THURSDAY: Oversight Seeks Answers from DOD on Missing Funds, Documents Destroyed, and Lax Contract Enforcement in Afghanistan

September 18, 2012

WASHINGTON – The House Oversight and Government Reform National Security Subcommittee, chaired by Rep. Jason Chaffetz, R-Utah, will hold a hearing Thursday to hear from Department of Defense officials about allegations in a recent Special Inspector General for Afghanistan Reconstruction (SIGAR) report that nearly half-a-billion dollars are unaccounted for in a major Afghanistan reconstruction program and that program records were destroyed. Full hearing details below.

At a September 13th House Oversight and Government Reform National Security Subcommittee hearing, SIGAR John Sopko informed the Committee that the “Petroleum, Oil and Lubricants” program, or POL, had received over $1.1. billion in funding to purchase fuel for the Afghan National Army, but the purchase, ordering, delivery, and consumption is poorly tracked.

The issue is particularly urgent, because despite the lack of records and justification for fuel purchases, the Department of Defense proposes to increase funding and the Obama Administration plans to give two-thirds of that amount in cash directly to the Afghan government. Under this “capacity building” strategy, the Afghans will purchase POL for themselves, but using U.S. taxpayer dollars, similar to USAID’s “Forward” initiative. 

When asked for specific examples of lack of accountability, Sopko explained that the Combined Security and Transition Command-Afghanistan (CSTC-A) is “paying approximately $20 million per year on firewood, and when my auditors asked for documentation of what we spent on firewood, we were basically told, ‘We don’t have the records. We just spend the money.’ And that’s the CSTC-A attitude.”

At the hearing, Sopko further criticized the Department of Defense for inadequate contract enforcement in Afghanistan.Companies and individuals on a suspension list or a debarment list cannot receive U.S. taxpayer funded contracts.  This includes companies that have committed fraud, or those with ties to terrorism.  In the area of fuel contracts, Sopko said it’s difficult to suspend or debar an entity – even when demonstrable fraud has taken place.

“We have signed affidavits- we have statements from U.S. officers and employees who are saying that the records with their signature on them are false. They did not sign those documents. But the Army is saying: ‘Well, unless you prove that the fuel didn’t actually go to the military base for the Afghans, we’re not going to suspend and debar.’”

Sopko indicated some of the firms omitted from the debarment list had known ties to terrorists. “We view this as just ridiculous,” Sopko continued. “They should be debarred immediately – they are listed by the United States government as terrorists. But at the same time they are able to contract with the United States government right now in Afghanistan.”

Last week’s hearing on the SIGAR report on fuel contract waste can be viewed in its entirety here. Full details on Thursday’s hearing below.

Hearing Details

SIGAR Report: Document Destruction and Millions of Dollars Unaccounted for at the Department of Defense. Part II
Subcommittee on National Security, Homeland Defense, and Foreign Operations, Chairman Jason Chaffetz, R-Utah

Thursday, September 20, at 2:00pm in 2247 Rayburn House Office Building

Witness List:

• The Honorable Alan F. Estevez, Assistant Secretary for Logistics and Materiel Readiness, U.S. Department of Defense
• Lieutenant General Brooks L. Bash, USAF, Director for Logistics, Joint Staff, U.S. Department of Defense
• Mr. John F. Sopko, Special Inspector General for Afghanistan Reconstruction
• The Honorable Donald K. Steinberg, Deputy Administrator, U.S. Agency for International Development (invited)