WASHINGTON — It remains to be seen how projects designed to spur economic growth in Afghanistan by a now-defunct Pentagon task force will turn out in the long run — like making carpets, raising goats for cashmere and tapping into compressed natural gas — but for the moment it appears that the money wasn't well spent.
And it has left lawmakers and DoD officials questioning whether the Pentagon should be directly involved in economic development in war zones or if the task is better left in the hands of such agencies as USAID.
“Ultimately, time will tell whether the task force succeeded in its objectives,” Brian McKeon, the principal deputy secretary of defense for policy, told the Senate Armed Services Subcommittee on Readiness and Management Support on Wednesday. “Independent assessments tell us that it had mixed results, with some successes and some failures.”
The Task Force for Business and Stability Operations projects in Afghanistan — the TFSBO — was created in 2009 to address economic revitalization efforts in Iraq. In 2010, the task force began similar work in Afghanistan. The task force closed in March 2015.
John Sopko, the special inspector general for Afghanistan reconstruction, has issued several reports finding waste, fraud and abuse related to TFSBO activities over the past year, highlighting a compressed natural gas station — that according to his best calculations cost $43 million — that only serves about a hundred taxi drivers in the area.
Other failed efforts include a $3 million cold and dry storage facility for Afghan farmers to store fruits and vegetables that has never been used, a $46.8 million Silicon Valley-like start-up in Herat that “did nothing,” a $7.5 million program designed to increase sales of hand-knotted carpets, and the importing of nine male goats from Italy to spur a cashmere industry, according to Sopko.
The TFBSO appropriated more than $820 million since fiscal year 2009 for programs and operations in Afghanistan, with about $759 million obligated and $638 million disbursed, according to SIGAR.
Sopko calls the projects “well-intentioned,” but the ideas that TFBSO came up with to foster economic growth seemed downright dumb for some lawmakers.
“SIGAR concluded the TFBSO generally has not delivered on its stated goals. SIGAR has received more complaints of waste, fraud, and abuse relating to TFBSO activities than for any other organization operating in Afghanistan,” subcommittee chair Sen. Kelly Ayotte, R-N.H., said.
“There’s never data presented that the ridiculous fuel station in Afghanistan helped anything. It was totally impractical and not sustainable,” Sen. Claire McCaskill, D-Mo., said. “We’ve got almost a billion dollars, no metrics, no cost benefit analysis, no sustainability analysis, a program that is dumb on its face.”
The TFBSO set out to build the first compressed natural gas filling station in Afghanistan to demonstrate that the gas is commercially viable as an automobile fuel. But, according to Sopko, it costs $800 to convert a car to natural gas while an average Afghan makes $690 a year.
“Did anybody in the room sit there and say, 'Is there anyone in Afghanistan that can afford this?'” McCaskill asked. “Who made this decision? ... I want to talk with that person and find out what they were on that day because that is bizarre.”
Moreover, in attempting to nail down the cost of the gas station, SIGAR asked DoD for information several times as early as May 2015, yet the Pentagon failed to provide documents, claiming the department no longer had the personnel or the expertise to respond, according to Ayotte.
Last week, Sopko received an additional 100 gigabytes of data on TFBSO work, which the inspector general said his team spent the weekend reading. However, he equated the amount of new data made available to that which can fit on an iPhone.
Only the day before the hearing did Sopko or the lawmakers receive a DoD estimate for the gas station, which fell well below $43 million. McKeon said at the hearing that the cost was likely “well under” $10 million and that the cost of the entire station was about $5.1 million. He noted, however, that the assumptions for calculating the labor cost is “likely flawed” and said “we cannot validate $30 million as being directly attributable to the CNG station.”
Sopko said the new information corroborates the $43 million calculation for the gas station.
The issue over the true cost of the gas station highlights the lack of record-keeping practices that existed within the TFBSO, the lawmakers, McKeon and Sopko all agreed.
The committee members also questioned TFBSO’s dealings with the Afghan oil, gas and mineral industries. The task force invested $175 million in extractive projects. A total of 215 had little, to no, or partial project achievement, and not a single project was transitioned to the Afghans or to USAID.
Sopko noted that the Afghan Ministry of Mines under former Afghan President Hamid Karzai was “the most corrupt ministry in a very corrupt government” and USAID pulled back direct assistance because it was so corrupt. He argued that the TFBSO did not know enough about where they were working and, because of this ignorance, “you are basically asking to lose all your money.”
The inspector said it’s unclear how much money the TFBSO dispersed was stolen, adding that the predecessor in control of the Ministry of Mines disappeared to Germany with $35 million in cash.
Lawmakers also took issue with what appears to be lavish spending by the TFBSO, such as shelling out $150 million on villas and security for no more than five to 10 staff when they could have stayed on a military base.
The TFBSO staff also took expensive trips to conferences in Europe and India related to the carpet and jewelry industries.
McKeon didn't have answers as to why the trips were taken or the lavish accommodations were needed and said his office is still digging through many questions.
Ayotte questioned whether the Pentagon was maneuvering to cover up the mismanagement of the TFBSO and noted at the hearing that a colonel who worked for TFBSO was in the room. She said he has claimed he was reprimanded for being a whistleblower about the waste he observed in Afghanistan.
The senator said Col. John Hope was assigned to the task force and started to raise issues about the TFBSO, such as its lack of operation and financial oversight.
Ayotte said that as a result of speaking out, Hope received a performance review given by McKeon himself that could be seen as a “career ender.” Prior to the review, Hope received highly positive feedback in other reviews, including a glowing one from the Army Chief of Staff Gen. Ray Odierno, she added.
McKeon said the rating Hope received “didn’t have anything to do with” the negative after action report Hope filed about TFBSO. “I deny and believe to my core there was no retaliation.”
While SIGAR and the Pentagon continue to review the task force’s effectiveness in spurring economic growth in Afghanistan, several lawmakers, Sopko and McKeon said it was clear that DoD should likely not have control over such responsibility in the future.
Sen. Tim Kaine, D-Va., said, “If there were mistakes, we need to correct them going forward” and it raises the question whether DoD is the best agency to do economic or reconstruction work or if other agencies should take control.
“This is not the proper role for DoD,” Sen. Jeanne Shaheen, D-N.H., said, adding Congress needs to look at how the role for DoD and the State Department figure into building economies in war-torn regions.
Sopko suggested a “whole of government approach,” arguing that its not the business of DoD to think like corporate America.
Ayotte advocated for a full financial audit of the task force, and Sopko said he would “probably do either a complete financial audit or an entire programmatic audit of the TFBSO.”
Sopko told reporters after the hearing that he would likely know more on the way ahead by the end of the month.