    [Senate Hearing 115-324]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 115-324

        AFGHANISTAN IN REVIEW: OVERSIGHT OF U.S. SPENDING IN AFGHANISTAN

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

                                     HEARING

                                   BEFORE THE

                        SUBCOMMITTEE ON FEDERAL SPENDING
                       OVERSIGHT AND EMERGENCY MANAGEMENT

                                     OF THE

                                  COMMITTEE ON
                             HOMELAND SECURITY AND
                              GOVERNMENTAL AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 9, 2018

                                   __________

                       Available via http://www.fdsys.gov

           Printed for the use of the Committee on Homeland Security
                            and Governmental Affairs

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    Available via the World Wide Web: http://www.fdsys.gov

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            COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                        RON JOHNSON, Wisconsin, Chairman
    JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
    ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
    RAND PAUL, Kentucky                  HEIDI HEITKAMP, North Dakota
    JAMES LANKFORD, Oklahoma             GARY C. PETERS, Michigan
    MICHAEL B. ENZI, Wyoming             MAGGIE HASSAN, New Hampshire
    JOHN HOEVEN, North Dakota            KAMALA D. HARRIS, California
    STEVE DAINES, Montana                DOUG JONES, Alabama

                      Christopher R. Hixon, Staff Director
                   Margaret E. Daum, Minority Staff Director
                         Laura W. Kilbride, Chief Clerk
                        Bonni Dinerstein, Hearing Clerk

      SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT AND EMERGENCY MANAGEMENT

                         RAND PAUL, Kentucky, Chairman
    JAMES LANKFORD, Oklahoma             GARY C. PETERS, Michigan
    MICHAEL B. ENZI, Wyoming             KAMALA D. HARRIS, California
    JOHN HOEVEN, Montana                 DOUG JONES, Alabama
                          Greg McNeill, Staff Director
                    Zachary Schram, Minority Staff Director
                          Kate Kielceski, Chief Clerk

                                C O N T E N T S

                                     ------
    Opening statement:
                                                                       Page
        Senator Paul.................................................     1
        Senator Peters...............................................     2
        Senator McCaskill............................................     8
        Senator Jones................................................    11
    Prepared statement:
        Senator Paul.................................................    29
        Senator Peters...............................................    31

                                   WITNESSES
                             Wednesday, May 9, 2018

    John F. Sopko, Special Inspector General, Special Inspector
      General for Afghanistan Reconstruction.........................     4
    Laurel E. Miller, Senior Political Scientist, Rand Corporation...     6
    Gregory McNeill, Majority Staff Director, Subcommittee on Federal
      Spending Oversight and Emergency Management....................    21
    Sergio Gor, Deputy Chief of Staff for Communications, Office of
      Senator Rand Paul..............................................    22

                         Alphabetical List of Witnesses

    Gor, Sergio:
        Testimony....................................................    22
        Prepared statement...........................................    62
    McNeill, Gregory:
        Testimony....................................................    21
        Prepared statement...........................................    58
    Miller, Laurel E.:
        Testimony....................................................     6
        Prepared statement...........................................    50
    Sopko, John F.:
        Testimony....................................................     4
        Prepared statement...........................................    33

                                    APPENDIX

    Minority Staff Report............................................    75
    U.S. Institute of Peace statement for the Record.................    95
    Responses to post-hearing questions for the Record from:
        Ms. Miller...................................................    98

        AFGHANISTAN IN REVIEW: OVERSIGHT OF U.S. SPENDING IN AFGHANISTAN

                                  ----------

                             WEDNESDAY, MAY 9, 2018

                                     U.S. Senate,
                            Subcommittee on Federal Spending,
                        Oversight and Emergency Management,
                        of the Committee on Homeland Security
                                      and Governmental Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 2:30 p.m. in room
    342, Dirksen Senate Office Building, Hon. Rand Paul, Chairman
    of the Subcommittee, presiding.
        Present: Senators Paul, Peters, Harris, Jones, and
    McCaskill.

                  OPENING STATEMENT OF SENATOR PAUL\1\

        Senator Paul. Thank you for coming. I call this hearing of
    the Federal Spending Oversight (FSO) Subcommittee to order.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Paul appears in the Appendix
    on page 29.
    ---------------------------------------------------------------------------
        Almost 17 years ago, the United States invaded Afghanistan
    to topple the Taliban regime, that provided safe harbor to
    perpetrators of the 9/11 terrorist attacks. I think that was
    the right thing to do at the time, but I think we have simply
    stayed too long.
        This is the longest military engagement in U.S. history. We
    have already been there 7 years longer than the Soviets, and
    their occupation is often characterized as a failure, their
    Vietnam. Instead of learning from their experience, we seem to
    want to duplicate it. We have occupied their old bases, we are
    trying to build the same kind of infrastructure, and we are
    fighting the same kind of guerilla force.
        What is more troubling is that some talk about never coming
    home. We are told our mission there is vital and that we are
    making a stable country in the region which will pay a peace
    dividend even if we have to stay 50 years.
        Recently, Secretary Pompeo admitted there is not a military
    solution to the Afghan war, and yet this Administration just
    upped our troop numbers. We build dams and electric
    transmission lines, and the Taliban blow them up, or worse,
    take them over and sell the power back to the Afghan people.
    And, by the way, while we are building infrastructure there,
    our infrastructure at home is aging and crumbling.
        The country is not safe. You cannot even leave the embassy.
    Most of the time our personnel cannot even visit many of the
    infrastructure projects we pay for. Let me repeat that: we
    cannot even visit many of the projects we are paying for.
        We have an opium problem there. We have an opium problem
    here. And despite spending over $8 billion in Afghanistan, they
    are still the leading producer of poppies, as an origin of
    heroin, for the world. It is just insane.
        To top it all off, we are spending over $40 billion each
    year for this. So the purpose of this hearing is to really take
    a deeper dive and to examine that spending. We have the Special
    Inspector General for Afghanistan Reconstruction (SIGAR) here
    today to talk about some of his great work exposing things like
    the $42 million natural gas station, the $60 million power
    transmission system that does not work, buildings that melt in
    the rain, and the $80 million consulate up in Mazar-e Sharif
    that was never occupied because it was not secure. We want to
    hear about their ongoing corruption review as well.
        Our second panel will be staff from the Subcommittee who
    recently returned from an oversight trip to Kabul. As
    mindboggling as the waste seems back here in Washington, I
    understand from them it is all the more galling when you are
    there on the ground.
        I have made it no secret I think we should come home. I
    think we went in for the right reasons but we stayed too long.
    It is not our job to build countries, and, frankly, I think we
    do a poor job of it. If you talk to our soldiers, I think they
    will tell you that is not why they enlisted.
        I think we anger as many people as we help, and that also
    makes the taxpayers back home angry.
        With that, I will recognize Ranking Member Peters for his
    opening statement. Senator Peters.

                 OPENING STATEMENT OF SENATOR PETERS\1\

        Senator Peters. Thank you, Mr. Chairman, and I would like
    to join you in welcoming Inspector General Sopko and Ms. Miller
    to the Subcommittee. I look forward to both of your testimony.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Senator Peters appears in the
    Appendix on page 31.
    ---------------------------------------------------------------------------
        Today's hearing is notable, not just because of its
    important topic, reconstruction spending in Afghanistan, but
    also because of its venue. Although the Senate regularly holds
    hearings related to our Nation's efforts in Afghanistan, until
    now those hearings have generally been held before the Armed
    Services Committee and the Foreign Relations Committee. It is
    rare for our Oversight Committee to focus on spending in
    Afghanistan, but I do think we should.
        In the 17 years since September 11, 2001, the American
    taxpayer has been asked to bankroll hundreds of billions of
    dollars of spending on combat relief and reconstruction in
    Afghanistan. Our total bill is quickly approaching $900
    billion, not counting what we spend here at home treating and
    caring for our veterans. More than $125 billion has been spent
    on relief and reconstruction alone, and even accounting for
    inflation, that is more than we spent on the Marshall Plan to
    rebuild Western Europe in the aftermath of World War II.
        Frankly, calling it reconstruction is somewhat of a
    misnomer. Much of our work in Afghanistan is construction,
    building infrastructure and capacity where currently none
    exists.
        After 17 years and hundreds of billions of dollars, it is
    more than fair for taxpayers to ask, ``Is it worth it?'' ``What
    is the return on our investment?'' ``Are we throwing good money
    after bad?'' and ``Why are we spending hundreds of billions of
    dollars on infrastructure thousands of miles away when our own
    roads and bridges are crumbling right outside our doors?''
        What do I tell the people of Flint, Michigan, who ask me,
    ``Why are my taxes paying for clean water in Kabul when I do
    not have clean water in my own home here in Flint?''
        These are important questions and very hard ones. Partly
    they are policy questions. Put simply, the money we spend in
    Afghanistan is intended to promote our national security, and
    thanks to the incredible dedication and sacrifice of our
    servicemembers, frontline civilians and their families, we have
    been successful in driving al-Qaeda out of Afghanistan and
    denying safe haven to transnational terrorists. We have made
    progress in democracy and development in helping to strengthen
    Afghan institutions. There are more roads and more electrical
    lines. Literacy is up and infant mortality is down.
        And yet, Afghanistan is not secure. We are constantly
    warned that chaos will follow a precipitous withdrawal of our
    forces and funding, and every year we add tens of billions of
    dollars to the bill.
        Taxpayers are growing weary. My constituents tell me we
    cannot afford to write a blank check.
        To draw America's longest war to a successful conclusion,
    we must empower Afghans to achieve and sustain the peace. We
    must responsibly reduce our spending as we continue to
    transition military and governing capacity to Afghans. How we
    achieve that is as much about process as it is policy. The
    right policies do not ensure success on their own; in fact, far
    from it. When the money we spend in Afghanistan is wasted,
    stolen, or ends up in the hands of the very enemies we seek to
    defeat, it undermines our policy, however well intended.
        I hope that is what we focus on here today. How do we
    prevent waste, fraud, and abuse from our spending in
    Afghanistan? How do we ensure that each dollar is put to its
    highest and best use? How do we track it? How do we measure its
    effectiveness? Are the right oversight structures in place to
    provide us with the information that we need to make the tough
    decisions?
        I know from my own visit to Afghanistan, and from the visit
    made by our staffs last month, our security posture severely
    limits the ability of Americans to work outside of the wire. In
    many cases, American aid workers and auditors cannot even visit
    the projects that our taxpayers fund. What oversight options,
    if any, do we have in that kind of security environment?
        I am grateful to be here to hear from Mr. Sopko and Ms.
    Miller, who have years of experience working on these
    questions, inside and outside of Afghanistan. Between them,
    they can speak to the challenge of conducting reconstruction
    programs and the challenge of auditing and overseeing these
    programs, and I certainly thank you for your service and thank
    you for being here today.
        Members of this Subcommittee have a wide range of views
    about our Nation's involvement in Afghanistan, but whatever
    your views, our success depends on spending money effectively,
    even as we seek to reduce our overall expenditures. Waste fuels
    corruption, undermines the institutions in Afghanistan that we
    seek to empower, and breaks faith with the American taxpayer.
        I hope today's hearing will help address these issues and
    send a strong message that Congress' role does not end when we
    pass a budget and write a check. We have an obligation to
    follow the money and ask the tough questions.
        I thank you and yield back.
        Senator Paul. Thank you, Senator Peters. With that I will
    begin with our witness opening statements. I will remind the
    witnesses that their already-submitted written testimony will
    be included in the record and to keep their remarks to 5
    minutes.
        Our first witness is Special Inspector General John Sopko
    of the Office of the Special Inspector General for Afghanistan
    Reconstruction. For those of you who are unaware, Special
    Inspector General Sopko worked for the Permanent Subcommittee
    on Investigations from 1982 to 1997. He assumed his role as the
    Special Inspector General in July 2012. He has an illustrious
    resume with more than 30 years of experience in oversight and
    investigations, as a prosecutor, congressional counsel, and
    senior Federal Government advisor. He holds a bachelor's degree
    from the University of Pennsylvania and a JD from Case Western
    University Law School.
        Special Inspector General Sopko, welcome back to the HSGAC
    hearing room, and I recognize you for your opening statement.

       TESTIMONY OF JOHN F. SOPKO,\1\ SPECIAL INSPECTOR GENERAL,
        SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

        Mr. Sopko. Thank you very much, Chairman Paul, Ranking
    Member Peters, and other Members of the Subcommittee. Thank you
    for inviting me to appear before this Subcommittee to discuss
    our oversight work in Afghanistan and the status of
    reconstruction there. Let me express my appreciation for the
    attention the Committee has paid to SIGAR's work.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Sopko appears in the Appendix on
    page 33.
    ---------------------------------------------------------------------------
        As you know, Mr. Chairman, both you and Senator Lankford
    have highlighted many of SIGAR's findings in your reports on
    government waste, and Senator McCaskill's recent report,
    entitled ``Fast Cars, Easy Money'' highlighted gross
    mismanagement of taxpayer dollars initially identified by a
    SIGAR audit. Likewise, I appreciate that the majority and
    minority staff of the Committee took the time to learn about
    our work firsthand during their recent travel to Afghanistan.
        Now this Committee, as you well know, is tasked with
    ``studying the efficiency, economy, and effectiveness of
    agencies and departments of the government.'' SIGAR is charged
    with a similar requirement, to look at all Federal entities
    involved in Afghanistan reconstruction. We are the only Office
    of Inspector General (OIG) authorized to examine all aspects of
    reconstruction, regardless of the department or agency
    involved, including U.S. funds contributed to international
    organizations for Afghanistan.
        Now that is critical, especially critical today, because
    reconstruction in Afghanistan has involved many United States,
    foreign, and multinational agencies conducting an immensely
    wide range of activities, including building the Afghan
    security force, undertaking efforts to improve education and
    health care of the Afghan people, fighting corruption, fighting
    the narcotics trade, and developing the Afghan economy.
        We have seen much good work done, but we have also reported
    on far too many instances of poor planning, sloppy execution,
    theft, corruption, and a lack of accountability. Some of the
    most egregious examples SIGAR has identified include the
    Department of Defense (DOD's) purchase of nearly a half billion
    dollars' worth of secondhand airplanes from Italy that were
    unusable and later sold as scrap; the construction of an Afghan
    security forces training facility that literally melted in the
    rain; numerous schools, clinics, roads, and other
    infrastructure built dangerously unsound and with little, if
    any, concern for the costs of supplying and sustaining them;
    and a failed $8.7 billion counternarcotics effort in a country
    where poppy cultivation increased by 63 percent last year
    alone.
        Common problems we have identified include touting dollars
    spent as a metric of success and counting outputs, like
    training courses held, rather than outcomes of activity, such
    as whether those courses actually improved performance; poor
    coordination and parochialism among United States and foreign
    agencies, rather than an integrated whole-of-government
    approach; projects and programs developed without a metric to
    assess them; a failure to take into account the Afghans'
    ability to sustain these projects; and a persistent lack of
    accountability for poor performance, whether by firms or
    individuals. Also a loss of institutional memory due to
    constant personnel rotations, and illegal acts, like soliciting
    bribes, taking kickbacks, or stealing money.
        Now Afghanistan reconstruction is a work in progress, and
    as we have all recognized, slow progress at that. Results to
    date have been decidedly mixed. But there has been progress, as
    noted by the members, including improvements in health and
    educational outcomes for the Afghan people.
        While great obstacles remain, I believe that an effective
    reconstruction effort in Afghanistan can support this
    Administration's policy that the country must never again be a
    launching pad for terrorist activity. But to succeed, our
    government must do a better job of planning, overseeing,
    monitoring, and imposing accountability for misconduct and
    incompetence.
        SIGAR, as you well know, does not make or weigh in on
    national policy. As an Inspector General, we do process. We
    look at the process. But as long as reconstruction efforts
    continue, we will persist in our efforts to improve the work by
    presenting the facts, as we find them, and making
    recommendations, where appropriate.
        Thank you and I look forward to the questions.
        Senator Paul. Thank you for your testimony.
        Our next witness is Laurel E. Miller. Ms. Miller is a
    Senior Political Scientist at Rand Corporation. She served as
    the Acting Special Representative for Afghanistan and Pakistan
    at the U.S. Department of State, and prior to that Principal
    Deputy Special Representative. She has participated in national
    security and foreign policy studies on subjects ranging from
    democratization to conflict resolution to institution-building
    in weak States.
        Ms. Miller holds an AB from Princeton and a JD from the
    University of Chicago.
        Thank you very much, Ms. Miller.

     TESTIMONY OF LAUREL E. MILLER,\1\ SENIOR POLITICAL SCIENTIST,
                            RAND CORPORATION

        Ms. Miller. Good afternoon, Chairman Paul, Ranking Member
    Peters, and distinguished Members of the Subcommittee, and
    thank you for having me here today.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Ms. Miller appears in the Appendix on
    page 50.
    ---------------------------------------------------------------------------
        I have been asked to address the effectiveness of U.S.
    spending in Afghanistan. This has two main components:
    efficiency of how the dollars are spent, as Mr. Sopko was
    addressing, and impact of the spending on achieving policy
    goals, and I will focus mostly on the latter, covering three
    main points. First, the motivation behind U.S. spending, why we
    are doing it; second, the results achieved; and third, I would
    like to propose a path forward toward reducing the U.S.
    commitment while mitigating risk.
        First, the rationale for U.S. spending stems from the 2001
    invasion. The United States ousted the Taliban regime not to
    improve conditions in Afghanistan for Afghans but to pursue
    U.S. national security interests in destroying al-Qaeda, and,
    because it had provided safe haven for al-Qaeda, the Taliban.
    The driving imperative of U.S. strategy since has been to
    prevent al-Qaeda and other international terrorist groups from
    regaining or gaining a foothold in Afghanistan and to prevent
    the return of Taliban rule.
        But the invasion created a vacuum, which then had to be
    filled by establishing a new government and by developing that
    government's capabilities to provide the country's security and
    to work with the United States in denying space to terrorist
    groups.
        The theory behind using taxpayer dollars to promote Afghan
    economic and human development, to improve public services, and
    to build institutional capabilities is that making those kinds
    of improvements would create a stable political and security
    environment. The United States has long recognized that it
    cannot only battle its way to stability in Afghanistan.
        Although, in certain areas, the improvements sought have
    been achieved, on the whole, neither political nor security
    conditions in Afghanistan are more stable now than they were
    prior to the surge in troops and spending a decade ago. In
    other words, there are specific spending objectives that have
    been achieved but the ultimate purpose, a stable and self-
    sustaining Afghanistan, has not yet been fulfilled.
        One possible explanation is that the theory I described of
    how this spending works is mistaken. One certain explanation is
    that achieving the kinds of impact that I have outlined, in a
    war-torn country anywhere in the world, is exceedingly
    difficult. For instance, creating from scratch security
    institutions cannot be achieved through quick-fix technical
    measures, but instead requires broad-based improvements in
    governance quality and changes in societal norms.
        If the main stability goals have not been achieved then the
    question comes, what results have been produced? One way to
    answer that is to look at particular projects and whether they
    were competently executed and whether they produced the desired
    outputs.
        But using a wider lens, it is also possible to answer in
    terms of the impact of the totality of aid on Afghan society.
    U.S. assistance has clearly produced some positive development
    outcomes, which have no doubt improved the lives of many
    Afghans.
        A variety of statistical indicators show that health,
    education, access to information, and other facets of life have
    improved significantly, and that is a tribute to U.S. spending
    in the country. One example is the ninefold increase in the
    number of Afghan children in school, which is an important
    investment in future generations. There is, however, some doubt
    about the sustainability of these outcomes and the economic
    picture in Afghanistan has begun to deteriorate, together with
    security conditions.
        In analyzing these results and the impact they have had on
    achieving policy goals, it is also important to consider how
    much better could be expected. It is important to note that the
    Afghan context is exceptionally challenging. It is still one of
    the world's poorest countries. It is arid, land-locked,
    historically has attracted interference by neighbors and
    regional powers, and it has suffered decades of damaging
    conflict. It can hardly be surprising that implementing
    assistance programs there is extraordinarily difficult. In
    realistically setting expectations for efficiency and impact,
    the significant limitations imposed by conditions in
    Afghanistan should be appreciated.
        The crucial question comes back to one of policy. To what
    extent do U.S. national security interests justify continuing
    to spend assistance dollars while accepting that, inevitably,
    there will be leakages, losses, and imperfections? Answering
    that question should take into account that the Afghan
    government and the security forces the United States has
    established, in their current forms, are now dependent on that
    financing. At the extreme end of a range of options, rapid
    elimination of U.S. assistance would likely lead to a steep
    downward slide of security and political stability.
        To conclude, I would say, in my judgment, U.S. national
    security interests could best be advanced by mounting a robust
    diplomatic initiative to negotiate a settlement of the conflict
    that would fold the Taliban into Afghan politics, enable the
    United States to narrow its security mission to focus on
    counterterrorism, and set the conditions for normalizing the
    scale of U.S. assistance.
        Current U.S. policy nominally acknowledges the need,
    ultimately, for a negotiated settlement, but actual policy
    execution is still very heavily dominated by the U.S. military
    effort. A concerted, prioritized initiative to negotiate would
    be a major foreign policy undertaking, requiring both clear
    political backing and substantial diplomatic muscle; as yet,
    those requirements do not appear to exist.
        Thank you.
        Senator Paul. Thank you for your testimony, and if Senator
    Peters is OK with this, I would like to encourage
    participation, and so I am going to skip myself, Senator
    Peters, and go to Senator McCaskill, unless you have a
    complaint.
        Senator Peters. No.
        Senator Paul. Is that good? All right.

                 OPENING STATEMENT OF SENATOR McCASKILL

        Senator McCaskill. Thank you, Mr. Chairman. Thank you for
    holding this hearing and thank you for deferring your
    questioning.
        I wish, John, I could say to you that it looks like you are
    about out of work, that we have been at this a long time.
        I have two parts of this I want to talk about. The first
    part, briefly, I think it is helpful for the Committee record
    to get some sense of what has happened in regard to
    infrastructure projects. Correct me if there is anything I am
    saying that is wrong, John but I believe what the genesis of
    this was, it all started with Commander's Emergency Response
    Program (CERP) money in Iraq. It started with walking-around
    money for sergeants and command leaders, to give storekeepers
    money for a broken window, to try to win the hearts and minds
    in a counterinsurgency fight.
        Well, before you know it, and about 14 Armed Services
    Committee hearings later, we realized this had morphed into a
    large infrastructure situation where all of a sudden you had a
    mixture of roles between the United States Agency for
    International Development (USAID) and DOD as to who was
    responsible for building infrastructure. Is that a fair
    assessment?
        Mr. Sopko. That is correct. We have discussed it before,
    about the conflict between some of the agencies.
        Senator McCaskill. So DOD decided they were going to start
    building things like highways, and they were going to start
    building things like health centers, and all of that went
    terribly awry in Iraq. You would think we would have lessons
    learned when we moved into Afghanistan, but, once again, we had
    an Afghanistan Infrastructure Fund (AIF), within the Department
    of Defense budget.
        Now, I worked many years getting that to be gone, and am I
    correct now that the AIF is actually gone and the money that is
    currently being spent on infrastructure is only being done by
    USAID?
        Mr. Sopko. Senator, let me just ask my staff. I think there
    still may be some residual funds there but let me just check.
        Senator McCaskill. Residual, but no new projects have been
    started with those funds in the last several years. Correct?
        Mr. Sopko. Not that we know of.
        Senator McCaskill. A little bit of progress. At least there
    is an acknowledgement that we should not be having the military
    decide about natural gas stations in a country where there are
    no cars that run on natural gas.
        The main question I would like to ask you now, Inspector
    General, about Afghanistan, is whether we are talking about the
    dual-fuel electric grid that never was operable, whether we are
    talking about the natural gas station, whether we are talking
    about the transmission project, whether you are talking about
    the highway that cost more to guard while we built it and there
    was no highway department in Afghanistan to maintain it, to
    your knowledge, has anybody been held accountable on those
    projects in terms of losing their jobs?
        Mr. Sopko. No. No, Senator. No one is being held
    accountable.
        Senator McCaskill. If there was anything that we could
    agree on, Mr. Chairman, it would be that I would love to
    partner with you and any of my colleagues on this Committee or
    any other committee to speak with one voice, that we are never
    going to stop some of this nonsense if the person who decided a
    natural gas gas station was a good idea never has consequences.
        Senator Paul. Could I interject a question and ask John why
    no one was held accountable?
        Senator McCaskill. It has to do with contractors.
        Mr. Sopko. I think it is contractors. It is also the
    system. I would just add, Senator and Chairman Paul, many of
    the problems we see in Afghanistan are not unique to
    Afghanistan. The people we have sent to Afghanistan are not
    evil. They are not stupid. We gave our diplomats, our military,
    and our aid officials a box of broken tools. If you look at
    procurement--and I know, Senator McCaskill, you and I have had
    this conversation--DOD procurement has been on the Government
    Accountability Officer (GAO) high-risk list----
        Senator McCaskill. Forever.
        Mr. Sopko [continuing]. Since 1991, the first time they
    came out with a high-risk list, but it is not fixed. The Office
    of Personnel Management (OPM) and personnel management has not
    been fixed. We cannot hire the right person fast enough and
    fire the wrong person fast enough.
        So you go through the list. These are problems that I am
    certain the U.S. Department of Health and Human Services (HHS)
    IG or the U.S. Department of Veterans Affairs (VA) IG or anyone
    else would come in and probably tell you they see the same
    problems here in the United States.
        Senator McCaskill. It is exacerbated somewhat in DOD
    because of the contractor reliance and the contractor
    relationships that are built up.
        Mr. Sopko. You are absolutely correct.
        Senator McCaskill. In the second part of my time I would
    like us to talk about the report that the minority staff of
    this Committee put out, and I would ask that the report, ``Fast
    Cars, Easy Money'' be put into the record of this hearing.\1\
    ---------------------------------------------------------------------------
        \1\ The Minority staff report appears in the Appendix on page 75.
    ---------------------------------------------------------------------------
        Senator Paul. Without objection.
        Senator McCaskill. I have been assured by Secretary James
    Mattis that I am going to get some answers. You were correct in
    your opening statement, John, that the genesis of this report
    was, in fact, your audit work in this area, where we discovered
    the legacy contract. The legacy contract is an effort to train
    Afghan personnel how to do intelligence gathering, and hundreds
    of millions of dollars have been spent.
        Let me ask you, first, were you able to find any metrics in
    your audit that showed that this was actually performing as
    advertised, in terms of training Afghan personnel in
    appropriate intelligence gathering?
        Mr. Sopko. Absolutely not.
        Senator McCaskill. And as part of this, we discovered that
    somebody shopped this contractor in DOD under a Broad Agency
    Announcement (BAA), which is a request for proposal that does
    not require competition. Basically they pretzeled this proposal
    to get the contract through without competition, and that was
    primarily done by a subcontractor who got the majority of the
    money and the legacy contract, New Century Consulting (NCC).
    Through the work of SIGAR and the work of my staff, we
    discovered that the United States of America has paid for
    Bentleys, for Aston Martins, for Porsches, all on the taxpayer
    dime, that the chief executive officer (CEO) and the chief
    operating officer (COO) are driving around the United Kingdom
    (UK), along with employing their spouses at average salaries of
    around $2-, $3-, $400,000 a year. It is my understanding that
    no work could be found these spouses or significant others had
    ever done. Correct?
        Mr. Sopko. That is my knowledge.
        Senator McCaskill. That is what this report outlines. It is
    an egregious example of contracting gone amiss. And the whipped
    cream and cherry on top of this incredibly nasty sundae is that
    NCC is still doing business with the United States of America.
    They are still an existing contractor with the United States,
    as we speak. Their lawyer, who also happens to be the lawyer
    for Michael Cohen, which is a little interesting, wrote me a
    letter and said I need to quit bad-mouthing them. No chance. No
    chance am I going to quit bad-mouthing this company until we
    get to the bottom of what happened.
        As I said, Secretary Mattis has indicated that he is going
    to get to the bottom of it. He sent me a handwritten note after
    the last Armed Services Committee hearing, when I went off on
    this, and he says we are going to hold somebody accountable.
        I will hold my breath and hope that happens. In the
    meantime, I want to compliment the work of all the Inspectors
    General. When I first went to Iraq, after I got elected, I
    discovered that Inspectors General within the military are not
    like Inspectors General in the rest of the government. The
    Inspectors General in the military report to their commander.
    They have no obligation to report to the public or to Congress.
    They are really more about giving the commander information,
    and that is why SIGAR and the Special Inspectors General in
    places like Iraq and Afghanistan are so important.
        There have been attempts to undermine your work. We have
    tried to defend you and protect the work that you do. But I
    want to compliment you on the record, and your great staff and
    all the auditors, especially those in theater, that do the
    really hard work. Thank you.
        Thank you, Mr. Chairman.
        Senator Paul. Explain that again. So Inspectors General
    typically report to----
        Senator McCaskill. Within the military----
        Senator Paul. I was going to say, outside the military, the
    rest of the Inspectors General report to----
        Senator McCaskill [continuing]. Us, and to the public.
        Senator Paul. To each individual committee.
        Senator McCaskill. Not to this Committee, but to the public
    and to Congress. And I got in a fight with the military when I
    first realized this because I was an auditor. I said, ``Why are
    you calling them Inspectors General within the military?''
    because it looked like, to me, in Iraq, when I discovered--it
    looked like some of them were just covering their commander's
    you-know-whats. And they said, ``Well, we had the name first,
    so you are going to have to rename everybody else before you
    rename us.''
        Senator Paul. Do you agree with this assessment, Mr. Sopko,
    that the chain of command is different for the Inspectors
    General in the DOD than the rest of government?
        Mr. Sopko. Absolutely, Mr. Chairman. What Senator McCaskill
    is pointing out is that the Inspector General concept goes back
    to the beginning of the Continental Congress, and General
    Washington appointed the first IG. But they are service IGs.
    They report to the command, and basically are the eyes and ears
    of the command and improve the structure. It is a good
    structure but it is not the independent Inspectors General that
    you have in all the departments.
        Senator Paul. Well, my thought would be, Senator McCaskill,
    if you do not have legislation on this, I would be interested
    in doing legislation where we change the line of command for
    Inspectors General in DOD.
        Senator McCaskill. There is a DOD IG that does not work
    within a command. In other words, we have an Inspector General
    at DOD.
        Senator Paul. OK.
        Senator McCaskill. But I was taken aback, when I went to
    Iraq and I thought, OK, I am going to sit down with the
    Inspector General and find out what is going on in this unit
    because I was looking at contracting, I discovered, oh, you are
    not that kind of Inspector General.
        Senator Paul. All right. I got you. Senator Jones.

                   OPENING STATEMENT OF SENATOR JONES

        Senator Jones. Thank you, Mr. Chairman. Just to follow up
    on that, although I am almost inclined to yield my time since
    Senator McCaskill is on a roll----
        Senator McCaskill. Do not do that. I could go all day on
    that.
        Senator Jones. Yes, I know. That is why I am not yielding
    my time, Senator.
        Senator McCaskill. Smart man.
        Senator Jones. I am a former prosecutor, former U.S.
    attorney, and I am just stunned by what I just heard, that no
    one is being referred, not to just be fired but to go prison on
    something like this. And the chain of command, what we just
    heard, is that the reason why there are no prosecutions going
    on here?
        Mr. Sopko. Senator, there are some prosecutions, and I
    apologize if I misstated that. We, ourselves, have the largest
    law enforcement presence in Afghanistan, U.S. law enforcement.
    We have indicted and convicted over 100 individuals.
        Senator Jones. OK.
        Mr. Sopko. My staff has recovered over a billion dollars in
    fines and penalties. But what I think I was responding to--and
    again, I apologize if I misspoke--is that for the misdeeds--and
    it is not criminal. This is just incompetency, sloppiness, and
    whatever--no one gets fired. If you steal $20, somebody will
    try to indict you. But if you, just through gross negligence,
    waste $150 million, like we saw in some of our cases, nobody
    gets fired by the Department of Defense, USAID, or the State
    Department. That is what we are dealing with.
        Senator McCaskill. Right.
        Senator Jones. All right. To follow-up on that, you
    mentioned that there is a significant problem with corruption,
    in general. Is that coming from the other side? Is that coming
    from the Afghan government, and officials that you have to deal
    with in these reconstruction efforts?
        Mr. Sopko. Oh, absolutely. Afghanistan is one of the most
    corrupt countries in the world, and it has been historically
    viewed that way, so you are dealing with a very corrupt regime
    to start with. Now, it has changed, I think for the better, and
    that is one of the improvements. With the national unity
    government under President Ghani and CEO Abdullah, they care
    about trying to fight this.
        But assume, sir, that it is almost like you are the mayor
    of Chicago in 1930. Every cop, every prosecutor, every judge
    has been paid for by organized crime. How do you start? And we
    have been helping. DOD has been trying to help, USAID, and
    everybody else, but it is an immense task to turn that around.
        Senator Jones. Is there anything that Congress can do, any
    tools that we can give that would assist, that you do not have
    now?
        Mr. Sopko. Well, I raise it in my statement. The big issues
    we have has to do with security and the ability of, not just
    us, but the Department of Justice (DOJ) attorneys who are over
    there, to help educate and mentor the prosecutors. They have a
    physical problem with getting out. They are faced with the same
    economic problem because of those charges that the State
    Department imposes on us. It costs more money for one of my
    people to travel three miles to the Afghan international
    airport, than it does to fly home to Dulles, and that is a
    charge that the State Department is charging us.
        So that affects every civilian agency. There are some
    things, and I am happy to discuss, where you can help us,
    because pretty soon it is going to be impossible, financially,
    for us to do oversight in Afghanistan.
        Senator Jones. Well, that is where I was going next, in the
    security. I take it that getting out into the country, to get
    to the places that you need to go, is a major problem for
    security reasons. So let us just go there. You said you are
    happy to discuss. Tell us what we can do to help alleviate the
    security issues, or at least alleviate the cost of the
    security.
        Mr. Sopko. Well, the cost of the security is one I
    identified. It is the International Cooperative Administrative
    Support Services (ICASS) costs and also the travel costs. I
    think somebody just needs to talk to the new Secretary of State
    and talk to him about these charges that they are imposing.
        The general security in Afghanistan has deteriorated, and
    there is nothing you can legislate about that. But you can talk
    to the State Department about a policy that we have seen over
    the last few years--and this is not meant as a criticism of
    Professor Miller, who had nothing to do with the policy--but
    there has been a reluctance to taking a risk. People have
    thought you could do diplomacy and have thought, at main State,
    that you can do reconstruction risk-free. You cannot. If you
    want to avoid all risk then you might as well shut down the
    embassy, and shut down my office, and try to do it remotely
    from Dubai. And that is what has permeated the State
    Department.
        Now I am hoping, with the new Secretary of State--I know
    there is a new Ambassador in Afghanistan who appreciates that
    problem, who wants his people to get out, who wants the aid
    officials to get out to see those sites, but there has been
    this risk aversion. That is something that is just killing us
    and killing our diplomats--and I do not mean physically, but
    killing their ability to work.
        Senator Jones. How are you doing it? How are you getting
    out there?
        Mr. Sopko. Well, we are trying to use satellites. We are
    trying to use Afghan civilians who work with us. We are trying
    to use every technique we can. But as your staff from the
    Committee will tell you, you have to go out and kick the tire.
    You have to put eyes on the Marriott Hotel. You have to go see
    these facilities. You have to take a calculated risk.
        What I am telling you, I have been doing this for 6 years.
    I have seen this over the last year. Nobody permits us to take
    that risk. And again, if we approach it that way, the bad guys
    have won, because we never leave the embassy, or rarely leave
    it.
        Senator Jones. I agree. Well, I commend you for the work
    that you have done.
        I would like to take my remaining seconds, Mr. Chairman, to
    commend my Alabama National Guard and the First Battalion of
    the 167th Infantry Regiment for all the work they have been
    doing, helping you and your security and contributing such a
    great deal to the U.S. efforts, transporting 18,000 passengers
    over thousands and thousands of miles. So just a plug for my
    guys.
        Mr. Sopko. I will definitely congratulate your Guard. I
    actually sent a letter of congratulations to them. They did a
    wonderful job, because they were supporting us on a lot of our
    moves, and they did a fantastic job. And that is what we really
    need. We need a memorandum of understanding (MOU) signed and
    approved by the State Department and DOD that where State
    cannot provide the security, DOD will step in. It makes sense,
    financially. They are there. They are very well trained. But we
    even had a reluctance by the State Department to allow DOD to
    protect us in doing our job.
        Senator Jones. Well, that is something, Mr. Chairman, I
    think we should explore.
        Senator Paul. We are going to turn to Senator Peters here
    in a second, but I just wanted to interject one thing on your
    point, is that you can do these things but the question is,
    yes, you should have oversight, but there is also a question of
    can we ever get to that point? For example, the gas station. I
    asked Mr. Sopko about the gas station. He said to see it, for
    an American to go see it, sure you can go see it, but you would
    have to have a couple hundred troops and warships and all this.
    You basically are going into enemy territory. We are not
    talking about spending $1,000 to go look at it. We are talking
    about an enormous expense.
        So we are not winning the war, necessarily, and I do not
    know--it is not a question of--for some of it it may be better
    oversight, but some may be, is it something we should continue
    to do at all? Senator Peters.
        Senator Peters. Thank you, Mr. Chairman, and I am going to
    want to ask some questions related to that, as far as just the
    overall metrics of how we measure success in Afghanistan, to
    ask those bigger questions that you just raised, Mr. Chairman.
        Before I get there, Mr. Sopko, you mentioned it in your
    opening comments too. It is an issue that just drives me crazy,
    especially given what we are facing here in the United States
    with the opioid crisis. I understand a lot of the opium from
    Afghanistan does not come to the United States. It is in Europe
    and other places. But on a recent trip that I took to
    Afghanistan, I was told we are just an illicit contract away
    from perhaps seeing an awful lot of Afghan opioids getting into
    the United States as well.
        And yet as you mentioned in your opening testimony, here is
    a situation where we have spent--I think this is based on your
    most recent quarterly report--we have spent $8.7 billion for
    counter-narcotics efforts since 2002, and what we have seen is
    the total area continues to increase for cultivation and now
    production has reached an all-time high.
        What is going on after spending $8.7 billion?
        Mr. Sopko. Well, our work has shown that the programs did
    not work and they were not well coordinated. First of all, let
    me just preface this, that we understand it is difficult to
    fight narcotics. I mean, they have been doing it in Mexico for
    decades. They have been doing it in Colombia. When I first
    testified here for Senator Sam Nunn and for Carl Levin we were
    looking at counter-narcotics programs in the Andean region in
    Colombia back in the mid 1980s. It is a very difficult
    undertaking, so I understand it.
        But we will be issuing a lessons-learned report. As a
    matter of fact, we have already issued three, but in another
    month we are going to issue one where we actually looked at our
    counter-narcotics programs for the last 17 years, and tried to
    draw out best practices. Since the report is not out yet and it
    is still under review I cannot really go into the details. I am
    happy to come back and brief you on that.
        Basically we had a lot of programs but they were poorly
    coordinated and poorly executed. We are now faced with a
    situation--and again, I may show my age, Senator. I go back
    here to the Bureau of Narcotics and Dangerous Drugs, which was
    created before Afghanistan, and I remember talking to former
    Commissioner Harry Anslinger, and he said, ``Look at these
    variables. Look at price and purity.'' In this case, look at
    price, purity, and look at the amount under cultivation.
    Hectares under cultivation have skyrocketed. Opium produced,
    skyrocketed. Exports, skyrocketed. Price has decreased because
    there is just so much opium out there.
        We have interdicted more, but if you take all of the
    interdictions over the last 10 years in Afghanistan, they are
    equal to 0.05 percent of the production, just for this year.
    Just let that sink in. Every interdiction we have done for the
    last 10 years is equal to 0.05 percent of the production just
    for this year, and next year will be a bigger crop. So we have
    to do something, because the opium is funding the corruption,
    the opium is funding the terrorists, and if you want to do
    something about both of those, we have to come up with some
    programs and policies that actually work, and commit ourselves
    to them.
        Senator Peters. Thank you. Ms. Miller, I would like to have
    you discuss a little bit about what you think would be the
    metrics that we would measure success in Afghanistan. I think
    in your testimony you talked about normalization, to be able to
    stabilize that, and in your oral testimony you talked about we
    still have not really achieved political and security stability
    there.
        But as we are spending the amount of money that we are
    spending in Afghanistan, I would hope that there is a set of
    fairly objective metrics, and not just measured in the outputs,
    as we heard in testimony as well, but what does success mean in
    Afghanistan? How do we measure that, and where are we today, in
    terms of those kinds of measurements, in your estimation?
        Ms. Miller. Thank you, Senator. First, just to add one word
    on the counter-narcotics issue. There may well have been
    problems with the process of how the assistance was delivered,
    coordination and such. I am certain that there were. But I do
    not think that is by any means the predominant reason for
    failure. The incentives driving narcotics production and
    trafficking in Afghanistan, and the conflict dynamics that help
    to perpetuate it, are just far more powerful than United States
    spending in Afghanistan, than anything we could do through
    assistance programs there in counter-narcotics. That is not to
    say we should not improve efforts where we can, but I have no
    expectation that U.S. Government programs in Afghanistan are
    going to materially address the narcotics problem there.
        On the question of metrics of success, the main metric of
    success should relate to the main reason why we are in
    Afghanistan, which is dealing with our counterterrorism
    concerns in the region. I think you could say that the fact
    that the United States has had considerable success in
    decimating al-Qaeda in the region is an out-and-out success, in
    terms of what our original reasons were for invading the
    country.
        The second key element is are we bringing stability and
    sustainable stability to the country in a way that will enable
    the United States to reduce its commitment, reduce its military
    presence, which is much more expensive than any of the
    assistance spending in the country, to normal levels and a
    normalized assistance relationship with the country. I think
    that success in that sense is only going to come through ending
    the conflict, through achieving a political settlement that
    enables us to reduce our troop commitment in the country,
    essentially to withdraw most or all of our troops from the
    country, and to normalize our assistance levels. Until we do
    that, we may have achieved some intermediate levels of success
    on some of the more narrow objectives but we will not really
    have succeeded in fulfilling our purpose in Afghanistan.
        Senator Peters. Yes. Mr. Chairman.
        Senator Paul. Mr. Sopko, you mentioned the half a billion
    dollars in cargo planes we bought from Italy, and then I guess
    they are being sold as scrap and that no one has really been
    held accountable for that. Correct?
        Mr. Sopko. That is correct.
        Senator Paul. So this is somebody in purchasing at DOD who
    made the decision to buy the airplanes?
        Mr. Sopko. That is correct.
        Senator Paul. OK. So when you do the analysis and you
    discover this and point out that this much money and this bad
    decision was made, you tell us or you issue reports. Do you get
    a time to specifically talk to commanders or people in the
    military about your reports?
        Mr. Sopko. Yes, we do, and many times we do get very
    positive response on that. On the G.222, which is that military
    plane, just so you know, we do have an open criminal
    investigation ongoing in that case.
        Senator Paul. OK. So there is a possibility that somebody
    will not be fired, that someone actually committed malfeasance
    in it. But let us say there is an example, just X example,
    where it is just a bad decision. You do go to the military and
    then if you indicate that this was just a terrible decision,
    that someone made an unwise decision, there was no malfeasance,
    do you get a response? Do you ever see anybody fired from your
    recommendations like that?
        Mr. Sopko. We normally do not see anyone fired. We have
    actually, on a couple of cases, recommended action be taken and
    nothing happens.
        Senator Paul. So you make formal recommendations sometimes
    on specific personnel that made a decision.
        Mr. Sopko. Yes, we have, in the past.
        Senator Paul. OK. And it is being pointed out exactly to
    the people who are in the chain of command of making these
    decisions.
        Mr. Sopko. A classic example, sir, was we uncovered a
    64,000-square-foot headquarters that was being built in Camp
    Leatherneck. I think it was $36 million, approximately. The
    Marine Corps commander down there said, ``Do not build it. I do
    not want it. We will not use it.'' His boss, General Allen,
    said, ``Do not build it. I do not want it. We will not use
    it.'' But somebody, a general officer sitting behind the lines,
    said, ``We have to spend it. We have to spend it because
    Congress gave us the money.'' So we wrote that up, we thought
    it was gross negligence, and the Secretary of Defense at that
    time, not the current Secretary of Defense, basically said they
    did not view that as an issue.
        Senator Paul. I wonder if part of the answer might be in
    who gets your reports if you are giving it to a chain of
    command and they happen to be good friends, and they have risen
    through the ranks together, and they are unlikely to make the
    necessary personnel change, whether or not it is presenting the
    evidence, maybe, to a higher level, to a political appointee or
    to a supervisor at a two or three levels removed that is not
    working with the people involved with the decisions--does that
    happen also?
        Mr. Sopko. Well, we do wide distribution, Mr. Chairman, of
    our reports, so I think politicals definitely see our reports
    also.
        Senator Paul. All right. And how often are you doing these
    in person? How often would you come before, if I am the general
    and four levels beneath me made this decision on half a billion
    planes, would you have a time where you are sitting face to
    face with a general or major general or an Assistant Secretary
    of Defense or a Secretary of Defense and let them know about
    these things?
        Mr. Sopko. Sometimes. We try. They do not always let us
    come in to brief them on that.
        Senator Paul. See, I am wondering if maybe that would be
    part of the solution. I cannot just say, ``Let us write an
    edict that people should be fired for a bad decision and we
    should do that.'' But I am wondering if maybe we could have
    legislation that some people have to come once a year and
    testify here--if, perhaps, maybe some of these reports need to
    have someone designated to listen to it in person, who is high
    up in the chain of command, making procurement decisions,
    making purchasing decisions. Do you think that would work or do
    you have any other suggestions on how we would make the system
    work better?
        Mr. Sopko. Well, I think you need to change the culture and
    hold people accountable for it. If you do not hold people
    accountable for wasting money, they will continue to waste
    money. I think we see that throughout the U.S. Government. I
    have been looking at this since I started in 1982, actually,
    1978--and people just are not held accountable for stupid
    decisions that waste taxpayers' money.
        Senator Paul. So sometimes it works but you think it works
    when we get a good person that you get to who says, ``We cannot
    allow this to happen.'' That begs the question, how do you get
    more good people in government?
        But I think in some ways we have to look at some sort of
    mandatory way of having people listen to your information, such
    that it gets to, and I think it has to be somewhat above the
    close part of the chain of command where you might be socially
    engaged with the people who made the decision, and unlikely to
    fire someone you are close to.
        There is another argument, as well, that Friedman always
    made, that nobody spends somebody else's money as wisely as
    their own. That is why you have more waste in government. It is
    not your money, and so, people are never going to be as good
    with it. I think there is truth to that. Government is never
    going to be very good, but it certainly should not be as bad as
    we see government to be.
        Mr. Sopko. But, Mr. Chairman, could I allude to something?
    In one case, for example, from publicly disclosing our
    findings--a good example is General Mattis, as Secretary of
    Defense, took one of our reports--it was a report on the
    camouflage uniforms--and basically sent a memo to every senior
    official in the Department of Defense saying, ``See this
    report, read it. Do not ever do anything like this again.'' And
    that sends a message.
        Senator Paul. Yes, and I think so. What I am getting at is
    thinking of--and I do not think we have to say that the
    Secretary of Defense has to sit down with you or meet with you.
    But maybe an Assistant Secretary of Defense, once a year,
    should have to sit down with you, and look at you across the
    desk, and have a group of people with them, their staff and
    your staff, and actually listen to what you are saying, and
    maybe you will get more results if we mandated such a meeting.
        Mr. Sopko. Well, there is no reason to mandate. We do that.
        Senator Paul. OK.
        Mr. Sopko. We meet with heads of agencies and we tell them
    what we are finding, and we identify people. We do that on a
    regular basis. But again, I think I would clearly look at the
    process for removing people or penalizing them for these
    actions. I do not think there is something in place or a
    motivation to do that, in many cases.
        Senator Paul. Ms. Miller, on the narcotics, I think I got
    your point but I think you could maybe expand on it a little
    bit. It seemed you were indicating that there were other forces
    so large that there was not an amount of money that would stop
    the growth and the distribution of poppy out of Afghanistan. If
    that is what you said, say yes, and expand upon what are those?
    I did not really get what those forces are that are so big that
    make it almost impossible to stop the narcotics trade.
        Ms. Miller. Yes. I mean, some of it is just that the sheer
    scale of the problem is enormous. Some of it is that it is just
    an incredibly lucrative commodity. The economic dynamics that
    support the perpetuation of the narcotics industry in
    Afghanistan are very powerful and are more powerful even than
    the $8 billion we spent on programs to try to fight it.
        There is also a problem of political will on the part of
    the Afghan government. I am not saying there is no will, but it
    is not only the Taliban and other malign actors in Afghanistan
    who benefit from narcotics trafficking and production. It has
    also historically been people who are associated with the
    Afghan government. And so the political incentives, as well, to
    try to fight this are not as strong as they could be.
        Senator Paul. Well, and I think that has been the comment
    by some that we blame it on them and we could also look in the
    mirror. If we did not want to buy it, they would not sell it.
    If there was not a demand, there would not be a supply. But I
    think it is important to highlight the degree of not believing
    that something will be done. This is an important one to know
    before, because if we are making policy decisions, we could
    spend $16 billion. This gets back to Senator Jones' point a
    little bit on how do we do better oversight. Well, we could. We
    could spend billions of dollars more and we could have armed
    escorts to every one of the projects we are spending money on.
    So it is either we keep spending the money and we spend more
    money to send armed troops to look at it, or maybe we re-
    evaluate whether we should spend the money there or here at
    home.
        I have no more questions, and we are probably going to end
    the panel, but I wanted to go to Senator Peters and anybody
    else that has a question before we finish up the panel.
        Senator Peters. I appreciate it, Mr. Chairman, and I will
    just pick up on the point, Ms. Miller, when it comes to the
    opium production in Afghanistan. You mentioned the Taliban are
    engaged but there are others. It is my recollection, in my trip
    to Afghanistan, that as big as the amount that the Taliban is
    producing--it is a very large amount, but it is a relatively
    small fraction of the total amount that is produced in the
    country. The numbers were overwhelming. There are folks outside
    the Taliban that are profiting to a considerable extent as a
    result of this production.
        But my question is in reference to a letter that was sent
    to the Subcommittee by Andrew Wilder from the U.S. Institute of
    Peace. He references the Goldilocks approach to aid funding,
    and he argues, in the letter, that I would like to enter into
    the record, if I may, without objection, that too much money
    for civilian and military reconstruction and stabilization
    programs during the period of the troop surge was a major
    factor promoting waste, fraud, and abuse. But he goes on to
    argue, sharply reducing to too little assistance within too
    short a timeframe would likely lead to State collapse in
    Afghanistan in a catastrophic way. Ms. Miller, would you like
    to comment on that approach?
        Ms. Miller. I largely agree with that. In the written
    testimony that I submitted I made the point that time is
    probably more valuable than money in Afghanistan. I think it is
    definitely a problem that we pushed out too much money too fast
    at the height of the surge, and that led not only to waste and
    abuse but it led to poor planning, and, really, I cannot say
    that I know anyone who was responsible for spending that money
    who did not feel that it was too much money, too fast, and it
    created bad incentives on the U.S. Government side, it created
    bad incentives on the Afghan side as well.
        I do think that the dollars that we are spending have been
    declining, and I think that is appropriate. But to go
    dramtically down from where we are now too precipitously, I
    think would jeopardize our own national security interests.
        Senator Peters. One final question, because I know the
    Chairman wants to get to the second panel here. As we have
    discussed with the extent of the corruption that we see with
    the Afghan government in executing these contracts and not
    seemingly meeting any of the expectations that we have for
    them, there has been discussion of entering into contracts with
    the Afghan government on the principle of conditionality, where
    you do not receive funding unless certain conditions are met,
    in terms of outputs.
        I would like both of you to comment briefly. Is that
    something we should explore? What are the positives, what are
    the negatives, and what has been done currently and what should
    we do differently?
        Mr. Sopko. Oh, I think that is a very important point, and
    we did not really have good conditions, and, more importantly,
    enforce those conditions until recently.
        I remember talking to General Semonite when he ran the
    Combined Security Transition Command (CSTC-A), 2 years ago, and
    he said DOD put no conditions up to that time.
        Senator Peters. Wow.
        Mr. Sopko. It was only when he took over that we started
    it, putting conditions. So that is what you have to do. If you
    talk to President Ghani--I was just there 2 weeks ago--he says,
    ``Give me conditions. If you give me real conditions I can use
    it to enforce my ministers to do the right thing.'' And I think
    you can see this right now with what you did in the
    appropriations bill. You basically passed a law ordering us to
    assess the Afghanistan anticorruption strategy and its
    implementation. Although I cannot tell you the results of that
    audit--it is going to be done in another month--we have seen
    tremendous efforts, on behalf of the Afghans, to get their act
    together, because they are afraid the appropriators are going
    to cut the budget.
        That is smart conditionality. I agree wholeheartedly,
    Senator. We need to do that. We need to enforce it. We have to
    be able to risk saying no to the Afghans and cutting funds if
    necessary.
        Senator Peters. Ms. Miller.
        Ms. Miller. I hate to be even less optimistic than John
    Sopko---- [Laughter.]
        I may have lost some friends there. But, look.
    Conditionality is an important tool. It is a tool that the
    United States has been using increasingly in Afghanistan and
    other donors as well. But it is no panacea, and there are two
    real limitations to using conditionality. One is a practical
    limitation. Who are you motivating by imposing conditionality?
    If there are Afghan officials, or people connected with them,
    who are prepared to steal from the public coffers, they are not
    going to be motivated not to steal from the public coffers
    because the U.S. Government is withholding funds. You may be
    providing some motivation to some of the good actors but you
    are not incentivizing the bad actors.
        The second problem is a policy one. We have entered into a
    mutual dependency with the Afghan government, because of the
    nature of our strategy in Afghanistan. We are giving the Afghan
    government this money because we have judged it to be within
    U.S. national security interests to have a stable government,
    and it has been judged necessary to give them this assistance
    in order to promote their stability. Therefore, if we reduce
    that assistance, as a matter of conditionality, we are
    undermining our own security. It does not mean you cannot do it
    to some extent, but that, we have tied our own hands behind our
    back in terms of using conditionality, because of the nature of
    the policy and the strategy that we have in the country.
        Senator Peters. Thank you.
        Senator Paul. Thank you for your testimony. Thanks for
    joining us and keep up the good work.
        We are going to go to our second panel now.
        [Pause.]
        Thank you. I would like to welcome our second panel. Our
    second panel is Greg McNeill and Sergio Gor. At the behest of
    this Subcommittee, they recently participated in a bipartisan
    staff delegation to Afghanistan to conduct oversight of Federal
    spending.
        Mr. McNeill has served on the FSO Subcommittee majority
    staff since 2015, and as Staff Director for 1 year. Prior to
    joining the FSO Subcommittee, Mr. McNeill spent 8 years as a
    budget analyst on the Senate Budget Committee. Additionally, he
    served as the Minority Staff Director for the Senate Budget
    Committee Task Force on Government Performance from 2009 to
    2015. He holds a bachelor's degree in political science from
    the University of Oregon and a master's of public
    administration from Central Michigan University.
        Mr. McNeill, you are recognized for your opening statement.

       TESTIMONY OF GREGORY McNEILL,\1\ MAJORITY STAFF DIRECTOR,
       SUBCOMMITTEE ON FEDERAL SPENDING OVERSIGHT AND EMERGENCY
                               MANAGEMENT

        Mr. McNeill. Thank you, Chairman Paul. Chairman Paul,
    Ranking Member Peters, and Members of the Committee, it is an
    honor to be here today to report on the Subcommittee's recent
    bipartisan and fact-finding mission to Afghanistan. I want to
    thank all of those from the State Department, the U.S.
    military, and SIGAR for making this fact-finding mission
    possible. Most importantly, I want to recognize the soldiers
    who served and sacrificed in Afghanistan, particularly those
    that have given their lives.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. McNeil appears in the Appendix on
    page 58.
    ---------------------------------------------------------------------------
        Over 2\1/2\ half days, our bipartisan team participated in
    approximately 12 meetings with personnel on the ground and four
    site visits at various locations in Kabul and at Bagram Air
    Base. I would say that we barely scratched the surface.
        The first thing I want to report is that we were told
    repeatedly that this was only the second congressional
    oversight mission to Afghanistan, whereas appropriators and
    authorizers go roughly every 10 days. If you do the math, that
    is 1 in about 150 trips. That means that congressional
    oversight is at a decided disadvantage to congressional
    spenders.
        I want to highlight just a few things that we saw while we
    were there. First, the U.S. efforts to provide electricity to
    the Afghan people, and second, U.S. demilitarization and
    disposable property.
        First, we investigated the northeast power system, and,
    really, the entire electrification effort in Afghanistan. In
    2001, roughly 6 percent of the Afghan population had power.
    Today that number is over 30 percent and we are aiming for full
    electrification by 2020.
        But this effort, which is expected to cost about $750
    million, is riddled with problems. To begin with, we are
    building towers on people's land without getting their
    permission first. Let me pause there. I should not say we are
    building these, because though U.S. dollars can go to these
    locations, U.S. personnel cannot because of safety concerns, so
    we are trusting contractors to do it for us.
        Nonetheless, this electric grid is being build, and though
    it does not even meet the standards of the contracts that we
    are writing, eventually it is turned over to the Afghan power
    authority. Last year, the Afghan power authority reported a net
    loss of $23.4 million. Now this could be for a couple of
    reasons. One could be that the Taliban keeps blowing up their
    transmission towers. We assume it is the Taliban and not the
    landowner who woke up 1 day to find a tower in his backyard.
    Nonetheless, these are getting blown up, sometimes dozens of
    times.
        Now, U.S. officials think that this is still a success
    because the Afghan power authority is now very accomplished at
    rebuilding towers and restringing line. We were told a couple
    of times it is done in hours now, whereas before it was done in
    days. Of course, this ignores the wasted money we spent
    building the original tower, and we still, through various
    means, provide funding to the Afghan electric authority.
        The end result is the same. Either the power authority
    eventually pays the Taliban a bribe to stop blowing up the
    towers or the Taliban just takes over the towers and then
    charges the local population. This, apparently, is seen as a
    success.
        The other item I want to talk about is a project this
    Committee has been working on for 4 years. Several years ago,
    we heard from a whistleblower that brand-new, never-used
    equipment and vehicles were being destroyed in industrial
    shredders in Afghanistan. We have been asking about this for 4
    years, and we keep getting told that either it is not happening
    at all or it is just extremely rare.
        We went to the facility at Bagram Air Base to see for
    ourselves, and we saw a lot of worn-out equipment being
    shredded in industrial shredders. But you can imagine how
    surprised we were, after being told that this was not
    happening, walking into a warehouse and finding three large
    bins full of brand-new electrical equipment--breaker boxes and
    breakers, still in their original packaging.
        Now we do know that during the drawdown the U.S. scrapped
    roughly $7 billion worth of military equipment, and we have
    been told repeatedly that there was a lot of waste during the
    early part of the war, and then, of course, during the
    drawdown. We heard that during the first panel that there was a
    blank check. But these things that I am reporting on here are
    not old items. Three weeks ago there were brand-new breaker
    boxes ready to be shredded in an industrial shredder. Right now
    we are building towers and they are being blown up. This is not
    a problem that has been solved.
        This gets back to my original point. Oversight in
    Washington is much different than oversight on the ground, and
    on-the-ground oversight cannot be a 1-in-150 affair.
        Let me close with this. Oversight does not compromise the
    mission, as some have argued, in Afghanistan or, frankly,
    anywhere else in the government. Tough questions and
    consequences condition and strengthen us. Moreover, they force
    us to assess the merits, or lack of merits, of what the
    government does.
        And with that I would be happy to answer any questions.
        Senator Paul. Thank you. Our next witness is Sergio Gor.
    Mr. Gor currently serves as my Deputy Chief of Staff for
    Communications. In this capacity, he oversees staff and the
    communications department, coordinates on matters of foreign
    policy, and administers special projects for the office.
        Prior to joining my staff, Mr. Gor worked as a producer at
    Fox News Channel and as a Communications Director in the U.S.
    House of Representatives. Mr. Gor holds a double major in
    international affairs and political science from George
    Washington University. Mr. Gor.

         TESTIMONY OF SERGIO GOR,\1\ DEPUTY CHIEF OF STAFF FOR
              COMMUNICATIONS, OFFICE OF SENATOR RAND PAUL

        Mr. Gor. Thank you, Mr. Chairman. Thank you for holding
    this hearing.
    ---------------------------------------------------------------------------
        \1\ The prepared statement of Mr. Gor appears in the Appendix on
    page 62.
    ---------------------------------------------------------------------------
        I would like to start by expressing our gratitude for all
    those that hosted us on the ground, to the embassy, especially
    Ambassador Bass, the Deputy Chief of Mission (DCM), all the
    security and personnel that were involved. A specific thank you
    to SIGAR and IG Sopko for his incredible work and the work they
    do.
        With that I will jump straight into it, and I would like to
    highlight some of the things that we actually saw, and I
    believe we have some photos to go along with it.
        The first project that we visited was nicknamed the Kabul
    Marriott. This project was started 11 years ago, and it was
    initiated with a $60 million loan from Overseas Private
    Investment Corporation (OPIC). The building was supposed to be
    completed several years ago, and, unfortunately, there was
    almost no oversight. One of the things that we saw over and
    over again on this trip was good intentions gone bad. When this
    building started being built, the only oversight consisted of
    the contractor submitting pictures back to headquarters, back
    to the United States.
        The one thing that I must mention is this building is about
    400 feet from the U.S. Embassy. We have 7,000 personnel there.
    This was a $60 million project and nobody went over there to
    look at it, to see that it was not completed. The updates would
    say it is ready for opening in 2 months. At best, this
    building, in our opinion, is at 30 percent completion.
        In addition to that, because this building was going so
    well, they decided to fund an adjacent building for $30 more
    million, so now we are at $90 million in the hole and nothing
    has been completed. This building has become a security threat
    to the point where we must provide 24-hour service protection
    because it is so close to the embassy. The State Department
    indicated to us that they are now acquiring this land with the
    ultimate goal of tearing down the building completely, for
    security reasons.
        The next project I would like to highlight is the Ministry
    of Interior, and this was a nice building from the outside. We
    spent $210 million building it. One of the rumors that we
    persistently heard was that the former minister was not happy
    with the lack of marble that was inside of this ministry. He
    compared himself to the Defense Minister of Afghanistan, and
    said, ``Well, if this guy has it, I surely want it too.'' While
    we are not able to verify exactly that those were his words, we
    did find $2.6 million in a follow-up upgrade, and that
    specifically included marble work.
        Additionally, as you look at the line items for this
    building, $7,000 was billed for lost time, waiting for
    instructions. So people standing around, not being told what to
    do; $10,000 was billed for a car and driver, and you would
    think with $210 million we would get something that would at
    least function. However, when we got a tour of the building on
    the inside, from local Afghan staff that work there, they
    pointed to one thing after another, including air conditioning
    units that do not work, fire doors that do not meet
    certification requirements, fire sprinkler systems that are not
    even connected to anything, and one interesting thing that we
    found in the building there was actually an item listed as
    ``disconnect the fire alarm system.''
        Those are the two main projects that I would like to
    highlight. However, there are two other points I would like to
    make. Corruption. Corruption is a massive problem. Every
    meeting that I attended, one of the points that I would ask
    was, ``What percentage do you think disappears due to
    corruption, waste, fraud, or abuse?'' and that number ranged
    anywhere from 20 percent to as high as 50 percent.
        Countless stories. The Kabul Bank, which was headed by
    former President Karzai's brother, basically ran a Ponzi
    scheme, defrauded close to a billion dollars and almost no
    accountability. One thing we kept hearing over and over again,
    ``It is part of the way things are here.''
        There is an internationally recognized group, Transparency
    International, and one of the things they put out is a
    Corruption Perception Index. In last year's ranking, they
    ranked Afghanistan as 177th out of 180 in terms of corruption.
    So the only countries ahead of them, I believe, are Somalia and
    Syria.
        My last point that I will make is something we kept hearing
    both from our side and the Afghan side, and that is Afghans
    that are leaving Afghanistan. They call it a brain drain. After
    contacting the State Department here, the number that we have
    received is 51,000 Afghans have moved to the United States.
    These are educated individuals. These are individuals that went
    to school, whether it is in Europe or in the United States, and
    they are not contributing back to their nation. Their president
    has actually been pretty good on this, and I quote, ``I have no
    sympathy for these people. They should remain and join efforts
    in rebuilding our own home.''
        So with that I will take any questions.
        Senator Paul. Well, thank you both for your testimony.
        Mr. McNeill, when you were talking about--in your testimony
    I think you were talking about oversight. When you said only 1
    in 150, you were referring to only 1 out of 150 projects have
    oversight, or what was your point?
        Mr. McNeill. No. One in 150 trips, either by members or
    staff, are oversight. The remainder are generally authorizers
    or appropriators.
        Senator Paul. Do you have an estimate of the projects, what
    percentage of the projects are able to have oversight? You and
    the previous panel talked about, because of the safety
    concerns, not being able to actually go to the sites of some of
    these projects. Ten percent getting visually seen or 20
    percent?
        Mr. McNeill. I do not have an exact number but I imagine
    that that is even probably a rosy figure. We asked to go see
    the gas station. We were told that was unsecure. Mr. Sopko
    testified to that.
        Many of these projects, U.S. personnel cannot go to when
    they are being built, let alone oversight conducted. The
    electric grid, I looked up the distances. At one point it is 13
    miles from Bagram Air Base, where our largest U.S. presence is.
    We cannot go 13 miles from there to look at a project that we
    are spending money on.
        Senator Paul. Right. Well, in looking at how we figure out
    solutions, people are saying, well, we can spend more going to
    the sites, but I think that sort of begs the question. The
    Marriott was 400 feet from the embassy, so, it is still within
    the compound, right?
        Mr. Gor. It is on the outside, so there is a wall
    separating it.
        Senator Paul. You can walk across the street.
        Mr. Gor. However, there is a closed street that is not open
    to traffic. So there are different perimeters, and it is one of
    the outer perimeters, but it is close enough that everybody
    passes it every day.
        Senator Paul. Right. That sort of begs the question that
    that is not a lack of access. Everybody is, in fact, seeing it.
        Mr. Gor. Correct.
        Senator Paul. It is sort of a big eyesore, that it has not
    been finished, and I believe it has been 11 years since it was
    started.
        Mr. Gor. Correct.
        Senator Paul. So I think these are the bigger, broader
    questions we face in this, is that government is full of waste.
    Do we try to fix the waste? Sure. We should try to make,
    whether it is less wasteful spending. The question is, is it
    possible, really, to eliminate the waste or do we need to
    readdress where the resources are going, whether they should go
    to Afghanistan or whether they should remain here at home.
        With regard to the Ministry of the Interior, you said it
    was $210 million, and the $2 million referred to an upgrade in
    marble?
        Mr. Gor. Correct. So there was a refurbishment, they called
    it, of $2.4 million, I believe, which was in addition to the
    $210 million initial investment, to build the building from
    scratch.
        Senator Paul. And do you think the contractors here are
    local or----
        Mr. Gor. So one point to make on that refurbishment, the
    refurbishment was paid by NATO, with some of our funds. So
    while we paid the initial $210 million, the $2.4 million was
    divided, just for full disclosure. They would put out bids for
    all these projects, whether it is the Marriott--it varies. The
    Marriott was by Jordanians. We saw some contracts by Tunisians.
    And there were some local contracts also.
        Senator Paul. With the question related to hundreds and
    hundreds of doors not being fireproofed, do you think that we
    are looking at not just waste but malfeasance, if they did not
    give them exactly what they ordered.
        Mr. Gor. Absolutely, and not only that, people get
    upcharged. We pay a certain amount and hundreds of dollars for
    a fireproof door that is supposed to sustain 30 or 40 minutes
    of a fire, so people are able to get out. Unfortunately, we get
    skimmed, and this happened not in just the Ministry of Interior
    but at multiple other locations that we heard about that we
    were not able to visit. But it is an ongoing problem. There is
    too much money, there is no oversight, and no one is held
    responsible.
        Senator Paul. Mr. McNeill, we talked about having
    conditions in contracts, sort of conditions of behavior, but I
    guess you can also condition contracts based on performance.
    People talk about government contracts being cost-plus, and
    people just adding and adding and adding their costs. Is there
    an example of government where we do contract that you think
    works better, contracts that have incentives, either for
    completion or for quality, or for ways that we can have
    oversight to the fact that you do not get your money unless you
    do your job, etc?
        Mr. McNeill. Sure. It is not a Federal example but after
    the San Francisco earthquake, the Bay Bridge was rebuilt on a
    performance contract, and it was built ahead of schedule and
    under budget because the contractor would get an incentive for
    doing so. That is something we could certainly do here in the
    Federal Government.
        But I wanted to point out, the projects are not meeting the
    standards of even the contracts we are writing, and what we
    have seen is they rewrite the contracts. With the fire doors,
    they noticed, these are not the right fire doors, these do not
    have the right labeling on them. SIGAR pointed this out to the
    U.S. Army Corps of Engineers (USACE) and so the Army Corps of
    Engineers sent an email to the contractor, saying, ``We are
    accepting what you are doing now as meeting the terms of the
    contract.''
        Senator Paul. Stick a different label on it?
        Mr. McNeill. Basically, yes.
        Senator Paul. With the previous panel we talked a little
    bit about getting the system to work. How do you get people to
    be held accountable for their decisions? And we talked a little
    bit about the Inspectors General, there are some that DOD has
    and then there are some that are more traditional Inspectors
    General that report to Congress.
        Mr. McNeill, do you have an opinion on ways to get the
    advice to be listened or acted upon, getting rid of bad people
    who make bad decisions, how we would do that better, or whether
    we should alter the Inspector General program within DOD to
    make things better?
        Mr. McNeill. Well, certainly I think there should be reform
    with the Inspector General process. Inspector General Sopko
    does an excellent job. I have dealt with Inspectors General
    over my entire career and some of them are, frankly, I would
    say, in bed with their agency.
        But I think this gets to a broader problem that, I think,
    Inspector General Sopko talked about, it is hard to fire people
    in government. A lot of times it is easier to just look the
    other way or transfer them, or something like that, or wait for
    their tenure in a place to be over.
        I mean, our personnel policy was written in the 1880s. We
    are still basically operating off of the Pendleton Act, which
    was created in response to the assassination of President
    Garfield. So I think it is probably time to update our
    personnel policy, so that we can hold people accountable.
        Senator Paul. SIGAR you hear about, and it has gotten
    notoriety for looking into waste in Afghanistan. I do not
    recall as much notoriety with the Inspector General from DOD.
    Are we paying the same amount of attention to the independent
    Inspector General for the DOD?
        Mr. McNeill. I would not say so. Their mission is
    different. Mr. Sopko made the point that he is the only one
    that has kind of cross-jurisdictional capabilities to look at
    spending elsewhere. We do pay attention to some of it that DOD
    talks about. For example, we have talked about the $700--was it
    million or billion--dollars in ammunition purchases. That was a
    DOD Inspector General report.
        Senator Paul. Well, I think that as a future project from
    this is we ought to look at that and see how well it works, and
    whether or not having two different sets of Inspectors General,
    whether that is a problem, whether they could be consolidated,
    whether the one that they have had in place that is reporting
    to DOD chain of command is useful or not useful, whether we
    should maybe have those resources directed more toward the
    Inspector General office that is independent or reports to
    Congress.
        I think there are some reforms. I think that and trying to
    figure out ways that we can waste less money within the system,
    and incentives that we can change.
        But with that I think we are going to close the hearing,
    unless you have a final comment, from either one of you.
        Mr. Gor. I think what Inspector General Sopko does and what
    SIGAR does, going back to your previous question, is he is not
    afraid to rock the boat, and one thing that we kept hearing
    over and over again is the SIGAR team in Kabul is not welcome,
    even among other Americans on base, because they show up and
    they do not take any prisoners. And as Mr. McNeill mentioned,
    some of the other Inspectors General, they are from that
    branch. They are from that department. They have to see these
    people. They have to live with them. So I think the more
    independence, the better.
        Senator Paul. I think this makes a strong argument for
    looking at the Inspector General process within DOD, because
    you need to have independence and you need to have people who
    are unafraid to do this.
        Thank you very much for your testimony, and the hearing is
    adjourned.
        [Whereupon, at 3:54 p.m., the Subcommittee was adjourned.]

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