[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
          INVESTIGATING WASTE, FRAUD AND ABUSE IN AFGHANISTAN

=======================================================================


                                HEARING

                               BEFORE THE

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 6, 2012

                               __________

                           Serial No. 112-162

                               __________

        Printed for the use of the Committee on Foreign Affairs


Available via the World Wide Web: http://www.foreignaffairs.house.gov/ 
                                  or 
                       http://www.gpo.gov/fdsys/

                                 ______




                  U.S. GOVERNMENT PRINTING OFFICE
74-637                    WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001


                      COMMITTEE ON FOREIGN AFFAIRS

                 ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey     HOWARD L. BERMAN, California
DAN BURTON, Indiana                  GARY L. ACKERMAN, New York
ELTON GALLEGLY, California           ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
DONALD A. MANZULLO, Illinois         DONALD M. PAYNE, New Jersey--
EDWARD R. ROYCE, California              deceased 3/6/12 deg.
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
RON PAUL, Texas                      ELIOT L. ENGEL, New York
MIKE PENCE, Indiana                  GREGORY W. MEEKS, New York
JOE WILSON, South Carolina           RUSS CARNAHAN, Missouri
CONNIE MACK, Florida                 ALBIO SIRES, New Jersey
JEFF FORTENBERRY, Nebraska           GERALD E. CONNOLLY, Virginia
MICHAEL T. McCAUL, Texas             THEODORE E. DEUTCH, Florida
TED POE, Texas                       DENNIS CARDOZA, California
GUS M. BILIRAKIS, Florida            BEN CHANDLER, Kentucky
JEAN SCHMIDT, Ohio                   BRIAN HIGGINS, New York
BILL JOHNSON, Ohio                   ALLYSON SCHWARTZ, Pennsylvania
DAVID RIVERA, Florida                CHRISTOPHER S. MURPHY, Connecticut
MIKE KELLY, Pennsylvania             FREDERICA WILSON, Florida
TIM GRIFFIN, Arkansas                KAREN BASS, California
TOM MARINO, Pennsylvania             WILLIAM KEATING, Massachusetts
JEFF DUNCAN, South Carolina          DAVID CICILLINE, Rhode Island
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
ROBERT TURNER, New York
                   Yleem D.S. Poblete, Staff Director
             Richard J. Kessler, Democratic Staff Director
                                 ------                                

              Subcommittee on Oversight and Investigations

                 DANA ROHRABACHER, California, Chairman
MIKE KELLY, Pennsylvania             RUSS CARNAHAN, Missouri
RON PAUL, Texas                      DAVID CICILLINE, Rhode Island
TED POE, Texas                       KAREN BASS, California
DAVID RIVERA, Florida

                            C O N T E N T S

                              ----------                              
                                                                   Page

                               WITNESSES

Mr. John Hutton, Director, Acquisition and Sourcing Management, 
  U.S. Government Accountability Office..........................    15
Mr. Charles Johnson, Jr., Director, International Affairs and 
  Trade, U.S. Government Accountability Office...................    17
Mr. Larry Sampler, Jr., Senior Deputy Assistant to the 
  Administrator, Office of Afghanistan and Pakistan Affairs, U.S. 
  Agency for International Development...........................    48

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

The Honorable Dana Rohrabacher, a Representative in Congress from 
  the State of California, and chairman, Subcommittee on 
  Oversight and Investigations:
  New York Times article, ``Intrigue in Karzai Family as an 
    Afghan Era Closes,'' dated June 3, 2012......................     2
  Prepared statement.............................................    11
  London Daily Telegraph article, ``Captured Taliban Bombers 
    Freed After Paying Bribes, Say Americans,'' dated June 5, 
    2012.........................................................    38
Mr. John Hutton and Mr. Charles Johnson, Jr.: Prepared statement.    18
Mr. Larry Sampler, Jr.: Prepared statement.......................    51

                                APPENDIX

Hearing notice...................................................    70
Hearing minutes..................................................    71


          INVESTIGATING WASTE, FRAUD AND ABUSE IN AFGHANISTAN

                              ----------                              


                        WEDNESDAY, JUNE 6, 2012

                  House of Representatives,
      Subcommittee on Oversight and Investigations,
                              Committee on Foreign Affairs,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:31 p.m., in 
room 2200, Rayburn House Office Building, Hon. Dana Rohrabacher 
(chairman of the subcommittee) presiding.
    Mr. Rohrabacher. I call to order this hearing of the 
Oversight and Investigations Subcommittee of the House Foreign 
Affairs Committee, and I was just about to ask for unanimous 
consent to move ahead.
    All right. So what we will be doing is we both have some 
opening statements, and then we will proceed with the 
witnesses, and hopefully we can be done here--votes will start 
around 4:30. So our goal is to be totally out of here and done 
with the hearing by 4:30. Let's see if we can do that.
    So I will begin, with your permission, begin with an 
opening statement.
    James Risen has had a story in the New York Times, in fact 
it was this last Sunday, which focused on the family of Afghan 
President Hamid Karzai.
    [The article referred to follows:]
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Rohrabacher. Risen reported and I quote:

        ``Members of his family are trying to protect their 
        status, weighing how to hold onto power while secretly 
        fighting among themselves for the control of the 
        fortune they have amassed in the last decade. One 
        brother, Qayum Karzai, is mulling a run for the 
        Presidency when his brother steps down in 2014.''

    There have been previous reports that Hamid himself might 
try to change or circumvent the constitution to serve a 
prohibited third 5-year term. Risen quotes a business partner 
of the Karzai family as saying, and I quote:

        ``We have an illegitimate and irresponsible government 
        because of Karzai and his family.''

    I have long been concerned about this problem, because the 
U.S. has unwisely bet everything on Hamid Karzai, giving him 
unprecedented power, in an overly centralized government that 
contradicts Afghan history and culture with its over-
centralization. Ten years of his rule has left the country 
teetering on the brink of collapse, even with the backing of 
half a trillion American dollars, and a vast and NATO Army at 
his disposal, from which some 2,000 Americans have been killed, 
and thousands more have been grievously wounded. And we are now 
on the hook for perhaps another decade of blood and treasure 
after 2014 to maintain an inherently flawed strategy.
    I wanted the GAO to look specifically into business deals 
involving Hamid Karzai and his family and their inner circle 
that have used U.S. funds. I was told that the GAO could not 
provide answers because, and I quote:

        ``The lack of complete data on U.S. contracts with 
        performance in Afghanistan, the difficulty in obtaining 
        publicly releasable information on Afghan firms, and 
        the improbability that ownership interest in firms 
        could be identified. Additionally, the database does 
        not provide information on subcontract awards.''

    USAID is one of those agencies that is not keeping adequate 
records on who is benefiting from American aid, and I want to 
know why. I want to know exactly why that is the situation, or 
that can be disputed. If a reporter for the New York Times can 
find out about Karzai's family, why can't USAID? I approached 
the Special Inspector General for Afghanistan Reconstruction 
and was told that they couldn't do it because they only have 
120 people working for them, working there, it said.
    Well, as has been widely reported, President Karzai denied 
me entry into Afghanistan as part of a congressional delegation 
in April. I have serious concerns about the strategy we have 
been pursuing in Afghanistan, but what has made the debate 
personal for Karzai, is this investigation into the corruption 
of his administration and what I may call a decentralization 
strategy that I support, and perhaps that is making him upset 
as well, because what reforms I am calling for could mean a 
great deal to the family fortune, so to speak.
    Many people in Washington as well as in Kabul do not want 
me or anyone else to look into the basket to see if all the 
eggs are still there. That includes the State Department, which 
has gone all in for Karzai, but it also includes Congress, 
where my request to hold hearings, conduct investigations, and 
explore alternative strategies for Afghanistan have been denied 
time and again. Indeed, I wonder if someone will cut off the 
broadcast of this session before it concludes, which is what 
happened last time I held such a hearing.
    Too many careers have been tied to Karzai; so many that the 
campaign is now out to save him. Instead, we are ending up 
trying to save him rather than save Afghanistan. Indeed, I was 
told not to mention Karzai in the title of this hearing. SIGAR 
has reported Afghanistan is plagued by corruption and is tied 
for third as the most corrupt country in the world, according 
to Transparency International's Annual Corruption Perception 
Index. Corruption threatens the U.S. military and 
reconstruction missions as well as the Afghan Government's 
legitimacy among its own people.
    Unfortunately, the records being kept by the United States 
Government agencies and departments, including USAID, and the 
lack of access to the Afghan Government's records, has made it 
virtually impossible for the GAO to do its job or to help this 
Oversight and Investigations Subcommittee do its job to 
safeguard the interests of the United States and the American 
taxpayer.
    There has, however, been a scandal so big that it could not 
be hidden by the bureaucracy. That was the Kabul Bank case. The 
Kabul Bank was the largest commercial bank in Afghanistan and 
held one-third of the entire banking system's assets. It was 
looted through a series of insider loans that were never meant 
to be paid back. The bank collapsed and was bailed out to the 
tune of $825 million according to the IMF. One of the central 
figures in that bank scandal was Hamid Karzai's brother, 
Mahmoud Karzai, who was given interest-free loans which he then 
used in part to buy a stake in the bank itself.
    It has been reported that much of the money loaned out by 
the bank was used to speculate on real estate in Dubai. So 
there was not even a pretext that the capital was being used to 
provide development for the Afghan economy. Which brings us to 
the U.S. Agency for International Development, which will be 
represented here today on our second panel.
    USAID and its contractors were involved in advising the 
Afghan Central Bank on regulations and supervising the 
operation of the banking system at the time the Kabul Bank 
scandal was taking place. USAID has claimed it could not have 
prevented such fraud, and I am hoping its witnesses today, or 
witness today, can elaborate on why it could not do so. The 
U.S. used the the Bank of Kabul for many, many transactions, so 
we had leverage and we had a great deal relationship with the 
people running the bank.
    For Fiscal Year 2013, the USAID request for Afghanistan is 
$5.2 billion. Since 2002, USAID has awarded $15.2 billion in 
Afghanistan reconstruction projects. However, a majority staff 
report from the Senate Foreign Relations Committee on June 8th 
of 2011, found that, and I quote.

        ``Roughly 80 percent of USAID's resources are being 
        spent in Afghanistan's restive south and east. Only 20 
        percent is going to the rest of the country.''

    Would it not be better as a long-term strategy in a civil 
war-type situation to build up the capabilities and areas that 
were loyal, or more loyal to you and to our country--for 
example, the northern--the areas where the Northern Alliance is 
more dominant? There is an old adage that goes: ``I don't need 
to pay my enemies to hate me because they will do it for 
free.'' It is our friends we want to reward.
    So there should be a distribution of aid--and there should 
have been all along--that is much fairer and more balanced than 
simply this southern-tier push to focus aid that we have seen, 
that we now know about in Afghanistan. The GAO reports have 
raised questions about how well USAID has protected American 
taxpayer dollars in Afghanistan, and I was shocked to learn 
from one report that it was only in January 2011 that USAID 
created a process to vet non-U.S. contractors regarding whether 
they were a terrorist or organized-crime funding risk.
    How many years of counterterrorist campaign does it take to 
start to worry about whether American funds are going into the 
pockets of terrorists? Part of the problem is that so many 
contracts get passed down through multilayers of 
subcontractors, so somebody gets the money. Then there comes 
the subcontractor, and who the heck knows who the 
subcontractor's subcontractor is. At each step the money is 
taken out of the stream, but the work then is passed on to 
someone else. It is less a process of construction than a 
systematic process of looting conducted by a labyrinth of shady 
connections that no one seems to be able to keep track of, and 
that everyone knows about the ties that it has--or whoever they 
are dealing with have to the government.
    So Afghani leaders can get rich through a $300 million 
power plant in Kabul that is too expensive to run, or a power 
plant in Kandahar that has no electric grid to which it can be 
connected, or a Helmand River dam whose generator is rusted as 
the project has stalled.
    We have in Ghazni Province, $4 million went to an Afghan 
firm whose owners fled to the Netherlands with the money after 
paving less than a mile of a 17-mile road project. I am hoping 
that both the GAO and the USAID can suggest a better way to 
control American money going forward through 2014 and beyond.
    I hope we can find an alternate strategy in Afghanistan, 
but whatever we decide to do, we need to make sure the money we 
spend actually goes to support our objectives, especially 
doesn't go to support people who hate the goals that we have 
laid down and our people are giving their lives for as we 
speak. But that hasn't been done so far.
    In 2010, I was briefed on a new software system that can be 
seamlessly inserted into all of the American taxpayer 
expenditures of aid funds for Afghanistan or any other 
recipient. If we insist that our aid be spent from a separate 
account and paid by a check, then this software will track 
every transaction as our money moves through the local economy, 
including the initial transaction involving our money that is 
made to a recipient outside of Afghanistan.
    So I think the technology exists that we can get the job 
done if the will exists to try to get control of this 
situation. Corruption must be stamped out. It would be ironic, 
as well as tragic, if one of the results of American 
development assistance was to provide the Afghan oligarchy in 
which the U.S. has invested so much, the means to implement 
personal exit strategies if things get rough.
    Most of the Karzai family and its cronies did flee the 
country the last time the Taliban invaded, and only came back 
to Afghanistan when they were protected by United States 
troops. In contrast, the Northern Alliance fought the Taliban 
every step of the way, never quit, and were on the vanguard 
when we fought to drive the Taliban out of Afghanistan in 9/11.
    We do not want cowardly allies who will take their ill-
gotten gains and cut and run, rather than stand and defend 
their country. We need allies who are rooted in the country, 
not sitting on huge foreign bank accounts and willing to take 
off once the going gets rough.
    With that said, I will now yield for an opening statement 
of any length that you would like to Mr. Carnahan, our ranking 
member.
    [The prepared statement of Mr. Rohrabacher follows:]
    
    
    
    
    
    
                              ----------                              

    Mr. Carnahan. Thank you, Mr. Chairman, and to our witnesses 
for being with us today. This is an important hearing, and is 
an important part of continuing the bipartisan tradition of 
this subcommittee conducting rigorous oversight of U.S. 
reconstruction efforts in Afghanistan.
    Two years ago, as I chaired the committee, we conducted a 
set of hearings, again bipartisan, on our reconstruction 
efforts in Iraq and Afghanistan and looked at what lessons the 
administration should learn in order to reduce the rampant 
waste, fraud, corruption, and abuse of U.S. taxpayer dollars. 
We heard from Stuart Bowen, the Special Inspector General for 
Iraq Reconstruction. He described an adhocracy with blurred 
chains of command between DoD, State, and USAID. He emphasized 
the lack of institutional structure and human resources to 
effectively perform stabilization and reconstruction 
operations.
    For the past several years I have been working on 
developing legislation to increase accountability, efficiency, 
and transparency in our overseas contingency operations. And I 
am sure we will hear from our witnesses today reforms have been 
implemented and improvements have been made on some fronts, but 
continuing to make real immeasurable progress in these areas is 
absolutely essential, especially as our troop levels decrease 
and Congress is tightening budgets across the government.
    No doubt the environment in which USAID, State, and our 
international partners operate is difficult and complex. But 
the work they do is critically important to the U.S., is vital 
to our national security interest, and reflects the moral 
values of who we are as a country. That is why regular and 
detailed oversight is required.
    Our development programs help build local capacity to 
invest in the programs that increase the political 
participation of women, help build the democratic institutions, 
expand health programs for women and children, and help 
transition the Afghan economy away from an overreliance on its 
scarce natural resources.
    I would like to commend the work of our diplomats who are 
working under complicated and sometimes dangerous 
circumstances. As it is our job to ensure strict accounting of 
all U.S. taxpayer funds, I commend the chairman, again, for 
calling this hearing and I look forward to hearing from our 
witnesses today.
    Mr. Rohrabacher. Thank you very much.
    Our first panel will be the Government Accountability 
Office, the GAO. John Hutton, who will be testifying as a 
director at the U.S. Government Accountability Office working 
for the Acquisition and Sources Management Team; in this 
capacity he provides direct support to congressional 
committees, and Members on a range of acquisition and sourcing 
issues. Throughout his 34-year career at the GAO, I remember 
that you had a full head of hair and it was totally dark hair 
when you first started there.
    Mr. Hutton. Yes, sir--and mustache.
    Mr. Rohrabacher. But throughout that long 34-year career at 
the GAO he has worked on a wide range of issues. Prior to his 
appointment to the Senior Executive Service he lead the GAO's 
reviews related to such diverse issues as Iraq and Afghanistan 
reconstruction, U.S. Mexico border infrastructure, U.S. and 
international efforts to combat AIDS and the promotion of U.S. 
exports. So you had all of the easy jobs that were given to you 
over the years. He holds two master's degrees; one in public 
administration, Syracuse, Maxwell School; and in one national 
security strategy from the National War College.
    He will be presenting the GAO testimony, but with him to 
help answer questions, is Charles Michael Johnson Jr., a senior 
executive with the U.S. Government Accountability Office. Mr. 
Johnson, is the director responsible for the GAO's portfolio 
addressing U.S. international counterterrorism and security-
related issues. Prior to joining the GAO's international 
affairs and trade team, Mr. Johnson was assistant director in 
the GAO's Homeland Security and Justice team. He spent a year 
detailed to the House of Representatives Homeland Security 
Committee, between 2005 and 2006, where he worked on border 
security and immigration issues. Mr. Johnson graduated summa 
cum laude from the University of Maryland with a degree in 
business administration.
    So Mr. Hutton, you may proceed and then we will go on to a 
second panel in which Larry Sampler, Senior Deputy Assistant to 
the Administrator of the Office of Afghanistan and Pakistan 
Affairs at the U.S. Agency for International Development will 
be testifying. And you may proceed with what time you may 
choose to consume, hopefully around 5 to 10 minutes.

    STATEMENT OF MR. JOHN HUTTON, DIRECTOR, ACQUISITION AND 
   SOURCING MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Hutton. Thank you, Mr. Chairman. Chairman Rohrabacher, 
Ranking Member Carnahan, and members of the subcommittee. Thank 
you for inviting Mr. Johnson and I to discuss the 
accountability and oversight of U.S. funds to assist 
Afghanistan. GAO has issued over 100 reports and testimonies on 
U.S. efforts, including those managed by USAID, DoD, and State 
in support of congressional oversight of the nearly $90 billion 
appropriated since 2002, to help secure, stabilize, and rebuild 
Afghanistan. Our work complements that of the Special Inspector 
General for Afghanistan Reconstruction and the Inspector 
Generals from DoD, USAID, and State.
    Now, drawing on past GAO work, our statement focuses on 
USAID and our findings in three key areas.
    First, our reports have shown that USAID faces systemic 
challenges that have hindered its management and oversight of 
contracts and assistance instruments, such as grants, used to 
carry out development programs and support USAID's mission in 
Afghanistan. These challenges include gaps in planning for the 
use of contractors and assistant recipients, and having 
visibility into their numbers.
    Now, while reliable data on contractors and grant 
recipients are a starting point for ensuring proper management 
and oversight, we have reported for the last 4 years on USAID's 
limited visibility into its Afghanistan contracts and grants as 
well as the personnel working under them.
    While USAID, along with State and DoD, agreed in 2008 to 
use a common database to track statutorily required information 
on contracts and associated personnel, we found in September 
2011, that the database still does not reliably track such 
information.
    Further, other sources of such information used by USAID 
have their own limitations. USAID has taken some actions to 
mitigate risks associated with contracting in Afghanistan. 
Under its Accountable Assistance for Afghanistan Initiative, 
USAID began vetting prospective non-U.S. contractors and grant 
recipients in 2011. Vendor vetting is intended to counter the 
risk of U.S. funds being diverted to support criminal or 
insurgent activity.
    At the time of our June 2011 report, we recognized that 
USAID's vetting process was in its early stages and recommended 
that USAID formalize a risk-based approach to identify and vet 
the highest-risk vendors. We also made a recommendation to 
promote interagency collaboration with DoD and State to better 
ensure that non-U.S. vendors potentially posing a risk are 
vetted, all of which USAID agreed to do.
    Second, we have identified weaknesses in USAID's oversight 
of program performance. We appreciate that the USAID mission in 
Afghanistan is overseeing programs in a high-risk security 
environment and has experienced high staff turnover, both of 
which hinder oversight. However, USAID has not consistently 
followed its own performance management and evaluation 
procedures in Afghanistan, which makes its programs more 
vulnerable to corruption, waste, fraud, and abuse. While we 
found in 2010 that implementing partners routinely reported on 
program's progress, USAID did not always approve the 
performance indicators being used and did not ensure that 
targets were established as required. USAID concurred with our 
recommendations to ensure that programs have such performance 
indicators and targets and to consistently assess and use 
program data and evaluations to shape the current and the 
future programs.
    I will now turn to our third key area and that is the 
accountability for direct assistance. That is funding that is 
provided either bilaterally to individual Afghan Ministries, or 
multilaterally to trust funds administered by the World Bank 
and the U.N. In 2011, we found that USAID did not complete pre-
award risk assessments such as determining the awardee's 
capability to independently manage and account for funds for 
bilateral direct assistance awards. Similarly, USAID had not 
consistently complied with its multilateral risk assessment 
practices. For example, USAID did not conduct a risk assessment 
before awarding an additional $1.3 billion to the World Bank's 
Afghanistan Reconstruction Trust Fund. Such assessments and 
other internal controls are key to providing reasonable 
assurances that agency assets are safeguarded against fraud and 
mismanagement.
    Based on our recommendations, USAID updated its policies to 
require pre-award risk assessments for all bilateral direct 
assistance awards, and also revised the guidance on pre-award 
risk assessments for the World Bank and other public 
international organizations.
    In closing, we have made numerous recommendations aimed at 
improving USAID's management, accountability, and oversight of 
assistance funds in Afghanistan. USAID has generally agreed and 
has taken steps to address them. Mr. Chairman, robust 
management and oversight of taxpayer's funds is paramount, 
particularly in challenging environments like Afghanistan where 
institutional capacity is weak.
    We would be happy to respond to any questions you may have.
    Mr. Rohrabacher. And Mr. Johnson, you are just here to jump 
in. Did you have something that you would like to just add--or 
add to that?

STATEMENT OF MR. CHARLES JOHNSON, JR., DIRECTOR, INTERNATIONAL 
    AFFAIRS AND TRADE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Johnson. Basically, what I would like to highlight a 
little bit more is that the USAID Administrator in 2010 
committed to this Congress that it would not award any 
additional bilateral direct assistance to the Afghan Ministries 
until pre-award risk assessments were done. We did find some 
cases, as John pointed out, where after that commitment was 
made in 2010 that there were additional awards done without 
that being required.
    Recently, we have discovered that there is a new policy put 
in place to help ensure that that doesn't take place in the 
future. And just to further elaborate on the World Bank, or the 
public international organizations issues where the U.S. is 
relying on these institutions for safeguards and controls, I 
would have to note that the U.S. has been working with the 
World Bank in particular to try to enhance U.S. access to 
certain information. That is a process for which they have 
ongoing negotiations with the World Bank.
    [The prepared statement of Mr. Hutton and Mr. Johnson 
follows:]
































                              ----------                              

    Mr. Rohrabacher. Okay. Let me, it is very frustrating to 
think that we are, you know, talking about people, we are 
saying we made these commitments back in 2010, but 2010 was 
years after we had been involved in Afghanistan. How much aid 
has the United States given Afghanistan since the liberation of 
Afghanistan from the Taliban?
    Mr. Johnson. Well, I guess I will take that question. I 
think our estimate is that it is close to $90 billion, and that 
does not include the cost of the U.S. troops, which is an 
enormous cost on top of that.
    Mr. Rohrabacher. Right. So $90 billion in actual foreign 
aid, or American aid, not American military aid, but sort of, 
we are talking about, you know, economic.
    Mr. Johnson. Well, that aid would focus on security, 
government and development-related projects. So it would be a 
significant amount that is actually paying for the Afghan 
security forces, the Afghan Army and police, a significant 
amount.
    Mr. Rohrabacher. Okay. How much did we give them that is 
nonmilitary oriented? I mean, it is one thing to understand 
that we had to give so much and so many AK-47s that we had to 
buy from somebody and give it to some military units there, but 
what--how much have we given the development assistance, and 
what we would consider to be humanitarian, and civilian aid?
    Mr. Johnson. Okay, the best estimate I can come up with, 
given work we have done that has looked at the Afghan security 
forces funds has been about $43 billion, roughly, recently. So 
I would estimate roughly close to $46 billion or $47 billion in 
terms of aid that has gone there. But we have reported--we did 
a report looking at the Afghan Government reliance on donors 
for money, which as we know, the Afghan Government cannot 
afford to sustain itself in some of the projects that we are 
putting in place to which the U.S. has been the largest 
contributor.
    Mr. Rohrabacher. Right. I am looking for a figure. How much 
in civilian aid have we given Afghanistan since the liberation 
from the Taliban?
    Mr. Johnson. My estimate for--would be----
    Mr. Rohrabacher. Nonmilitary aid.
    Mr. Johnson. Nonmilitary, nonsecurity assistance in terms 
of expenditure numbers, that is the best number I have, would 
be roughly somewhere in the ballpark of $12-15 billion. 
Expenditures is what I am saying, where money has actually been 
disbursed and hit the ground. There is money in the pipeline, 
obviously, but in terms of disbursements----
    Mr. Rohrabacher. Right. So you are saying that we have 
actually--and that is over this last 10-year period, basically.
    Mr. Johnson. Well, my numbers go from 2006 to 2010, but 
basically, that is where the surge has taken place. In the 
earlier years the numbers were much smaller. So my range would 
be somewhere in the range of $12-15 billion, is the range I can 
give you. We can go back and give you the number going back to 
2002, but since 2006 up through 2010, the expenditure numbers 
show roughly about $12 billion.
    Mr. Rohrabacher. Since 2006.
    Mr. Johnson. Right.
    Mr. Rohrabacher. But how many years have we been in 
Afghanistan before 2006?
    Mr. Johnson. We have been there since 2002. A lot of the 
money early on was security-related money. The data in the 
reports that we recently noted, the U.S. has paid for 90 
percent of the security. We probably pay roughly about 36 or 37 
percent of the nonsecurity. So the donor international 
community actually has contributed more in terms of expenditure 
in the nonsecurity area than the U.S. There has been a shift in 
that area.
    Mr. Rohrabacher. Okay, I am going to go--am I off base by 
saying that when we take a look at what we have spent in the 
civilian sector in terms of not, you know, not arming people, 
not the security, but the civilian sector aid since the Taliban 
was kicked out of the country--and that is long before 2006--
would I say, would $20 billion be sort of in the right range?
    Mr. Johnson. It depends on if you are talking funds 
allocated versus obligated or disbursed. They are different 
numbers there. What I gave you was disbursement numbers, 
meaning funds that have hit the ground. The number would go up 
closer to $45 billion if you are talking about money that has 
been either awarded or allotted toward nonsecurity related 
stuff in Afghanistan.
    Mr. Rohrabacher. $45 billion? All right. Your staff just 
gave you a little help there.
    Mr. Johnson. Staff just gave me a new number. Thank you.
    Mr. Rohrabacher. What is the figure we are looking at now?
    Mr. Johnson. This is allocation of funds for reconstruction 
from 2002 to 2010, and basically the numbers are roughly about 
$22 billion in non-DoD funds.
    Mr. Rohrabacher. Right. Okay.
    Mr. Johnson. But that is allotments, with money that is in 
the pipeline yet to be disbursed.
    Mr. Rohrabacher. I am getting a lot of figures here, and--
--
    Mr. Johnson. Yeah, well, we will actually go back and give 
you precise figures. Again, this is 2002 to 2010.
    Mr. Rohrabacher. I would just like to know the number 
between when the Taliban were driven out and now, and how much 
we pumped into the nonmilitary effort in Afghanistan. When I 
ask about the GAO to give me any data that they had on how much 
of those billions of dollars that we spent ended up in the 
pockets of the Karzai family, we were told that is impossible 
to do. It is impossible to know how much the Karzai family 
profited from those tens of billions of dollars that we have 
spent there to help build up their economy and the well-being 
of their people.
    How basically--I mean, we don't know where the money has 
gone then?
    Mr. Hutton. Mr. Chairman, you outlined some of the 
challenges that we saw and there is additional challenges in 
terms of how you determine how much money went where.
    Mr. Rohrabacher. Uh-huh.
    Mr. Hutton. You hit some of the key ones about the 
difficulties and just knowing, once you make an award to a 
prime, then how the money flows down, and it could be several 
tiers and things like that. One of the bigger challenges, 
though, is just trying to identify who is the firm's owner, or 
who is benefiting from a firm's award. And that is difficult 
because, first of all, even in the United States, it is very 
difficult to be able to determine who is actually benefiting 
from an award. Not all companies have their information public. 
But in the Afghan context, it is important to note that SIGAR 
had done some work that showed that all firms that are 
operating in Afghanistan have to be licensed by the Afghan 
Government. Now, while there is data on the Afghan Government 
side, SIGAR had tried to do some work, and they saw challenges 
in even determining whether that data are reliable. They also 
identified issues that once an award was made, ownerships may 
change over time, and being able to consistently track that 
over time is very challenging.
    Mr. Rohrabacher. In a younger life, you know, when I was--I 
was probably--I was a totally different person when I was 19; 
but when I was 19, I found myself in the central highlands of 
Vietnam, and I was not in the military, but we were doing some 
special projects there.
    And then I was supposed to go down to a town on the coast 
and meet up with some doctors to tell me about corruption. And 
I will never forget that, because the doctors at the end of 
this--I am 19 years old, and he has got these doctors who are 
crying, I mean literally, men who are crying that we are going 
to lose this war because of the corruption level in Vietnam. 
And they took me out to show me the hospitals that had been set 
up to win the hearts and minds of the Afghan--of the Vietnamese 
people, and they had been looted, and they had been looted by 
our Vietnamese allies and perhaps even some American people who 
were there supposedly to help.
    I will never forget that because at the same time these 
guys--there was a lot of people who were--these guys were 
aiding and treating the men who were coming right out of the 
combat zone, and here they were, understanding that all of this 
blood, and this horrible price that was being paid by 
Americans, but yet we have so much corruption, they did not see 
how the Vietnamese people could respect us. Because if they 
could see it, the Vietnamese people could see it, and why 
couldn't our Government see it?
    And you know what? I don't think we ever did crack down on 
that. And I think that was one of the factors that put us in a 
situation that when we left, we left in disgrace in Vietnam. I 
would hope that that is not what we do in Afghanistan, but it 
appears that we have had this same type of attitude.
    And, you know what I am hearing right now is that we really 
haven't had an accounting system to make sure that what we are 
putting into this country to help improve the lives of the 
people, whether or not that money has been looted to a great 
degree or not. Am I mistaken here from what I am hearing from 
you? I mean, it sounds like there hasn't been a real attempt at 
serious accounting at this.
    Mr. Hutton. Mr. Chairman, it is interesting that when you 
think about what normally is expected to be put in place, first 
of all, you have things like the Federal Acquisition 
Regulations. That is a pretty sound framework. It has a lot of 
different things in there that contracting officers can use to 
protect the taxpayer's interest when they are awarding a 
contract, for example. But what our work has shown over time is 
that, whether you are talking about in that environment DoD's 
contracting, State, or USAID, they all face similar challenges. 
And the challenges really center on three pieces: The need for 
clearly defined requirements of what you are trying to 
accomplish. If you can't clearly define those requirements, you 
are starting off on a very bad foot.
    Second, you have to have the sound business arrangements 
that is going to increase, you know; that if you have sound 
business arrangements you are going to help, again, better 
protect the taxpayer. What that means is using the right 
contracting vehicles; writing them in such a way with the 
certain clauses that are already in the Federal Acquisition 
Regs. They are going to help protect the taxpayer's interests. 
But most importantly, sir, is the lack of trained personnel in 
both numbers and experience to oversee and monitor the 
performance. That is key.
    So when you think about it from the start, there is already 
processes that allow you to set the footing correctly. But our 
work has shown, whether again, we are talking about any of the 
main agencies in those environments, a lot of these problems we 
are seeing are emblematic across all of their----
    Mr. Rohrabacher. Well, let me give you an example. It was 
reported in the London Telegraph yesterday, that the Taliban 
insurgents who were responsible for IED attacks that killed 
several American paratroopers, that these Taliban insurgents 
were actually released from jail by officials in the--is it 
Konzi Province--and that they would release these Taliban after 
bribes were paid to these provincial officials. When that 
happens, okay, let's say we have that happening. Do we cut off 
aid to those people? Do those people still receive aid who have 
then--who have released people who have been murdering our 
troops?
    [The article referred to follows:]
    
    
                              ----------                              

    Mr. Hutton. Sir, that is a very difficult question for me 
to respond to. That is really policy. What we try to focus on 
are the institutions, the agencies that are spending hard-
earned taxpayer funds, whether it is in environments we are 
talking about, here that they are best equipped to understand 
what they are trying to accomplish, understand the risks 
involved, ensuring they have a proper framework in place, and 
then executing. Execution is often the issue.
    Mr. Rohrabacher. Yeah.
    Mr. Hutton. We are not executing these contracts and grants 
as well as we could. And that presents the risks overall.
    Mr. Rohrabacher. Well, there is a lot of--so are you 
telling us that you are satisfied that the money that we are 
providing in aid to uplift the Afghan people, that it is 
actually getting down to them, and not being pilfered away?
    Mr. Hutton. Sir, what I am saying is that when you look at 
the whole body of work, I mentioned at the outset we have done 
over 100 reports and testimonies across, again, the main three 
agencies. But what you see in many cases are similar problems 
where we are executing these awards and we don't know if we are 
getting the good outcomes that we set out to do, because we 
don't have the good monitoring and oversight.
    Mr. Rohrabacher. Well, the answer is yes. You are not 
certain then. You don't feel confident that the money is coming 
down to it. And let me just suggest, the American people are 
war-weary. They are war-weary of Afghanistan. We ended up 
spending all of these years in Iraq, and now we have a 
government in Iraq that seems to be anti-American, and more 
pro-Mullah than pro-American, and certainly they are ungrateful 
for all of the blood and treasure, trillion dollars that we 
spent in Iraq.
    I happen to know the Afghan people, and I know that there 
is among a large segment of Afghan people, a great deal of not 
only respect, but a gratitude and a love in their hearts for 
the American people. I have been there with them. I have been 
in their villages and fought with them. And what we have here 
is not shame on the Afghan people. I think--I feel, I 
personally resent that the Iraqi people do not--are not 
grateful to us for relieving them of the oppression of Saddam 
Hussein. But I don't think that--I am not disappointed in the 
Afghan people at all. I think that basically if we have a 
system that still functions and permits people such leeway as 
we have just been mentioning, shame on us, not shame on them.
    And Mr. Carnahan, you may proceed.
    Mr. Carnahan. Thank you, Mr. Chairman. I want to start with 
a question about the agricultural development teams that have 
been deployed across Afghanistan. Our Missouri National Guard 
have been one of those entities that have been deployed. They 
have been in the Nangarhar Province, and we have heard some 
good success stories about what they have been able to do on 
the ground. And I wanted to ask specifically about how we can 
sustain and build upon the success of stories that we have 
heard about those agricultural development teams and your 
assessment of their work.
    Mr. Johnson. We did some work recently, the last 2 years, 
on the agricultural sector in Afghanistan as part of our 
counternarcotics focus. And I would concur with your point that 
there has been a renewed focus on the ag sector in particular. 
Former SRAP Holbrooke placed that emphasis on more building up 
the agricultural sector in Afghanistan. And as part of that it 
was to elevate the civilian presence, the expertise of USDA and 
others as a part of the PRT teams that were going out. Prior to 
that we didn't have the right type of resources or that whole 
confidence of approach to deal with the ag sector.
    And so I would say that report in July 2010 does talk about 
that and notes the fact that the U.S. has made some progress in 
the alternative development sector of building the ag and the 
water irrigation sector as well. And more recently, some work 
we did this February 2012, we looked at the civilian surge, the 
civilian presence in Afghanistan. And a part of those findings 
also talked about how the civilian part will be parallel to the 
military leadership to make certain that things like 
agriculture were going to be a priority and that you have the 
experts there on the ground in the different districts and 
provinces carrying out those functions.
    Mr. Carnahan. Thank you. The other area that I wanted to 
get into was Afghan National Police training. There is 
certainly wide agreement and recognition that the fundamental 
element of the future stability of Afghanistan, your report 
certainly addresses the critical nature of that. We have had 
increased funding toward those efforts, yet the Department of 
Defense has not assessed the effectiveness of civil policing 
activities, and State has yet to conduct an evaluation of its 
program in Iraq.
    Can you talk about that lack of evaluation and even being 
able to measure how effective that is, and to get beyond just 
the quantity of the police that we are training to the quality 
of that training?
    Mr. Johnson. Well, one of the issues I can tackle in an 
open setting is the Iraq piece on evaluation. That is part of 
our censored but unclassified product. But on the civilian 
police issue in Afghanistan, in particular we do note, you 
know, DoD has done those assessments. They have contracted out 
in that area. In terms of doing more in terms of civil order 
policing, they have committed in their recent reports to the 
Congress that they would focus more attention on civil-order 
policing as opposed to sort of the paramilitary-type police 
training and the capability of these police to take on 
paramilitary type things. I think DoD is shifting some of that 
focus toward more civil-order policing in terms of assessments 
in that area.
    So you are correct that there were some deficiencies in 
that area, but DoD has noted those deficiencies and has agreed 
to take steps to correct them.
    Mr. Carnahan. And was that entirely being done by 
contractors?
    Mr. Johnson. It is a combination of using contractors such 
as DynCorp, and the U.S. military, along with our international 
partners, and doing those sort of things. Right now it is a 
concerted effort involving the contractors and folks who may be 
embedded with the police in the communities.
    Mr. Carnahan. So what is your assessment of--has there been 
adequate assessment now or is that yet to be done?
    Mr. Johnson. We are hoping that is going to be forthcoming 
in the next Department of Defense report that is required to be 
provided to the Congress. There is an annual report that they 
do. I think it is called a Section 1230 report that they are 
required to provide to the Congress, and we are anticipating 
that the forthcoming report should include that information. 
That was basically their response back to the issue that we 
raised in our recently issued Global Foreign Police Training 
Report.
    Mr. Carnahan. And what is the date of that report?
    Mr. Johnson. The Global Foreign Police Training Report was 
issued about a month ago, I believe. I think it was, if I am 
not mistaken, sometime in March. And we can make sure you get a 
copy. We will send a copy up.
    Mr. Carnahan. And the next report you referenced is due 
when?
    Mr. Johnson. The next report for DoD should be sometime 
in--I think they just issued one in June. Should be the end of 
the year, December, around the December time frame; December, 
January.
    Mr. Carnahan. And do we expect them to just do it the way 
we wanted it done in the first place, or are they changing the 
metrics and the way they are doing it?
    Mr. Johnson. Well, I think given the plans that the U.S., 
and DoD in particular, has to draw down combat troops, they 
have over the past year recognized the need to pay more 
attention to ensuring that the Afghan National Police focus on 
civil order, rule-of-law type issues, and I think there is some 
recognition, given some criticism from some past work that the 
IGs have noted, as well as the Congress itself, that more 
attention needs to be done in that area. And I think now that 
it is more a NATO-led training mission; that that has begun to 
be the case, that they all want to focus on civil-order police 
because of the planned withdrawal of the combat troops by the 
international community.
    Mr. Carnahan. Also related to the police ensuring that 
there is an adequate number of female members in the Afghan 
National Police, can you talk about that? My understanding is 
there is about 9 percent within the police, with the goal of 
5,000 by 2014. How are we doing on achieving that goal, and 
what are we doing to achieve that goal?
    Mr. Johnson. Unfortunately, Congressman, we don't have any 
updated information or statistics on female police in the 
Afghan security force. We would be happy to undertake that 
work, though, or to get back to you on those numbers. We can 
check with some of the information we can get from the State 
Department and the Department of Defense and get back to you on 
that.
    Mr. Carnahan. Thank you. I would like to see that.
    Mr. Johnson. Okay.
    [The information referred to follows:]
    
    
    
    
                              ----------                              

    Mr. Carnahan. And then finally, we have worked with Stuart 
Bowen and others in developing legislation that would look at 
consolidating civilian stabilization management functions into 
a U.S. Office for Contingency Operations, and, not 
surprisingly, we have not had a lot of great feedback from the 
State Department or Defense Department. But I would like to see 
if you would comment on that concept of having joint 
contingency operations like that, or other recommended changes 
in how we can do this better and get beyond some of the 
traditional tension between DoD and State and USAID, and be 
more effective, in particular, in terms of accountability 
measures.
    Mr. Johnson. Well, there are two parts to that. One is the 
whole contingency operation. With regard to that function 
itself we have seen some of the earlier draft proposed 
language. We raised some caution or concern in showing that 
some of the functions that are being considered to be rolled 
in, that they are brought into the contingency operations.
    For example, INL functions are broader than just 
contingency operations. They are doing counternarcotics work 
and law enforcement training across the globe. Some of that 
will have to be taken into consideration. That was one of the 
issues I think we may have provided some feedback on.
    In addition, when you talk about oversight and 
accountability, I guess our position there is that obviously 
the GAO, as part of your investigative arm, stands ready to 
meet any of your needs in the contingency operation 
environment, whether that is Iraq, Afghanistan, Pakistan, 
Yemen, and we have been doing significant work in all of those 
areas and stand ready to continue to do that work for the 
Congress.
    Mr. Carnahan. Thank you very much. I yield back, Mr. 
Chairman.
    Mr. Rohrabacher. Thank you very much. We will have a second 
round at this point, and I would like to ask a little bit, some 
details here about, for example, the bank scandal. Okay, there 
is your specific. Apparently this bank, the Kabul Bank went 
broke, or bankrupt, and $825 million were lost in this bank. 
Now, at the same time, we have this--and I know you pronounce 
it Deloitte, is that it, DeLoitte, the accounting firm, this 
major accounting firm that we have got was actually there, 
American accounting firm, was involved in that operation to try 
to keep--try to keep it so it wouldn't go broke.
    And I understand that also the United States Government 
used this bank to deposit many of its accounts, and they used 
it as a vehicle for aid, et cetera. How is it that when we have 
such a prestigious accounting firm on the premises, and we have 
American Government officials directly involved with running 
accounts through the bank, that the bank can just go belly-up 
like this and there is $825 million evaporated?
    Mr. Hutton. Mr. Chairman, we have not looked at that, but I 
do know that USAID within the last year or so, did some work 
looking at the contractors that were supporting technical 
advisors for that particular bank.
    Mr. Rohrabacher. Well, we did have technical advisors. We 
must have had technical advisors in that bank.
    Mr. Hutton. Yes, contractors were performing as advisors, I 
believe
    Mr. Rohrabacher. So how is it that that bank, we have 
American technical advisors on the scene, how can we just blink 
our eyes and all of a sudden there is $825 million evaporated?
    Mr. Hutton. Well, we have not looked at that specifically, 
but I could take that back to just the internal controls again, 
sir, and having the institutions and the oversight framework 
for being able to assure that procedures are followed, whether 
it be the banking sector or any other sector.
    Mr. Johnson. And Mr. Chairman, if I can sort of chime in on 
what John just was alluding to, part of the issue is that the 
U.S. and the international community made a commitment to move 
more toward direct assistance, provide more money on budget. At 
the same time, we were trying to build the Afghan Government's 
institutional capacity, whether it is the banking institutions, 
financial institutions, whether it is the Ministry of Interior, 
Defense----
    Mr. Rohrabacher. Right, sure.
    Mr. Johnson. All of those things. So these things were 
happening at the same time, which in an environment where we 
have noted security is a challenge, corruption is a challenge 
in this country, as we know, and as well as, more importantly, 
the lack of institutional capacity did not exist, so the U.S. 
and the rest of the community have been trying to build that 
while we are also trying to pump billions of dollars into the 
governments directly.
    Mr. Rohrabacher. Has there been an investigation into this 
bank, and so we know where that money went? There are reports, 
of course, that President Karzai's brother, who was heavily 
involved in this bank, has been able to purchase property in 
Dubai, for example. Has anyone looked into that charge?
    Mr. Johnson. As John noted, we have not looked specifically 
at the----
    Mr. Rohrabacher. Who would look into it? If it was going to 
be looked into, who would look into it?
    Mr. Hutton. Sir, I think typically, for GAO, if we are 
doing any job and we see some things that look like it might be 
potentially fraud, waste--or fraud in particular.
    Mr. Rohrabacher. Right.
    Mr. Hutton. We would then turn that over to the IG that is 
responsible for that program to take the next look because that 
is more their core specialty.
    Mr. Rohrabacher. Has it been turned over to them?
    Mr. Hutton. Sir, I have not looked at it, I cannot tell 
you, but I don't know whether any of the other witnesses from 
the executive branch might be able to give you some more 
insights into that, but I don't have information on that, sir.
    Mr. Rohrabacher. Do you have any information on that as to 
whether or not----
    Mr. Johnson. No, sir.
    Mr. Rohrabacher. So the IG is supposed to investigate?
    Mr. Hutton. Typically that is the process that we use.
    Mr. Rohrabacher. Okay, typically, and in Afghanistan, that 
is what we are doing. If something comes up like this, we ask 
the IG to investigate, but we have an $825 million loss, but 
you are unaware of whether or not there has been a request for 
an investigation?
    Mr. Johnson. Well, I would note this was an issue that came 
up probably 1\1/2\ years, 2 years ago, and there was a hearing 
before the Approps Committee, and this was mentioned during 
that hearing with the IG present as well as SIGAR present, and 
my understanding is that there were some investigations that 
were going to be undertaken but not by the GAO.
    Mr. Rohrabacher. Okay.
    Mr. Hutton. The only other thing I would add, sir, is 
investigations may not only involve that one particular 
inspector general that I mentioned, there may be other tools 
such as Federal Government investigators and other support, but 
I don't know anything in terms of the specific details about 
the case you raise.
    Mr. Rohrabacher. Let me ask you this: Do you have a 
blacklist of Afghan officials and presidential family members 
who you will not do business with because there is evidence 
that they have been involved with high level corruption?
    Mr. Hutton. No, sir.
    Mr. Rohrabacher. There is no blacklist, there is no list 
of----
    Mr. Johnson. No list that the GAO has.
    Mr. Hutton. Right.
    Mr. Rohrabacher. Hmmm. And so, for all we know, a large 
number of people who you are dealing with are people who have 
engaged in blatant corruption?
    Mr. Hutton. Well, one thing, sir, when you talk about 
lists, we mentioned in our formal statement as well as in our 
past work, we identified that there are vetting processes that 
the DoD and USAID in particular have used. To the extent to 
which they are vetting contractors or grantees before they make 
the award and they find that they have some issue, regardless 
of what the issue is, that is information that they would have 
in their own organization. One of the issues we came up with in 
our report was making sure that the interagency shares 
information so that all that information can be leveraged if 
that particular contractor or grantee wants to participate in 
another Federal agency's programs.
    Mr. Johnson. If I can add on, Mr. Chairman.
    Mr. Rohrabacher. Yes, go right ahead.
    Mr. Johnson. With respect, again, getting back to the 
direct assistance issue and the decision made to move more 
toward direct assistance by the international community and our 
own Government to provide more than 50 percent there, there was 
a push and has been a push to, you know, provide funding 
directly to the Afghan or the Pakistani Governments or their 
firms, local firms for that matter. And as a part of that, as 
we noted and as John noted in his statement, the key to that 
being successful is to make sure we do pre-award risk 
assessments to determine where the vulnerabilities, the 
weaknesses are. And there are situations from that standpoint--
--
    Mr. Rohrabacher. That means you would have to have a list, 
and you apparently don't have a list.
    Mr. Johnson. Even if they have a list and the list tells 
you that this organization or institution is corrupt, and we 
have some situations where in Pakistan, the institution may 
have been corrupt, they would still decide to go the direct 
assistance route, but they would take mitigating things to put 
in place, such as embedding someone in there to ensure that 
there is no mismanagement of funds or to require certain 
additional controls. Those are things that can be done to help 
safeguard and prevent waste, fraud, and abuse of some of the 
U.S. funds.
    Mr. Rohrabacher. Tell me, have you studied the 
reconstruction that was done in Japan after World War II? You 
haven't?
    Mr. Johnson. No, sir.
    Mr. Rohrabacher. What countries have you studied 
reconstruction programs on that were successful?
    Mr. Hutton. That were successful? In my professional work 
at GAO, I focused on Iraq and Afghanistan. That is my----
    Mr. Rohrabacher. So you have never focused on a successful 
program of restoration. I doubt whether the Americans after 
World War II permitted Japanese companies who were involved in 
corruption to continue to get contracts with the economy-
building measures that we were taking then. I doubt that. I 
don't know for sure.
    But let me just say that I can understand why the American 
people would be horrified if they found out how loose we have 
been with their money, and the fact is that this corruption in 
Afghanistan, if the United States isn't willing to take it so 
seriously that we blacklist anybody who has been engaged in it, 
much less put them in jail, if we don't do that, no wonder they 
don't take it seriously, because we are not taking it seriously 
then. And I think that, after all of these years, it is 
disheartening to hear this late in the game how loose this 
whole situation is.
    I want to thank you, and I am not--I am not blaming you 
guys. This whole thing--anyway, it looks, after all of these 
years to hear this, I am very disappointed, but thank you very 
much. We will have the next panel, please.
    Mr. Hutton. Thank you.
    Mr. Johnson. Thank you, Mr. Chairman.
    Mr. Rohrabacher. All right, thank you very much, and we 
will now proceed with our second panel, which is composed of 
Larry Sampler, Jr., a senior deputy assistant to the 
administrator, Office of Afghanistan and Pakistan Affairs of 
the United States Agency for International Development. Now 
that was a mouthful.
    He also served as a deputy coordinator for reconstruction 
stabilization with a joint appointment at both the State 
Department and USAID. He was a research staff member for the 
Institute of Defense Analysis with a focus on West Bank and 
Gaza, which is another garden spot that you were involved in. 
During 2002 and 2005, he served as chief of staff for the 
United Nations Assistance Missions in Afghanistan.
    Prior to that assignment, he was a consultant to the Afghan 
Government in support of the Afghan constitutional Loya Jirga, 
after which he was awarded a constitutional medal by President 
Karzai.
    Mr. Sampler did his undergraduate work in physics and 
electrical engineering at Georgia Tech, has a master's degree 
in diplomacy from Norwich University, and is an Army veteran 
who served with the Special Forces.
    You are on the hot seat now, but we appreciate you being 
here, and we appreciate a very serious and frank dialogue with 
you today, but you may proceed with your opening statement, and 
then we will go from there.

STATEMENT OF MR. LARRY SAMPLER, JR., SENIOR DEPUTY ASSISTANT TO 
THE ADMINISTRATOR, OFFICE OF AFGHANISTAN AND PAKISTAN AFFAIRS, 
           U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

    Mr. Sampler. Thank you, Mr. Chairman.
    I will be brief and leave as much time as possible for 
questions. I thank you for the opportunity to testify. I do 
represent the Office of Afghanistan and Pakistan Affairs at 
USAID.
    And I would like to begin the way I always do, which is by 
thanking the veterans, be they military, State Department, 
USAID or even contractors, who have served in the past decade 
in Afghanistan.
    As you rightly noted, since the time you were there and the 
time I was there, there has been a tremendous amount of 
sacrifice, and I would like to recognize that both on the part 
of the international community but also the Afghans, from Abdul 
Haq and Ahmad Shah Masood, to the thousands of Afghans now who 
put their lives at risk every day working to make Afghanistan a 
better place.
    So while it is my responsibility, and I take it quite 
seriously, to address as many of the concerns as have been 
raised as possible, I also hope that in my remarks, I can give 
a few opportunities for people to take pride in what has been 
accomplished and have some sense of optimism about the way 
ahead and things to come.
    As you noted, I have worked in Afghanistan since 2002, off 
and on, much of that time physically in Afghanistan, and so I 
know firsthand a lot of the challenges that implementers face, 
and I am happy to share during the question and answers as that 
is appropriate.
    Before I talk directly and specifically about oversight, I 
would like to address a few of the successes that the Afghans 
have achieved with the support of the U.S. taxpayers, USAID, 
the interagency and the international community. And I have to 
note, one of the best unintended consequences of my travel to 
the region is that I get out of the constant news cycles of 
Washington, and I get to see firsthand when things are working 
and when there are successes and how much progress there has 
been since 2002.
    For example, under the Taliban there were less than 900,000 
people in school. Very few of them, if any, were girls. 
Currently more than 8 million children are enrolled in school, 
more than a third of those are girls, and now after a decade of 
improving schools and improving access to education, we are 
finding a generation of young men and women graduating from 
these schools who have much better critical thinking skills. 
This will make them better citizens, and it will make them much 
more resilient in their opposition to thoughtless or malicious 
doctrines.
    In 2002, only 9 percent of Afghans had access to basic 
health care. Today that access is over 60 percent of the 
population, and by basic health care, we mean medical 
assistance within an hour's walk of where they are. Life 
expectancy at birth now is 20 years higher than it was in 2002, 
and maternal and infant mortality rates have dropped 
significantly, drawing international attention to what the 
Afghans have done right in that regard.
    Our work in the energy sector has tripled the number of 
Afghans with access to reliable electricity, not just 
supporting but actually enabling economic growth in the 
country. With USAID's support, Afghanistan's national power 
company has increased their revenue collection by 50 percent 
every year since 2009. This has reduced the need for a subsidy 
for this state-owned enterprise from $170 million a year to 
around $30 million a year last year.
    And as a segue, USAID is focusing our efforts on areas with 
the greatest potential for increasing domestic revenue and 
sustainable growth and away from areas that require foreign 
assistance. These are areas such as agriculture, extractive 
industries, energy, trade, and generic capacity building for 
their government. We are, in fact, reducing new infrastructure 
projects to focus instead on building the Afghan capacity to 
maintain the infrastructure that they have.
    We are cementing gains that we have made by women, gains 
made in the areas of health and education, and we are 
increasingly focusing on how to involve the private sector both 
in Afghanistan, among the Afghan diaspora, and among the 
international business community in our programs. We are 
focusing, in other words, on sustainable development.
    The successes that I have talked about have been achieved 
by constantly improving how we do business in Afghanistan. 
Protecting taxpayer resources is a key concern of USAID. Over 
the past 2 years, we have taken several measures to better 
track our funding, to enhance accountability, and to ensure our 
programs do have the desired impact in the communities we seek 
to impact.
    We have developed the Accountable Assistance for 
Afghanistan initiative that the GAO colleagues referred to. It 
is actually an extra layer of oversight, recognizing that 
Afghanistan is a high-risk environment in a war zone. It 
involves better award mechanisms that are more carefully 
crafted to keep our partners more carefully constrained. It 
involves intensive partner vetting for all non-U.S. partners. 
It involves stronger financial controls, how we actually parse 
out the resources and the money. And it involves a closer, more 
professional oversight of the projects in the field.
    Ultimately, our goal is that Afghanistan can monitor and 
manage programs themselves. To that end, we are engaging in 
financial management training with our Afghan partners at all 
levels, both inside and outside of government. We are also 
supporting efforts to promote a professional Afghan civil 
service, and in the long term, this will improve accountability 
and reduce the opportunities for corruption.
    So, as part of our goal of Afghan management of their own 
development, we are working to concentrate more assistance 
directly to the Afghan Government while at the same time 
tailoring oversight to make sure that we have a high degree of 
accountability.
    We do not work with the Government of Afghanistan as a 
whole. Instead, we work with specific Ministries, and we only 
engage after careful assessments have determined that the 
Ministry has the technical, financial, and administrative 
systems necessary to responsibly manage our resources. Our 
primary method in these cases is a disbursement of funds on a 
reimbursable basis for costs incurred. In other words, the 
Ministry does the work; we validate that the work has been 
done; and then we provide the funds.
    Finally, as you know, there are multiple independent 
oversight bodies that review our work, including the GAO, but 
also SIGAR and the USAID inspector general. These organizations 
have done about 70 audits of our work since October 2010, and 
some of these audits I would note were initiated at our 
request; USAID asked for them. In fact, the A3, or the 
Accountable Assistance for Afghanistan initiative, was 
specifically in response to an audit that we had requested. We 
really welcome their oversight, we have a good working 
relationship with all of the oversight bodies, and we do 
welcome their insight.
    Finally, in conclusion, we recognize the sacrifices in 
blood and treasure made by Americans and Afghans alike. We are 
under no illusions about the challenges we face, but we think 
these challenges call for exercising more care and diligence in 
how we operate rather than walking away from the vital national 
security interests that this work supports. Our mission of 
defeating al Qaeda and denying it a safe haven or a place to 
rebuild is still critical, and USAID programs are an important 
contribution toward that goal because we are helping to build a 
stable, sustainable, and secure Afghanistan that will not 
require huge amounts of foreign assistance.
    Mr. Chairman, I am happy to take your questions or to 
address some of the issues raised by GAO at your convenience.
    [The prepared statement of Mr. Sampler follows:]
    
    
    
    
    
    
    
    
    
    
                              ----------                              

    Mr. Rohrabacher. Thank you very much.
    And I won't say that that was a contradictory set of images 
being presented, but it was not necessarily totally consistent, 
either, between the first and the second panel, but not 
necessarily contradictory.
    Let me just get into some details with you here. I 
appreciate how difficult your job is, and let me just note 
that, and I am very pleased that someone of your caliber has 
taken on such a heavy responsibility and such a difficult task.
    Mr. Sampler. Thank you, Mr. Chairman.
    Mr. Rohrabacher. And I understand that. So could we take a 
look at, first of all, how much money--let me ask you the 
question, 2002 to the present, 10 years, how much money have we 
spent in American aid to Afghanistan, not military aid?
    Mr. Sampler. I had the advantage of having my staff look 
this up after you asked the GAO.
    Mr. Rohrabacher. I was hoping you were going to do that.
    Mr. Sampler. $15.7 billion is what USAID has had 
appropriated for our use in Afghanistan since 2002.
    Mr. Rohrabacher. Say that again now.
    Mr. Sampler. $15.7 billion. For clarity, that does not 
represent all civilian assistance. I am not cognizant on what 
USAID or other agencies may have had, but it would not approach 
anything like the amount that USAID has been given.
    Mr. Rohrabacher. Okay. And when you have money that is 
coming in, you are saying that you actually have tried to give 
this directly to people within the Afghan Government who you 
have determined have specific responsibilities for trying to 
achieve these specific goals. Has the money been, has our then 
tax dollars or the Treasury money that is coming into this, 
would that have gone through the Kabul Bank?
    Mr. Sampler. No, Mr. Chairman. With respect to the Kabul 
Bank concerns, no U.S. dollars were associated with Kabul Bank 
at all. We didn't even use the electronic fund transfer 
mechanism of that particular bank. It was not a policy 
decision, per se. There are other banks, and we just had not 
been doing business with Kabul Bank.
    Mr. Rohrabacher. Okay. But we did have one of our great 
firms there to make sure that their books were being, 
supposedly being kept right, but they were being paid by whom?
    Mr. Sampler. I believe you are referring to Deloitte.
    Mr. Rohrabacher. Yes.
    Mr. Sampler. Who bought out BearingPoint. BearingPoint had 
a contract as a part of the Economic Growth and Governance 
Initiative.
    Mr. Rohrabacher. Where did that contract come from?
    Mr. Sampler. That was a USAID program.
    Mr. Rohrabacher. A U.S. What program?
    Mr. Sampler. I am sorry?
    Mr. Rohrabacher. U.S. Aid program?
    Mr. Sampler. USAID program.
    Mr. Rohrabacher. Okay.
    Mr. Sampler. It was about a $95 million program over 
several years. This piece of it was about 8 percent of that, so 
$7 million roughly that Deloitte was using not at Kabul Bank 
but at the Afghan Central Bank. The Afghan Central Bank is the 
institution that is charged with preventing things like Kabul 
Bank from happening.
    Mr. Rohrabacher. Right.
    Mr. Sampler. One of the issues, in my opinion, is the 
institutions in Afghanistan are not yet mature enough to have 
prevented or to prevent adequately the kinds of Afghan-on-
Afghan crime that Kabul Bank represents. The Deloitte program, 
the Economic Growth and Governance Initiative, was supposed to 
help build the central bank's ability to supervise subordinate 
banks or to supervise outlying private banks.
    Mr. Rohrabacher. Okay. So you didn't have anything directly 
involved with the Kabul Bank, but you did provide a grant to 
Deloitte to do its job, which was partially to oversee banks in 
Afghanistan, and Kabul Bank happened to be the biggest one?
    Mr. Sampler. Not precisely, and I am sorry; I don't mean to 
quibble. It was not a grant, it was a contract, and Deloitte 
was not responsible for doing any oversight themselves. They 
were trainers. They would not have been able to do oversight 
because they wouldn't have the language skills, for example, to 
review Dari and Pashto and Balochi documents. Their job was to 
serve as mentors to the central bank examiners working for the 
Government of Afghanistan, and these central bank examiners 
would have been the ones who would go out and do the bank 
investigations and the bank inquiries at the private banks. So 
it was not Deloitte's responsibility. And in fairness to our 
own inspector general, USAID asked for an investigation after 
the Kabul Bank fiasco, and our inspector general disagreed with 
us. We said that Deloitte's responsibilities would not have 
given them any particular insight into this Afghan-on-Afghan 
crime, and our inspector general thought differently, and they 
said in their report, we believe that if Deloitte were doing 
what you told them to do, they would have seen precursors to or 
indications of fraud, and they should have reported that to the 
U.S. Government.
    We took that on board, and we actually terminated that 
program because despite the fact that they weren't directly 
responsible for this, the program lost tremendous credibility 
because of the press associated with it, but we have now 
issued----
    Mr. Rohrabacher. I would suggest that it was more the $825 
million that evaporated rather than just the press from----
    Mr. Sampler. No, the bank fiasco, there is no question. 
Deloitte was caught up in the press associated with that.
    Mr. Rohrabacher. Is Deloitte then serving as an NGO, would 
that be what you would say or just a contractor?
    Mr. Sampler. They were a contractor. In this case, they 
were a contractor, and to the best of my knowledge, I don't 
think they work as an NGO.
    Mr. Rohrabacher. All right. So it was a profit-making 
contract?
    Mr. Sampler. They were and are, and this was, yes. But we 
have since then, based on the IG report, issued guidance to all 
of our contractors that if they detect any indication of fraud, 
waste or abuse, they have a responsibility to report it, and 
that is across the board in our contracts now.
    Mr. Rohrabacher. In your testimony, you were talking about 
with pride of how you have tried to go directly through the 
Afghan Government when possible to achieve the social goals and 
the development goals that you have set out for yourself. Now, 
in the Afghan Government, there are people who have committed 
crimes; they have been shown to have been involved, you know, 
there is the fellows who just let go all of these Taliban 
prisoners, et cetera, et cetera. Do you have a list, a 
blacklist of people that you will not give our money to?
    Mr. Sampler. We do, Congressman. With respect to direct 
assistance, we don't give money to individuals. We work with 
Ministries, and we don't even work with the Ministries until we 
have positive--we have done this initial assessment. If there 
are shortcomings, we have provided technical assistance to 
compensate for those shortcomings. So there is no check written 
to an individual in the Bank of Afghanistan.
    Mr. Rohrabacher. Sure, of course.
    Mr. Sampler. But we do have, and there is----
    Mr. Rohrabacher. But if the guy at the Ministry who takes 
in the checks and writes the checks for the Ministry happens to 
be the same guy who was, you know, fingered for stealing money 
from some other organization----
    Mr. Sampler. There are a couple of interagency task forces 
and some that are international among all the donors, one being 
Task Force Shafafiyat, which looks specifically at issues of 
Afghan corruption, and we certainly share information among the 
interagency. To take your example, though, of a Ministry that 
we have done the pre-award assessment, we would have identified 
through this task force or through the interagency 
collaboration most likely that this individual was of 
questionable repute, and there would have been some mitigation 
taken to make sure that he did not have access to these funds.
    I don't--to the best of my knowledge there is no situation 
where one individual in any Ministry we work with has signatory 
authority for funds. It doesn't work that way. They do the 
work. They say they have done the work and certify it. USAID 
direct hire staff or our third-party contractor validate that 
the work is done, and then we reimburse the receipts for that 
work. These are lessons we have learned the hard way, not just 
in Afghanistan but in other places that USAID works. This is 
not the first corrupt place that we have had to work.
    Mr. Rohrabacher. Yes. Yes, I understand that. I want to ask 
you a little bit about NGOs and then back to the point you were 
just making.
    So there was a senior auditor for SIGAR, James Peterson, 
wrote a column for Politico yesterday suggesting that NGOs were 
taking far too much money off the top of various programs that 
have been given money to do this or that, but they end up 
having enormous overhead costs. And he suggested in this 
article, that USAID has struggled to keep NGO overhead costs 
below 70 percent. So is that right? I mean, we are actually 
just looking at the NGOs going in, and they are only providing 
the money that is given to them, only 30 percent is ending up 
trying to achieve the goal?
    Mr. Sampler. Well, I can reassure Mr. Peterson, we are 
successful at keeping overhead below 70 percent. I don't know 
where he got that number. I can't speak for all NGOs, I know 
the NGO that I worked for and I know the ones that I have 
worked with in my 10 years, none of them have overhead that 
approaches even 30 percent, to be honest, but certainly not 70 
percent. I did see Mr. Peterson's article back I think when it 
came back out in January or February and found it to be not 
particularly credible, to be honest.
    Mr. Rohrabacher. Okay. So the--that is okay. So you would 
suggest that using NGOs is an alternative or one of the 
alternatives that would be a very viable alternative for USAID 
to look at and to continue down that road in terms of your 
development strategies, is that correct, in Afghanistan?
    Mr. Sampler. Yes, NGOs, we have direct assistance, we have 
contracts with for-profit companies for the most part, and we 
have cooperative agreements and grants.
    Mr. Rohrabacher. Do you want to give me a little assessment 
on whether the NGO approach or giving direct money to specific 
government agencies in meeting the Afghan Government's 
agencies, which is the most effective in building the new 
clinics and schools that you talked about?
    Mr. Sampler. Certainly. This is part of I think what makes 
my job so interesting, to be honest, Congressman, is there are 
things that NGOs are better able to do, and they are valuable 
partners all over the world, and they have both international 
NGOs and domestic Afghan NGOs, but I constantly remind myself 
and our staff that our job is to work the international 
community out of a job, out of business.
    Using international NGOs is somewhat effective at that, but 
it is more effective if we can find Afghan partners in whom we 
can build that capacity from the ground up.
    Mr. Rohrabacher. And you have used these Afghan partners 
and been satisfied at the level of competency and also the 
level of corruption or lack of corruption that you have found?
    Mr. Sampler. If we are not satisfied, we don't use them, 
Congressman. Competency we can train; corruption we can't 
tolerate. So if we meet with an organization that needs 
capacity to be able to do whatever we have asked them to do--
the Ministry of Public Health is a great example. The Ministry 
itself needed some work. We created a technical assistance 
mechanism to help the Ministry do this, and then the Ministry 
went themselves to NGOs, and the Ministry and USAID helped 
build the NGO capacity to execute the programs. We could have 
done it with an international NGO, but that would not have had 
the same capacity building value of doing it through the 
Afghans.
    Mr. Rohrabacher. I would just note that my personal 
observation over the years has been that when NGOs come in, a 
lot of them have to have drivers. They have to have very secure 
locations, and sometimes luxurious for the country they are in, 
a luxurious location to nest, and it seems to me that there is 
a lot of--NGOs going out and roughing it has not necessarily 
been what I witnessed. Although I am sure there are many NGOs 
that do that, there is a lot of NGOs that aren't.
    Mr. Sampler. Thank you, Congressman. NGOs range everything 
from small faith-based NGOs that are supported by one 
congregation in north Georgia all the way up to some very large 
multinational NGOs.
    Mr. Rohrabacher. Right. Do you believe that Karzai's 
brother profited from the bank failure from the Kabul Bank 
scandal?
    Mr. Sampler. Congressman, all I know about Karzai's brother 
and the bank is what I have read in the press. The most recent 
story I read was that he had reached an accommodation with the 
prosecutor where he would not face jail time as long as he made 
restitution, and that is what the press is reporting. Other 
than that, I don't know.
    Mr. Rohrabacher. Okay. Have you heard stories about any 
other member of the Karzai family that seemed credible to you 
that they might have been involved in drugs in some way?
    Mr. Sampler. You have to stop at the credible to me part. 
Congressman, I know you know from your own time in country that 
it is a country that has an oral tradition as opposed to a 
written tradition, and there are stories about everything and 
everyone in Afghanistan, so certainly those stories were 
rampant.
    To be clear, though, at no time during my DoD experience 
there, with ISAF, with the State Department or with USAID have 
I ever seen a credible story that is documented that we could 
take action on, and I am confident knowing that people that I 
worked with----
    Mr. Rohrabacher. That little caveat ``that we could take 
action on'' leaves a big door open. Let me ask you this: Do you 
know of the Karzai family owning property in Dubai?
    Mr. Sampler. I do not. And I wouldn't know. I go through 
Dubai on the way, but that is all.
    Mr. Rohrabacher. But you are at the same time providing 
grants, are you not, to the various government officials and 
agencies in the Afghan Government that would be responsible for 
trying to ferret out that type of corruption?
    Mr. Sampler. The most relevant organization that I can 
think of that we support is the Office of High Oversight, which 
is their equivalent perhaps of an inspector general at the 
national level. So, yes, we do support the Government of 
Afghanistan's attempt to police its own.
    Mr. Rohrabacher. Right. And you haven't heard of anything 
coming from--about the Karzai family being on their blacklist?
    Mr. Sampler. No.
    Mr. Rohrabacher. Or is it just something everybody knows, 
or is it just something that perhaps is probably not true?
    Mr. Sampler. I don't know exactly how to answer that, 
Congressman.
    USAID's business is with the Government of Afghanistan. I 
am very comfortable discussing corruption and allegations about 
the Government of Afghanistan and about specific Ministries. 
With respect to particular families, be it Karzai's or Habib 
Yaqubi's, I could go back, if you wish, and find out what we 
have on our books, but I don't know those answers off the top 
of my head.
    Mr. Rohrabacher. Well, he did give you a medal and 
everything.
    Mr. Sampler. He did, and I am quite proud of it.
    Mr. Rohrabacher. I would be proud of a medal from 
Afghanistan, and he was representing Afghanistan at the time. I 
think you can be very proud of that medal.
    Mr. Sampler. He was.
    Mr. Rohrabacher. And we are very grateful for the service 
that you are providing.
    Mr. Sampler. Thank you, Congressman.
    Mr. Rohrabacher. Part of that service is having to come up 
and be cross-examined by Members of Congress, which makes it 
even a little bit more of a drudgery or a tough job.
    Let me ask about this new agreement that we have signed 
with the Afghan Government. It is my understanding--well, first 
of all, it has tied us into a relationship with an Afghan 
Government that I personally would question whether we should 
be tied into or not, but does this agreement, from your 
understanding, tie us into a relationship with the Afghan 
Government where 50 percent of our, of all of our assistance 
will have to go through the Afghan Government in what you were 
saying rather than being given to contractors and NGOs?
    Mr. Sampler. The agreement does call for a 50 percent on-
budget contribution. We will not do that until we can assure 
ourselves that that contribution will be properly managed. So 
that is what--it is set for us as a goal, just as we have set 
goals for the Government of Afghanistan.
    Mr. Rohrabacher. So we have agreed to try to achieve that 
goal?
    Mr. Sampler. That is correct, Congressman.
    Mr. Rohrabacher. Okay. But we haven't agreed to do it, we 
have just agreed we are going to try to do it?
    Mr. Sampler. Absolutely.
    Mr. Rohrabacher. Okay. That is a very interesting 
interpretation of the agreement. I will take a look and make 
sure the wording is sort of that way. I will have to suggest 
that we have been in Afghanistan now for close to 10 years, and 
you are right when you talked about Commander Masood and Abdul 
Haq and some of the great leaders that they had. This is--they 
have lost 1 million people in the last 20 years, many of them 
who would be providing the leadership, the honest and committed 
leadership that Afghanistan or any society needs. 
Unfortunately, they are gone, and we have got to do our best 
without them.
    Let me ask a little bit, I have one or two more questions 
about aid, and you do not have a specific list of people who 
work for the government who you are not now--who are on your 
blacklist, who you are not going to deal with?
    Mr. Sampler. USAID, other than our suspension and debarment 
list, which is a corporate list, does not have a blacklist of 
individuals, but before we work with a particular Ministry, 
part of the preventive maintenance or the preventive assessment 
that we would do, the preparatory assessment would involve who 
will be working with this money and who will be the signatory 
for this.
    Mr. Rohrabacher. Okay. How much of the aid--I have received 
information that suggests that a large portion of the aid that 
we have spent in Afghanistan in these 10 years has gone to the 
southern tier of Afghanistan, which is basically the Pashtun 
territories. Is that true? And if it is true, why are we 
putting a lion's share of our aid there rather than working 
with those people who actually helped us defeat the Taliban, 
who come from more of the northern tier of the country?
    Mr. Sampler. Congressman, that is not an uncommon question. 
The demographic distribution of the funds is somewhat skewed by 
the fact that Kabul is itself in the east of Afghanistan, so in 
the regions, the east and the south have Kabul and Kandahar. 
The south and even the southwest, the Helmand River valley 
area, have been identified as particular recipients of 
assistance, primarily in support of the military or the 
comprehensive approach to countering the insurgency there.
    In meetings with the governor of Bamiyan, which you may 
know is a beautiful part of Afghanistan and has not seen much 
of the war lately, they lamented the fact that they are 
peaceful. They are law abiding. They have a woman governor, 
they have a minister, an admirable administration, but they 
don't get the level of resources that they think they should 
get.
    We are working--I mean, we constantly realign our 
portfolio. We did a portfolio review just in the past 6 months, 
and part of that realignment is focusing on where do the 
resources need to go. We avoid political distributions. These 
are not--the resources are determined primarily by the needs of 
the U.S. Government and then by the priorities of the 
Government of Afghanistan.
    Mr. Rohrabacher. Okay. Your list of things for which we can 
be proud of, and let me just suggest that shortly after the 
liberation--of course, I went in and out of Afghanistan before 
the liberation and back during all the way to the Russian 
times, but I remember right after the liberation, I went in, 
and I drove between Kabul and Mazar-i-Sharif, and halfway 
through, there was a school, a tent that was set up. And I will 
have to admit to you one of the most inspiring sights that I 
have ever seen were those kids in that school and where you had 
little girls and little boys both, and here they had just come 
from a society where educating a girl would have meant they 
would cut the head off the teacher. And these people were 
committed to teaching their children, all of their children, 
the basics that would permit them to live a decent life. And 
that was very inspiring, and helping schools and health care 
can't go wrong in that regard, unless somebody is pilfering all 
the money, like I suggested when I was in Vietnam, I noticed 
then that money had been pilfered.
    Mr. Sampler. Congressman, you lamented the loss of Abdul 
Haq and Commander Masood, and I think a lot of people do. But I 
am inspired when I go back by the young people who look up to 
those men and their peers and who aspire to fill their shoes. 
One of the things that excites me about the education programs 
in particular, and it was my words, I wrote the part of my 
presentation talking specifically about critical thinking 
skills. Young Afghan men and young Afghan women are not going 
to be led blindly into bad ideas, be they governance ideas or 
be they some other maligned doctrine, and these schools I think 
are the hope and the future, not just for Afghanistan but for 
the region. They will be better citizens, they will be better 
business people.
    Mr. Rohrabacher. And the schools, are they in the southern 
part of the country as well, is this something that you are 
focusing on, and how does that--I mean, as we know, the 
southern part of the country where the Pashtuns are the 
dominant force, much of the Taliban's antifemale aspects of 
them comes from or actually the Pashtuns agree with some of 
that, a lot of that. Is there a resistance in these Pashtun 
areas to that type of education?
    Mr. Sampler. It varies community by community. As you 
probably recall, they have a very tribal and clan-structured 
society, especially in the south, and if the leadership of that 
community have had exposure, if one of their nieces or 
daughters or a woman in their family has been educated and they 
have seen that this contributes to the well-being of the 
family, then those patriarchs are able to help push that 
message out.
    But the other thing that makes this irreversible, I think, 
is the number of young women who have been educated and who 
will not be put back into the dark ages, and the radio 
programs, there are some 15,000 independent radio stations now 
across the country that are quietly but slowly spreading a 
message that education of women is a good thing. So, yes, there 
is resistance. In some cases, it has been brutal resistance, 
but I think that that is on the wane in general.
    Mr. Rohrabacher. You mentioned Kandahar, and that of course 
has been a priority area, but it has also been a priority area 
that has been dominated by the Karzai family, and what has been 
your experience with the Karzai family in Kandahar?
    Mr. Sampler. I have no personal experience with the Karzai 
family in Kandahar. When I was the chief of staff of the U.N. 
mission, I spent a fair amount of time there, and I would be 
able to say that the Karzais' tribe was a prominent tribe but 
not the only dominant tribe in that part of the country, and 
during my time there, that would have been 2004 to 2006, their 
clan or their tribe was competing with others for resources and 
for dominance, but I was not in Kandahar at a time when 
anything like the Karzai family ran the city. I didn't 
experience that.
    Mr. Rohrabacher. And what else is prevalent in Kandahar, is 
there something that grows out in the countryside?
    Mr. Sampler. You are probably speaking about opium, and 
Helmand is actually quite a bit more----
    Mr. Rohrabacher. Yes, I understand, but Kandahar is in that 
part of the, that whole swath of the country where opium is----
    Mr. Sampler. Across the south, if there are not strong 
institutions and if there are not, alternatively, livelihoods 
and value chains and access to market, opium will certainly be 
grown.
    Mr. Rohrabacher. Okay. And I know that you have got a list, 
and I hope you will provide for me a list, and I know you have 
got it because--and it is good--of enterprises that we are 
trying to use as alternatives to the opium trade, and I won't 
ask you to detail that for us now, but I am sure that is part 
of what you are trying to do?
    Mr. Sampler. It is.
    Mr. Rohrabacher. If you could send that to me in writing, 
that would be deeply appreciated.
    Mr. Sampler. We will be happy to do that, Congressman.
    [The information referred to follows:]
    
    
    
    
                              ----------                              

    Mr. Rohrabacher. Do you have anything you would like to 
add?
    Mr. Sampler. Just one thing I would like to address, with 
respect to the GAO, and I don't know if they stayed, I speak 
sincerely when I say we appreciate the oversight they provide. 
I don't take great umbrage when the GAO finds mistakes. I take 
and pay particular attention to open recommendations that we 
have not closed. So the GAO finding a problem is not great news 
for us, but it is not a failure on our part. Not addressing 
their recommendation and not closing the recommendation is. And 
that is where I think we have such a good relationship, not 
just with GAO but also with SIGAR and in particular with the 
USAID IGs. We will argue with them vociferously about points of 
art and about the state of how we do this, but at the end of 
the day, their job is to point out weaknesses, and our job is 
to address the weaknesses. So I think hearings like this are 
very useful, and I certainly think that the GAO and the two IGs 
provide a valuable resource. We had--I asked my staff, we have 
had over 248 recommendations from our IG over the course of the 
10 years that we have been in Afghanistan, and of those, all 
but about 49 of them have been closed, and I know some of the 
49 because they cross my desk regularly. The IG said that we 
needed to do X, but for reasons why we can't do that yet. So 
that would be the only point I would make is that I view this 
as not antagonistic and certainly not adversarial but as parts 
of a whole and making sure that we are good stewards with 
taxpayer resources.
    Mr. Rohrabacher. Okay. So you have been in and out of 
Afghanistan now for quite a few years, and you know about our 
struggle to develop that country. Is the government structure 
that we helped put in place, that we actually pressured people 
to adopt, is that so centralized that, number one, it 
encourages corruption? I mean, we have now a presidential 
system in which the President of the central government 
appoints all of the provincial governors, and then the 
governors then appoint the other officials down under them, so 
basically we have set up a system that if it was in the United 
States, the President of the United States would be controlling 
all the governments all the way down to the local city hall. Do 
you think that system lends itself to corruption?
    Mr. Sampler. I am smiling, Congressman, that is a great 
question, and it is one that actually I think during the 
emergency Loya Jirga and the constitutional Jirga, we in the 
international community debated almost constantly, but what we 
fell back on to in the end was that it was not our decision to 
make, we did have and there is no question that the 
international community influenced the Afghans in the shape and 
the form of their government.
    Answering from a developmental academic perspective, I 
don't think that a centralized government fosters corruption 
more than, say, a decentralized government would. What prevents 
corruption is robust institutions, and if the Afghans had the 
capacity in the provinces and the districts for robust 
institutions, there would be more room for decentralization. It 
is my experience, my personal experience, not the Agency's, 
that in Afghanistan, that capacity is not there universally 
yet. It is growing. And, again, the schools are growing it 
fast. As these provincial centers are able to absorb capacity 
and to absorb resources, they should.
    If you are asking me whether or not having, whether the 
Afghan Constitution having the President appoint and the 
governors appoint is the best system, the only comparison that 
I can make is it took us 12 years to go from the Articles of 
Confederation to a Constitution that was the best I think in 
the world, and even then our Constitution took 114 years as of 
yesterday to give women the right to vote. I think it is 
important that we hold the Afghans accountable to a high 
standard, but it has to be an achievable standard, and you know 
better than I perhaps because you roamed that country with less 
security details and less constraints, their culture is 
incredibly entrenched. And it is not going to be something that 
we can change in a decade, which is one of the reasons I have 
been so encouraged to hear discussion about a longer-term 
investment, certainly at diminished levels, but the United 
States is going to stay the course in Afghanistan so that we 
don't make mistakes that we made after the last time we were 
working in that part of the world.
    Mr. Rohrabacher. The opposition to the current government 
from the northern sector of the country is suggesting that they 
have--by the way, people have claimed that I believe in some 
sort of segmentation of the country and dividing the country, 
which I do not, just for the record. And where they get that is 
that I believe that we have to have a system that does in some 
way address their basic culture, which is decision making needs 
to be made at the tribal and village level as much as possible, 
but in terms of the--so Mr. Karzai has covered himself by 
suggesting that means I believe in cutting the whole country 
apart. Also I happen to believe in--that in Afghanistan, it 
might be better--or whatever I believe is irrelevant, but the 
people may want this, and they should be given the choice of 
deciding. A lot of people in the northern part of the country 
would rather have a parliamentary system in order to make sure 
that you just don't have all the power in one man and if you do 
have a President or Prime Minister of the country, that at 
least that person has to rely on a coalition instead of 
everything from the top down, and--any thoughts on that?
    Mr. Sampler. Congressman, I think your recognition of local 
decision making is just as relevant today as it was when you 
were there. One of the lessons that we have learned in our 10 
years there was focusing, for example, on rule of law issues. 
Rule of law, to us, means judges, it means prosecutors, defense 
attorneys; it means courtrooms. Rule of law to Afghans mean 
local shuras, and it means sitting down with the elders of the 
two villages that are in dispute and coming to a sensible 
conclusion, and then everyone agreeing to it and walking away. 
That is a lot less expensive than courts. In Afghanistan, it is 
a lot more effective. It is sensitive and recognizes the 
leadership that they have in their own communities.
    Just an anecdote about illustrating the differences in how 
we see the world and how they see the world, after the 
emergency Loya Jirga, I sat with elders and was beginning to 
presage that there were these elections coming, and one of the 
gray beards from one of the communities said, Mr. Larry, I 
fought with the Muj, I am the water master in my village, I 
have been on the Hajj, I have done all these things. This young 
man is my grandson, why should his vote count the same as mine? 
And I was a recent graduate from an excellent university in the 
United States, and I didn't have an answer to that. What I have 
come to realize is that Afghan systems aren't worse than ours 
in some cases; they are just different. We need to identify 
their strengths and their weaknesses, and we need to make sure 
that we protect our equities, be it taxpayer dollars or people, 
and then we need to let the Afghans get on with doing business 
in ways that are transparent and accountable.
    Mr. Rohrabacher. Let's just note that the only time period 
that I have been able to discern from their history where they 
had decades long of relative stability happened under the 
leadership of Zahir Shah, who is one of the beloved figures of 
Afghan history, and the reason why he was beloved and able to 
be the leader of the country is he left people to govern 
themselves at the local level and let the village and the 
tribal leaders have their meetings and make their decisions. He 
did not try to govern the country by having a centralized army 
forcing everybody to do what his appointee in that area was 
insisting. That is how he succeeded and in Afghanistan had 
decades of relative stability, and after the Communist efforts 
to unseat him and he was in exile in Rome, I believe the 
greatest mistake we ever made was not bringing him back and 
pressuring him to bring Karzai into a position of being able to 
be in power, and so, right now, my analysis of what this 
structure looks like is I find it difficult to tell the 
difference between the structure that we have set up, a 
centralized structure where one person is making the 
appointments and they are trying to build a strong army in the 
center and having foreign troops there to give added strength 
to the central government, I don't see where we are any 
different than what the Soviets were in when I first went to 
Afghanistan 25 years ago. And the Soviets did not succeed, and 
we won't succeed if that is what it is all about.
    So I respect the fact that you and others are doing your 
best to try to help our country succeed, and you are doing your 
very best, and I know our military people are doing their very 
best. I don't think that we have given, laid down the ground 
rules in a way that will permit them to succeed, and the 
American people can't go on like this. We may have signed a 
contract to be with them for another 10 years. American people 
don't want to be in Afghanistan another 10 years. We don't want 
to be providing foreign military advisers there. We don't want 
to be providing foreign aid there. We want to let those people 
govern themselves, work through the systems that work with 
their culture, not try to superimpose things, and leave with a 
smile and say, we are your friends, but we are not your 
keepers.
    So, thank you, again, for what you are doing, and I agree, 
I am very happy that you started your comments thanking the men 
of the American military who sacrifice so much and people like 
yourself have sacrificed for that, too.
    With that said, I am going to give you the last word, 30 
seconds.
    Mr. Sampler. No, thank you very much.
    Mr. Rohrabacher. With that said, I want to appreciate, 
Larry, I appreciate you being here.
    I appreciate the first witnesses, and I think we have had a 
really honest dialogue and discussion today.
    I think if we dig through all of this, we are going to find 
some gems, and with that said, I hold this hearing adjourned.
    [Whereupon, at 4:22 p.m., the subcommittee was adjourned.]
                                     

                                     

                            A P P E N D I X

                              ----------                              


     Material Submitted for the Hearing RecordNotice deg.




               \\ts\


                                 
