U.S. tax money may have gone to Taliban

WASHINGTON — Millions of dollars in U.S. taxpayer funds may have been paid to Taliban fighters in southern Afghanistan to provide security for a U.S. development project, a U.S. government audit has found.

The report, released Thursday by the inspector general of the U.S. Agency for International Development, said subcontractors hired to protect a development project near Jalalabad may have paid more than $5 million to local authorities who probably included Taliban militants.

Allegations often have been made about such payments, but the report is a rare investigation by the government into a specific case.

The audit examined payments for security under a $349 million contract awarded to a U.S. contractor, Development Alternatives Inc., for a small-scale infrastructure and community development project.

Because the Taliban are entrenched in the area and it is deemed too dangerous to be visited regularly by the contractor, Development Alternatives left it to local subcontractors to negotiate security arrangements with local authorities.

The report says local authorities in the region often demand a 20 percent "protection tax" in such circumstances. Under such deals, the Taliban will send security guards, with promises that they won't attack the subcontractors or their equipment, and won't try to halt the contract work, it said.

Often they will try to renegotiate the agreement just before the work begins, to increase the price, the report said.

Officials of U.S. AID and the contractor told the investigators that since the development work was taking place in a war zone they weren't directly monitoring, there was no way they could provide assurances that U.S. taxpayer money paid to subcontractors didn't end up in the hands of the insurgents.

If the Taliban demanded the typical 20 percent cut on the amount of money budgeted for security, as much as $5.2 million might have ended up in Taliban hands, the report said.

The auditors didn't propose ways to put controls on the spending. Instead, they recommended that the agency consider whether it was even wise to try to carry out work in such areas.

The report also found "indications of pervasive fraud" in Development Alternatives' project office in Jalalabad City.

The report said an Afghan employee was involved in several fraud schemes with other employees, centering on conspiracy to demand kickbacks from local subcontractors.

The employee had special ties of kinship or friendship with one of the project's subcontractors, who ended up with about 20 subcontracts.

The employees would provide details to favored subcontractors "on how much the project was worth, how much to bid on the project, what the project entailed, and where to inflate the prices in the bids," the report said.

As one example, the report details how the group increased the purchase price of $32 wheelbarrows to $75.

The report said the employees also would collude to provide fabricated reports on the progress of projects in areas considered too dangerous to be visited by U.S. government and foreign personnel. The employees "would take bogus photographs, or use photographs from other projects, and present them as evidence of progress on the current project," the report said.