr. Sopko, if we were to wake up one morning and USAID would decide to implement all of the recommendations that their own assessments have put forth and the Inspector General's office put forth, what additional resources would the USAID offices need? Mr. Sopko. We haven't done an assessment on what type of resources. Mr. Tierney. Would they need more? Mr. Sopko. They probably would need more. But a lot of this is requiring the Afghan government to implement these changes. So we think that is money well spent. Mr. Tierney. Do you think the Afghan government in its current situation is capable and willing to implement those changes? Mr. Sopko. Those are two questions. The willingness and the capability. We are hopeful the new government will. Mr. Tierney. What makes you hopeful of that? Do you know the characters or individuals that are involved there? What gives you hope? Mr. Sopko. My hope is always eternal. This is a chance for an election, a new government, we are hoping for the best. I can't comment on any individual running for office. I don't think it would be proper for me. But we are very hopeful. It gives us an opportunity to do that conditionality. It gives us that opportunity which we don't have, I believe, with the current government. Mr. Tierney. And now the capability? Mr. Sopko. The capability is something we are going to have to work on. But the important thing is, we have training missions, AID has done some good work. As a matter of fact, we highlighted one of the ministries as being done the right way. So obviously they know how to do it. They came up with a plan. We are not certain it has been implemented, but at least they came up with a plan with DABS. So they know how to do it. And we can do it. What we are saying is they should have done it for the rest of the ministries before we gave them money. Mr. Tierney. Mr. Sampler, is there any going back and putting the types of conditionalities that Mr. Sopko speaks to on the issuance of aid? Mr. Sampler. Congressman, there are two levels of conditionality. One is a political level that USAID doesn't have. That is a State Department decision about conditionality of the assistance to Afghanistan. But I would like to set the record straight with respect to the chart. Mr. Tierney. I will let you do that in a second. But I want to go back to the full answer of my question if I could. So you have your own internal process used here, the conditionalities that you would generally put on something you say were waived on that basis. Mr. Sampler. They were not waived. Mr. Tierney. They were not waived. All right. So the second set, you have your political considerations. Mr. Sampler. Yes. Mr. Tierney. And then you have your own processes that set aside political considerations you would normally put on there? Mr. Sampler. Yes. Mr. Tierney. So what about those? Mr. Sampler. Congressman, we do have a set of safeguards. When I say they weren't waived, ADS 220 was waived, but despite the waiver, we have implemented safeguards that replicate both the letter and intent of what ADS 220 would require. Mr. Tierney. Why didn't you just implement ADS 220? Mr. Sampler. ADS 220 has two components. The first component we couldn't implement. We had already begun the engagement and we had moved past that chronologically. Mr. Tierney. I'm sorry, let's break it down step by step. What is it that you have moved past that you couldn't go back and do better? Mr. Sampler. An initial comprehensive assessment of things like the status of democracy and governance, the status of human rights. It is, I call it, well, we will run over the world perspective of is this a government where we wish to do GDG asesssments. Mr. Tierney. Why couldn't you stop at whatever point you were at and do that? Mr. Sampler. That was a policy decision that was made in 2001 when we went to Afghanistan. We were already there. This is a decision of do we go there or do we go to Yemen or Somalia or to some other deserving country to do this work. We made the decision that we are in Afghanistan and we made the decision that we have to proceed. Mr. Tierney. Okay, so you are saying, we have, are you saying political actors have? Mr. Sampler. The U.S. Government has made the decision that we will be there. And USAID is part of that engagement in Afghanistan. The second stage is where we do have rigorous mechanisms to provide checks and balances. I wouldn't call it conditionality, I would just say, we won't do it until these things are met. Mr. Tierney. That would be pretty conditional. Mr. Sampler. And that is a very focused approach to individual projects. The risks that we identified when we did the initial assessments to these ministries are all credible and very important risks, I don't deny that. Mr. Tierney. So why not condition every dime that goes out on the satisfaction of all those points? Mr. Sampler. We prioritize the risks that directly affect the projects we are trying to accomplish. If we waited to have perfect ministries before we began working on things like health care and education, we would not be working on health care and education. Mr. Tierney. Because you don't think the government would respond to do those things, it was not important enough for them? Mr. Sampler. Congressman, in 2002 when I was in Afghanistan---- Mr. Tierney. Well, it is not 2002 any more, right? It is 2014. So today, you think putting conditionalities on that that the Afghan government isn't interested enough in having those things done with our assistance that it would rabidly comply with whatever conditionalities we are putting? Mr. Sampler. They are and will rapidly comply with the things they are capable of doing and the things that they have the will to do. So absolutely, they will. But the capacity isn't there. These ministries are being built from the ground up. Mr. Tierney. So it is your assessment, I guess, that despite the fact that they don't have the capacity and they may not have the will to implement all the things that are necessary to be risk-free, you think the risks are worth it? You have made that assessment? Somebody in your entity has made the assessment that risk is worth just doing these things without all assurances in place? Mr. Sampler. Congressman, I don't want to accept the way that is stated. Mr. Tierney. Well, restate it if you want. But you know what I am getting at. Mr. Sampler. I do. And I will accept that we recognize there are risks that we are not mitigating at this point in time. Those are risks that must be mitigated before these ministries are fully functioning. But in the interim, we are projectizing our assistance, on very specific things. And the risk associated with that project will and must be mitigated before we move any money to that ministry. Mr. Tierney. But you are not totally mitigating, you understand that, and you know that some money is going out the door? Mr. Sampler. I don't know that you can totally mitigate a risk in Afghanistan. We are mitigating the risks specific to a project to a level that satisfies us that we can control the funds going to that project. Mr. Tierney. Mr. Chairman, I know I am over my time and I thank you for that. I would like to go back hopefully to some sort of question as to how much is that risk, how much is going out there, and make an assessment on that. Mr. Chaffetz. I concur, thank you very much. I now recognize the gentleman from Florida, Mr. Mica. Mr. Mica. Thank you, Mr. Chairman. Mr. Inspector General, as I recall when you came before us before, you testified that we had approximately, I believe the amount was $20 billion that, in Afghanistan money that was backed up, that they had neither the ability nor capacity to spend or steal, I think it was, was that an accurate statement? Mr. Sopko. I think you are correct. It is about, actually it is more than $20 billion right now, that has been appropriated, authorized but not yet spent. Mr. Mica. And I think you had said that, then I asked you again, was that correct. In fact, later on I called your office to make sure I wasn't misquoting you. Because I was just stunned by that. We spent over $100 billion, the chairman said, $100 billion in 10 years, is that about right, Mr. Sampler, in U.S. money in AID? I am not talking about military aid, I am talking about economic aid. Mr. Sampler. That is not correct, Congressman. Mr. Mica. How much is it? Mr. Sampler. USAID's number is $14.2 billion. Mr. Mica. In how many years? Mr. Sampler. Since 2001. Mr. Sopko. Mr. Mica, if I could just correct. That was the amount of money for reconstruction. Now, reconstruction isn't just USAID. The bulk of that money is actually DOD. Mr. Mica. Okay, but we are approaching $100 billion in reconstruction. An that is not military money, is that right? Mr. Sopko. We draw the distinction between reconstruction and money actually for the war fighting. So reconstruction can also be paying the salaries, we are paying the salaries of all the soldiers. Mr. Mica. So since there is not much infrastructure and not much in the way of sophisticated communities that we are spending an awful lot of money in a country whose annual budget, the federal budget is at $5.7 billion, in that range? Anybody know? Mr. Sopko. They collect revenue of about $2.2 billion, that is how much they collect. They spend a lot more. Mr. Mica. All right. Well, they have great models in spending more than they take in. But my point is again, first of all, I would like to cut off all economic aid, reconstruction aid, AID aid, any reconstruction money to Afghanistan, period. I would also like to know, Mr. Sampler, what have we done, schools? I was over there and saw some schools, I saw some roads, I saw some bridges, infrastructure. Is that some of what we are doing in infrastructure and aid? Mr. Sampler. Yes, sir, it is. Mr. Mica. Yes. Well, I can tell you, I come from communities that could use all of that. In fact, I may have an amendment in Appropriations that we open that $20 billion that is backed up to my communities. I might get a few votes on that. Because we have those same needs in our communities. And again, when I have someone charged with oversight who tell us they have neither the capacity to spend or steal, that gives me great heartburn. I think of people getting up early in the morning, going to work and trying to feed their family, pay their mortgage and just get by week to week. And we are sending that money over there, that drives me bananas. I was there, I saw the schools. A school pointed out, I went through the school. And it was the community joke. Everyone was telling us, the troops were telling us, the locals were telling us, we paid five times what we should pay for construction of that particular facility. We are getting ripped off. My question earlier was, have the Afghans held any accountable of either violating Afghan law or has the U.S. gone after anybody and held them accountable? Do we have that list yet? Mr. Sopko. Congressman, I don't have the list. We can provide that list from what we have done. Mr. Mica. That was promised before. That was March 13th. And we haven't gotten that I know of. Mr. Sopko. I didn't testify then, sir. Mr. Mica. Okay, well, whoever came. But I have been promised a list, we don't have the list. I want to know, do you know if many have been prosecuted within Afghanistan? Mr. Sopko. I don't know how to define many. We brought a number of investigations, we prosecuted individuals, Afghan individuals. The difficulty is, we have to have a nexus to the United States, since we can't extradite. But we have turned some information over to the Afghan Ministry of Justice and they have actually prosecuted some individuals, not many. They are the small fry, the prosecutors and police readily admit that they can't get us the big fry, the big players. So they have done some of that work. Mr. Mica. Mr. Sampler wanted to respond. Mr. Sampler. If I could just add, we received actually just yesterday a press release from our inspector general that an Afghan, Abdul Kulial Kaderi, was arrested and charged with embezzlement by the Afghan National Security Police for attempting to embezzle $539,000 from a partner. Now, I admit this with some reservation. Mr. Mica. I was told that the theft goes from the lowest official to the president's office, the president's family and others. And it is widely known that people are ripping off the United States through our various aid and assistance programs. People have to be held accountable. I think we have to stop pouring money into this black hole. I yield back. Thank you. Mr. Chaffetz. I now recognize the gentlewoman from Illinois, Ms. Kelly, for five minutes. Ms. Kelly. Thank you, Mr. Chair. Mr. Sampler, I would like to draw your attention to a February 11th, 2014 Associated Press article that discusses the effects of the planned U.S. troop drawdown on the continuing U.S. presence in Afghanistan. While the article raises some concerns over the drawdown, it does not indicate how much USAID programs and projects will be affected. The article quotes your thoughts on this transition, and according to the article you say as international military forces leave, Afghanistan will more closely begin resembling a normal operating environment for USAID. Can you explain what you mean by a normal operating environment? Mr. Sampler. Yes, ma'am. The USAID operating environments around the world range from highly permissive to highly non- permissive environments. I have some experience with Colombia where in one country there are places where we can work in open, soft-skinned vehicles and in other places where we can't go without armed guards. So it will resemble a normal operating environment, however, in that development decisions will be based on development principles and priorities and less focused on stabilization priorities. That is the challenge in Afghanistan, has been balancing good, sound development principles with the requirement to provide stabilization support at the same time. That is how it becomes a bit more normal for us. Ms. Kelly. Okay. And I know USAID operates in many challenging environments, such as Iraq and Pakistan without direct military security support, is that correct? Mr. Sampler. Yes, ma'am, it is. Ms. Kelly. And in these high risk environments, how do you ensure the safety of your staff and implementing partner staff? Mr. Sampler. It is different in each situation. We have the tremendous support of the regional security officers that the State Department provides at the embassy. And they assist us, in fact they guide us on where we can and can't go. But we do a lot of our work in support of local communities and then we are able to rely on the local community to assist us in dissuading malign actors from interrupting the work. That is one of the fundamentals of development. But it is different in each case. In parts of Pakistan we don't send U.S. citizens there because it is not safe. We again rely on third party monitors to observe the work there. In other parts of Pakistan, we do engage with U.S. direct hire citizens. Ms. Kelly. The article also stated that U.S. officials have predicted that as a result of the troops drawing down by the end of 2014, USAID workers, investigators and auditors will only be able to travel to just 21 percent of Afghanistan, down from nearly 50 percent of the country in 2009. Is it reasonable to assume that as the U.S. military completely withdraws by the end of the year, as is now being considered, that areas accessible to U.S. personnel, including your workers, will be reduced even further? This raises serious concern about continued oversight and monitoring and evaluation. So how are you going to ensure continued oversight of the projects and programs that you have in the field? Can you give us a few examples? Mr. Sampler. Yes, ma'am. The military drawdown actually began for us about 18 months ago. And the military transition occurred last June. So we are living now in a situation where the U.S. military doesn't provide direct logistical support to get us out to any of these sites. In terms of the prognosis going forward, it is hard for me to predict. I actually hope that five years from now, when we visit Afghanistan, it will be a much more permissive place and that the new government will have taken the steps necessary to make the government one that is respected in all 34 provinces. But whether that is true or not, in each of our programs, we work with the control or contract officer, who runs that program, to find ways for them to get the information they need to decide, does this program continue or does it not. That is the first point of responsibility. And that individual, a young American man or woman, has to decided, do I have enough information coming in. Part of my job is to create systems that will allow them to collect that information. They may collect some of it from the local community, they may collect some of it from other partners working in the area to say, we drive across that bridge every day. We may still collect some of it from the international military, where they have flights that overfly or they have experience with our projects, they can report back to us as well. But the question of sufficiency is one that the contract or the agreement officer has to make. When she or he feels like they don't have enough information, they raise their hand and say, we have to stop. Ms. Kelly. Are the Afghan nationals who travel to the more challenging locations, what about their safety and security? Mr. Sampler. There are a couple of different mechanisms for moving Afghans around to support these programs. Some do it as contractors. And they make a decision, it is their corporate entity, whether or not they wish to go to a particular place. Some do it as U.S. government foreign service nationals, they are employees of our embassy. And the decision is being made at this point in time that when an Afghan working for our embassy travels, she or he has the same security requirements as I have. Ms. Kelly. I am out of time. Thank you, I yield back. Mr. Chaffetz. I thank the gentlewoman. We now recognize the gentleman from Tennessee, Mr. Duncan, for five minutes. Mr. Duncan. Thank you, Mr. Chairman, and thank you for your efforts to stay on top of all this. This whole thing is so ridiculous that it is just very, very sad. I have read so many examples of just horrendous waste over the years in Afghanistan, and a $34 million military headquarters built that stands empty because nobody is going to use it, totally wasted. NBC News just reported about an Afghan prison built with $11 million, an American-funded prison that is falling down before it opens. Five days ago, Farah Stockman, a reporter for the Boston Globe, who served over there with the Massachusetts National Guard, wrote this. She said ``Corruption in Afghanistan is now considered as great a threat to the country as the Taliban.'' Now, this is a report from five days ago. ``But as the U.S. military is starting to acknowledge, it was baked into the system from the start. We toppled the Taliban in 2001, not with massive American firepower, but with proxy warriors, local warlords who received cash and weapons in return.'' And she goes on and says, ``But as the years went by, those militia leaders we worked with kept expecting more money, more favors, more sweetheart deals. Even Karzai himself is reported to have accepted suitcases full of cash. Is it any wonder that the country has turned into a place where loyalty is sold to the highest bidder?'' I am wondering, I heard one time about, in one of our hearings a few years ago, about plane loads of cash being flown over to Afghanistan. Mr. Sopko, are we still dealing a lot in cash over in Afghanistan, to your knowledge? Mr. Sopko. To my knowledge, there is still some cash being used. That causes some concerns. As a matter of fact, the ministerial asesssments that we have alluded to in the past have highlighted problems of cash in the individual ministries. We have tried to get away from cash in some of our programs, but it still does exist and it is a problem. Mr. Duncan. This $100 billion figure that Mr. Mica referred to, I remember seeing that in an article I think last July. And of course, we have spent another billion or two or more since then. So we keep adding to it. But I saw in an interview you gave a few days ago, there was some coverage in the Washington Post, to talk about a very large trust fund being used to pay the salaries of the Afghan national police. And you say in this interview that we just uncovered some allegations about the Afghan national police and there are certain funds or monies taken out of the police salaries every month that we don't know where the money went, nor do our allies. How large is this trust fund and how much are we spending on the Afghan national police and are we still not able to account for is it a small percentage, large percentage of it? What is the story on that? Mr. Sopko. Just so you understand, the trust fund reference there is the Law and Order Trust Fund for Afghanistan. It is managed by the United Nations on behalf of the donors. We contribute a significant amount of money of that, but so does the European Union and all of our other allies. They actually contribute more. We basically pay all the salaries of all the police and all the soldiers and all their support staff. So we are talking about billions of dollars. What I was alluding to is information we uncovered that the European Union was so concerned about the internal controls based upon audits that they had done that they were concerned that the money, particularly, was going to ghost workers. So we are following up on that. We brought that information to the attention of DOD on my last trip back in July, or I should say November. They weren't aware of it, but they followed up and they have been very aggressive. They are concerned, too. In the course of my latest trip there and meetings with the European Union and other of our allies, a number of other issues arose, including a 2.5 percent, so this is 2.5 percent of all the salaries, money was taken out to pay for something, we don't even know exactly what it is. But they can't find that amount of money. So we are talking about millions of dollars if you multiply that by the number of police. And there is a 5 percent fund taken out, a 5 percent deduction taken out going toward retirements. Apparently the UN can't find where that money ended up. Then there is also the question of approximately 1,000 generals who are not supposed to be paid who are getting salaries. So a number of issues, ghost workers, the 2.5 percent, the 5 percent pension fund and the unauthorized generals, to cite Senator Dirksen, after a while, we are talking real money. And the problem is the internal controls are so bad that there may be some serious money lost. To not only us, but also our allies. Mr. Duncan. My time is up, but let me just say this. There was a column in the Politico a few weeks ago by Roger Simon in which he says the Administration has a plan to keep anywhere from 10,000 to 16,000 troops in Afghanistan until at least 2024 at a cost of mega, mega billions. I think that is very, very sad. I yield back. Thank you, Mr. Chairman. Mr. Chaffetz. I thank the gentleman, and I appreciate your concern about this issue and our persistence on it. I now recognize the gentlewoman from New York, Mrs. Maloney, for five minutes. Mrs. Maloney. I thank the chairman and the ranking member for calling this important hearing on tracking taxpayer money. But on my visit to Afghanistan, right outside of the headquarters there was a memorial to 9/11 and all those that died. That is the district I am privileged to represent. So we are there to combat terrorism. And I want to mention something very positive that USAID has done. I strongly believe the best way to fight terrorism is an educated population, particularly a female population. And when you went there, no women were going to school. Six hundred schools have been built, teachers have been trained. And of the 8 million students now in USAID-supported schools, a third of them are women. I would say that that is a very positive contribution to combating terrorism. And I want to thank you for that. But corruption should not be tolerated. One of these reports I was reading, the transparency international corruption perception index ranked Afghanistan as the most corrupt country in the world alongside North Korea and Somalia. That is certainly not good company and a terrible, terrible tab or brand on them. So I would like to first ask Mr. Sopko and Mr. Sampler, do you agree with this assessment? Is it the most corrupt country in the world, along with North Korea and Somalia? Mr. Sampler. Ma'am, thank you for your comments about USAID and our role supporting women. I will update your information. Mrs. Maloney. And education in general. Mr. Sampler. And education in general. One of the things that I find encouraging in Afghanistan is that now, after 12 years of supporting education, we are seeing the students who have been educated in Afghanistan moving to vocational training and universities. We now have about 40,000 women attending either vocational training or universities, which represents about 20 percent of the total. So it shows that with persistence and with strategic patience, these things do actually make progress. Mrs. Maloney. I would just like to say, I think that is wonderful. I have constituents who had relatives who were shot and killed because they went to school, women. And I really do think there is a correlation between an educated population, particularly women, in countries where women are educated, the degree of terrorism is not there, because the population combats it with their government. So I think that is an important aspect. In fact, I would like to see, Mr. Chairman, a hearing on the correlation between an educated population and educated women, where women are treated like people and allowed to be educated, and the ability of that country to combat terrorism. I think it is an important aspect that hasn't been looked at. But that is not the purpose of this hearing. So I would like to hear your assessment of the corruption and what you have put in place to combat it. Mr. Sampler. Yes, ma'am. To the comparison with North Korea and Somalia, I can't comment. There is no question that Afghanistan is the most corrupt place that I have ever worked. The challenge for USAID is helping Afghanistan build institutions that can fight corruption and can withstand corruption when the political will is there, so that they will be able, on their own, to eliminate corruption within their government. The challenge for me and for USAID specifically is making sure that our programs are able to operate in Afghanistan without being subject to the corruption that is endemic in the government and in society. Mrs. Maloney. I would like to add to that. I share the concerns of my friends on the other side of the aisle that we need to combat it, and that no American aid should be used in any corrupt area. But the Administration and the international community pledged roughly 50 percent of a development aid to Afghanistan as direct assistance. And it conditioned this assistance on progress toward combating corruption. So I would like, Mr. Sampler, for you to build on one of the comments that you made at the last subcommittee hearing on this topic. You said that USAID released $30 million out of $75 million available to the World Bank's Afghan Reconstruction Trust because the Afghan government had achieved certain benchmarks. Can you tell us what reform goals were put in place and what reform goals were met? And certainly, Mr. Sopko, if you could help clarify that, too. But first, Mr. Sampler, then Mr. Sopko. Mr. Sampler. Yes, ma'am. At the senior officials' meeting in Kabul last year, I announced that there would be $75 million that would be an incentive fund to encourage the Afghans to make some politically difficult decisions with respect to progress within the construct of their government institutions. There were five general categories for those funds. And it has been our determination last month that the Afghans had met the goals we set in two of those particular categories. So of five different funds, of about $15 million each, and we have awarded them $30 million of the incentive fund. This is important to the government, because the funds are sent in such a way that they can be used not specifically for a general, these are not projectized funds in the same way. They are overseen and they are controlled, but it is an area, it is a type of funding that the minister of finance is very attracted to. The first and most specific and most time sensitive of those upgrades and improvements in Afghan government had to do with the elections. There were some very difficult decisions with respect to the independent election commission and the appointment of commissioners. There were some very difficult challenges with respect to who will oversee the election complaints commission and who gets to adjudicate disputes after the elections happen on Saturday. We wanted those decisions to be made in a particular way, in a way that was transparent. And they were. The governor of Afghanistan, after some wrangling, made those decisions. And I believe the incentive fund was part of that. Separate from that, at the other end of the spectrum, with respect to the Ministry of Mines and Petroleum, we have asked that a minerals law or a mining law be passed in Afghanistan that would keep Afghanistan from falling down the mineral wealth trap some other countries have had, or problem that some other countries have had. That has not yet been done. But the mining law has been proposed two or three times by parliament, President Karzai at several different points said that he would do this by fiat. It hasn't been done. So those funds have been taken off the table. Our greatest hope with respect to the challenges and the changes that you are alluding to with respect to corruption and building institutions in the government of Afghanistan have to do with the election. In some period of weeks, there will be a new president of Afghanistan. We hope and expect that he will appoint an attorney general who will end the endemic corruption in Afghanistan or at least begin to end the endemic corruption. And we hope that he will appoint ministers and deputy ministers who share that vision. Mrs. Maloney. My time is expired. Thank you for the goals you have reached. Mr. Chaffetz. Thank you. We will now recognize the gentleman from Vermont, Mr. Welch, for five minutes. Mr. Welch. Thank you very much. I again want to thank our chairman and ranking member for pursuing this together for several years now. The turning point for me on this came when I was at a meeting in Kabul with attorneys that had been sent over to Afghanistan to help train Afghanis how to detect and stop corruption. I asked them, how is the program going. And they told me they had to end it. The reason they ended it is because in training people how to detect corruption, they used the information to do corruption. And that is literally the frustration that we are having. Now, Congress cooked up this policy in Afghanistan and supported the nation-building. And you guys are trying to deal with it, AID, I so admire the work you do, and we have made a very tough job, you do it. In a way you are like our soldiers, we give you the mission and you do your best to do it. Your office has been fantastic, just giving us the lay of the land and what the facts are. But I think a lot of us are just wondering whether there is any confidence that we can have, on behalf of being custodians of the taxpayer money, that it won't go south. Just a couple of things I will ask about. The bridge, I guess, Mr. Sopko, you were talking about $300 million or so that has been spent on the bridge. What is the status of that? Mr. Sopko. Are you talking about the bridging solution? Mr. Welch. Yes. Mr. Sopko. Well, the bottom line is because we are not getting electric power out of Kajaki like we want, we of course created these diesel generators at Kandahar. And I was told by DABS, which is the electric utility company, as well as USAID officials, as well as the general who is paying the checks for the fuel, that they are going to stop soon. And we don't have a real solution for it. So they came up with a new solution, which I am encouraged by, except it is talking about another hydroelectric plant and it is talking about solar power as the answer to the first bridging solution, which they can't afford any more. Mr. Welch. So we will have gone from spending hundreds of millions of dollars at the Kajaki Dam that failed to hundreds of millions of dollars in this bridging project that looks like it is going to fail to yet another new way to spend more money without any confidence that it will work. Mr. Sopko. The problem here with the Kajaki Dam is that we are still working on it, and starting back in the 1950s. I think building the pyramids in Giza was faster. There is no likelihood, and with all due respect to my colleague, that their new solution is going to end up with the third turbine finally in. And even if the third turbine is put in, that still doesn't guarantee that you are going to have enough power in Kandahar, which is significant. Mr. Welch. I get it. This is amazing. I think what I am hearing from my colleagues is whether we just have to call the question at a certain point. It is realistic for the Congress to appropriate money, and then ask AID or the military related reconstruction, to do the impossible when the structural foundations of Afghanistan are based on the benefits of corruption. And let me just ask you a question. Because whatever oversight we have, I don't have confidence that it can work. They will find ways around it. Would it make sense for us as a condition of releasing any money to require Afghanistan to put its own money into the project, 10 percent, 15 percent, or 20 or 25 percent? On the theory that the only way we can have any confidence that there will be an incentive on the part of the Afghan government to not steal the money is to require them to have some skin in the game themselves? I will start with you, Mr. Sampler. Mr. Sampler. Congressman, thank you. With respect to energy, which is one of the areas that actually is the least corrupt and is actually making the most progress, DABS, the public utility, is working to install the turbine in Kajaki. Mr. Samadi told me on my trip last week that what he intends to do with the diesel program in Kandahar is to do what he says he has done in 12 other provinces where they use standalone diesel generators, and that is to set up a cost system where it will be paid for. The community that gets the electricity will pay for the electricity. He has some track record for being able to do that. He went from receiving subsidies of over $60 million a year to this year receiving no subsidies. And in fact, he has collected from the users of electricity enough money to now buy electricity from other countries rather than generate it, because they don't yet have the generation. Your notion of having Afghan skin in the game is exactly the right thing to do. And I think what Mr. Samadi is proposing is to even take it a step lower, so that local communities have skin in the game. It will be their money that pays for these diesel generators and pays for the power that they actually consume. So yes. Mr. Sopko. Can I respond? If it is okay, Mr. Chairman. The problem with that is, I was down in Kandahar and got a briefing from the DABS officials down there. And there is no way, they told us, they can pay for the diesel. So there is a reality, you have to get out of the embassy and get down there. They are saying, we can't charge the fees because the law is set so low that we cant collect the fees. Their other concern is that the power will go out. They are saying they will be able to do another hydroelectric plant and come up with solar power generation within the year. Because within the year, we stop subsidizing them. And that is the whole problem with, and I think it is an excellent point, Mr. Welch, and we are happy to introduce the briefing slides from them explaining why they need this solution because they can't afford the diesel fuel. The whole problem with putting skin in the game, Mr. Welch, is they only have $2 billion they collect. The game is billions more. We overbuilt for Afghanistan. Mr. Welch. We overbuilt and they don't have a tax system. Mr. Sopko. And they don't have the sustainability, the capability to sustain what we gave them. In my statement itself, USAID even admits that there are going to structures, things that we are just going to have to abandon because the Afghans can't afford to maintain them. So that is the problem from poor planning up front and putting too much money too fast in a country that is too poor to handle it. Mr. Welch. Thank you. Thank you, Mr. Chairman. Mr. Chaffetz. I thank the gentleman. Mr. Sampler, do you care to expand on that? That is the concern, we are out there spending billions of dollars for things they can't maintain. Mr. Sampler. It is easy at this point in the process to armchair quarterback decisions that were made eight or ten years ago. So I don't accept the notion that this was poor planning. It was wartime contracting and war planning. Mr. Chaffetz. But wait a second. We have spent $102 billion, and now we are going to spend more money then ever, we are accelerating the spending as we are drawing down the troops. Mr. Sampler. Congressman, I don't know that I accept the notion that we are accelerating spending. USAID is not accelerating our spending. Mr. Chaffetz. The overall spending, which includes USAID, Mr. Sopko, what is the number we have that you said has been appropriated? Mr. Sopko. It is $22 billion, although Congress did cut some of the money, the end result is the amount of money sitting there that has been authorized and appropriated but not spent has actually increased. Mr. Sampler. Your point, though, your question, Congressman, is what are we doing to make sure that the Afghans can maintain the work that has been done. The environment from 2003 or 2004 or 2005 up through 2008, 2009 and even last year has been one focused on stabilization. Mr. Chaffetz. Well, we are talking about moving forward here. You say it is easy to be that quarterback on the armchair. But you have to look back, you have to understand what we have done and the mistakes that we have made. One of the key concerns, one of my biggest concerns is that we have U.S. money flowing to the very terrorists that wish to do us harm. I believe that everybody in USAID and the U.S. government wants to do good and help the basic Afghan person who is probably a good and decent person. But the reality is the terrorists know how to get this money from us. And they have been getting that money. That was highlighted in the report that my colleague here, Mr. Tierney, Mr. Flake, others had done through the host nation trucking. It was a great report. But we have to learn from that. You take issue with this USA Today article that came out. You said it was false. Mr. Sopko is quoted in there as saying USAID kept this information from Congress and the American people. Mr. Sampler. That is correct, Congressman. We have not withheld any information from your committee or any other committee in Congress. Mr. Chaffetz. Mr. Sopko, do you care to comment on this USA Today article? Mr. Sopko. I would start with, Mr. Chairman, did you get copies of the stage two assessments a year ago when you wanted all this information on reconstruction, or did you have to wait until I provided it to you? Mr. Chaffetz. We had to have a hearing and we had to insist that we get the information. We had to instruct and hope and push the Inspector General to be able to get that information. There is a difference in camera review and giving this information to Congress. As is pointed out in this article, a KPMG audit of the Ministry of Rural Rehabilitation and Development says ``A mechanism has not been developed for screening of beneficiaries for the possible links with terrorist organizations before signing contracts or providing funds to the suppliers.'' This is an independent KPMG assessment. But the next sentence in this article, a copy of USAID's version of the same document shows that mentions to links of terrorism were blocked out. Now, that is just projecting against something that is embarrassing. It is not protecting some individual from life and limb. And that is the concern. Mr. Sopko? Mr. Sopko. Mr. Chairman, can I add a little bit, and I am happy to put a chronology in, the reason we were concerned is, back in May, if you recall, you originally asked for these documents you had problems getting. We had problems getting them. And I don't want to spend too much time on chronology, we originally were told, when I first found out about these documents, these assessments, that they were an embarrassment and we couldn't get them. We had to give them, AID had to give them to the Afghan ministry, and this is what I was told by AID officials in Kabul, so they could review them, excise any of the embarrassing material. Nobody raised any concern about people getting hurt. It was embarrassment. Eventually you asked the AID IG to get them. Eventually he couldn't. We were contacted back in April of 2013 by the USAID Inspector General's general counsel, the USAID general counsel, a State Department legal advisor, requesting that SIGAR not provide copies of the ministerial assessments to any Congressional committee or member of Congress. SIGAR's general counsel informed USAID and SIGAR that we had not received the Congressional request but we would, and we intended, to provide them. On May 1st, SIGAR was told that USAID provided redacted copies of the ministerial assessments to the House Oversight Committee. OGR staff then requested the unredacted versions from us. At that time, we received from USAID copies of the redacted copies that you got, and that is how we were able to do the comparison when later we got a FOIA. Now, what is of great concern to me is, not only were these things about terrorism excised. Now remember, the allegation was, this was to protect individuals. We were going to delete individuals' names all the time. But also what was deleted was the fact that some of the ministries lacked controls on management of cash, I don't know how that implicates any security issue. And that they could not keep track of fixed assets and were using pirated copies of Microsoft software. And we are happy to give you, and it is listed in the letter my general counsel sent, about the other things that were redacted. The thing is, these are the redacted copies that we got from the AID general counsel's office. These were the documents they gave to you. And I would add, my understanding, and only you can answer, Mr. Chairman, is did you get these? Which are far more damning and far more important to your work. The further question I would ask is, did the appropriating committees get these? Did the other authorizing committees that are interested? Remember, the language requiring these assessments was put into multiple appropriations bills because the appropriators and the authorizers were concerned about the loss of direct assistance money in Afghanistan. Now, we were told during our audit by USAID headquarters officials they had never even seen the stage two assessments. So we doubt seriously that they gave them to the Hill. Mr. Chaffetz. And this is the concern, that we are having to pry this information out, that it is not being forthright in giving us that information. Mr. Sopko, you mentioned that you believe that you have come across some funds that are actually being used or going to Iran. Can you expand on that? Mr. Sopko. We have an ongoing criminal investigation, as I told you, on the Ministry of Public Health. And specifically, the criminality is focused in the system that AID praises as the great protection of our assets. Allegations we have received, and I can't really go into too much detail, is that money is being diverted to go to purchase items from Iran. Mr. Chaffetz. Do you have a sense, can we get a sense of the dollar amount that we are talking about here? Mr. Sopko. At this point I couldn't tell you. I would have to talk to my investigators. Mr. Chaffetz. Have you come across any other allegations that money is being diverted to Iran? I am specifically concerned about the PLO, the petroleum oil lubricants. Mr. Sopko. We haven't gotten any new information on that, but as I told you the last time I testified, we have not, and by we I mean the U.S. government, has not instituted the real corrections they need to ensure that we are not buying fuel from Iran. And that is because of expense. So yes, we could be buying Iranian fuel to support our troops in Afghanistan. Mr. Chaffetz. I am well over the time. I am going to turn the time to my colleague, the ranking member, Mr. Tierney. Mr. Tierney. Thank you. First of all, let me just start by saying, Mr. Chairman, I assume that we should tell Mr. Sampler now that as we review the stage two assessments and other assessments with regard to the redactions on that or whatever, does the chairman agree that Mr. Sampler has an opportunity between now and then to submit a blow by blow description of why each redaction was made. That would help you answer the issues that Mr. Sopko raised. And we will consider those. But it is concerning to listen to those considerations. And if you think of some reason why the comments or the statements that Mr. Sopko said were redacted, then tell us. Mr. Chaffetz. Oh, absolutely. If the gentleman would yield, the spirit here is to get to your full and complete perspective on this. But the allegations are pretty serious. It has been going on for close to a year. We are just trying to get the clean, unfettered information and of course, we will work in a bipartisan way and allow you to comment on those as well. Mr. Tierney. Exactly. Now, to both of the witnesses, has anybody ever assessed whether or not the country of Afghanistan is going to have a revenue trajectory other than foreign aid that is going to enable it to cover its general operating costs and when? Mr. Sopko. The World Bank has done that assessment. I believe we reference it in our statement. And it is not a pretty picture. I think we are talking about 30, 40, 50 years out. And so the discussion about minerals, we are talking 50 years out, 70 years out, assuming the best. So in all likelihood they will be a client state for years to come. Mr. Tierney. So the more infrastructure that aid from any source helps to build, the more operating and maintenance costs accrue to a country that doesn't have revenue to cover its existing operation and maintenance costs, never mind additional ones, is that correct? Mr. Sopko. That is very correct, and we reference that with, unfortunately, gory detail with all the audits, and we are happy to provide others about roads that have no sustainability, buses that have no sustainability, you name it. They can't sustain it. Mr. Tierney. Can either of you identify for me any other nations in the world that are substantially operated only by virtue of foreign assistance and that would not be able to be liquid in and of themselves? Mr. Sopko. I only cover Afghanistan. I will turn to my colleague, here. Mr. Sampler. Congressman, most of my work has been in failed states, that for a number of years after emerging from failed state status are client state and continue to be for some period of time. Mr. Tierney. Has that period ever been 40, 50 years out? Mr. Sampler. Congressman, I don't accept the notion of 40 or 50. I don't have an alternative to it. It is predicting the future. Certainly more than a decade there will be some form of client state. But the notion that infrastructure should be subsequent to being able to be self-sustaining is, I think, flawed. Mr. Tierney. I am not sure that anybody made that case. They are just making the case that as it happens, it increases the cost of maintenance and operation. Mr. Sampler. It also increases economic opportunity and growth, which pays for that. Mr. Tierney. That would depend on whether or not it was well-constructed and actually worked. Mr. Sampler. And it does work, Mr. Congressman. Mr. Tierney. Well, let's see whether or not the Kabul power plant actually works and has the fuel necessary to do that. Is the government subsidy from Afghanistan, I understand it was supposed to expire this month, last month, actually. What happened with that, Mr. Sopko? Mr. Sopko. I don't have the answer to that. Maybe Mr. Sampler does. Mr. Tierney. Did the Afghan subsidy to the power plant expire last month? Mr. Sampler. They have stopped subsidizing DABS, yes. Mr. Tierney. So who is paying for the fuel now? Mr. Sampler. In Kabul, the fuel that the Tarakhil power plant generates is paid for from electrical subscribers in Kabul. Mr. Tierney. And how about the rest of the patrons that are supposed to be served by it? Mr. Sampler. I am sorry, the rest? Mr. Tierney. More than just Kabul is supposed to be served by that power plant, correct? Mr. Sampler. The 105 some odd megawatts that it generates is generated to what they call an island of distribution. And that island of distribution pays for that power. And Mr. Samadi tells me that they have done that in 12 other provinces, smaller places, where they have diesel generators providing power. But it is important to note that Tarakhil is not meant to provide regular, routine power. As Samadi acknowledges, it is more expensive than importing electricity. He calls it a peaking plant. I would call it reserve power. Just last week, the power line coming from the north into Kabul, snowfall shorted out the power line and they lost it. But rather than have brownouts and blackouts in Kabul, Tarakhil fired up and they run this expensive diesel. But Mr. Samadi, who is the CEO of DABS, assures me that they pay for it out of the revenues they collect. Mr. Tierney. Have you been able to verify that? Mr. Sampler. I have been out to Tarakhil a number of times and in fact, stood by a generator when it fired up without me knowing it was happening. They do turn it on and they do turn it off. Mr. Tierney. An awareness issue, right? Mr. Sampler. Right. But I can't confirm that the payments they make cover the cost of diesel. I can take that as a QFR and come back. Mr. Tierney. Thank you. Thank you, Mr. Chairman. Mr. Chaffetz. The gentleman from Vermont, Mr. Welch. Mr. Welch. I would like to get back to what are some practical steps we can do that will work. As a precondition of having aid, number one, shouldn't there be some confidence there will be a sustainable revenue system? And my understanding is Afghanistan is taking steps toward doing that. And then number two, should we condition aid on Afghanistan putting their own money in a project? Both of those would go hand in hand because if they are going to put money in a project, they have a way to raise money and they do have an economy. So I would really appreciate your opinion as to whether those might be simple ways to try to get greater accountability. A, do we want it as a condition that they establish a revenue system and B, do they have to put money in any project? I will start with you, Mr. Sampler. Mr. Sampler. Certainly. The World Bank actually has incentive programs that are driven to encourage the Afghans to generate revenue streams. USAID has programs in place, the Afghan Trade and Revenue program is an example. It specifically focuses on allowing the Afghans to collect tariffs at customs stations and makes sure that the money goes into the coffers at Afghan banks. Mr. Welch. My question is, is it being done? In other words, we can conceive of these things, but there are so many impediments on a practical level in a country such as Afghanistan to do things that haven't been part of their tradition. Mr. Sampler. Right. Mr. Welch. What I understood from Mr. Sopko is that on the other hand, if we come in and put in these huge projects that have as an unstated but necessary assumption a local capacity for raising revenue to sustain it, for having engineering expertise to fix it, all of these things that actually don't exist, then we are just ships passing in the night. And a lot of this is, from my perspective, guaranteed failure even before you get to the corruption. So my view is that there has to be something really simple that takes into account the practical limitations of the Afghani revenue stream, the practical limitations of their skill test, and then have a right size approach which would be intended to actually have a chance at working. Mr. Sopko. Mr. Welch, I think you have hit on it. And they key thing is conditionality. It is great that Mr. Sampler is talking about, we are going to help raise revenue at the border. I just noted in my speech, I just came back from Torkham Gate, which is the largest customs post. And we can't get to it any more. No American will be able to get to Torkham Gate to check and see if they are stealing half of the revenue. And that is the problem of corruption. We know it is endemic. We have to build programs that deal with it. And that is why conditionality. And I applaud Mr. Sampler and USAID for their conditioning, I believe it was, $30 million held back. Unfortunately, it was on a $17 billion program. So the conditionality has to be not just on an incentive program, it has to be with one voice, with our allies, to condition putting the internal controls in, putting the asesssments in, fighting the corruption. On the corruption issue, we still have a dysfunctional judiciary over there. We have never conditioned on that. We have a dysfunctional financial system, and I know the chairman is very interested in the Kabul bank issue. Well, FATF, the Financial Action Task Force, just came in and downgraded, downgraded Afghanistan and if they continue to downgrade it because they don't have a money-laundering statute, just like Mr. Sampler said, they still don't have that statute dealing with minerals. What will happen in June is, they will be blacklisted, which could have tremendous implications to any corresponding bank. If you don't have a banking system, you are not going to have financial investment. So the thing is, you have to prioritize, our U.S. government, not just AID, it is everyone, prioritize the conditionality and fixing these issues. We still, and I will end by this, Mr. Welch, we still don't have a coordinated anti-corruption strategy for the U.S. government. We have highlighted that in two audits. If we are really serious about corruption, why don't we have a strategy? Mr. Welch. Here would be what I would find some comfort in. If the two of you had an agreement that could be stated on one piece of paper that said what the conditions were, or the preconditions really, is it a revenue stream, is it putting money into the account at the same time we put money in an account? But things that are up front that are very simple to measure and don't depend on trust, they really just depend on checking the bank account. Mr. Sopko. We do that in every audit we have. We have recommendations. The problem is, I have to be independent. So I can't design a program, as much as I would like to, with Mr. Sampler. Because then I can't come back in and audit it. So by definition I can't design programs. But we have many recommendations, and if you look at my statement, Congressman, there are like 40 or 50 audits done by us, the AID IG, the State IG, the DOD IG, and the GAO with tremendous recommendations that USAID and the rest of the government should follow. Mr. Welch. I just want to say one last thing. Mr. Sampler, I really appreciate the work that you guys do, USAID. You are just dealing with an incredibly difficult situation. And you are on the receiving end of a lot of the frustration we have. But a lot of us are responsible for some of the policies that got us to where we are. So I just want to say a sincere thank you for your service and to you as well. We are not beating up on you as much, not today. [Laughter.] Mr. Chaffetz. The gentleman yields back. I do have a few more questions and I appreciate the indulgence of my colleagues here, to go through some of these. It have looked at maps, and it is hard not to do it with the maps, but one of the biggest concerns is the diminished security situation and our ability to get out, review these projects, see these projects. Remind me again what percentage of the areas, do we have percentages or some sort of metrics to try to quantify, we are investing, spending money on all these projects in various parts of the country, we can't get out and see them. Mr. Sopko. Mr. Chairman, it is hard to do that. Because we don't know the number of troops we are going to have. We also don't know the number of enduring bases. So we are guessing. But at our guesstimate, I think we are saying less than 20 percent of the country. Now, what I also mentioned is, that is assuming the very best. That is assuming good weather, we can get out there. The problem with those circles, as I indicated, is they are now turning into Swiss cheese. I have auditors and inspectors who can no longer travel to certain sites, even inside the bubbles, because they have to go down a road where there is an Afghan security base and booth and they check them out. The next kilometer down, there is an insurgency toll booth and base. So we can't go there. That is the problem. Bottom line is it is getting harder. Mr. Chaffetz. Is there any other update? I appreciate your bringing up the information on the Kabul bank. Do you have anything else you can share with us regarding the Kabul bank situation? Mr. Sopko. I think the important thing is not focusing on the exact money inside the bank. But it had to be recapitalized, and that money had to come out of the central bank, and that is over $500 million. When you are dealing with a country like Afghanistan where they have very little money of their own, we know that donor money had to be used for that instead of better purposes. I think that is the thing to consider. And also the problem with the whole financial sector. It hasn't gotten any better. That is what people are telling me on the last trip, with their financial sector and their ability to oversee the financial sector. Mr. Chaffetz. Mr. Sampler, there are these news reports about USAID and Cuba, relating to Twitter accounts and that sort of thing. Do you have any insight into that? Mr. Sampler. I don't. Those are in my pile of things to read after this hearing, Congressman. I haven't had a chance to look at that. [Laughter.] Mr. Chaffetz. Put that at the top of your pile, if you would. I would appreciate it. I want to go back to this what you called the mineral wealth trap. What are the concerns there? What are the things that you are suggesting they need to do or not do? Mr. Sampler. Congressman, the Task Force for Business and Stability Operations that the Defense Department ran started early on working with the Ministry of Mine and Petroleum to build their capacity to manage contracts. And to manage contracts for what may be up to $3 trillion worth of wealth that is buried in the soil of Afghanistan. They recognize that if the government gets ahead of the contractors and of the vast multinational corporations who want to exploit that wealth, the government can benefit directly and in significant ways. The resource trap is one, however, where the government never builds that capacity. The institutions don't reach maturity before the external bidders can take control of the resources. So the notion is, Afghanistan owns these resources. The people of Afghanistan should benefit from them. How can we get laws on the books and transparency into those laws so that as the resources are exploited, the benefits accrue to the government and to the people of Afghanistan? Mr. Chaffetz. That is interesting. In the long term, I really would appreciate being kept up to date on that. I would appreciate it. One other thing I want to talk about are these incentive funds. I believe the number you used was $75 million? Mr. Sampler. That is correct. In last year's budget, we used $75 million. In this year, we incentivize $100 million. Mr. Chaffetz. Are these bonuses? Mr. Sampler. They are not. This is money that comes out of existing programs that we incentivize. Mr. Chaffetz. But where does that money go? Does it go to individuals? Mr. Sampler. No, it doesn't, Congressman. It goes to the Ministry of Finance for something that we will negotiate with the Ministry of Finance. Mr. Chaffetz. Give me an example. Mr. Sampler. The $50 million they receive for having succeeded in getting the election laws on the books in a timely manner and appointing the different chairmen and the different commissioners, that money went to the Minister of Finance for a particular program that the Minister of Finance wanted to fund but that we had not funded heretofore. The money that we don't award can be awarded by USAID for programs that the government of Afghanistan has no interest in seeing. So in other words, he gets to choose programs that are of more interest to him if they meet the objectives. If they don't meet the objectives, and we choose programs that are of interest to us, then we put the money somewhere else. Mr. Chaffetz. I just fundamentally don't understand. Again, it is above and beyond just USAID. But here we are spending $102 billion and we have to provide these guys incentive bonuses to achieve their metrics and their goals? It sounds like a bonus to me. You may say, oh, it was appropriated. But we wouldn't have spent it otherwise. It is not as if we saw some critical individual need. And you are going to up that from $75 million to $100 million? Mr. Sampler. What is useful about the incentive, Congressman, it is not incentivizing individuals, it is incentivizing the parliament, for example, to make difficult decisions. Mr. Chaffetz. But isn't it incentive enough to say, you are not going to get any of our U.S. money unless you do the right thing and set up the metrics and the oversight that you need, we are not going to give you that money? Mr. Sampler. Some of these are more institutional. The elimination of Violence Against Women law was something that was not politically palatable to the parliament in Afghanistan but is absolutely essential to us that that be done. So we have incentivized the passage of that law and the implementation of quarterly reports about violence against women in the provinces. Without some sort of incentive, the president and the minister of finance and the cabinet would not have had the horsepower to turn Afghan parliamentarians in the direction of doing this thing. Mr. Chaffetz. Wait a second. Lobbying money? Mr. Sampler. No, I wouldn't describe it as lobbying money. It is an incentive to get the parliament to do the things that we need them to do. Mr. Chaffetz. So the parliamentarians get this money? Who gets the money? Mr. Sampler. No, that is not correct. The Minister of Finance, the money that is received Mr. Chaffetz. Going back to the specific example of the women's violence issue, where does that money go? Mr. Sampler. Again, it goes to the Minster of Finance, it does not go to members of parliament or even to the parliament, but it goes to the Minister of Finance for programs that he has identified that he would like us to fund that we heretofore have not. And then the same project oversight measures kick in. Mr. Chaffetz. So we go through all these assessments, we have all these things, we have these objectives. It doesn't even show up on our top 200 list. But he has his own pet project over here, which we will fund if he passes legislation that--I mean, we have a lot of laws here in the United States of America that prohibit that type of thing happening here in the United States, and we are upping the amount of money that we are going to use for this program? If we incentivize the Secretary of Education to get some laws passed here in the United States Congress, and by the way, we are going to go ahead and take your pet project over here and fund it, we weren't going to do it otherwise, but we will fund that, are you kidding me? That is the very essence of corruption. And we are funding that? Mr. Sampler. Congressman, it is not his pet project. These are programs that Mr. Chaffetz. It is a project that he gets to pick. It didn't show up on our list. Mr. Sampler. The government of Afghanistan, I should not characterize it as the Minister of Finance. It is a project of importance to the government that we have not yet chosen to fund. We still, it isn't a matter of we are obligated to do certain things. It is a sense that if the government can make these certain milestones that are a part of the Tokyo mutual accountability framework then we will incentivize their compliance and their achievement of those milestones. Mr. Chaffetz. I don't want to get caught up on semantics, but I am just telling you, you have an incentive fund, it sounds like a bonus, it sounds like a slush fund, it sounds like a lot of very negative things. I guess my question to you is, would we do that here in the United States. Would we do that with our own government? Would we do that? And I don't expect them to mirror everything we do in the United States. But you are going to have to help explain why we have $100 million sitting over here that we have this great discretion from, we are going to take it from $75 million to $100 million, and if they do things that they want to do then--I just don't understand. Mr. Sampler. Congressman, one of the challenges in Afghanistan is that their government is chronologically where we were when we disbanded the Articles of Confederation and started over. Mr. Chaffetz. Oh, it is more like the Stone Age. Fred Flintstone is more progressive than a lot of places in Afghanistan. And that is the problem. We are $100 plus billion dollars later, and they don't have the infrastructure to do the basics. I feel for those people. But the Special Inspector General asked for a list of the ten most impressive, most successful programs in USAID and the ten least. There are going to be some failures, we all understand and appreciate that. When are you going to provide him, and I would like to have a copy of this as well, a list of the projects, the most successful and the least successful? Mr. Sampler. Congressman, we don't rack and stack our projects by most and least successful. Mr. Chaffetz. But you go back and assess them, right? Mr. Sampler. We do. But they are not compared one against another. It is like asking me which of my sons do I love the most. Mr. Chaffetz. No, but you are going to tell me whether or not they were successful in doing something or not. These are very tangible items. If we are building a power plant or we are building a school, we are trying to build a water well, you have to know. Mr. Sampler. Congressman, we can share on any given project what they succeeded at doing and what they haven't yet succeeded in doing. Mr. Chaffetz. So you are not going to comply with the request from the SIGAR? Mr. Sampler. We have provided a list of our top ten accomplishments in Afghanistan. Mr. Chaffetz. Has USAID satisfied your request, Mr. Sopko? Mr. Sopko. Absolutely not. They have given us just some generalities. We have increased health, we have increased education, we have increased the lives of women and children, which is great, we all support it. But we are in the game of what particular program or programs or policies led to this tremendous doubling of the age or the increase. Because you are required by OMB regulation to have that information and they are not providing it. So no, they have been totally non-responsive. Mr. Sampler. To my knowledge, we are not required to rack and stack one contract or one program against another. I am more than happy to share any information about the successes of specific programs. But I do not rack and stack one program against another and say, this one was better than that one. Mr. Chaffetz. You can understand the concern when we get the report from the Special Inspector General for Afghan Reconstruction, Congress set this up so we can have some third party verification of what is happening and not happening. And he uncovers lists of things that don't happen. It is a tough place. We have good people in the most difficult circumstances I can think of on the face of the planet. The people out there, USAID, are doing yeoman's work. We understand that things are going to fail. But the concern is, when we are $102 billion into it, and most of that is DOD, it is not USAID, we continue to pour money into this thing and we haven't tackled the most basic problem which I think is corruption. If I had to list my top three or top four concerns, corruption is right near the top of that list. Mr. Sampler. It is at the top of everyone's. And Congressman, it is not correct that we haven't addressed it, we just haven't licked it. Mr. Chaffetz. But when you have 333 different recommendations and you only insist that they implement 24, I have a problem with that. We have an example of the SIGAR coming in and seeing an agency or ministry that is doing it the right way. Why don't we insist that everybody do it the right way? They don't get the money unless they do it the right way. More than a decade later, and you think we would have learned this lesson. Mr. Sampler. The DABS report that I think you are referring to as having a ministry that does it the right way actually is the model that is used in other ministries. What we are not doing at this point in time is disbursing our resources across all 700 risks that have been identified. We are focusing our resources on the risks that surround U.S. taxpayer dollars. In other words, we are huddling around money Mr. Chaffetz. NBC News just had this report out today or yesterday, Afghan prison built with U.S. money falling down before it opens. Mr. Sampler. I wish I could comment on that, but that is not something we built, Congressman. I saw the story and expected to hear about it, but I just don't know what it is. Mr. Chaffetz. It says if falls within U.S. State Department. This is the first paragraph, an $11 million American-funded prison in Afghanistan is falling apart before it even opens. And the U.S. State Department plans to rebuild it, call for shoddy construction, a government watchdog said Wednesday. I have gone way past my time. I will yield to the gentleman from Vermont, if he has questions. Mr. Welch. I actually don't have any more questions. But I am hoping that we can do is find a way, Mr. Chairman, to perhaps legislate some conditions and bring that to the full House for consideration. We just can't keep asking taxpayers to blow this money. And it is not just about blowing money, if we have a model there that simply doesn't work, where this is a total mismatch between their resources, their governmental structure and their ability to sustain projects in hindsight may have been grandiose or misaligned. Let's just not keep pouring good money after bad. The dilemma, of course, is that it is in our interests as well as the Afghans' interest that they don't have a failed state. So the goal here is one I share, I think that is a very important goal, both for strategic and security reasons and humanitarian reasons. But the fact that we share a goal doesn't necessarily mean we have the means of achieving it. That is the dilemma. And I just think that the responsibility that we have in Congress and oftentimes have not accepted is to call the question. And I think that if we are asking our soldiers or we are asking our State Department people to do something that is trying to fit a square peg into a round hole, when we ask you to do it, you will do it. Then we will go to you to say, why is it not working and we forget that we are the ones who started the whole thing in the beginning. So there is a certain amount of looking in the mirror that I think Congress has to do on these policies. But Mr. Chairman, I do think it is time, we are asking the question here, but I would like to see our committee make that statement to the Congress as to what the findings are that your work and Mr. Tierney's work has provided, and then maybe as a committee come to some conclusions about next steps that we can take that will not have us keep digging in the same hole. So I thank you and Mr. Tierney for your leadership on this. Mr. Chaffetz. Thank you. This is truly an effort that I believe is bipartisan in its nature. I do think it is important for Congress to understand and look back on what has worked well and what hasn't worked well. We are honest about the fact that there are good things and there are bad things. If you are refusing to rack and stack, as you said, I would appreciate it if the Special Inspector General would go through that exercise. You highlighted a lot of concerns. But we will do it that way, if USAID doesn't want to participate. Mr. Sopko. We will do that, sir, it is part of our mandate. But as I tried to explain and maybe it wasn't artfully enough, I can draw lessons learned upon failures or successes. I am required by statute to do lessons learned reports. I would prefer to do them on a mix of information. But I can't get generalities that health care has been improved. Well of course, it improved. If you throw a hundred billion dollars at it, obviously it is going to improve. If you stop the shooting war, of course it is going to improve. And then I hear education has improved, and at the same time, there were no buildings. Well, they start comparing education right during the war or right after the war. Of course there was no education. Everybody was scurrying from the Taliban and the bullets. So I need something specific because you are demanding from me, look at the programs. And if the information isn't provided to you, what are you left to do? Across the board cuts. And that is not the way to do it. Because that cuts the good programs as well as the bad programs. So that is what we need to know. Thank you, sir, we will try to do that. Mr. Chaffetz. Thank you. Thank you both. I appreciate this hearing and the good work that the men and women do on the front lines. This committee stands adjourned. [Whereupon, at 12:01 p.m., the committee was adjourned.] APPENDIX ---------- Material Submitted for the Hearing Record [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]