US faces Iraq-like spending problems in Afghanistan

The US government is pouring vast amounts of new resources into Afghanistan for security and reconstruction projects. But it's running the risk of repeating some of the same mistakes it made in Iraq where government auditors have said it wasted billions of dollars.

The US record on reconstruction spending in Iraq continues to be less than stellar, lawmakers complain, raising fears that US spending in Afghanistan could be plagued by the same kinds of excess and lack of accountability.

"I just hope that you will have a renewed effort to put a magnifying glass on these contractors and the amount of money that's going out because there is unbelievable abuse in waste and yes, fraud," Sen. Byron Dorgan (D) of North Dakota told Defense Secretary Robert Gates during a Senate panel hearing Thursday. "We just have to lace it up and stop."

After much hand-wringing over contracting problems in Iraq, lawmakers like Senator Dorgan want to make sure the US doesn't waste more money in Afghanistan, where the problems may be far harder to overcome.

The US has already spent more than $33 billion in reconstruction funds in Afghanistan as of January, on top of another $25 billion from other countries. But there are still too few auditors to track where all the US money went, let alone how billions of dollars of new money will be spent, says one official close to the situation.

"There has been no oversight in the last seven years, and because Afghanistan is not really a tribal society as much as a mafia-type society with strongmen, there has been a culture of spending money in very loose ways," says the official, who was not authorized to comment publicly on the matter.

This official fears that when government auditors begin to sift through the documentation for some of that spending, they won't find that the US got what it paid for.

"Did the money get used and appropriated and achieve the results it was intended for? The answer will be a resounding no," says this source.

The new Special Inspector General for Afghanistan Reconstruction has just begun its work, issuing its latest report Thursday, which essentially sets the table for further inquiry.

Arnold Fields, the inspector general, now employs 44 people, with 17 on the ground in Afghanistan. The goal is to build the Inspector General's office to 90 and have more than 30 people auditing contracts in Afghanistan, says a spokeswoman for the office in Washington.

As in Iraq, the US will rely heavily on government contractors in Afghanistan, and they will work in an environment in which corruption is as common as chicken and rice.

Severe poverty and widespread illiteracy also permeate a society for which the concept of governance is fairly alien. That puts all the more burden on American contractors, government officials, and auditors to ensure that the money the US is spending goes to the right places.

The US has created a new database to track contracts and contractors, but a recent Government Accountability Office report concluded that the system, the Synchronized Pre-Deployment and Operational Tracker database, or SPOT, is not yet sufficient to manage the sheer number and size of all the contracts.

Stuart Bowen, the inspector general for Iraq reconstruction, warned last month that the US must heed the lessons of Iraq if it is to avoid waste in Afghanistan.

"We also need in Afghanistan a system ... to track projects, to track programs," Mr. Bowen said. "There's no good system over there now."

The US must watch carefully its own balance sheet and the ability of the US contractors it hires to do the job right. It is also pushing Afghanistan to rein in its own corruption problems.

Mr. Fields, who left for Afghanistan Thursday, is expected to issue a report in the coming weeks on a $404 million contract under the US training command in Afghanistan, a spokeswoman says.

Defense Secretary Gates, who has railed against Pentagon spending, believes the heart of the problem is in the Pentagon's lack of capacity to oversee its own spending overseas: There are simply too few qualified government employees who can conduct oversight of the billions being spent in the war zones. Moreover, many of those auditors are contractors themselves.

Mr. Gates hopes to eliminate the fox-guarding-the-henhouse problem by converting some of those contractors to a corps of professionally-trained acquisition experts. Some believe it will be hard to attract highly-paid contractors to lower-salaried government jobs, but Gates aims to have 4,000 such workers in place during fiscal 2010.

"We can't afford to spend a single dollar that we don't have to because it takes away from resources to do other things," he said at this week's Senate hearing. "And to spend it on contractors who aren't doing their jobs is not just waste, fraud and abuse, it impacts our abilities."