[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
AFGHANISTAN: IDENTIFYING AND ADDRESSING WASTEFUL U.S. GOVERNMENT
SPENDING
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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
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Printed for the use of the Committee on Oversight and Government Reform
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Available via the World Wide Web: http://www.fdsys.gov
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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
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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
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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
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Material Submitted for the Hearing Record
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