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Hearing of the Subcommittee on National Security, Homeland Defense and Foreign Operations, Committee on Oversight and Government Reform - Opening Statement


Location: Washington, DC

Congressman John Tierney, Ranking Member of the Subcommittee on National Security, Homeland Defense, and Foreign Operations, questioned Department of Defense (DoD) officials today during a hearing focused on continued reports of contracting corruption in Afghanistan. The hearing was scheduled as a follow-up to Congressman Tierney's 2010 investigation into the U.S. Army's $2.16 billion Afghanistan Host Nation Trucking contract. That investigation and report, Warlord, Inc., found that the DoD's principal logistics contract in Afghanistan had bred a vast extortion racket that was a major source of funding for insurgents, warlords, and criminal patronage networks.

In response to Rep. Tierney's 2010 investigation, DoD established two task forces to address the problem of contracting corruption. In July 2011, the Washington Post reported that Task Force 2010 concurred with Rep. Tierney's findings and concluded that the trucking contract was a major source of funding for malign actors. In August 2011, the AP reported that Task Force 2010 had identified $360 million from U.S. contingency contracts in Afghanistan that had been diverted to warlords, powerbrokers, criminal patronage networks, or insurgents. Two weeks ago, the Commission on Wartime Contracting also confirmed billions in waste in war spending days before Congressman Tierney introduced legislation to implement one their recommendations.

Today's hearing was requested by Rep. Tierney in May 2011 and provided members with an opportunity to examine recent reports of contracting corruption and press the Department of Defense on what steps it is taking to ensure that U.S. taxpayer dollars do not end up in enemy hands.

A copy of Congressman Tierney's opening statement is below:



Subcommittee on National Security, Homeland Defense and Foreign Operations

Committee on Oversight and Government Reform

U.S. House of Representatives

Hearing on "Defense Department Contracting in Afghanistan:

Are We Doing Enough to Combat Corruption?"

September 15, 2011

As Prepared for Delivery

We have just marked the ten year anniversary of September 11th and it will soon be a decade since U.S. forces first crossed the border into Afghanistan. We entered that conflict for a righteous cause and our brave men and women in uniform have largely accomplished the mission of ridding Afghanistan of al Qaeda and the international terrorists there that threatened our homeland. I want to begin today by honoring their sacrifice and stating once again how proud I am of their service. I also want to thank our witnesses for their service and continued support for our soldiers, sailors, airmen, and Marines.

I asked Chairman Chaffetz to call this hearing to examine the problem of contracting corruption in Afghanistan. Last year, I led a six-month Subcommittee investigation of the major Department of Defense logistics trucking contract there. Our investigation found that the trucking contract had spawned a vast protection racket in which warlords, criminals and insurgents extorted contractors for protection payments to obtain safe passage. Our investigation further showed that senior officials within the U.S. military contracting chain of command had been aware of the problem but had done little to address it.

In plain English: the investigation found that the Department of Defense's supply chain in Afghanistan relied on paying the enemy and fueling corruption in order to maintain our substantial military footprint.

Following the Subcommittee's investigation, Gen. Petraeus established three task forces designed to address the problem of contract corruption and he issued new contracting guidelines to break down the silos between contracting and operations. Those were important first steps. Since then, the Department has provided multiple briefings to the Subcommittee staff demonstrating substantial progress in identifying where U.S. taxpayer dollars are going. I commend the Department for that ongoing effort.

Unfortunately, the picture presented is not pretty. Recent news reports stated that Task Force 2010 had specifically identified and traced over $360 million in contracting dollars in Afghanistan that had been diverted to warlords, powerbrokers, insurgents, and criminal patronage networks. The task force also confirmed the results of the Subcommittee's investigation, finding that many of the trucking contractors were in fact making illicit payments that ended up in the hands of the enemy. The Commission on Wartime Contracting looked at contingency contracting in both Iraq and Afghanistan and estimated that upwards of $60 billion in U.S. contracting dollars had been lost to waste, fraud, and abuse.

I fear that these reports are only the tip of the iceberg. Much of the Afghan economy now centers around the U.S. and international military presence and logistics contracts but a significant portion of these funds seem to end up supporting the Dubai real estate market rather than jobs in Afghanistan. At the top of the hierarchy, there are weekly reports about politicians, or brothers and cousins of politicians, who have obtained multi-million dollar contracts with the U.S. government. At the bottom of the hierarchy, the extortion of international contractors is a booming industry.

Today, the business of Afghanistan is war. How can we ever hope to extricate ourselves from that war when so many Afghans benefit from the insecurity that is used to justify our continued presence? To my mind, we have crossed a tipping point in which the size of our military footprint inadvertently fosters further instability. Every additional soldier and every additional supply convoy that we send to Afghanistan further fuels this cycle of dependence, corruption and endless war.

With that said, I want to focus today's hearing on three basic questions: (1) what is the scope of contracting corruption in Afghanistan, (2) what is being done to address it, and (3) how can we dramatically reduce it. Although I am skeptical about the design of the current United States' endeavor there, for today's hearing we must focus on practical solutions that can be implemented right away.

Congress also has an important role to play. This Spring, I worked with the Armed Services Committee to include an amendment in the National Defense Authorization Act that would give commanders in the field more authority to immediately stop contracting with companies that undermine the efforts of our troops on the ground. I recently introduced a bill to establish a permanent Special Inspector General for Overseas Contingency Operations, one of the key recommendations of the Commission on Wartime Contracting. I encourage my colleagues to join me in that legislation. I am also working to draft comprehensive contingency contracting reform legislation to fundamentally change the way we do business in war zones.

I want to close by reading from Gen. Petraeus' "Counterinsurgency Contracting Guidance" released in September 2010. He wrote: "If we spend large quantities of international contracting funds quickly and with insufficient oversight, it is likely that some of those funds will unintentionally fuel corruption, finance insurgent organizations, strengthen criminal patronage networks, and undermine our efforts in Afghanistan."

Simply stated, we cannot afford to fail at getting a handle on contracting corruption in Afghanistan. It is utterly unacceptable for any U.S. taxpayer dollars to ever make their way into the hands of those who would use them as a means to harm our brave men and women in uniform.

I appreciate your testimony here today and I look forward to our discussion. Thank you, Mr. Chairman.

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