CORRUPTION IN CONFLICT

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in corruption. 58 Afghans also witnessed the U.S. failure to adequately monitor contractors associated with the reconstruction effort. Corruption and waste drained away benefits that were intended to accrue to the Afghan population. Afghans knew this, and it undermined their faith in the international effort. 59 Possible Reasons the U.S. Government Failed to See the Problem This report traces the U.S. government’s delay in grasping the extent of the corruption problem and its threat to the security and stability missions. The report does not explore in detail the reasons why bureaucracies get things wrong or fail to understand the consequences of their actions. Nevertheless, several factors help to explain why U.S. agencies took years to fully diagnose the threat of corruption: • Lack of access to accurate information: Information deficits pose a perennial problem for policymakers and practitioners in conflict environments and are central to the principal-agent conundrum. 60 As one public administration scholar explained, “The principal seeks information from agents working on its behalf. The agents have incentives to hide information from the principal. In the Afghan context, the [U.S. government] is the principal and the agents are the myriad contractors [and] NGOs implementing projects on its behalf.” 61 In a conflict zone where U.S. officials do not have the ability to access or physically monitor the majority of projects, contractors and NGOs can easily withhold information about, for example, the quality of construction and materials used, subcontractors employed, or protection payments made to armed groups. 62 • Organizational culture and institutional incentives to color field reports: Especially where the U.S. government has invested significant political capital in the outcome of an intervention (for example, by deploying thousands of U.S. service members and civilians), U.S. officials face powerful incentives to positively color their assessments of the situation on the ground. Pressures to report success up the chain of command in a civilian or military bureaucracy often outweigh the demand for truth-telling or accounts of failures. Further, once significant financial or other investments have been made, U.S. agencies cannot recover sunk costs and may be reluctant to abandon a program or effort, even if it proves less successful than anticipated. 63 • Unrealistic expectations: To many policymakers and practitioners, Afghanistan represented an unstable and insecure environment with complex cultural, historical, political, and social dynamics. These factors made it difficult to craft appropriate timelines and expectations for assistance programs. Adding to the complexity, U.S. officials were hamstrung by short tours, frequent staff turnover, and lack of mobility to actually engage with implementing partners. These challenges exacerbated problems that can affect any development effort, such as programs poorly suited to the environment, ill-considered attempts to transplant programs that are successful in other contexts, and “fast track” institution building, despite limited evidence of success. 64 12 SIGAR I CORRUPTION IN CONFLICT I SEPTEMBER 2016
Together, these and other factors facilitated misperceptions about corruption in Afghanistan. The incentive structure did not encourage U.S. officials to report on waste, fraud, and abuse, or on weaknesses in oversight; there were “few incentives for spending less money more effectively over time.” Nor were contractors or NGOs, who benefitted from the largesse of the security and statebuilding effort, incentivized to report such weaknesses. 65 A Framework for Anticorruption Efforts Anticorruption activities aim to prevent or control corruption. In Afghanistan, these efforts fell into two categories. The first category consists of activities directed at the Afghan government and society to promote reform, accountability, and transparency. These include institutional reform and capacity building, improving judicial capabilities for investigations and prosecutions, improving financial oversight, and strengthening civil society organizations and the media. To work toward these objectives, State Department and other officials applied diplomatic pressure on the Afghan government and took some measures to condition the provision of aid on host government performance. DOD, State, USAID, Treasury, and Justice also pursued programmatic initiatives to move the anticorruption agenda forward. The second category of anticorruption activities consists of those directed internally, that is, toward U.S. policies and practices. The focus here is on improving management of contracting systems and aid programs to ensure they do not contribute to corruption. In Afghanistan, DOD, State, and USAID took steps to try to ensure contractors and subcontractors, who were bidding on and implementing assistance programs and military contracts, were not engaged in bribe-taking, embezzlement, collusion, extortion, or other forms of corruption. To be successful, work in either category must be grounded in an understanding of the nature and scope of corruption in a particular environment. Political economy and network analyses are crucial to revealing how corruption occurs. These analyses should look comprehensively at who is engaging in corruption; their family, business, and political ties and interests; the licit and illicit financial networks they use; the larger power structures that protect them; and institutional weaknesses and vulnerabilities. In Afghanistan, such analyses revealed a strong nexus of corruption, narcotics trafficking, criminality, and the insurgency. This complexity made the issue difficult to solve and required the close coordination of the military, diplomatic, development, and law enforcement communities. SIGAR I CORRUPTION IN CONFLICT I SEPTEMBER 2016 13
Page 1 and 2: Special Inspector General for Afgha
Page 3 and 4: Special Inspector General for Afgha
Page 5 and 6: TABLE OF CONTENTS EXECUTIVE SUMMARY
Page 7 and 8: ILLUSTRATIONS FIGURES FIGURE 1: Sha
Page 9 and 10: In the early years of the reconstru
Page 11: Recommendations To address corrupti
Page 14 and 15: 1. Corruption undermined the U.S. m
Page 16 and 17: large sums of money. For example, a
Page 18 and 19: Corruption Has Increased from Pre-2
Page 20 and 21: capacity, legislative and regulator
Page 22 and 23: dynamic we have to change if we wan
Page 27 and 28: ISAF Public Affairs photo PART ONE
Page 29 and 30: checkpoints, activities which they
Page 31 and 32: usinesses that served the internati
Page 33 and 34: for the long-term threat that corru
Page 35 and 36: combat corruption globally, which i
Page 37 and 38: opium when they raided the governor
Page 39 and 40: measurable benchmarks and target da
Page 41: While certain individuals and offic
Page 44 and 45: that Afghan leaders were not commit
Page 46 and 47: U.S. government documents increasin
Page 48 and 49: the state’s legitimacy and capabi
Page 50 and 51: and helping to fund the enemy. The
Page 52 and 53: would benefit from an approved stra
Page 54 and 55: fundamental flaw: The Afghan govern
Page 56 and 57: By the time of Salehi’s arrest an
Page 59 and 60: U.S. Marine Corps photo PART THREE
Page 61 and 62: and partners, other countries in th
Page 63 and 64: BOX 2: ABSORPTIVE CAPACITY In the d
Page 65 and 66: Capacity-building efforts would be
Page 67 and 68: “The international community held
Page 69 and 70: success, due in part to unwillingne
Page 71 and 72: ability to conduct robust oversight
Page 73 and 74: The story elicited a sharp congress
Page 75 and 76:
London, Kabul, and Tokyo Conference
Page 77 and 78:
officials. The task force member no
Page 79 and 80:
These cancelled or forestalled cont
Page 81:
a desire to tackle corruption and a
Page 84 and 85:
These findings underscore that the
Page 87 and 88:
LESSONS USAID/Afghanistan photo Bas
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eport, international assistance acc
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in Afghanistan failed to address th
Page 94 and 95:
This legislation should: • Requir
Page 96 and 97:
Intelligence agencies should: • C
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10. The State Department should pla
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the U.S. Embassy in Kabul, which wa
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APPENDIX B ABBREVIATIONS 4A Assista
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ODA OECD OEF OSD-P OTI PACC PRT PSC
Page 106 and 107:
APPENDIX D Strategy or Plan Assessm
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Organization Lead Agency Mandate Hi
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APPENDIX F U.S. Support to Afghan G
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ENDNOTES 1 Ryan Crocker, SIGAR inte
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34 OECD Development Assistance Coun
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65 Fishstein and Wilder, Winning He
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101 Joint Staff, Joint and Coalitio
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148 Dressler, Counterinsurgency in
Page 122 and 123:
192 NSC, White Paper on the Interag
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235 U.S. Embassy Kabul, “Afghanis
Page 126 and 127:
284 Department of the Treasury, “
Page 128 and 129:
Transition to Transformation, July
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368 SIGAR, Quarterly Report to the
Page 132 and 133:
411 Torabi, email to SIGAR, March 5
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463 Congressional Research Service,
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525 U.S. Embassy Kabul, U.S. Govern
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586 U.S. Embassy Kabul, “Update o
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633 DOD, Report on Progress toward
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SELECT BIBLIOGRAPHY Afghan Research
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Century Foundation. Afghanistan: Ne
Page 146 and 147:
Federal Bureau of Investigation.
Page 148 and 149:
Human Rights Watch. Blood-Stained H
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Koumans, Mark. Testimony before the
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Pritchett, Lant, Michael Woolcock,
Page 154 and 155:
Schmeidl, Susanne. “The Man Who W
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Stanekzai, Mohammad M. “Afghanist
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U.S. Department of State, Office of
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United Nations Development Programm
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ACKNOWLEDGMENTS SIGAR acknowledges
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SIGAR SPECIAL INSPECTOR GENERAL FOR
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CORRUPTION IN CONFLICT

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