Periodic analysis and discussion about corruption in Iraq and other countries from a consultant and Certified Internal Auditor who worked in Baghdad for 23 months to help setup the new Iraqi anti-corruption agency, Commission of Public Integrity (CPI). This main page contains postings for the current month. Go to categories list or scroll down to archive lists to see earlier entries. You can also reach this blog by visiting www.FiscalRangers.com .
-----Original Message----- From: Bronstein-Moffly, Alexander H (Alex) CIV SIGAR CCR (US) Sent: Friday, May 15, 2015 9:30 AM Subject: $562 Million in US Assistance for Afghan Civil Aviation Sector
Today, SIGAR released an audit of the $562.2 million in U.S. assistance to Afghanistan's civil aviation sector, primarily administered by the DOD ($500 million) and the FAA ($56.5 million).
The audit notes:
-- The U.S. and its international partners have succeeded in strengthening Afghanistan's civil aviation capabilities over the past 12 years.
-- Despite accomplishments, the U.S. could not transfer airspace management operations to the Afghan government at the end of 2014, as it had originally planned, due in part to a lack of trained Afghan civil aviation personnel, particularly air traffic controllers.
-- Despite its efforts, the FAA was not able to train enough air traffic controllers for Afghanistan to operate airspace management services on its own
-- As of October 2014, the majority of the FAA-trained Afghan personnel had not yet completed required on-the-job training programs.
-- FAA attempted to train students abroad, but faced problems obtaining passports and visas for the students, and some students did not return to Afghanistan after being sent for training in other countries, including the U.S. Additionally, due to security concerns, Afghan students could not access the facilities they needed for on-the-job training.
-- The Afghan government's failure to award an airspace management contract resulted in the U.S. paying $29.5 million for an interim contract to continue those services. The Afghan government did not award a contract, citing what it believed to be excessive costs. Unless the Afghan government awards a follow-on contract before the interim contract expires, the U.S. government could be called upon to fund another interim contract.
-- The Afghan government uses only a portion of the about $34.5 million revenue collected from airspace over-flight fees for civil aviation purposes, despite the government's stated commitment of using its civil aviation revenue to finance aviation services and infrastructure development.
SIGIR, the Special Inspector General for Iraq Reconstruction, closed last year, but their website lives on, archived on a "cybercemetary" at the Univ. of North Texas. They were responsible for auditing reconstruction spending in Iraq since 2004 and investigating corruption in US funded and Coalition funded programs. They started when the initial funding was set by Congress at $22-billion and the funding grew significantly over the years then tailed off.
SIGIR was the model for other later anti-corruption and fraud investigation groups for Afghanistan (SIGAR.mil) and then there is SIGTARP, which audits the Federal stimulus grants and still sends out email alerts.
Here is a link to former SIGIR head Stuart Bowen's testimonies before Congress. Or, you can still reach the archived site by going to SIGIR.mil for the landing page, which has the link to the archive.
You can learn lots about anti-corruption by reading reports and audits on that site. I worked with some SIGAR folks when I was in Baghdad in 2004-2006.
SIGAR is Special Inspector General for Afghanistan Reconstruction.
He repeats most of the exact same problems reported by SIGIR (IRAQ) during my time in Iraq in 2004-2006. At least Iraq had oil revenue to pay more for the costs than Afghanistan.
Even the problem with State Dept. programs having no metrics and no ability to show success for their spending.
Just think, when I was at IRMO in Iraq, we got a huge $22-million to spend, and now Afghanistan is getting $104-billion.
"This weekend G20 leaders adopted new High Level Principles on Beneficial Ownership Transparency in Brisbane, declaring “financial transparency, in particular the transparency of beneficial ownership of legal persons and arrangements a ‘high priority’”. But just how good are these principles? Here are six take-home points:"
Here is the rest of Transparency International's Press Release
1. THEY WERE ADOPTED. AND THAT’S A GOOD START.
To bring a set of countries as diverse in political and economic leanings as Australia, India, Mexico, Saudi Arabia, South Africa and the UK to agreement on an issue as sensitive as making it harder for individuals to hide behind secret companies, especially when corrupt public officials may be involved, is a tremendous challenge. The G8 adopted Beneficial Ownership Principles last year under David Cameron’s leadership. Those principles have certainly informed these G20 principles but the diplomatic efforts required to scale up so quickly from eight to 20 members must be congratulated, not least with late reservations from China.
2. MORE AMBITION NEEDED
The principles state that countries should ensure that law enforcement, tax authorities and other “competent authorities” have access to information in a “timely” manner to follow dirty money trails. They “could implement this, for example, through central registries of beneficial ownership of legal persons or other appropriate mechanisms”. It is disappointing that the word “public” is missing from the central registries – after all, it is regrettably only a suggestion, not a full commitment. Public registries would, of course, be a method that would produce the most timely access of this information to all relevant authorities and other stakeholders, including in other jurisdictions trying to follow the money trail. Public registers would strip the veil of secrecy from those abusing corporate entities.
3. WE MAY SEE A SHIFT TOWARDS CRACKING DOWN ON THE PEOPLE AND SECTORS WHO HELP THE CORRUPT ENJOY LIVES OF LUXURY
One G20 principle that is a new addition to those adopted by the G8 last year is a commitment to “identify high-risk sectors, and enhanced due diligence could be appropriately considered for such sectors”. We hope that within this framework, additional attention can be placed on looking at the luxury goods sector and real estate which allows the corrupt to enjoy lavish lifestyles, as well as accountants and lawyers who make it happen. Of course, we would prefer that once the high-risk sectors are identified, enhanced due diligence “will be applied” as opposed to “could be considered”.
4. AMBIGUITY COULD WREAK HAVOC WITH IDENTIFYING CONCRETE ACTIONS
There are many instances in the new principles where ambiguous wording could provide camouflage for inaction. This wording needs to be tightened up – if not in G20 statements then at least in national level legislation and policy.
According to the principles, authorities should have “timely” access to beneficial ownership information in order to do their due diligence. But why not “direct” or “automatic” access?
In one principle “countries should require financial institutions and DNFBPs [Designated Non-Financial Businesses and Professions, such as lawyers, accountants and real estate], including trust and company service providers, to identify and take reasonable measures … to verify the beneficial ownership of their customers.” Yet the next clause states that countries should only “consider facilitating access” to that information. One way to facilitate access is to make this information automatically and freely available – preferably through a public register.
5. IT’S GOOD TO SEE EMPHASIS ON INTERNATIONAL COOPERATION.
G20 countries are being asked to “ensure that their national authorities cooperate effectively domestically and internationally” and exchange information “with international counterparts in a timely and effective manner”. Cross-border corruption by its very nature requires good cooperation. The G20 is one of the major forums that can help bring this about.
6. MOMENTUM IS GROWING. THERE’S NO GOING BACK.
This year has seen unprecedented unanimity from a range of actors on the need for enhanced beneficial ownership transparency. Each of the official G20 engagement groups called for beneficial ownership transparency within their priority recommendations. The Civil 20, Think 20 and Youth 20 each made a call for G20 countries to adopt public registries containing beneficial ownership information in their key recommendations. The Business 20 called for G20 governments to “endorse the G8 core principles around transparency of ownership and control of companies and legal arrangements”.
In addition, an Open Letter to G20 Leaders coordinated by Transparency International and signed by 25 global civil society, anti-corruption and religious leaders called on G20 leaders to adopt public registries of beneficial ownership. The signatories included two Nobel Peace Prize Laureates, Archbishop Desmond Tutu and Tawakkol Karman, as well as the heads of Transparency International, Global Witness, Global Financial Integrity, Amnesty International, Oxfam, Care International and others.
Australia should feel pleased that it managed to bring all G20 members to a common agreement on action they need to take to make it harder to for the corrupt to hide behind secret companies. There is restlessness amongst civil society for better, stronger, more ambitious commitments and actions. But a key point is that these new High Level Principles bring all countries on to one page. It’s now down to pressure at the domestic level to have these principles adopted and strengthened back on a national level."
"The Securities and Exchange Commission said Monday that a foreign tipster will collect a record whistleblower award of more than $30 million, more than twice as much as the highest previous award."
"A record $14 million whistleblower award paid by the SEC last year was for a tip about an alleged Chicago-based scheme to defraud foreign investors seeking U.S. residency, The Wall Street Journal previously reported. That was at the time by far the biggest award under the SEC's whistleblower program."
The head of SIGAR, the Special Inspector General for Afghanistan Reconstruction, gave his quarterly report to Congress recently, and here is a good report from POGO:
I inserted my comments.
Hearing Spotlights Afghanistan Corruption and Waste
On Thursday, the House Subcommittee on National Security held a hearing titled “Afghanistan: Identifying and Addressing Wasteful U.S. Government Spending.” Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko and United States Agency for International Development (USAID) official Donald Sampler testified.
The U.S. has committed more money to rebuilding Afghanistan than to any other single country in our history—$102 billion since 2002. The hearing focused on USAID’s efforts to help rebuild the country’s political, economic, and social infrastructure, which have cost taxpayers more than $18 billion. Sampler discussed his agency’s successes over the last 12 years, emphasizing that Afghanistan is a difficult environment in which to work.
Sopko’s written testimony lays out four lessons learned from USAID’s efforts in Afghanistan, all of which have relevance to future contingency operations.
Lesson #1: Reconstruction programs must take into account the recipient country’s ability to afford the costs of operating and sustaining them.
USAID has implemented projects and built infrastructure without articulating a clear plan for ensuring that the Afghan government can sustain them. The risks of unreasonable sustainability expectations include cost overruns, project delays, wasted funds (resulting in what SIGAR calls “stranded assets”), and a loss of international confidence in the U.S.
(Neither SIGAR or USAID have learned the lessons we learned in Iraq when I was there - in 2005, we discovered the same problem - The Iraqis (and generically, it seems developing middle east or arabic countries) have no maintenance gene when getting foreign aid to pay for capital projects, whether trucks or $10-million generators. Since the items are FREE, they fail to assign maintenance budgets or people to maintain equipment. That is a huge reason to never give them capital goods unless a maintenance contract is part of it. vj)
Lesson #2: Reconstruction of a conflict-ridden state is inherently risky, and that risk must be properly mitigated.
USAID and other donors must not only worry about the safety of their workers in Afghanistan, they must also take steps to safeguard funds from corruption. “Corruption poses the most severe threat to the integrity of U.S. government reconstruction aid to Afghanistan,” according to SIGAR. Indeed, most of the hearing focused on steps USAID is taking to address the massive amount of corruption in Afghanistan. In January, SIGAR caused a stir when it issued an audit report that found billions of dollars in USAID assistance provided directly to Afghan ministries is at high risk of misuse.
(This has always been a huge risk and mistake. NEVER trust third world governments to actually use the funds you give them for what they are intended. Another reason to discontinue foreign aid to such countries. If they are in the lower half of Transparency Internationals Corruption Perception index, axe the funds. vj)
Lesson #3: Oversight is a critical element of reconstruction.
SIGAR acknowledges that oversight in Afghanistan is “uniquely challenging.” One of the biggest impediments to oversight is limited mobility due to insurgent violence. The Project On Government Oversight has blogged about “oversight access bubbles” shrinking as U.S. and NATO troops withdraw and leave vast areas of the country unguarded. SIGAR estimates that no more than 21 percent of Afghanistan will be accessible to civilian oversight personnel by the end of 2014.
USAID and other international relief and development organizations must therefore develop alternative oversight methods. Last month, POGO expressed concerns about USAID’s plan, which outsources oversight to contractors. USAID continues to have contract oversight problems, which makes us worry about oversight of the overseers.
(This was always a problem in Iraq also. Their IG, the SIGIR, reported many abuses and lack of completion of projects. They had to hire local national contractors and make them take lots of pictures to actually see what the problems on a project were. Thus another reason to terminate foreign aid for reconstruction is when security is so bad you cannot get your own trusted observers to a work site. vj)
Lesson #4: A reconstruction effort must have clearly articulated goals and a sound way to measure progress toward those goals.
While it is widely acknowledged that strategic planning is a must, SIGAR has repeatedly found that such planning has been ignored throughout the reconstruction effort. For example, the U.S. has never articulated a clear anti-corruption strategy in Afghanistan. SIGAR also found that, even when nominal strategic plans exist, U.S.-government implementing agencies, including USAID, do not consistently articulate the goals they hope to achieve and the metrics they intend to use to assess whether those goals have been achieved. In short, the problem is that these agencies emphasize outputs over outcomes.
(When I was in Iraq, the reconstruction programs were run by civilian subject matter experts in IRMO, which was initially staffed via the DoD, then State. They were experts, not STATE department employees. In Afghanistan, all the leaders of reconstruction were STATE Dept. employees who had no clue about reconstruction, construction or anti-corruption practices. I was there in 2009 and because my anti-corruption training program kept finding corruption, their prime contractor shut it down. They were more interested in training consulting revenues than reporting corruption, and had no faith the State Dept. people would do anything to back them up. vj)
Finally, Special Inspector General Sopko’s written testimony notes that USAID needs to be “more forthright in providing complete information to both Congress and the American people about its reconstruction activities in Afghanistan.” This became a flashpoint at the hearing due to recent events. Earlier this week, USA Today reported that SIGAR had accused USAID of concealing from Congress information showing that the Afghan government is unable to prevent contracting with individuals and companies tied to insurgents and terrorist groups. At the hearing, Sampler took strong issue with the USA Today article, insisting it was false. Sopko stood by the accusation.
(State Dept. "weenies" avoid conflict and seem to always support the conflict country government, no matter what. Rather than have people who can be strong overseers to protect US investments in reconstruction, they hide information. From my experience in Iraq and Afghanistan. See more at my old blog on corruption at http://webworks.typepad.com/corruption_in_iraq ).
Judging from the highly charged questioning at the hearing, especially by Subcommittee Chairman Jason Chaffetz (R-UT) and Representative Peter Welch (D-VT), Congress is far from done on the issue of waste in Afghanistan reconstruction. Expect many more animated hearings in the near future.
The U4 Resource Centre is operated by the Chr. Michelsen Institute
(CMI), Bergen, Norway - a private social science research foundation
working on issues of development and human rights. The web server and
the core team behind U4 are based at CMI. Transparency International’s Secretariat in Berlin is responsible for the U4 Help Desk.
- See more at: http://www.u4.no/info/about-u4/#sthash.Pgv8vGBK.dpuf
The U4 Anti-Corruption Resource Centre assists donor
practitioners in more effectively addressing corruption challenges
through their development support.
U4 offers relevant anti-corruption material, including our
own applied research (featured under Themes), through an extensive web
based resource centre. U4 also runs in-country
workshops and online courses on anti-corruption measures and strategies
for our partner agencies and their counterparts. Finally, a Helpdesk
service providing expert answers to the most pressing questions faced by
development practitioners in the field is also available through our
website.
U4’s distinctive role in the anti-corruption field is a close working
relationship with aid donors, whose practical challenges and policy
issues shape our agenda and inform our priorities. Through our online
resources and trainings U4 hopes to uphold our vision and mission. U4
does not investigate cases of corruption nor has the capacity to assist
countries in pursuing investigations.
- See more at: http://www.u4.no/info/about-u4/#sthash.Pgv8vGBK.dpuf
About U4
The U4 Anti-Corruption Resource Centre assists donor
practitioners in more effectively addressing corruption challenges
through their development support.
U4 offers relevant anti-corruption material, including our
own applied research (featured under Themes), through an extensive web
based resource centre. U4 also runs in-country
workshops and online courses on anti-corruption measures and strategies
for our partner agencies and their counterparts. Finally, a Helpdesk
service providing expert answers to the most pressing questions faced by
development practitioners in the field is also available through our
website.
U4’s distinctive role in the anti-corruption field is a close working
relationship with aid donors, whose practical challenges and policy
issues shape our agenda and inform our priorities. Through our online
resources and trainings U4 hopes to uphold our vision and mission. U4
does not investigate cases of corruption nor has the capacity to assist
countries in pursuing investigations.
- See more at: http://www.u4.no/info/about-u4/#sthash.Pgv8vGBK.dpuf
About U4
The U4 Anti-Corruption Resource Centre assists donor
practitioners in more effectively addressing corruption challenges
through their development support.
U4 offers relevant anti-corruption material, including our
own applied research (featured under Themes), through an extensive web
based resource centre. U4 also runs in-country
workshops and online courses on anti-corruption measures and strategies
for our partner agencies and their counterparts. Finally, a Helpdesk
service providing expert answers to the most pressing questions faced by
development practitioners in the field is also available through our
website.
U4’s distinctive role in the anti-corruption field is a close working
relationship with aid donors, whose practical challenges and policy
issues shape our agenda and inform our priorities. Through our online
resources and trainings U4 hopes to uphold our vision and mission. U4
does not investigate cases of corruption nor has the capacity to assist
countries in pursuing investigations.
- See more at: http://www.u4.no/info/about-u4/#sthash.Pgv8vGBK.dpuf
**Anti-fraud Collaboration Website**
The Anti-fraud Collaboration, featuring organizations
including The IIA that represent the financial reporting supply chain, has
launched a new website ( http://bit.ly/12wpV5c
) to highlight resources to help audit committees, financial
organizations, internal auditors, and external auditors detect and deter
financial reporting fraud. The site includes fraud deterrent and detection
resources developed by the Collaboration partners as well as tools developed by
the individual contributors. All materials on the site are free of charge.
Here it is 2013, and Afghanistan still is at the bottom of the list of most corrupt countries. Transparency International issues annual reports on 176 Countries ranked by perceived corruption.
So, Afghanistan is third from the bottom or third most corrupt country.
So the Afghan Anti-Corruption network has sent letters of complaint to Afghanistan leaders and US President Barack Obama (that should REALLY help) before an upcoming anti-corruption summit.
The United Nations General Assembly designated 9 December as International Anti-Corruption Day, when it adopted the UN Convention against Corruption in October 2003. The aim is to raise awareness of corruption and its impact on society, and to mobilize governments to tackle this threat to economic development, democracy and stability. NATO is playing its part to reduce the risk of corruption in the defence establishments of Allies and partners through the Building Integrity Initiative.
“Corruption undermines democracies and the rule of law. It has a corrosive effect on development and security,” says Ambassador Dirk Brengelmann, NATO Assistant Secretary General for Political Affairs and Security Policy. “In the security sector, corruption wastes public resources and reduces the effectiveness of forces and operational capabilities. NATO remains committed to developing security institutions and structures that are transparent and accountable.”
Now in its fourth year, the Building Integrity Initiative has developed a range of practical tools to support individual countries’ efforts to enhance transparency, accountability and integrity in the defence sector. Meeting earlier this week, NATO foreign ministers endorsed a progress report on the initiative’s ongoing efforts, which include a tailored programme for Afghanistan.
The initiative is supported by a Trust Fund led by Norway, Poland, Switzerland and the United Kingdom. Afghanistan: a priority
NATO Ambassador for Building Integrity Jan-Lucas Van Hoorn meets Afghan Defence Minister Abdul Rahim Wardak in Kabul in September 2011 At the Lisbon Summit in November 2010, the Alliance and the Government of the Islamic Republic of Afghanistan committed to developing a tailored Building Integrity programme to reduce the risk of corruption in the Afghan National Security Forces.
“Fighting against corruption is a crucial part of the transition we are engaging now in Afghanistan,” says General Stephane Abrial, NATO’s Supreme Allied Commander Transformation. “It is also the reason we devote so much effort in training people in this field of building integrity and anti-corruption.”
The tailored programme includes a proposal to establish a Building Integrity Centre as part of the Afghan National Security University. The centre will support the Afghan National Security Forces in developing expertise and supporting a sustained effort, providing practical measures to reduce the risk of corruption in the security sector. The Building Integrity Tool Kit
Established by the Euro-Atlantic Partnership Council in November 2007, the Building Integrity Initiative seeks to raise awareness and promote good practice. It provides practical tools to help nations build integrity and reduce risks of corruption in the security sector by strengthening transparency and accountability.
The Building Integrity Tool Kit offers education and training activities, a pool of subject-matter experts to strengthen procedures and practices in areas such as management of financial and personnel resources, and a handbook to promote good practice. Work is ongoing to develop further tools.
The tool kit and programme of activities are open to all Allies and NATO’s partners in the Euro-Atlantic area, the Mediterranean and the Gulf region, as well as other partners across the globe. Participation is on a voluntary basis. Ongoing efforts
To date, six nations – Afghanistan, Bosnia and Herzegovina, Bulgaria, Croatia, Norway and Ukraine – have completed the Self Assessment and Peer Review. Action plans have been developed for Afghanistan, southeastern Europe and Ukraine.
Training teams have been established and over 500 civil servants, military officers and representatives of civil society have taken part in Building Integrity training and education activities conducted in Europe and Afghanistan.
National pre-deployment preparations now also include elements to better understand corruption as a security risk and practical measures to reduce the risk of corruption and building integrity.
A progress report on efforts to mainstream and further develop the Building Integrity Initiative will be presented to Allied leaders, when they meet in Chicago for the next NATO summit in May 2012.
Pictures of Iraq during my 23 months there and items related to anti-corruption. Most scenes are in the Green Zone plus a few convoy trips into the Baghdad area.
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