Remarks Prepared for Delivery by Special Inspector General John F. Sopko on the release of SIGAR’s first lessons learned report, “Corruption in Conflict: Lessons from the U.S. Experience in Afghanistan.”

Corruption in Conflict: Lessons from the U.S. Experience in Afghanistan

Good morning, ladies and gentlemen:

I am pleased to be with you today to release SIGAR’s first lessons-learned publication, a study of how the United States has understood and tried to address corruption in Afghanistan.

As this audience, more than most, understands, corruption is an enormous threat both to the stewardship of U.S. tax dollars and to Afghanistan’s prospects for developing into a peaceful, modern nation-state.

Corruption is, of course, not unique to Afghanistan nor is it a recent development. In 70 B.C., a young Roman lawyer named Marcus Cicero made a name for himself by prosecuting a corrupt governor, Caius Verres. Speaking at the trial before the Roman Senate, Cicero attacked Verres as “the embezzler of the public funds,” “robber,” and “the disgrace and ruin of the province of Sicily.”[1]

Cicero’s rhetoric and evidence were so damning that Verres immediately fled to a distant province—not the first or last bad actor to escape justice in such a manner. As a former state and federal prosecutor who had some experience with organized crime, corruption, and Sicily, I too saw first-hand the damage inflicted by corruption, and the difficulty of fighting it.

As the Special Inspector General for Afghanistan Reconstruction, I regularly sign off on reports, investigations, audits, and special projects that uncover egregious corruption. SIGAR’s findings have implicated federal employees, officers and enlisted personnel of our armed forces, and American contractors, as well as Afghan and third-country nationals.

The best summary of corruption’s significance in Afghanistan, I believe, was presented in a Defense Department report commissioned by U.S. Marine Corps General Joseph Dunford. It said:

Corruption directly threatens the viability and legitimacy of the Afghan state … 2 Corruption alienates key elements of the population, discredits the government and security forces, undermines international support, subverts state functions and rule of law, robs the state of revenue, and creates barriers to economic growth.[2]

I suspect everyone here has been appalled and discouraged by accounts of massive bribes, everyday extortion, thefts of fuel and equipment, ghost soldiers and civil servants, padding of payrolls, contract fraud, shoddy construction, and other misdeeds. For the reasons cited in the Dunford report, it is critical that these corrupt acts be identified and their perpetrators punished. But we need to do much more than that.

We need to understand why U.S. and Afghan anticorruption efforts have consistently fallen short of their objectives. We need to understand how U.S. policies and practices unintentionally aided and abetted corruption, while fostering the perception among Afghans that the international-assistance effort is itself corrupt. We must recognize the danger of dealing with characters or networks of unsavory repute, tolerating contracting abuses, accepting shoddy performance, and delivering unsustainable projects. These practices may serve short-term goals, but they reward corruption, while breeding public cynicism and contempt for our presence.

Most importantly, if you expect that the United States will continue to be drawn into overseas contingency operations—whether in a conflict setting like Afghanistan or in a non-combat contingency like our response to Haiti’s devastating 2010 earthquake—we need to know what we can do to improve execution and outcomes in the future in the face of the corruption threat.

Considering that more than 2,300 Americans have died in Afghanistan and that Congress has appropriated nearly $115 billion for Afghanistan reconstruction—a number that does not include the far greater costs of U.S. military operations there—it would be an absolute dereliction of duty not to try to extract lessons from 15 years of struggle.

Learning lessons is a statutory obligation for SIGAR. Our legislative mandate includes providing recommendations to promote economy, efficiency, effectiveness, and leadership on preventing and detecting waste, fraud, and abuse.[3]

For these reasons, I established a Lessons Learned Program in the agency in late 2014. Former ambassador Ryan Crocker, General John Allen, and other distinguished Americans with experience in Afghanistan encouraged us in this decision, and we are grateful for their support. They and others noted that many of the lessons of Bosnia, Iraq, Haiti, and other venues have had to be relearned in Afghanistan, and must not be allowed to fade from memory again or go unaddressed in doctrine and practice.

To carry out this new project, SIGAR assembled a team of subject-matter experts with considerable experience working and living in Afghanistan, as well as a staff of experienced research analysts. For example, Jim Wasserstrom, team leader for today’s report, worked for many years as senior anticorruption advisor to USAID and the State Department at the U.S. Embassy in Kabul. Principal writer Kate Bateman also worked at the U.S. Embassy in Kabul and for the State Department here in Washington, where she provided support to the Special Representative for Afghanistan and Pakistan.

Many of our Lessons Learned Program employees have served in the U.S. military or worked in the State Department, USAID, the intelligence community, and other federal agencies. The program staff’s work undergoes peer review by other subject-matter experts and formal review by U.S. agencies, not to mention careful scrutiny by our own professional editors.

SIGAR’s Lessons Learned Program benefits from our agency’s unique position as the only independent oversight entity authorized to examine any and all U.S. reconstruction activities in Afghanistan.

SIGAR’s broad mandate uniquely positions us to extract whole-of-government lessons. In keeping with that broad view, our Lessons Learned staffers not only use published materials, but also submit requests for unpublished official documents, consult with experts in academia and research institutes, and conduct in-depth interviews with key personnel in all agencies that have significant roles in Afghanistan.

In the process, the Lessons Learned Program staff may have made the greatest use yet of nonpublic information resources to trace the story of the U.S. experience with corruption in Afghanistan. They conducted scores of interviews and written exchanges. I would add that officials at Defense, State, Justice, and Treasury were especially cooperative in dealing with our inquiries and candid in offering feedback. Their engagement greatly strengthened our report, and we are grateful for it.

Today’s report will be the first in a series of products from our Lessons Learned Program. Later this month we plan to release a report in conjunction with the U.S. Institute of Peace sharing insights from the international community's experiences in Afghanistan reconstruction. Additional reports, on security, counternarcotics, and other critical topics, are in process to be released over the next year.

Today’s report examines how the U.S. government—mainly Defense, State, Treasury, Justice, and the U.S. Agency for International Development—perceived the risks of corruption in Afghanistan, how the U.S. response to corruption evolved, and the degree to which that response was effective.

Our report points out that while corruption in Afghanistan pre-dates 2001, it has become far more serious and widespread since then. By 2001, the brutal conflicts of the 1980s and 90s had already decimated government institutions, the social and political fabric of the country, and the economy. But after 2001, internal drivers of corruption—including insecurity, weak systems of accountability, and the drug trade—combined with new drivers: a huge influx of foreign assistance, poor oversight of that assistance, and a willingness to partner with abusive and corrupt powerbrokers.

All these factors increased the opportunities for corruption among Afghans and foreigners alike. The result for Afghanistan was systemic corruption—pervasive and entrenched, affecting the courts, the army and police, banking, and other critical sectors.

It is this endemic corruption that poses an existential threat to Afghanistan and to U.S. policy objectives. Our report discusses evidence that for many years, Defense, State, and USAID did not place a high priority on anticorruption. This flowed in part from an early, high-level aversion to “nation-building,” which was not conducive to long-term investments in accountability. But the lack of attention to corruption also flowed from the overwhelming focus on security, political stability, and rebuilding. These goals largely took precedence over building good governance and the rule of law.[4]

That approach rested on a false dichotomy. Anticorruption efforts should not be seen as subordinate to or mutually exclusive with security or reconstruction. Rather, fighting corruption is a fundamental part of creating lasting security, political stability, and economic health.

Our report recounts how the United States collaborated with abusive and corrupt warlords, militias, and other powerbrokers. These men gained positions of authority in the Afghan government, which further enabled them to dip their hands into the streams of cash pouring into a small and fragile economy. Limited U.S. oversight, institutional and political pressures to spend money quickly for fast results, and Afghan awareness that the inflow would not run forever, combined to create perverse incentives. For our part, the bureaucratic temptation to use money as evidence of commitment, and the urge to spend down accounts for fear of losing funds in the next round of appropriations, added to the rush of the reconstruction funding stream.

Eight years into the reconstruction effort, however, U.S. officials were increasingly concerned that corruption was fueling the insurgency by financing insurgent groups and stoking popular grievances. U.S. agencies set up and supported several U.S. and Afghan organizations to tackle the problem.

But those efforts faced the Catch-22 that success required political will and cooperation from the very Afghan elites and networks that benefited from the corruption we helped fuel. We could train Afghans to investigate and prosecute cases, but we couldn’t force political leaders to use those special units. We could urge institutional reform, but undertaking reform was up to the Afghan government.

On the other hand, U.S. political commitment also waivered. Given our security and political goals, U.S. officials had to make hard judgment calls on how much political capital to invest in anticorruption efforts. The United States did not fully employ more aggressive tools, like visa revocation, strict conditionality on aid, or prosecution of corrupt officials with dual U.S. citizenship. While agencies appeared to agree that corruption posed a threat, there was no consensus on what to do about it. Perhaps for this reason, various U.S. anticorruption efforts in Afghanistan have never been unified by a broad, coherent official strategy.

On the positive side, our report chronicles how we devoted more resources to studying corrupt patronage networks, and how DOD and USAID improved their oversight and vetting of contractors. Those improvements, however, coincided with drawing down our presence, and some effective units were down-sized or closed—possibly prematurely.

Today’s report is not an audit or an investigation. Nor is it meant as a critique or criticism of the many brave men and women who worked in Afghanistan over the last fifteen years. Rather, it is meant as a learning experience, drawing together evidence and analysis into findings that underpin key lessons. We believe these lessons should inform reconstruction efforts at the outset of and throughout contingency operations. They include:[5]

American personnel in Afghanistan, including more than two dozen SIGAR staff on duty there, know this to be true. They are generally confined to the U.S. Embassy, and must take a helicopter even to get to the airport because the roads are so unsafe. Large parts of Afghanistan are effectively off-limits to foreign personnel, whether they are managing projects or responsible for oversight functions. SIGAR, I should mention, is mitigating this challenge by using Afghan-national employees, using GPS technology, and by working with a local nongovernmental entity.

First, anticorruption efforts must be a top priority so that corruption does not sabotage overall objectives. As Ambassador Crocker said in an interview conducted for this report, “The corruption lens has got to be in place at the outset, and even before the outset, in the formulation of reconstruction and development strategy, because once it gets to the level I saw . . . it’s somewhere between unbelievably hard and outright impossible to fix.” [6]

Secondly, another lesson is that to counter corruption, U.S. agencies must analyze and jointly understand how corruption works in the political economy and networks of the host country.

Thirdly, the U.S. government must better assess how much foreign assistance the host country can reasonably absorb, and improve our own ability to oversee and monitor the assistance.

Fourthly, the U.S. government should limit alliances with malign powerbrokers. Our report acknowledges that these actors are not easily marginalized. But U.S. decisions to engage with bad actors are cost-benefit analyses. Policymakers must weigh very carefully whom we do business with, ally with, and train, and include in that cost-benefit analysis the risks that corruption and abuse by our partners can seriously undermine our primary security goals.

Fifth, anticorruption must be part of security and stability goals, not treated as a trade-off or tangential item.

Sixth and finally, none of this will bear fruit unless the United States recognizes that endemic corruption requires political solutions and high-level, consistent political will to secure host-government reforms and to ensure U.S. entities are not exacerbating the problem.

Our report notes that failure to effectively address corruption in future contingency operations means U.S. reconstruction programs may, at best, continue to be subverted by systemic corruption, and, at worst, may fail.

When I last spoke here in December 2014, I quoted my good friend and colleague Sarah Chayes, who made the point so well that I’ll quote her again: “There is increasing reason to believe that acute corruption contributes to international instability,” by creating grievances, spurring indignation, and generating support for anti-government militants.[7] In addition to this, I would add from today’s report that corruption diverts U.S. taxpayer funds away from vital purposes, and reduces the quantity and quality of goods and services delivered to the Afghan people. Where the U.S. government is seen as either complicit in or contributing to opportunities for corruption, our legitimacy and credibility, including that of our armed forces, are damaged.

Corruption, in other words, is a corrosive acid—partly of our making—that eats away the base of every pillar of Afghan reconstruction, including security and political stability. These realities explain why corruption and the rule of law appeared in first place among seven critical threats identified in SIGAR’s High-Risk List of December 2014.

SIGAR takes seriously the lessons that anticorruption strategy and planning must be an original component of contingency operations and reconstruction programs from the get-go, and that structures and practices must be better adapted to exert effective pressure against corrupt networks.

Our Corruption in Conflict report therefore offers 11 recommendations that build on the lessons of 15 years in Afghanistan. Three are legislative, and eight are executive.[8]

SIGAR recommends that Congress consider making anticorruption a national-security priority in contingency operations and requiring an interagency strategy. Second, we suggest that Congress authorize sanctions against corrupt foreign officials and their allies, to provide a deterrent effect and a powerful tool to hold accountable such officials. Third, we recommend requiring joint vendor vetting by DOD, State, and USAID, which could institutionalize one of the lessons we did learn in Afghanistan, that it is vital to know whom we are doing business with.

Our recommendations for the Executive Branch include having the National Security Council establish an interagency task force to formulate policy and lead anticorruption strategy in contingency operations; using the intelligence community to regularly assess links between corrupt officials, criminals, traffickers, and terrorist organizations; and establishing dedicated positions and offices for anticorruption work in contingencies. We also recommend expanding Treasury’s list of transnational criminal organizations to include individuals and entities who have transferred the proceeds of corruption abroad, as an important tool to bring pressure to bear on host governments.

We suggest promoting anticorruption as a high priority for the host government and international partners, from the outset of a contingency. Finally, we recommend increasing State Department internal reporting on corruption issues, and building greater expertise on corruption and anticorruption within key agencies. SIGAR’s report has the details on these recommendations. It is posted at our website, sigar.mil.

Our recommendations are evidence-based, actionable, prudent steps that together can make a difference. Put in place in policy and practice, they can provide better planning for contingency operations, reduce the risk that our aid will make matters worse, mitigate the corrosive effects of corruption, and deliver better outcomes for the host country, for U.S. taxpayers, and for U.S. security, political, and humanitarian objectives.

You will notice that our recommendations do not constitute a tactical manual or best-practices guide to anticorruption. That is a different undertaking. The Corruption in Conflict report lays out the strategic case for taking corruption seriously, and for making the attitudinal and structural adjustments needed to fight corruption from the outset of planning and conducting contingency operations.

You may also notice that I have not mentioned Afghanistan’s role in the fight against corruption. That is because, ultimately, the United States cannot wage the Afghan government’s anticorruption campaign for it. Indeed, many Afghan officials serve their country with integrity; even where corruption is widespread, not everyone is corrupt. Those who resist or expose corruption do so at great risk to themselves and their families.

I and other SIGAR staff who have met with President Ashraf Ghani and Chief Executive Abdullah believe they are sincerely committed to fighting corruption. They are keenly aware that international donors’ willingness to support the Afghan government depends partly on progress against corruption. We are encouraged by the invitation for SIGAR to participate in meetings of the Afghan national procurement council and by other measures the administration has taken.

But we must also recognize that President Ghani and Chief Executive Abdullah face powerful entrenched interests, and that fighting corruption demands sustained political commitment—by both the Afghan and U.S. governments. The best intentions and exertions of a host government do not relieve the U.S. government of its prudential duty to improve its institutional and practical safeguards against corruption in zones of contingency operations.

TI close by noting that President Ghani told the UK’s Guardian newspaper during the 2014 presidential elections, “The Afghan public is sick and tired of corruption,” adding, “We are not going to revive the economy without tackling corruption root, stock, and branch.”[9]

I believe President Ghani was quite correct. Corruption is a vicious threat to all governments, whether emerging democracies or established states, that requires comprehensive and sustained vigilance and countermeasures. I hope you will agree that the analysis and recommendations of SIGAR’s new Corruption in Conflict report make a solid contribution to that effort, and I welcome your comments and support.

Thank You.