U.S. Army $1 Billion Afghan Trucking Plan Aims to End ‘Racket’
The U.S. Army tomorrow will begin using a $1 billion trucking contract in Afghanistan with new safeguards designed to prevent the funneling of millions of dollars in protection money to warlords.
The adoption of the new National Afghan Trucking contract, between the Army and 20 local trucking companies, will be used by the U.S. military to transport supplies through the war-torn country. It comes more than a year after a congressional investigation uncovered what its chief author described as a “vast protection racket” in which contractors were forced to pay warlords and insurgents to obtain safe passage.
The new contract expands from 8 to 20 the number of prime contractors used, ensures greater transparency of subcontractors, establishes a code of ethics, and provides greater oversight and vetting of all companies, said Kim Denver, the Army’s deputy assistant secretary for procurement.
While applauding those efforts, members of a House subcommittee today said the military is still not doing enough to combat corruption in Afghanistan contracting.
“The Defense Department has to get this right,” said Representative Jason Chaffetz of Utah, the Republican chairman of the House Oversight and Government Reform subcommittee on national security, at a public hearing. “We’re talking about billions and billions and billions of dollars.”
The Commission on Wartime Contracting, a Pentagon advisory panel, last month found that more than $30 billion in U.S.- funded contracts in Iraq and Afghanistan were lost to waste, fraud and abuse.
‘Tip of the Iceberg’
“I fear that these reports are only the tip of the iceberg,” said Representative John Tierney of Massachusetts, the subcommittee’s most senior Democrat. “The extortion of international contractors is a booming industry,” he said.
Tierney said he was particularly concerned about the refusal of the Defense Department to bar an Afghan private security contractor known as the Watan Group from any future U.S. business. He has accused the contractor of paying bribes to local Afghan officials.
Gary Motsek, who oversees wartime contracting as deputy assistant secretary of defense for program support, said the Army reached an “administrative agreement” with Watan that will prevent it from providing convoy security for three years.
Tierney said the company was already out of the trucking business, “so that wasn’t much of a punishment.”
Instead of doing its own investigation of Watan Group, Tierney said, “the Army basically cut a deal.”
Increasing Penalties
Tierney also said penalties may need to be increased to discourage the diversion of funds to warlords and insurgents. He said contractors face a penalty of only $25,000 for not delivering a full truckload of oil, even though the load is valued at $40,000.
“The penalty may not be offsetting the actual street value,” agreed Brigadier General Stephen Townsend, who advises the chairman of the Joint Chiefs of Staff on Afghanistan and Pakistan issues. The military is working to adjust the penalty, he said.
Tierney said he is drafting legislation to overhaul war- zone contracting and introduced a bill to establish a permanent special inspector general for overseas contingency operations.
Motsek told the panel that corruption in Afghanistan will never be eliminated, though it can be reduced.
“This is a country that’s based on doing things this way for 3,000 years and we’re not going to change it overnight,” he said.
Motsek, in an interview, said he wouldn’t disclose the names of the 20 prime contractors in the new contract because of security concerns.
To contact the reporter on this story: David Lerman in Washington at dlerman1@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
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