Oversight sought for battlefield 'bags of cash' in Iraq, Afghanistan

Senate appropriators are worried there isn’t enough oversight of the millions of dollars military commanders spend in Iraq and Afghanistan, and now the Pentagon is taking a closer look.

Last year commanders had $1.2 billion of cash at their disposal – funds to buy soccer balls, to hire locals, or to fix hospital roofs, often carried in bags by a soldier designated as the "money man." The Defense Department program, long the envy of many a diplomat, is seen as an effective tool in a counterinsurgency environment, giving commanders the authority to spend money in the local economy to quickly make a difference.

Gen. David Petraeus, head of US Central Command, calls these purses “the most important authority.” But the funds, known as the Commander’s Emergency Response Program, or CERP, often flow like water and with little oversight.

Congress has had its eye on the program for years and, though aware of the need to give commanders flexibility, has been unable to determine how well the money was being spent. Now, as lawmakers mull over the current defense budget – $708 billion plus an additional $33 billion war funding request – Congress is getting interested again.

The Pentagon is spending more in this regard: The Obama administration’s budget request for fiscal 2011 is about $1.3 billion, up from $900 million in fiscal 2009, according to Army budget documents. Congress has asked the Pentagon to create better tracking mechanisms for the cash and to better train those tasked with handing it out.

Defense Secretary Robert Gates seems to understand, but to a point.

“I understand there is some concern on this committee about the way CERP has been used in recent years,” Mr. Gates told Senate appropriators Thursday in announcing that the Pentagon is performing “an internal assessment” of the way the money is spent. Gates is considering hiring someone to oversee CERP money, and other managers and contracting personnel to ensure there is enough oversight for all the money that is spent.

But Gates said it will be impossible to keep a close eye on all of the spending.

“Even with improved execution and oversight, it is unrealistic to expect a tool like CERP – whose very effectiveness is tied to its flexibility and the discretion granted to local commanders in a war zone – to attain a zero-defect standard,” Gates said.

The importance of the purses given to commanders is crucial in Afghanistan, says Michael O’Hanlon, a senior fellow at the Brookings Institution, a liberal-leaning think tank in Washington. He says it is “absolutely essential,” especially now as the US tries to wrest momentum from the Taliban.

“I cannot imagine a more important time for CERP money,” he says, adding that he recognizes the need for greater oversight, to a point. “The concern is understandable, but wrong.”

The Defense Department has long been criticized for its lack of oversight of war-zone contracts. Despite the billions spent annually, defense officials acknowledge much of the problem stems from a lack of staff to oversee the thousands of contracts that are let every month.