Afghani officials smuggling U.S. money?

Marketplace Staff Jun 28, 2010

TEXT OF STORY

Tess Vigeland: Cash stashed in suitcases and sent out of the country on airplanes. Sounds like the latest thriller out of Hollywood. But it’s actually the latest story of alleged corruption in Afghanistan. Billions of dollars are reportedly being flown out of the country; some of it diverted U.S. aid.

Marketplace’s Nancy Marshall Genzer explains what all the fuss is about.


Nancy Marshall Genzer: Some of your tax dollars could be winging their way to Dubai. The Wall Street Journal reported today that more than $3 billion has been tucked into suitcases or packed on pallets in Afghanistan and flown to foreign banks over the past three years. The Journal says the U.S. government thinks Afghan officials are behind the airlift of diverted American aid and drug money.

How did we let this happen?

Steven Schooner: We just have a lot of contractors in theater doing a lot of different things that the government used to do.

That’s Steven Schooner. He teaches procurement law at George Washington University. He says the U.S. government hires American contractors to hand out foreign aid and logistics money in Afghanistan. That used to be done mostly by State Department employees, but safety became an issue.

Moyara Ruehsen teaches international finance at the Monterey Institute of International Studies.

Moyara Ruehsen: We have tried to have people on the ground dispersing aid money and lives have been lost.

And there’s an incentive to hire Afghans. The U.S. wants to support local businesses. But those companies play by Afghan rules.

Brian Fishman is a counter terrorism expert at the New America Foundation.

Brian Fishman: And Afghan rules, for a long time now, have meant a lot of corruption, and paying off armed factions so that you can build a road or move trucks along a road or those sorts of things.

Or airlift money out of the country. The government of Afghanistan says it’s going to investigate. So is Congress.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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