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28 June 2010

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William R. Cumming

Well Follow the Money is always a useful aphorism. Unfortunately to do so you need audit trails and accounting none of which exists in Afghanistan.

The same is occurring simultaneously in Haiti much closer to home.

The question is really a basic one? Is the corruption a major factor in ensuring that NO US policy or objectives can be achieved? My guess is yes! The US is de facto the protector of the opium harvest in many areas. So like POGO is reputed to have stated "We have seen the enemy and it is US"!

Patrick Lang

WRC

How about Washington? Any audit trails there? pl

Fred

Ahmed Chalibi is still free, too.

As to D.C. look at the prior corruption:

http://www.washingtonpost.com/wp-dyn/content/graphic/2005/12/12/GR2005121200286.html

The Twisted Genius

I think this thread could largely answer the question of American purpose and interest in AFPAK. The gravy train is a mile long and it's not just corrupt Afghan fat cats riding it. A number of American contractors, as well as the entire COIN industry, are making a comfortable living off this venture. I'm sure they and their financier friends are willing to invest some of their winnings to ensure that no effective audits are ever conducted. Maybe the "Rolling Stone" will put a couple of investigative reporters on the trail.

Lysander

"How about Washington? Any audit trails there?"

There had been an Audit the Fed resolution in congress that got the parliamentary treatment and was put in a box.

And as I've said before, the real corruption is that of a cartel of private banks (AKA the Federal Reserve) manipulating the money supply and bailing out the big banks that had put it all on black and lost.

Afghanistan can't compete with that.

Sorry for the off topic rant. I can't help myself sometimes.

JohnH

"Prosecutors and investigators have been ordered to cross names off case files, prevent senior officials from being placed under arrest and disregard evidence against executives of a major financial firm."

Obama has prosecuted exactly how many Big Fish from financial services, oil companies or defense contractors?

You don't even need a single finger hand to count the number...

Harper

I read the Post story today with great interest, and I thought immediately of the McChrystal flap. One of the underlying factors in the general's deep frustration was the role played by Richard Holbrooke. As reported to me, Holbrooke had been constantly meddling in the Afghan affair, and had insisted that all American funds flow through Kabul and Karzai, even those funds clearly earmarked for specific provinces. Karzai made decisions on whether that money went, as designated, depending on his relations with the local provincial governors and tribal leaders. McChrystal tried to develop a close enough relationship to Karzai to trump Holbrooke's crazy notion that by funneling all money through Kabul, it would create a strong central government. Obviously that is not the case, and the corruption has been centralized, on the "official" side, in Karzai and his circle. On the "insurgent" side, Taliban has an equally corrupt opium-funded operation. So, a coalition government between Karzai and Taliban, which is being promoted by some erstwhile US allies like Britain and Saudi Arabia, would consolidate an opium state, spreading instability all across Eurasia.

A group of senior Marine officers recently complained to a friend of mine that the 900 pound gorilla in the room is the opium business, and that until and unless that problem is tackled, there is no way out of Afghanistan or for Afghanistan.

Patrick Lang

TTG

You are wise. pl

Fred

Harper,

Didn't the Taliban effectively shut down opium producton while they were in power?

Adam L. Silverman

Lysander:

The audit the Fed resolution passed both chambers and has survived the reconciliation committee and is in the final bill that President Obama will sign. It is not as strong as Congressman Paul would like, which was to audit and then dismantle the Fed, or even as his co-sponsor Congressman Grayson wanted, which was to set up a regular audit procedure, but there will be an audit.

You have hit the nail on the head though regarding the Fed and all other central banks for that matter. Regardless of what their charters might call for or say, they essentially exist to protect banks and the banking industry - and in the US the financial industry as well. This is something that is too often forgotten when we talk about the Fed or other central banks. I remember a conversation in Iraq about trying to get credit flowing for some agricultural projects - the USAID rep, a really good guy, remarked "we'll just put in a request to the Iraqi Central Bank to require lending and a lending office" in the area under discussion. I remarked that that's not what central banks do and then explained what they did do. The BCT CMO, a reservist Civil Affairs O5, got it, everyone else at the meeting - the PRT folks, including the USAID guy - looked at me like I was speaking Martian. And then they just went on as if I'd said nothing. Needless to say the lending office didn't open and the lending never happened.

steve

JohnH--

"Obama has prosecuted exactly how many Big Fish from financial services, oil companies or defense contractors?"

Where is Harry Truman when we need him?

Roy G

Task Force 2010, a Pentagon initiative to 'follow the money' through the contractor chain in Afghanistan is finally coming on line, after 9 years.

http://washingtonindependent.com/87803/military-task-force-tackles-thorny-issue-of-contractors-in-afghanistan

It's about time. A new growth industry in the US ought to be white-collar prisons, because those are the criminals ruining the country.

JohnH

Adam L. Silverman: now that it appears that the Fed will be audited, when do you suppose that DOD will be audited?

Audits are intended to identify and dissuade corruption...

citizen

Col,

This will never be investigated fully or effectively. The political fallout from a successful revelation of how widespread the corruption, and the degree to which Westerners are involved would taint any future interventions for the next generation.

I think everyone realizes how big the stakes are. I don't think the West suffers any existential threat from Dar Al Islam, unless Westerners allow it to happen as in Europe with its population vacuum or the Banana Republic shenanigans of late in the US. But a threat does remain, a threat to the DC villagers' ability to utilize their tax serfs (citizens is the polite term) as loan collateral to engage in all sorts of quixotic adventures the world over. If this goes badly, and it looks that way, "COIN" as Ricks et al define it, will go the way of a 1980s fashion faux pas like extra large shoulder pads. Will this mean no cash for Africom? Will Bibi and his Moldovan bouncer friend realize they have to behave themselves because big brother isn't always going to be there? Will the Middle Eastern leadership that their Faustian bargain with radical Islam is a potential death-pact because Israel is beyond cornered and will attack real or perceived threats, and that the US might not always be a willing referee? In other words, will the kids grow up because mom and dad are getting older and can't nurse them anymore? International politics aside, how will all of this play out internally within the US?

Patrick Lang

citizen

You are correct for all the reasons that you give. i am a voice whimpering in the wilderness. pl

Adam L. Silverman

JohnH: I honestly have no idea. The only reason I was up to speed on the status of audit the Fed was because I'd read an article about Congressman Grayson this morning!

Ideally, for promoting proper/good governance, what is necessary is actually multiple audits: one each for Iraq and Afghan Operations - with specific portions devoted solely to contracting/contractors, one for weapon's acquisitions (my understanding from reading news reports and commentary that is where a very large amount of waste is, constant over runs, stuff never gets actually out of testing, let alone built, etc, but we can't get rid of it because the work is spread out in Congressional districts all over the country), and one for contractors being used as intel analysts; I'd really like to know whether the corporate bottom line is warping the intel process as badly as many of us suspect.

While there are IGs that could do all these things, until either Congress starts doing real oversight and actually uses and enforces the subpoena, or legislates audits like they've done with the Fed, then very little is going to happen unless there is a big scandal.

While I don't want are already work averse members of Congress, especially the Senate, to have an excuse to do even less for the American people, it might, perhaps, make some sense to actually look backwards for a bit, not just forward. If you don't investigate and understand what's gone wrong before, there's no way to avoid the same mistakes going forward.

JohnH

Adam L. Silverman: I didn't mean to put you on the spot. But I did want to take advantage of your mention of the Fed audit to put out the lack of any meaningful DOD audits, particularly in light of the giant money hole in Afghanistan.

I wonder when the last time was that the government of a world power let itself be plundered and pillaged into insolvency? Maybe 16th century Spain?

Charles I

There's no way to avoid the same mistakes going forward" but that's assuming "They", as opposed to we, wish to do so.

William R. Cumming

To specifically answer PL question--there are few effective audit trails for federal programs, functions, and activities. Why? Lobbyists for those who might be impacted long ago prevented either adequate legal authority, funding, or staffing for the audit function in the government. The FED is a leading example. We do know that over $12 Trillion went out through the FEDS back door to the FIRE sector. We now face the prospect of similiar amounts to keep the states of Florida, Alabama, Mississippi, Louisiana and Texas in business from the BP catastrophe. By Labor Day BP could well be a distant memory on the corporate history board yet we now know that OBAMA Adminstration has decided that BP is too big to fail and will properly provide financial recourse by those damaged and impacted by the event.
I can assure you that there is NO effective audit trail for the energy sector in the UNITED STATES. What we do know is that all efforts at effective statistical collection by the federal government for that sector were largely prohibited by federal law. Ida Tarbell and Upton Sinclair where are you when we need you. SECDEFs recent efforts to limit G&A for DOD contractors will not get far. Why?
DCAA is a thoroughly corrupt federal agency much like the MMS that was in charge of regulating offshore drilling.

Adam L. Silverman

JohnH: No worries. I do have to now qualify my remarks though. Apparently, and not so surprising to anyone whose been observing the Senate over the past two years, if not longer, when the reconciliation bill, which includes the audit the Fed provisions, was voted out of committee and back to both chambers for a final vote the three Republican senators from the NE (SEN Collins, SEN Snowe, and SEN Brown) all chose to pull their support. They are upset that there is both a provision to unwind/liquidate insolvent banks in the case of a future financial crisis and that the legislation pays for it by taxing the largest banks to establish a liquidation fund. This coupled with SEN Byrd's death and two other Democratic senators opposition because they don't believe the legislation is tough enough (SEN Feingold wants iron clade too big to fail language) means that the Democrats are short enough votes in the Senate to get cloture. There's more than enough votes to actually pass the legislation, at least 54 to 56, but because the Republicans have been demanding soft filibusters for every piece of legislation and nomination since President Obama's election, the legislation may never actually get to a vote, which it would easily pass! One day, when we all belong to whatever political party the Chinese let us join, we're going to look back on all of this and cry while chained to our chairs making sneakers for 15 cents an hour.

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