[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

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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.
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    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.
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    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.
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    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.
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    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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