Combating Terrorism: U.S. Efforts to Address the Terrorist Threat
in Pakistan's Federally Administered Tribal Areas Require a	 
Comprehensive Plan and Continued Oversight (20-MAY-08,		 
GAO-08-820T).							 
                                                                 
Since 2002, destroying the terrorist threat and closing safe	 
havens have been key national security goals. The United States  
has provided Pakistan, a key ally in the war on terror, more than
$10 billion in funds and assistance. Pakistan's Federally	 
Administered Tribal Areas' (FATA) rugged terrain, poor economic  
conditions, low literacy, underdeveloped infrastructure, and	 
unique legal structure, all add to the complexity of efforts to  
address the terrorist threat in the FATA. This testimony	 
discusses the (1) progress of U.S. national security goals in the
FATA, (2) status of U.S. efforts to develop a comprehensive plan,
and (3) oversight of U.S. Coalition Support Funds (CSF) provided 
to Pakistan. The testimony is based on recent reports on the	 
status of a comprehensive plan (GAO-08-622) and preliminary	 
observations on the use and oversight of U.S. CSF (GAO-08-735R). 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-820T					        
    ACCNO:   A82149						        
  TITLE:     Combating Terrorism: U.S. Efforts to Address the	      
Terrorist Threat in Pakistan's Federally Administered Tribal	 
Areas Require a Comprehensive Plan and Continued Oversight	 
     DATE:   05/20/2008 
  SUBJECT:   Combating terrorism				 
	     Counterterrorism					 
	     Defense capabilities				 
	     Embassies						 
	     Federal aid to foreign countries			 
	     Federal intelligence agencies			 
	     Foreign financial assistance			 
	     Foreign governments				 
	     Foreign military assistance			 
	     Homeland security					 
	     Interagency relations				 
	     International cooperation				 
	     International organizations			 
	     International relations				 
	     Military intelligence				 
	     National defense operations			 
	     Program evaluation 				 
	     Program management 				 
	     Public diplomacy					 
	     Security investigations				 
	     Security policies					 
	     Security threats					 
	     Strategic planning 				 
	     Terrorism						 
	     Funds management					 
	     Foreign countries					 
	     Program goals or objectives			 
	     Security operations				 
	     Federally Administered Tribal Areas		 
	     (Pakistan) 					 
                                                                 
	     Pakistan						 

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GAO-08-820T

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entitled 'Combating Terrorism: U.S. Efforts to Address the Terrorist 
Threat in Pakistan's Federally Administered Tribal Areas Require a 
Comprehensive Plan and Continued Oversight' which was released on May 
21, 2008.

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Testimony: 

Before the Subcommittee on Near Eastern and South and Central Asian 
Affairs, Committee on Foreign Relations, U.S. Senate: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery: 
Expected at 3:00 p.m. EDT:
Tuesday, May 20, 2008: 

Combating Terrorism: 

U.S. Efforts to Address the Terrorist Threat in Pakistan's Federally 
Administered Tribal Areas Require a Comprehensive Plan and Continued 
Oversight: 

Statement of Gene L. Dodaro: 
Acting Comptroller General: 

GAO-08-820T: 

GAO Highlights: 

Highlights of GAO-08-820T, a testimony report to before the 
Subcommittee on Near Eastern and South and Central Asian Affairs, 
Committee on Foreign Relations, U.S. Senate. 

Why GAO Did This Study: 

Since 2002, destroying the terrorist threat and closing safe havens 
have been key national security goals. The United States has provided 
Pakistan, a key ally in the war on terror, more than $10 billion in 
funds and assistance. Pakistanï¿½s Federally Administered Tribal Areasï¿½ 
(FATA) rugged terrain, poor economic conditions, low literacy, 
underdeveloped infrastructure, and unique legal structure, all add to 
the complexity of efforts to address the terrorist threat in the FATA. 

This testimony discusses the (1) progress of U.S. national security 
goals in the FATA, (2) status of U.S. efforts to develop a 
comprehensive plan, and (3) oversight of U.S. Coalition Support Funds 
(CSF) provided to Pakistan. The testimony is based on recent reports on 
the status of a comprehensive plan (GAO-08-622) and preliminary 
observations on the use and oversight of U.S. CSF (GAO-08-735R). 

What GAO Found: 

The United States has not met its national security goals to destroy 
terrorist threats and close the safe haven in Pakistanï¿½s FATA. 
According to U.S. officials and intelligence documents, since 2002, al 
Qaeda and the Taliban have used Pakistanï¿½s FATA and the border region 
to attack Pakistani, Afghan, as well as U.S. and coalition troops; plan 
and train for attacks against U.S. interests; destabilize Pakistan; and 
spread radical Islamist ideologies that threaten U.S. interests. GAO 
found broad agreement that al Qaeda had established a safe haven in the 
FATA. A 2008 DNI assessment states that al Qaeda is now using the FATA 
to put into place the last elements necessary to launch another attack 
against America. The United States has relied principally on the 
Pakistani military to address its national security goals in the FATA. 
Of the approximately $5.8 billion directed at efforts in the FATA 
border region from 2002 through 2007, about 96 percent ($5.56 billion) 
was U.S. CSF, used to reimburse the Pakistani military. U.S. and 
Pakistani government officials recognize that relying primarily on the 
Pakistani military has not succeeded in neutralizing al Qaeda and 
preventing the establishment of a safe haven in the FATA. 

The National Strategy for Combating Terrorism (2003), independent 9/11 
Commission (2004), and congressional legislation (2004 and 2007) called 
for a comprehensive plan that included all elements of national power--
diplomatic, military, intelligence, development assistance, economic, 
and law enforcement support to address the threat in the FATA. Since 
2002, the U.S. Embassy in Pakistan has not had a Washington-supported, 
comprehensive plan to combat terrorists and close the terrorist safe 
haven. In 2006, the United States and Pakistan began an effort to focus 
on other elements of national power beyond military. However, as of 
last month there was not a formally approved comprehensive plan and 
support from the recently elected Pakistani government was uncertain. 

Continued oversight is required to ensure the development and effective 
implementation of a comprehensive plan and the proper use of the 
billions of U.S. dollars devoted to assisting Pakistan in its efforts 
to combat terrorism in the FATA. Preliminary results from GAOï¿½s ongoing 
work on the oversight of U.S. CSF indicate that Defense may have 
recently increased its oversight of CSF. In 2007, Defense officials at 
the U.S. embassy in Pakistanï¿½the Office of the Defense Representative 
to Pakistan (ODRP)--began playing a larger role in overseeing CSF 
reimbursement claims. Furthermore, Defense recently deferred or 
disallowed a larger amount of Pakistani claims. For the months 
September 2004 ï¿½ February 2007, Defense disallowed or deferred an 
average of just over 2 percent of the Pakistani governmentï¿½s CSF 
claims. For the most recent claims (March ï¿½ June 2007) processed in 
February 2008, Defense disallowed or deferred over 20 percent. The 
extent of ODRPï¿½s oversight in the future is unclear, given that its 
role has not been formalized. 

What GAO Recommends: 

GAO previously recommended that a comprehensive plan be developed to 
combat the terrorist threats and close the safe havens in the FATA. 
Defense and USAID concurred; State asserted that a comprehensive 
strategy exists, while the Office of the Director of National 
Intelligence stated that plans exist. In GAOï¿½s view, these plans have 
not been formally integrated into a comprehensive plan. The National 
Security Council did not comment. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-820T]. For more 
information, contact Charles Michael Johnson Jr. at (202) 512-7331 or 
[email protected]. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss U.S. efforts to assist 
Pakistan combat terrorism in Pakistan's Federally Administered Tribal 
Areas (FATA) and border region. My testimony is based on our two recent 
reports on the United States' lack of a comprehensive plan to destroy 
the terrorist threat and close the terrorist safe haven in the FATA, 
and preliminary results from our ongoing examination of U.S. Coalition 
Support Funds (CSF) reimbursements to Pakistan.[Footnote 1] Since 
October 2001, the United States has provided Pakistan with over $10 
billion for military, economic, and development assistance activities 
in support of the critical U.S. national security goals of destroying 
terrorist threats and closing terrorist safe havens.[Footnote 2] 
Approximately $5.8 billion of this amount has been directed at efforts 
to combat terrorism in Pakistan's FATA and border region. 

My testimony today discusses (1) U.S. progress in meeting U.S. national 
security goals in Pakistan's FATA region; (2) the status of U.S. 
efforts to develop a comprehensive plan for the FATA; and (3) the 
oversight of U.S. CSF provided to Pakistan.[Footnote 3] 

Summary: 

In summary, we found the following: 

* The United States has not met its national security goals to destroy 
terrorist threats and close the safe haven in Pakistan's FATA, a 
mountainous region which shares a 373-mile border with Afghanistan. 
According to U.S. embassy officials in Islamabad and U.S. intelligence 
documents, since 2002, al Qaeda and the Taliban have used Pakistan's 
FATA and the border region to attack Pakistani, Afghan, as well as U.S. 
and coalition troops; plan and train for attacks against U.S. 
interests; destabilize Pakistan; and spread radical Islamist ideologies 
that threaten U.S. interests. We found broad agreement that al Qaeda 
had established a safe haven in the FATA. A 2008 Director of National 
Intelligence (DNI) assessment states that al Qaeda is now using the 
Pakistani safe haven to put into place the last elements necessary to 
launch another attack against America. The FATA's rugged terrain, wide 
spread poverty, high unemployment, low literacy, underdeveloped 
infrastructure, and unique legal structure[Footnote 4] all add to the 
complexity the U.S. and Pakistani governments face in addressing 
terrorist threats in this region. 

* The United States has relied principally on the Pakistani military to 
address its national security goals in the FATA. There has been 
relatively limited development assistance or efforts to improve 
governance as a means to mitigate underlying causes of terrorism in the 
FATA. Of the approximately $5.8 billion directed at efforts in the FATA 
and border region from 2002 through 2007, we determined that about 96 
percent ($5.56 billion) of this amount was used to reimburse the 
Pakistani government through CSF [Footnote 5] for military operations, 
3 percent ($187 million) was directed towards a border security 
program, and 1 percent ($40 million) was spent on USAID development 
activities. 

* Defense, State, intelligence, U.S. embassy, and Pakistani government 
officials in power at the time of our review, recognize that relying 
primarily on the Pakistani military has not succeeded in neutralizing 
al Qaeda and preventing the establishment of a safe haven in the FATA. 
In 2006, the embassy, Defense, State, and USAID, in conjunction with 
the Pakistani government, began an effort to focus more attention on 
other key elements of national power, such as development assistance, 
infrastructure improvements, and public diplomacy, to address U.S. 
national security goals in the FATA. However, this effort has not been 
formally approved by U.S. government stakeholders who would play a key 
role in the funding and implementation of such an effort, and support 
from the recently elected Pakistani government is uncertain. 

* A comprehensive approach is needed as required by the 
administration's own National Strategy for Combating Terrorism, 
recommended by the independent 9/11 Commission, and mandated by 
congressional legislation.[Footnote 6] Since 2002, the U.S. Embassy in 
Pakistan has not had a Washington-supported, comprehensive plan to 
combat terrorists and close the terrorist safe haven in the FATA. We 
have recommended that the administration produce a comprehensive plan 
using all elements of national power to combat terrorist threats and 
close safe havens in Pakistan's FATA region. The comprehensive plan 
should also include key components called for in the Intelligence 
Reform Act and components that we have previously reported as being 
needed to improve the effectiveness of plans involving 
multidepartmental efforts to combat terrorism.[Footnote 7] Among other 
things, the plan should: 

- place someone directly in charge of this multidepartment effort to 
improve accountability; 

- articulate a clear strategy to implement the national security goal 
to destroy terrorists and close the safe haven in the FATA; 

- clarify roles and responsibilities of each department for 
implementing the goal, including establishing compatible policies and 
procedures to operate across agency boundaries; 

- provide guidance on setting funding priorities and providing 
resources to meet these national security goals; and: 

- require a monitoring system and provide periodic reports to Congress 
on the progress and impediments to meeting national security goals in 
Pakistan. 

* Continued oversight is needed to ensure the development and effective 
implementation of a comprehensive plan. Further, it is important that 
there is sufficient oversight of the billions of U.S. dollars devoted 
to assisting the Pakistani government in its efforts to combat 
terrorism in the FATA. Preliminary results from our ongoing work 
focusing on the use and oversight of U.S. CSF show that Defense may 
have recently increased its oversight of CSF. For example, in 2007, 
Defense officials at the U.S. embassy in Pakistan--the Office of the 
Defense Representative to Pakistan (ODRP)--began playing a larger role 
in overseeing CSF reimbursement claims. Furthermore, Defense recently 
deferred or disallowed a larger amount of Pakistani claims. 
Specifically, for the months September 2004 - February 2007, Defense 
disallowed or deferred an average of just over 2 percent of the 
Pakistani government's CSF reimbursement claims. For the most recent 
reimbursement (March-June 2007 claims) processed in February 2008, 
Defense disallowed or deferred over 20 percent of Pakistan's claim. Our 
preliminary observations indicated that this was the first time that 
ODRP recommended significant denials or deferrals of Pakistani claims. 
[Footnote 8] The extent of ODRP's oversight in the future is unclear, 
given that its role has not been formalized. 

* In response to our previous reports, Defense and USAID concurred with 
our recommendation that a comprehensive plan was needed; State asserted 
that a comprehensive strategy exists, while the Office of the Director 
of National Intelligence stated that plans to combat terrorism exist. 
In our view, these plans have not been formally integrated into a 
comprehensive plan as called for by Congress and that cover the full 
range of unique challenges associated with the FATA. Additionally, 
Defense recognized the importance and necessity of oversight over CSF. 

Background: 

Some of the characteristics of the FATA make it attractive to terrorist 
groups, such as al Qaeda and Taliban, seeking a safe haven. The FATA is 
mountainous and shares a 373-mile border with Afghanistan. It has an 
estimated population of 3.1 million people, and is one of Pakistan's 
poorest regions, with high poverty, high unemployment, low literacy, 
and an underdeveloped infrastructure (See fig. 1). 

Figure 1: Map of the Federally Administered Tribal Areas, Pakistan: 

[See PDF for image] 

This figure is a map of the Federally Administered Tribal Areas, 
Pakistan. The following Federally Administered Tribal Areas (FATAs) are 
indicated on the map: 
* Bajaur Agency; 
* Mohmand Agency; 
* Khyber Agency; 
* Kurrum Agency; 
* Orakzai Agency; 
* North Waziristan Agency; 
* South Waziristan Agency. 

Also indicated on the map are: 
* Durand Line; 
* North-West Frontier Province (NWFP); 
* Peshawar; 
* Parachinar. 

Characteristics of the FATA: 
* Rugged Terrain; 
* Poor Economic Conditions; 
* Low Literacy Rate; 
* Underdeveloped Infrastructure; 
* Separate Legal Structure. 

The boundaries and names used on this map do not imply official 
endorsement or acceptance by the U.S. government. 

Sources: GAO; USAID and Map Resources (maps). 

[End of figure] 

The FATA is governed by an administrative system and a judicial system 
different from the rest of Pakistan--the Frontier Crimes Regulation 
(FCR) of 1901, codified under British rule.[Footnote 9] Because 
Pakistan retained the colonial administrative and legal structures of 
the British, as codified in the FCR, the FATA populations are legally 
separate from and unequal to other Pakistani citizens. Examples of 
these differences under the FCR include: 

* The FATA residents do not have access to national political parties, 
and political parties are forbidden from extending their activities 
into the agencies of FATA. 

* The FATA is under the direct executive authority of the president of 
Pakistan. Laws framed by the National Assembly of Pakistan do not apply 
in the FATA unless so ordered by the president. 

* FATA residents do not have the right to legal representation. Those 
convicted are denied the right of appeal in Pakistan's courts. 

* The president's representatives to the FATA, who are called political 
agents, can punish an entire tribe for crimes committed on the tribe's 
territory by issuing fines, making arrests, implementing property 
seizures, and establishing blockades. 

Defense has noted that the FCR is a culturally acceptable recognition 
of the tribal structure of the FATA, where the population is ethnically 
different from the majority of Pakistan's citizens and precludes forced 
assimilation. Further, Defense noted that removing the FCR without a 
replacement mechanism that is accepted by the indigenous population has 
the potential to create a vacuum that could result in negative 
consequences.[Footnote 10] 

The U.S. Government Has Not Met National Security Goals in Pakistan's 
FATA; al Qaeda Remains a Threat and Terrorist Safe Haven Still Exists: 

The United States has not met its national security goals to destroy 
the terrorist threat and close the safe haven in the FATA. While 
national security strategies have called for the use of all elements of 
national power, such as diplomatic, military, intelligence, development 
assistance, economic, and law enforcement support, to meet these goals, 
the United States has relied principally on supporting the Pakistani 
military. We found broad agreement, however, that al Qaeda has 
regenerated its ability to attack the United States and succeeded in 
establishing a safe haven in Pakistan's FATA. In particular, the 2007 
National Intelligence Estimate (NIE) and 2008 DNI's Annual Threat 
Assessment state that al Qaeda has regenerated its attack capability 
and secured a safe haven in Pakistan's FATA.[Footnote 11] These 
conclusions are supported by a broad array of sources, including 
Defense, State, and senior U.S. embassy officials in Pakistan. 

The DNI's 2008 assessment stated that the safe haven in Pakistan 
provides al Qaeda with many of the same advantages it had when based 
across the border in Afghanistan. According to the assessment, the safe 
haven in the FATA serves as a staging area for al Qaeda's attacks in 
support of the Taliban in Afghanistan. Further, it serves as a location 
for training new terrorist operatives for attacks in Pakistan, the 
Middle East, Africa, Europe, and the United States. U.S. government 
officials in Washington and Pakistan also acknowledge that al Qaeda has 
established a safe haven near Pakistan's border with Afghanistan. The 
NIE also found that in the past 2 years, al Qaeda's central leadership 
regenerated the core operational capabilities needed to conduct attacks 
against the United States. It also found that al Qaeda's central 
leadership, based in the border area of Pakistan, is and will remain 
the most serious terrorist threat to the United States. 

The DNI's 2008 assessment and other sources have concluded that the 
resurgence of al Qaeda terrorists on the border between Pakistan and 
Afghanistan now pose a preeminent threat to U.S. national security. It 
states that al Qaeda is now using the Pakistani safe haven to put the 
last element necessary to launch another attack against America into 
place, including the identification, training, and positioning of 
Western operatives for an attack. The assessment found that al Qaeda 
and other Pakistan-based militants now pose a threat to Pakistan. The 
assessment found an unparalleled increase in suicide attacks against 
Pakistan's military and civilians over the past year, with total 
casualties in 2007 exceeding all such attacks in the preceding 5 years. 
These attacks were ordered by Pakistan-based militants, many of whom 
are allied with al Qaeda. The assessment concluded that radical 
elements now have the potential to undermine Pakistan itself. 

The United States Has Relied Primarily on the Pakistani Military to 
Accomplish Its Goals in Pakistan's FATA, with Limited Focus on Other 
Elements of National Power: 

The United States has relied principally on the Pakistani military to 
address U.S. national security goals in the FATA. There have been 
relatively limited efforts, however, to address other underlying causes 
of terrorism in the FATA, such as providing development assistance or 
addressing the FATA's political needs. For example, although the FATA 
has some of the worst development indicators in Pakistan and is ruled 
under colonial administrative and legal structures dating from 1901, 
the United States has devoted relatively little funding to address 
these issues in the FATA. 

Approximately $5.8 billion has been directed at efforts to combat 
terrorism in Pakistan's FATA and the border region. As figure 2 shows, 
about 96 percent of this amount was used to reimburse the Pakistani 
government through CSF for military operations in support of Operation 
Enduring Freedom in Afghanistan, most significantly against terrorists 
in Pakistan's FATA and border region. We identified only two 
nonmilitary activities that occurred in the FATA and border region: 
State's border security program, which received about $187 million, and 
USAID development assistance activities, which amounted to about $40 
million. 

Figure 2: Percentage of U.S. Funding Directed towards Activities in 
Pakistan's FATA and Border Region, Fiscal Years 2002 to 2007: 

[See PDF for image] 

This figure is a pie-chart depicting the following data: 

Percentage of U.S. Funding Directed towards Activities in Pakistan's 
FATA and Border Region, Fiscal Years 2002 to 2007: 
Military efforts: 96%; 
Border Security Program: 3%; 
Development assistance: 1%. 

Elements of National Power: 
* Diplomatic; 
* Military; 
* Intelligence; 
* Development assistance; 
* Economic; 
* Law enforcement support. 

Source: GAO analysis of Defense, State, and USAID data. 

[End of figure] 

According to a State Department report, Pakistan's military forces have 
had some tactical successes in the FATA. The Pakistani government 
stationed military and paramilitary forces along the border with 
Afghanistan, and security operations in the FATA disrupted terrorist 
activity by targeting and raiding al Qaeda and other militant safe 
havens.[Footnote 12] According to State, Pakistan has helped kill or 
capture hundreds of suspected terrorists, including al Qaeda operatives 
and Taliban leaders. 

Key Government Stakeholders Recognize That a More Comprehensive 
Approach Is Needed: 

Defense, State, U.S. embassy, and Pakistani government officials 
recognize that relying primarily on the Pakistani military has not 
succeeded in neutralizing al Qaeda and preventing the establishment of 
a safe haven in the FATA. State's April 2007 Country Reports on 
Terrorism states that, despite having Pakistani troops in the FATA, the 
government of Pakistan has been unable to exert control over the area. 
The report concluded that Pakistan has now recognized that military 
operations alone would not restore security and stability to the FATA. 
Similarly, U.S. embassy officials in Pakistan stated that Taliban and 
al Qaeda elements have created a safe haven in the FATA and have used 
it to plan and launch attacks on Afghan, Pakistani, U.S., and coalition 
forces in Afghanistan and Pakistan. The embassy further noted that al 
Qaeda and the Taliban continue to recruit, train, and operate in the 
FATA. 

No Comprehensive Plan for Guiding U.S. Efforts in the FATA Has Been 
Developed, as Called for by the Administration and Congress: 

The National Strategy for Combating Terrorism (2003), the independent 
9/11 Commission (2004), and Congress in repeated legislation (2004 and 
2007) recognized that a comprehensive plan employing all elements of 
national power--diplomatic, military, intelligence, development 
assistance, economic, and law enforcement support--was needed to combat 
terrorism and close terrorist safe havens in Pakistan's FATA region. 
However, a comprehensive plan to meet U.S. national security goals in 
the region has not yet been developed. Even after the creation of the 
National Counterterrorism Center (NCTC), an organization specifically 
intended to develop, implement, and monitor multidepartment plans to 
combat terrorism, the embassy has lacked a Washington-approved, 
comprehensive plan that combines the capabilities of Defense, State, 
USAID, intelligence agencies, and other U.S. departments to combat 
terrorism in the FATA. 

In addition, Defense, State, embassy officials, the DNI, and USAID 
recognize that a comprehensive approach is needed to meet U.S. national 
security goals in Pakistan. The Pakistani government in power at the 
time of our review, also recognized that it must take a more 
comprehensive approach to defeating terrorism and that an intensified 
and sustained effort that combines administrative, economic, 
educational, legal, and social reforms to defeat the terrorist threat 
is required, according to the DNI.[Footnote 13] 

Pakistan and the U.S. Embassy Are Encouraging More Focus on Other Key 
Elements of National Power to Achieve U.S. Goals in the FATA: 

In March 2006, the president of Pakistan requested that the 
United.States. support Pakistan's effort to support a more 
comprehensive approach to combating terrorism in the FATA. As a result, 
the U.S. embassy in Pakistan began coordinating efforts by Defense, 
State, and USAID to develop department-specific efforts to support 
Pakistan's Sustainable Development Plan for the FATA. Pakistan's 
Sustainable Development Plan is a 9-year, $2 billion effort to provide 
economic development, extend the influence of the Pakistani government, 
and establish security in the FATA. To assist this effort, Defense 
undertook a counterinsurgency assessment in the FATA and began 
developing its Security Development Plan. At the same time, USAID 
provided technical assistance to the Pakistani government to help 
formalize its Sustainable Development Plan, as well as to plan USAID- 
development assistance activities in the FATA. This approach, if 
approved by the administration and key U.S. government agency 
stakeholders, would constitute the U.S. government's first attempt to 
focus more attention on other key elements of national power to address 
U.S. counterterrorism goals in the FATA. 

Proposed Bilateral Efforts to Focus on More Elements of National Power: 

According to officials with the U.S. embassy and Pakistani government 
officials in power at the time of our review, a more comprehensive 
approach is critical to addressing the terrorist threat in the FATA and 
would represent a significant departure from the past. As such, the 
United States began an effort in fiscal year 2007 to provide over $1 
billion from fiscal year 2007 through 2011 for development assistance, 
security, infrastructure, and public diplomacy in support of the 
Pakistani government. This approach represents the first effort by the 
U.S. embassy to directly plan, implement, coordinate, and monitor a 
multidepartment effort to combat terrorism in the FATA. 

The embassy planned to spend $187.6 million on this initial effort 
using fiscal year 2007 funds. The funding has been directed to four 
areas: 

* Development: The $99 million development effort would be led by USAID 
and would include capacity building for the FATA institutions needed to 
plan, manage, and monitor development projects; efforts to build 
community and government relations; funding for health and education 
services; and efforts to increase employment and economic 
growth.[Footnote 14] 

* Security: The $54.1 million Defense and State security effort would 
include training for military and paramilitary units in the FATA-- 
including the Frontier Corps, special operations forces, and air crews-
-and for providing night vision goggles, radios, and other equipment. 

* Infrastructure: The $32.5 million the U.S. embassy has designated for 
infrastructure improvements related to both its security and 
development efforts would be used for road construction, the Frontier 
Corps training center, and border surveillance outposts. 

* Public diplomacy: $2 million in funding was allotted for public 
diplomacy programs. 

According to the embassy, the success of this new effort in the FATA 
will depend on close coordination among an array of institutions within 
the U.S. and Pakistani governments. The new effort also will involve 
partner agencies and allies, including the United Kingdom, Japan, and 
Europe; the Asian Development Bank; nongovernmental organizations; and 
the Pakistani private sector, civil society, and the tribes of the 
FATA. 

This effort, however, does not yet constitute a comprehensive plan and 
has not been formally approved by U.S. government stakeholders who 
would play a key role in the funding and implementation of such an 
effort. Support from the recently elected Pakistani government, at the 
time of our review, was also uncertain. 

Preliminary Observations on the Use and Oversight of U.S. Coalition 
Support Funds Provided to Pakistan: 

For the period covering October 2001 through June 2007, the United 
States reimbursed Pakistan about $5.56 billion in CSF for military 
operations in FATA and other support in the war on terror. CSF 
reimbursement funds are paid directly into the Pakistani government 
treasury and become sovereign funds. Once they become sovereign funds, 
the U.S. government has no oversight authority over these funds. 

In response to a Defense Inspector General review conducted in 2003, 
Defense implemented additional guidance to improve oversight of the CSF 
reimbursed to Pakistan. Moreover, in 2007, the ODRP began playing a 
larger role in overseeing CSF reimbursement claims. 

In performing oversight, ODRP reviews the Pakistani claims and 
indicates that, to the best of its knowledge, military support was 
provided and expenses were actually incurred. U.S. Central Command 
(CENTCOM) then validates that Pakistani operations listed were 
essential to support U.S. military operations in the theater. The 
claims are sent to the Office of the Under Secretary of Defense for 
Comptroller, who (1) performs a macro-level review comparing the cost 
to similar operations, and (2) assesses whether the cost categories are 
reasonable, selected subcategories are reasonable compared to U.S. 
costs, and costs are consistent with previous claims. In addition, both 
the Undersecretary of Defense for Policy and the State Department 
verify that the reimbursement is consistent with the U.S. government's 
National Security Strategy and that the CSF payment does not adversely 
impact the balance of power in the region. 

In recent months,[Footnote 15] Defense has disallowed or deferred a 
larger amount of CSF reimbursement claims from Pakistan, as shown in 
figure 3. 

Figure 3: Amount of Pakistan Government CSF Claims Disallowed or 
Deferred by Month: 

[See PDF for image] 

This figure is a line graph depicting the following data: 

Amount of Pakistan Government CSF Claims Disallowed or Deferred by 
Month: 

September 2004:	$0.462 million; 
October 2004: $0.442 million; 
November 2004: $0.072 million; 
December 2004: $0.3639 million; 
January 2005: $1.5939 million; 
February 2005: $0.3162 million; 
March 2005: $3.151 million; 
April 2005: $0.3286 million; 
May 2005: $1.4398 million; 
June 2005: $1.35 million; 
July 2005: $1.3901 million; 
August 2005: $1.5829 million; 
September 2005: $3.6818 million; 
October 2005: $0.234868 million; 
November 2005: $0; 
December 2005: $0.000339 million; 
January 2006: $1.539 million; 
February 2006: $0.55607 million; 
March 2006: $1.2734 million; 
April 2006: $1.02555 million; 
May 2006: $3.30517 million; 
June 2006: $3.9917 million; 
July 2006: $1.311 million; 
August 2006: $1.9533 million; 
September 2006: $6.23081 million; 
October 2006: $7.17288 million; 
November 2006: $5.60229 million; 
December 2006: $5.22462 million; 
January 2007: $5.21479 million; 
February 2007: $3.85375 million; 
March 2007: $23.4936 million; 
April 2007: $21.7683 million; 
May 2007: $20.7287 million; 
June 2007: $15.2004 million; 

Source: DOD. GAO has not verified the reliability of DOD Comptrollerï¿½s 
data processing. 

Note: There is a lag between the provision of support and DOD's 
reimbursement of these costs. Submitted costs were (a) recommended for 
approval; (b) "deferred" or returned for additional documentation; or 
(c) "disallowed" for not being consistent with the scope of CSF. 

[End of figure] 

We plan to monitor the status and progress of the U.S. government in 
developing this effort and provide an assessment in a subsequent report 
covering security, political, and development assistance activities 
undertaken by the United States to meet U.S. national security goals in 
the FATA. This work is being conducted in response to requests from the 
House Committee on Foreign Affairs; the Subcommittee on the Middle East 
and South Asia, House Committee on Foreign Affairs; the Subcommittee on 
National Security and Foreign Affairs, House Committee on Oversight and 
Government Reform; Senator Harkin; and Senator Menendez. 

Conclusion: 

Combating terrorism is the United States' top national security 
priority at home and abroad. The U.S. national security strategies have 
consistently called for using all elements of national power to combat 
terrorism, including diplomatic, military, intelligence, development 
assistance, economic, and law enforcement support. Because the use of 
the various elements of national power falls under the authority of 
numerous U.S. government agencies, a comprehensive plan is required to 
ensure that the full capacity of the U.S. government is focused on 
meeting U.S. national security goals. 

We believe that such a plan would help to ensure coordination, 
integration, and implementation of U.S. efforts to close the terrorist 
safe haven in the FATA. A comprehensive plan to combat terrorism in the 
FATA that establishes goals, objectives, priorities, outcomes, and 
milestones, including specific performance measures, would allow an 
assessment of progress and help ensure accountability of U.S. efforts. 
As such, we believe that the administration should develop a 
comprehensive plan using the full capabilities provided by Defense, 
State, USAID, and other U.S. agencies and stakeholders to further 
assist Pakistan in combating terrorism. 

Additionally, the U.S. has spent billions of CSF on Pakistan military 
operations in the FATA border region. As these funds continue to 
support Pakistani operations in the FATA, it is important that there is 
adequate oversight. 

Prior Recommendations for Executive Action: 

In our report issued in April 2008, we recommended that the National 
Security Advisor and the Director of the NCTC, in consultation with the 
Secretaries of Defense and State, and the Administrator of USAID, the 
intelligence community, and other executive departments as deemed 
appropriate, implement the congressional mandate to develop a 
comprehensive plan using all elements of national power to combat the 
terrorist threat and close their safe haven in Pakistan's FATA region. 

The comprehensive plan should also include key components called for in 
the Intelligence Reform Act, the Implementing Recommendations of the 9/ 
11 Commission Act of 2007, and components that we have previously 
reported as being needed to improve the effectiveness of plans 
involving multidepartmental efforts to combat terrorism.[Footnote 16] 
Among other things, the plan should: 

* place someone directly in charge of this multidepartment effort to 
improve accountability; 

* articulate a clear strategy to implement the national security goal 
to destroy terrorists and close its safe haven in the FATA; 

* clarify roles and responsibilities of each department for 
implementing the goal, including establishing compatible policies and 
procedures to operate across agency boundaries; 

* provide guidance on setting funding priorities and providing 
resources to meet these national security goals; and: 

* require a monitoring system and provide periodic reports to Congress 
on the progress and impediments to meeting national security goals in 
Pakistan. 

Agency Comments and Our Evaluation: 

In response to our previous reports, Defense and USAID concurred with 
our recommendation that a comprehensive plan was needed; State asserted 
that a comprehensive strategy exists, while the Office of the Director 
of National Intelligence stated that plans to combat terrorism exist. 
In our view, these plans have not been formally integrated into a 
comprehensive plan as called for by Congress. Additionally, Defense 
recognized the importance and necessity of oversight over CSF. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 
any questions that you or other Members have at this time. 

GAO Contacts and Staff Acknowledgements: 

For questions regarding this testimony, please contact Charles Michael 
Johnson Jr. on (202) 512-7331, or [email protected]. Other contributors 
to this statement were Hynek Kalkus, Assistant Director; Edward J. 
George; Claude Adrien; David Hancock; Karen Deans; Mark Dowling; and 
Jena Sinkfield. 

[End of section] 

Appendix I: Scope and Methodology: 

Our objectives and findings for this testimony were based on two 
recently issued reports.[Footnote 17] To address these objectives, for 
our earlier reports, we reviewed relevant national security strategies, 
the 9/11 Commission Report, key congressional legislation, and related 
documentation from the Departments of Defense (Defense) and State 
(State) and the U.S. Agency for International Development (USAID), and 
discussed these issues with relevant department officials.[Footnote 18] 
To determine progress in meeting national security goals, we compared 
the national security goals with unclassified assessments conducted by 
the Director of National Intelligence (DNI), State, and U.S. officials 
operating in Pakistan. We have previously reported on the need for 
plans to combat terrorism to include elements that would enhance 
interagency cooperation and improve effectiveness.[Footnote 19] 

To determine if comprehensive plans that included these key elements 
were developed and contained the elements recommended by national 
security documents and legislation, we requested all plans addressing 
U.S. efforts in the FATA from the Central Intelligence Agency (CIA), 
Defense, NCTC, NSC, State, USAID, and the U.S. Embassy in Pakistan. We 
reviewed all plans made available from Defense, State, USAID and the 
U.S. Embassy in Pakistan. The CIA, NCTC, and National Security Council 
(NSC) did not provide any plans. 

In addition, we conducted field work in Pakistan in both Islamabad and 
Peshawar, near the FATA, and met with officials from the U.S. embassy 
and consulate, Pakistan's Ministries of Defense and Interior, the 11th 
Army Corps, the Frontier Corps, the FATA Secretariat, and a Pakistani 
nongovernmental organization with experience working in the FATA, as 
well as international donors.[Footnote 20] We determined the amount of 
U.S. funding to Pakistan by analyzing Defense, State, and USAID budget 
documents covering the period from fiscal years 2002 through 2007. We 
determined the amount and oversight process used for CSF reimbursements 
to Pakistan by analyzing Defense documents covering reimbursement 
claims for the period from fiscal years 2002 through June 2007. 

We conducted these performance audits from July 2007 through May 2008 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings based on our 
audit objectives. 

[End of section] 

Footnotes: 

[1] See [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-622], 
Combating Terrorism: The United States Lacks Comprehensive Plan to 
Destroy the Terrorist Threat and Close the Safe Haven in Pakistan's 
Federally Administered Tribal Areas (Washington, D.C.: Apr. 2008); and 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-735R], Preliminary 
Observations on the Use and Oversight of U.S. Coalition Support Funds 
Provided to Pakistan (Washington, D.C.: May 2008). 

[2] These goals have been set forth in the 2002 National Security 
Strategy, the 2003 National Strategy for Combating Terrorism, and the 
2004 9/11 Commission Report, and have been endorsed by the Intelligence 
Reform and Terrorism Prevention Act of 2004 (P.L. 108-458, sec 7102 
(b)(3)) and the Implementing the Recommendations of the 9/11 Commission 
Act of 2007 (P.L. 110-53, sec. 2042(b)(2)). 

[3] See Appendix I for a brief description of our scope and 
methodology. The work on which this testimony is based was conducted in 
accordance with generally accepted government auditing standards. 

[4] The FATA is governed by the Frontier Crimes Regulation (FCR) of 
1901. This legal system, codified under British rule, is separate from 
and unequal to the legal system governing the rest of Pakistan. The 
information on foreign law in this report does not reflect our 
independent legal analysis but is based on interviews and secondary 
sources. 

[5] CSF reimburses Pakistan for a variety of activities in support of 
the global war on terror, the majority of which consists of Army and 
Air Force operations against terrorists in Pakistan's FATA and the 
border region. However, some of the CSF also supports Pakistani Navy 
and Air Force activities outside of this area. Defense was unable to 
quantify what was reimbursed for activities outside the FATA and the 
border region at the time of our report, and therefore, we included all 
CSF as funds going toward the FATA and the border region. CSF 
reimbursement funds are paid to the Pakistani government treasury and 
become sovereign funds. 

[6] The administration's 2003 National Strategy for Combating 
Terrorism, the independent 9/11 Commission Report, and Congress's (1) 
Intelligence Reform Act and Terrorism Prevention Act of 2004 (P.L. 108- 
458, sec. 7120) and (2) the Implementing the Recommendations of the 9/ 
11 Commission Act of 2007 (P.L. 110-53, sec. 2042 (c)) all support the 
development of a comprehensive plan that uses all elements of national 
power. Elements of national power include diplomatic, military, 
intelligence, development assistance, economic, and law enforcement 
support. 

[7] GAO, Combating Terrorism: Law Enforcement Agencies Lack Directives 
to Assist Foreign Nations to Identify, Disrupt, and Prosecute 
Terrorists, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-697] 
(Washington, D.C., May 25, 2007); GAO, Results-Oriented Government: 
Practices That Can Help Enhance and Sustain Collaboration among Federal 
Agencies, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-15] 
(Washington, D.C., Oct. 21, 2005); and GAO, Combating Terrorism: 
Observations on National Strategies Related to Terrorism, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-03-519T] (Washington, D.C., Mar. 
3, 2003). 

[8] Submitted costs can be (a) recommended for approval; (b) "deferred" 
and returned for additional documentation; or (c) "disallowed" for not 
being consistent with the scope of CSF. 

[9] The information on foreign law in this report does not reflect our 
independent legal analysis but is based on interviews and secondary 
sources. 

[10] A recent announcement by Pakistani Prime Minister Yousaf Raza 
Gillani regarding the repeal of the FCR drew mixed reactions from 
tribesmen and political leaders, some of whom called for amendments to 
the FCR, rather than its repeal. 

[11] The DNI's 2007 NIE and its 2008 Annual Threat Assessment are 
designed to help U.S. civilian and military leaders develop policies to 
protect U.S. national security interests and represent the combined 
judgments of 16 U.S. intelligence agencies, according to the NIE. 

[12] Department of State report to Congress, pursuant to Section 2042 
of the Implementing Recommendations of the 9/11 Commissions Act of 2007 
(P.L. 110-53) 

[13] Annual Threat Assessment of the Director of National Intelligence 
for the Senate Select Committee on Intelligence, February 5, 2008. 

[14] In providing agency comments on GAO-08-622, USAID stated it 
received $88 million for these efforts in the Fiscal Year 2007 
Supplemental Appropriation. 

[15] The March-June 2007 claims reimbursed in February 2008 are the 
latest claims reimbursed by DOD Comptroller, as of May 2008. 

[16] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-697], 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-15], and 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-519T]. 

[17] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-622], 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-735R]. 

[18] We also requested meetings with the Central Intelligence Agency 
(CIA), the National Counterterrorism Center (NCTC), and the National 
Security Council (NSC); however, only the CIA agreed to meet with us. 

[19] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-697]. 

[20] We met with international donors from Canada, Japan, the 
Netherlands, and the United Kingdom. 

[End of section] 

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