CORRUPTION IN CONFLICT

By 2014, MEC successes included issuing the report of its public inquiry into
the Kabul Bank crisis and maintaining public attention on implementation of
its related recommendations. 439 The MEC also brought attention to alleged
corruption in the Law and Order Trust Fund for Afghanistan (LOTFA) and
advanced the investigation into graft at the Dawood National Military Hospital. 440
A further success was the MEC’s analysis of 38 of the 146 anticorruption
provisions of Presidential Decree 45 on governance and corruption, including
tracking substantive implementation actions by relevant GIROA departments. 441
The MEC was a successful model for enhancing transparency and bringing
pressure to bear on GIROA, while also providing technical benchmarks
and reforms for both donors and the government. The MEC’s virtue was
independence and technical expertise; however, this virtue became a liability in
that it had no statutory authority to act and received uneven political support
from the Afghan government. The MEC could make strong recommendations,
but had no power to ensure their implementation. Following the formation of
the National Unity Government in September 2014, however, President Ashraf
Ghani and Chief Executive Abdullah Abdullah set a tone of greater support for
the MEC’s work. According to the MEC’s March 2015 semiannual report, after a
series of meetings with Ghani and Abdullah, MEC officials observed a “dramatic
improvement” in the responsiveness of Afghan government offices to implement
MEC recommendations. 442
On-Budget versus Off-Budget Assistance
Donors and GIROA differed in their thinking about appropriate mechanisms
of aid delivery. They often disagreed whether “on-budget” or “off-budget”
assistance was more susceptible to corruption or other leakages. On-budget
assistance is defined as development assistance (either from bilateral
contributions or multilateral trust funds) that is channeled through the Afghan
government’s core budget. 443 Off-budget assistance is executed through
contracts, grants, and cooperative agreements that remain outside the Afghan
budget and beyond the reach of Afghan officials, theoretically providing more
control to donors. 444 Thus, when donors harbored concerns about corruption
and weak capacity in the host government, they often favored off-budget aid
mechanisms. 445
As aid levels rose, Afghan leaders increasingly criticized off-budget assistance
for encouraging parallel structures—entities outside government that competed
for and managed development projects—which distorted resource allocation,
led to redundancy, and siphoned talented Afghan employees away from the
government. 446 In addition, off-budget assistance denied GIROA the opportunity
to exercise its budgetary and oversight processes and to “own” projects in
terms of operations and maintenance. Off-budget assistance thus undermined
capacity-building efforts and local ownership. 447 Furthermore, as donors grew
more aware of systemic corruption issues, they realized off-budget mechanisms
could fuel corruption, too. 448
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SIGAR I CORRUPTION IN CONFLICT I SEPTEMBER 2016