As the U.S. is planning its exit from Afghanistan, a group of trained financial experts is focusing on busting up the terrorist organizations and corrupt officials who have ripped off American taxpayers for billions of dollars. The goal is ambitious: not simply to recover money for the U.S. Treasury, but to cripple terrorist and insurgent groups by cutting off the cash that serves as the life blood of their operations. Experts believe somewhere between $30 and $60 billion was lost through fraud or mismanagement during the Iraq and Afghanistan wars. Some of it ended up in the hands of America’s sworn enemies. An investigation last year by the Commission on Wartime Contracting — a bipartisan legislative panel established to investigate contracting fraud in Afghanistan and Iraq — found that $360 million in rebuilding contracts for Afghanistan ended up in the hands of the Taliban and other criminal organizations.
Much of the money lost in war zones is gone forever, of course, but billions of dollars might be traced to bank accounts that can be frozen, and eventually returned to the U.S. government, according to some of those involved in the mission.
Thomas Creal serves as the lead forensic accountant with a U.S. military task force in Afghanistan charged with tracking terror financing — a job that will intensify as the war there winds down. He told The Washington Examiner that recovering “as much of those U.S. funds as possible” is essential to disrupting ongoing terror operations and retrieving lost dollars around the globe. His recent work with the U.N. Security Council’s Sanctions Committee shows that such efforts can succeed, he said. The group froze millions of dollars stolen by former Liberian President Charles Taylor, who is awaiting the outcome of his trial as a war criminal. If he is convicted, millions of those dollars can be recovered, Creal said.
“It sends a very powerful message to all the war criminals, terrorists and crooks, that if you steal or misuse monies, we are coming after you,” Creal said. “The missing piece of the war is our ability to bankrupt the enemy. Now that is a sustainable victory.”
The World Bank estimates that “cross-border flow of the global proceeds from criminal activities, corruption and tax evasion” totals hundreds of billions of dollars a year, a large portion of which comes from American taxpayers. Between $20 and $40 billion is used annually to bribe politicians and officials in developing and underdeveloped nations, “a figure equivalent to 20 to 40 percent of flows of official development assistance,” the World Bank estimates. A portion of those lost funds are used by criminals and terror organizations to recruit operatives, plan attacks, purchase weapons and use proxy groups to destabilize weak governments, experts said.
In Afghanistan, mismanagement and lack of oversight made it relatively easy for crooked contractors and government officials with links to the Taliban and other enemy combatants to take advantage of the system. One of the most lucrative ways to steal money has been through U.S. and NATO contracts for trucking companies with ties to the insurgency. Some of these companies were paid a security premium that amounted to a payoff to the enemy not to attack supply routes. Some contractors with high-level connections did not have to bid for contracts worth tens of millions of dollars. The actual worth of the work performed was a small fraction of the amount paid. U.S. taxpayer money was also used by corrupt contractors to bribe both Afghan and NATO officials who are charged with awarding the contracts, U.S. military officials said.
Transparency International, a nonprofit group tracking global corruption, has rated Afghanistan as one of the world’s most corrupt nations. Cooperation between the U.S. and Afghan governments is fragile. Afghan officials have obstructed U.S. investigations, particularly when they involve family members accused of stealing funds.
Billions of U.S. tax dollars from Afghanistan have been funneled to banks in the Persian Gulf, European banking institutions, “and as far as the Cayman Islands or are being laundered into multimillion-dollar homes,” said a military official.
Tracking terror financing is not only imperative to dismantling terror operations but to understanding their connections globally, the official said. Failure to wage war on terror organizations’ financing “will allow them to operate with impunity long after we leave Afghanistan and provide them with the resources needed to mount future attacks against Western interests or the homeland.”
Sara A. Carter is The Washington Examiner’s national security correspondent. She can be reached at [email protected].
