A Costly Effort in Afghanistan

by Joel Brinkley

They're stealing from our people who are trying to help them and killing our soldiers who are trying to train them. And when called on it, they say we are lying.

It's probably no surprise that I'm talking about Afghanistan. But a new U.S. government auditors' report puts glistening new icing on the cake.

The Afghan Finance Ministry has levied nearly $1 billion in unwarranted taxes on United States aid agencies that "build roads, schools, hospitals" for the Afghan people, the auditors' report said -- even though the U.S. and Afghan governments signed agreements a decade ago saying these aid agencies were tax-exempt, as they certainly should be.

What this means in actual fact is that when the United States Agency for International Development, as an example, hires a contractor to build a new hospital in a poor Afghan province that doesn't have one, the government in Kabul charges income tax and other taxes on the money USAID disburses to the contractor so he can buy the building supplies and pay construction workers.

Called on this, Afghan Finance Minister Omar Zakhilwal dispatched a combative reply back to Washington, calling the report "deeply flawed." He blamed the situation on the contractors and called the original tax-exemption agreements "legally suspect, poorly drafted and ill-suited to the complex reality of 2013." Of course, Zakhilwal did not mention that his government signed those documents without qualm in 2003 -- and hasn't called for their revision since.

He also didn't mention that, on occasion, according to the report, officials from his office show up at aid agencies' offices and demand payment on the spot, offering no documentation or authentication. And some contractors who have declined to pay have been arrested or forbidden to travel to their job sites.

This, just the latest outrage, comes as Afghan military trainees shot and killed three more American servicemen who were training them this month, bringing the total killed over the last five years to 135. Earlier this month, Afghan President Hamid Karzai, delivering the keynote address to the U.S.-Islamic World Forum, a Brookings Institution event in Doha, blamed the United States for the spread of Islamic terror around the world -- looking directly at the U.S. ambassadors and numerous other American officials sitting in the audience as he spoke.

"The Muslim world has seen more radicalism, from Pakistan and Afghanistan all the way today to Mali and Nigeria" since America's war on terror began, Karzai said. Washington "needs to explain itself to the Muslim world."

This came shortly after that Special Investigator General for Afghanistan Reconstruction report showing that Karzai's government has stolen "over $921 million in business taxes and associated penalties on 43 contractors that support U.S. government efforts in Afghanistan."

Of course, Karzai said not a word about that. And given that Transparency International still ranks his nation as the third most corrupt in the world (just behind Somalia and North Korea), you know where that $921 billion most likely went: into suitcases carted through Kabul's airport to foreign banks. Don't forget that, last year, the special inspector general installed "bulk currency counters at the airport to monitor the outflow of funds," it said then. But shortly after installation, they were turned off.

Certainly the U.S. has made grievous mistakes during the 12 years American forces have fought there -- the longest war in American history. But is there any other nation on earth that would offer such hostile ingratitude for the sacrifices Americans have made on behalf of the Afghan people -- 2,300 Americans killed, close to $2 trillion spent, including more than $100 billion in development aid?

American officials hold some of the blame for allowing this thievery to continue year after year. The inspector general found that most government agencies "do not understand Afghanistan tax laws as they relate to contracts they oversee" and as a result "have erroneously reimbursed contractors for taxes levied by the Afghan government."

And some agencies greeted the report's findings with hostility. For example, rather than addressing the problem, the State Department questioned the inspector general's authority to research the department's spending practices.

"The audit extends beyond the scope" of the inspector general's mandate, State opined in response.

Still, the most outrageous response came from Zakhilwal, who claimed that the inspector general "neglected to consult with or seek meaningful input" from his ministry.

Actually, Special Inspector General John Sopko wrote back, auditors met with senior ministry officials twice - and he named them. The auditors repeatedly requested relevant documents.

But "your agency never provided the requested information."

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