CORRUPTION IN CONFLICT

overhead for each of these levels absorbed 20 percent of the budget, and provided
a hypothetical situation to explain further:
The local engineer hired to implement the project knows his
incentives. Everyone is under pressure to spend money, so
he can inflate his budget. He can get second-rate materials
because no one will check the work (or he can likely pay off
inspectors). He will hire family to do the work. He, and every
other contractor, is graded not on quality but on how many
schools he builds, because … this is the metric demanded in
Washington. Therefore, he has little incentive to coordinate
with local communities, other donors, or the local government.
Just get the schools built so he can get the next contract. In
addition, he doesn’t know how long the money will continue
to flow, and he has many people in his family and community
depending on him and telling him that it is his responsibility to
make money now to support the rest of them when things go
bad again. So, even for honest contractors, the incentives are
for expensive, shoddy, uncoordinated, quickly built schools.
And that is often what we got. 103
In an interview for this report, Ambassador Ryan Crocker lamented the effects of
an overwhelmingly large amount of assistance, amid pressures to spend quickly:
I always thought Karzai had a point, that you just cannot put
those amounts of money into a very fragile state and society,
and not have it fuel corruption. You just can’t …. You need
to have corruption framing everything you propose to do, in
terms of development and reconstruction, and to overcome
the instinctive American urge to do a whole lot and to do it
tomorrow, to understand that if you try to do that, not only
are there fundamental capacity questions … but that you will
inevitably be fueling large-scale corruption.” 104
Another former U.S. official spoke to the same problems. Kirk Meyer, who served
in Afghanistan for five years and directed a counterterrorist finance cell, said that
by the time a local contractor received money to build a project, he “didn’t have
enough money to build the road, plus pay the Taliban, plus pay the corrupt officials
who usually took about 20 percent of every development project. So basically, the
contractors didn’t build the projects or they built them shoddily, and because the
projects were in contested areas, nobody verified whether they were built.” 105
From 2001 to 2008, these dynamics characterized an aid delivery and contract
system that would later be overwhelmed by even higher levels of assistance, and
by greater political pressure to spend quickly and demonstrate progress.
Emerging But Insufficient Appreciation for the Corruption Threat
Reviews of planning documents from 2001 to 2004 and interviews with former
officials suggest there was inadequate appreciation within DOD, State, and USAID
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SIGAR I CORRUPTION IN CONFLICT I SEPTEMBER 2016