U.S. Auditor: Corruption Threatens Afghan Progress

More than a decade of work financed with American tax dollars is at stake if bribery and theft are left unabated in Afghanistan, according to a quarterly report released Wednesday by the top auditor of U.S. reconstruction spending in the impoverished nation.

Widespread corruption hampers the government's ability to collect revenue and hinders economic development and the effort to promote accountability, the 260-page report by the special inspector general for Afghanistan reconstruction said.

"The costs in Afghanistan — both in lives lost and money spent — have been enormous,'" Special Inspector General John Sopko said in the report. "If we don't take advantage of this opportunity and get serious about corruption right now, we are putting all of the fragile gains that we have achieved in this — our longest war — at risk of failure."

SIGAR says corruption is affecting all levels of customs collection, a revenue stream that could help Afghanistan become less dependent on international assistance. The report said U.S. agencies estimate that tens of millions of dollars are lost to smuggling each year and that stemming corruption "could potentially double the customs revenues remitted to the central government."

Between December 2012 and December 2013, Afghanistan missed its $2.4 billion revenue collection target by nearly 12 percent and reportedly could miss this year's target of $2.5 billion by as much as 20 percent, the SIGAR report said.

"This would mean that the Afghan government will only be able to pay for about a third of its $7.5 billion budget. It will depend on the international community to cover the shortfall," according to the report.

The U.S. has allocated at least $198 million to help Afghanistan collect customs revenue. Efficiency and collections have been improved at various sites, including the Kabul International Airport, but corruption still permeates all levels of the process, the report said.

"Criminal networks use intimidation to smuggle commodities, resulting in the estimated loss of approximately $25 million annually for wheat and rice imports at a single customs location," the report said. Trade officials told SIGAR that about $60 million is lost each year to commercial smuggling and that Afghan employees listening to U.S. advisers are being kidnapped and intimated.

Progress has been slow in setting up an electronic payment system, and customs fees in Afghanistan continue to be collected in cash. This requires customs brokers to travel long distances with large quantities of cash to pay the fees, leaving brokers vulnerable to theft and increases opportunities for corruption.

On related issues, the SIGAR report said:

—There were no significant changes in the effectiveness of the Afghan attorney general's office. The office declined offers from the State Department to train prosecutors on investigative methods and canceled several meetings with State officials, who say that the attorney general is refusing to pursue corruption cases.

—While Afghanistan's High Office of Oversight and Anti-Corruption has adequate administrative and technical capabilities, it suffers from a "lack of political will ... in fighting corruption, especially when it involves the powerful and political elite." While the office is seeking more international assistance, donor nations are reluctant to invest more because it has not seen sufficient results.

Congress created the Office of the Special Inspector General for Afghanistan Reconstruction to provide independent and objective oversight of Afghanistan reconstruction.