Fleeced: How aid billions were squandered in Afghanistan

Published by The Mail on Sunday (22nd August, 2021)

If you want to understand the horrifying return to power of the Taliban in Afghanistan you could delve into the history of a mountain nation that repeatedly repels foreign invaders. Or you could consider the saga of nine Italian goats. 

These animals from Tuscany were airlifted into the country as part of a £4.4 million scheme planned by the Pentagon to help the Afghan cashmere industry and create thousands of jobs.

The blond billy goats were sent to breed with darker females to boost the yield and quality of the luxury wool from nine million local goats. 

But several fell sick, their newly designed home was too small, huge food costs made the plans unsustainable, the intended Afghan partner pulled out, and the project chief quit in dismay. 

Those in charge could not even tell if the unfortunate goats ended up in a cooking pot. ‘We don’t know,’ said John Sopko, the Special Inspector General for Afghanistan Reconstruction. ‘This was so poorly managed.’

This farcical scheme perfectly symbolises the costly and corrosive folly of Western attempts to build a new society in Afghanistan, based on arrogance, arms and vast flows of aid.

Tony Blair declared it our ‘duty’ to rebuild Afghanistan as a ‘stable and democratic’ nation. But despite some advances in education, female empowerment and prosperity, naive foreign interventions played a damaging role in fuelling corruption, furthering divisions and fostering a mafia state, thereby assisting the return of the Taliban.

The International Monetary Fund may have blocked the latest £330 million tranche of aid from failing into their hands, but how much have they already pocketed?

For the waste of taxpayers’ money was astonishing, with ‘ghost’ schools and military forces, counter-narcotic efforts that backfired, dodgy construction and fuel deals siphoning off billions, and cash and gold smuggled out through Kabul airport.

US diplomatic cables revealed one Afghan vice-president flew to Dubai with £38 million in cash, and that drug-traffickers and corrupt officials were shifting £170 million a week out of a country where average incomes were scarcely £430 a year.

The West’s plans were so naive, controls so weak, spending so vast, and changes in personnel and strategy so frequent, that this now serves as a textbook study in how not to build a better and democratic state.

It shows the lethal impact of pouring aid into a fragile, conflict-riven country – while the two-decade debacle, backed by floods of donor cash at times bigger than the entire Afghan economy, helped transform the aid sector into a greedy, pernicious and self-serving industry filled with fat-cats.

Sadly, all the warning signs were ignored. More than a decade ago, Richard Holbrooke, US special envoy to the region, said corruption was destroying efforts to create a fledgling democracy. He called it the Taliban’s ‘No 1 recruiting tool’.

Now the legacy is clear, with heartbreaking scenes of fundamentalist bigots seizing control.

No surprise that President Ashraf Ghani fled last week, reportedly in a helicopter stuffed with stolen cash.  Yet the West turned a blind eye not just to corruption, electoral fraud and creation of a mafia state but even to the trafficking of boys into sex slavery.

The UN warned more than a decade ago that Afghan security forces were ‘recruiting boys, sometimes with sexual exploitation as a motivating factor’.

Yet last year the US State Department admitted there was still a ‘pattern of sexual slavery in government compounds’, with high-ranking officials involved in bacha bazi (a tradition of rich older men recruiting boys for entertainment, including to dance for them dressed as girls, and rape) yet routinely avoiding prosecution.

In the first years after the 2001 invasion, budgets were comparatively tight, as the focus was on stifling terrorism. 

The US promised to build or refurbish 1,000 schools and clinics by the end of 2004, but managed to achieve barely a tenth of that number. Then the money taps were turned on as focus shifted to ‘nation-building’.

Many schemes were absurd. Take the spending of £32 million on a single natural gas fuel station – 140 times more than a similar one in Pakistan – only to discover it cost more than the average annual income for Afghans to convert their cars to drive on natural gas, so there was little use.

A string of official reports – many deleted last week from US government sites due, apparently, to ‘ongoing security concerns’ – showed how a corrupt elite ran the government for personal gain while committing crimes with impunity, alienating ordinary people and driving many into the arms of the insurgency.

Christopher Kolenda, a colonel who advised three US commanders in Afghanistan, said that by 2006 the government had ‘self-organised into a kleptocracy’. 

Politicians paid to be given official posts, then recouped costs ‘from assistance programmes, selling uniforms or ammunition on the black market, drug-trafficking or kidnapping’.

Little wonder the £6.6 billion British-led efforts to stop the opium trade flopped as poppy cultivation boomed. One governor was found with nine tons in his office – when, unusually, he was sacked, he joined the Taliban with his 3,000 men.

By 2010, a US diplomatic cable quoted the Afghan national security adviser saying ‘corruption is not just a problem for the system of governance in Afghanistan – it is the system of governance’.

But the West’s money kept flowing as shameless politicians spoke about stability: almost a trillion dollars spent by the US over two decades and £30 billion by Britain, including £3.3 billion on aid, in a country of 38 million people.

If all the international aid spent had simply been divided up among Afghans, each citizen could have become an instant millionaire. Instead, the poverty rate has soared in recent years to engulf more than half the population.

The big beneficiaries were the crooks in charge and the Dubai property market, where many stashed their stolen wealth. 

One powerbroker at a Kabul bank used a web of fake firms to make fraudulent loans to ministers, officials and warlords, leading to losses equivalent to one-twelfth of the size of the country’s economy.

The bank also spent £117 million on 35 luxury villas on Dubai’s Palm Jumeirah island complex, which it used for entertaining.

The slow-burn catastrophe was charted by the Special Inspector General for Afghanistan Reconstruction, an unusually pugnacious official body, with quarterly reports and probing investigations.

British Ministers driving up aid budgets, such as Andrew Mitchell, spoke of ‘endemic’ corruption and parliamentary reports exposed blurred focus, weak scrutiny, lack of data and ‘leakage’ of funds.

‘People ignored the corruption because it was easier than trying to fix it,’ said a British contractor who assessed UK schemes. 

‘I was told not to go there when evaluating, since they might have to stop the programmes.’ 

This veteran aid worker said Whitehall officials pretended to oversee ‘acceptable’ losses of up to 2.5 per cent on projects when, in reality, up to half the funds went missing.

Three years ago, the reconstruction inspectorate revealed that £11.4 billion of the £38 billion spent on rebuilding projects was wasted, stolen or failed, while almost £3.7 billion spent on ‘stabilisation programmes’ was ‘largely unsuccessful’ in building state institutions.

The watchdog concluded the West spent so much that it achieved the opposite of what was intended – for the cash ‘often exacerbated conflicts, enabled corruption, and bolstered support for insurgents’. 

In too many cases, it added, the amount of money spent ‘became the main metric for success’.

In attempting to foster democracy, donors spent £1 billion on elections, yet an analyst concluded that reforms led to a ‘tug-of-war over who controls the electoral bodies and through them, the outcome’. 

The last presidential election, in 2019, was deemed the most corrupt yet.  One British aid worker involved in several elections said he and colleagues complained about fraud to their UN bosses during the first post-invasion presidential vote in 2004. ‘They ignored us,’ he said.

At one point, the US Congress estimated £3.3 billion – equal to 22 per cent of Afghanistan’s GDP – was being smuggled out of the country, with two-thirds of this illegally earned. 

But government ministers and airport bosses frustrated efforts to thwart this destructive capital flight. Four years ago there was a US-led seminar on how to spot fraud. 

One person attending said he knew of a person due to travel that day to Dubai with a hoard of loot, who was apprehended at Kabul airport with 92 lb of gold bars worth £1.5 million.

Meanwhile, scores of schools were built to Western standards, five times more costly than those put up by charities.  But cranes could not be used to install the heavy roof designs in much of the mountainous terrain and lighter replacements sometimes collapsed in heavy winter snowfalls.

The US spent £800 million on these schools, yet half had insufficient tables or chairs. Others that did not exist received funding, while some teachers were forging attendance lists.

A power plant cost £246 million, ten times more than planned, then delivered less than one per cent of intended capacity since Afghan officials could not afford the fuel. Even a £62 million loan for a hotel opposite the US embassy disappeared, leaving an empty shell. 

Police advisers watched TV cop shows to learn about policing while, over the past decade, the Pentagon spent almost £3 billion on fuel for Afghan defence forces but half was stolen. Security bases were built but never used. 

Weapons went missing and a £403 million fleet of transport planes left to rot on a runway before being sold as scrap for £29,550.

Gert Berthold, an accountant who helped analyse 3,000 contracts worth £78 billion, concluded that four in every ten dollars ended up in the pockets of corrupt officials, gangsters or insurgents.

In Helmand, centre of British operations, a new police chief five years ago found about half of 26,000 security personnel assigned to the province ‘did not exist when we asked for help’. 

One Afghan contractor, paid to cover flood culverts under roads to prevent bomb attacks on military vehicles, faked photos of the work submitted with his invoices – and two soldiers died as a result of his duplicity.

Washington tripled the number of civilians to accompany the troop surge that started in 2009, spending almost £1.5 billion. It turned out later the average cost of each civilian deployment was between £300,000 and £420,000. 

Meanwhile, £110 million was spent in four years on food, security and villas for a management team of fewer than ten people.

One frustrated US official argued it was better to let Afghan warlords skim off 20 per cent than to hire outside experts who would spend almost all the funds on overheads, salaries and profits. 

Richard Boucher, Assistant Secretary of State for South Asia during George W. Bush’s administration, conceded that even though the money ‘would go through five layers of corrupt officials’, more of it might trickle through to reach needy villagers.

Unsurprisingly, a British aid contractor told me his firm earned more in Afghanistan than at any other point in his career.

Significantly, another said the cascade of foreign cash to Afghanistan marked a turning point for the aid industry. 

‘It was the start of people working in aid not to do good but because they were chasing the money,’ said Simon Parry, who spent almost three decades in troublespots across the world.

Westerners repeatedly pushed their own systems – of governance, finance and justice – but they floundered in face of the local culture ‘without sufficient regard for what was practical or possible’, in the words of the reconstruction watchdog’s most recent report.

This damning indictment of aid and nation-building concluded that Afghanistan’s power-brokers co-opted funds and ‘rather than reform and improve… worsened the problems these programmes were meant to address’.

The report said aid chiefs asked for the removal from the report of the word ‘mafia’ to describe ‘the web of corruption at high levels of the Afghan government’, before warning that ‘trying to design and assess programming without even acknowledging, much less grappling with, the realities that term referred to is a recipe for failure’.

Douglas Lute, who co-ordinated Afghan strategy for the National Security Council for six years, said they lacked a fundamental understanding of the country. 

‘We didn’t know what we were doing,’ he said. ‘We didn’t have the foggiest notion of what we were undertaking. It’s really much worse than you think.’

So as those Italian goats showed, we were fleeced. And far worse, the Afghan people were dismally failed – with disastrous consequences for them and the world. 

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