Remarks to the press by Special Inspector General For Afghanistan Reconstruction Arnold Fields and Assistant Inspector General for Investigations Ray Dinunzio

January 12, 2010 | Kabul, Afghanistan

Moderator:  I think we're ready to begin.  We have with us two very special guests.  We have General Arnold Fields, who's the Special Inspector General for Afghanistan Reconstruction, and Mr. Ray DiNunzio, who is the Assistant Inspector General for Investigations for the Office of the Special Inspector General.

General Fields:  It's my honor to be here this morning and I really thank everyone for coming to this press event.  I apologize for being a few minutes late due to other matters here at the Embassy, but I will assure you that, to the extent that your schedules will permit, I will stay here for the full measure of your interest.

As you may know, I am the Special Inspector General for Afghanistan Reconstruction.  In that capacity I provide independent oversight to the Congress of the United States, to the people of the United States, to the government of Afghanistan and to the people of Afghanistan regarding the extent to which we, collectively, are applying the reconstruction funds for the benefit of the people of Afghanistan and this overall reconstruction effort.

As an independent agency, I report directly to the Congress of the United States.  I also report to the Secretary of Defense of the United States and the Secretary of State.

I provide quarterly reports.  That means every three months I provide a written report to the Congress of the United States which essentially rolls up where we stand in reference to spending associated with reconstruction here as well as where we are in addressing the issues within the Afghanistan National Development Strategy consisting primarily of security, governance and development.

In that regard there are two primary things that we do.  One, we audit.  That means we look at records.  We look at monies that were appropriated for reconstruction in Afghanistan and we determine if there is waste, fraud or abuse.

Similarly, we investigate.  I will not labor over what that really means in that I am privileged to have with me today Mr. Ray DiNunzio, who is our Chief Investigator, who will be addressing that issue later on in our dialogue here today.

I want to reemphasize the waste, fraud and abuse aspect of our work.  We are interested in finding those individuals who are bilking the government of the United States, the government of Afghanistan or any government out of monies made available for the reconstruction in this country.  If they're bilking that money or misusing it, lining their own pockets, then we are out to find you and to bring you to justice.

This is the sixth trip that I have made to Afghanistan and have been privileged to make to Afghanistan in my capacity as the Special Inspector General. On this particular trip, among a whole list of concerns, we are emphasizing the issue of corruption or anti-corruption.

In support of our anti-corruption agenda, on this particular trip there are a number of folks within the government of Afghanistan and within the government of the United States with whom we will meet or have met.  Thus far on this trip, I and my colleagues have met with the Attorney General and had a wonderful meeting with him.  We have met with the Chief Justice.  Later today we will meet with the Minister of Interior.

We have already conducted a specific audit associated with anti-corruption and that audit involved the High Office of Oversight.  That report is complete.  It has been presented to the Congress of the United States, to the government of Afghanistan, and it's available on our web site for information and use by other institutions.

In addition to the officials that I've already mentioned I want to underscore that I have met with Lieutenant General Caldwell, who is responsible for training and equipping the Afghanistan National Forces -- the police as well as the army.  And last evening I met with General McChrystal.

This is very much a team effort and the fact that I'm meeting on this trip, as I have on previous trips, with members of the government of Afghanistan, members of the government of the United States and members of the international community, all of whom are bringing their wherewithal to bear upon this reconstruction effort.

We also reach out to the interior of the country.  We just don't spend our time here in Kabul.  Yesterday, for example, we met with the Governor of the Province of Farah, Governor Amin, where among a number of reconstruction efforts we are using American tax payer dollars to construct a garrison at the cost of about $68 million.

To ensure that the $68 million invested by the United States is being used for the appropriate purposes, we are conducting an audit of the brigade or garrison facility in the province of Farah.  While there yesterday, even though our audit is not yet completed, there were many issues brought to our attention by the brigade commander and his subordinate commanders.  We are looking into those matters.

As your time permits I encourage you to go to our web site and to review the already five reports that we have put together for the benefit of our Congress and the community that I previously mentioned.  Those reports are being translated into two of the widely spoken languages here in Afghanistan.  It is by the laws of the United States under which I operate that those documents be translated into the widely spoken languages of Afghanistan.

I want to emphasize that, because this is not just about the United States.  This is about the partnership that the United States shares with the government of Afghanistan and the people of Afghanistan.

As I mentioned, we do basically two things - audit and investigate.  Because we're emphasizing corruption and anti-corruption on this particular visit, I respectfully asked that Mr. Ray DiNunzio accompany me on this trip.  Mr. DiNunzio is our Assistant Inspector General for Afghanistan Reconstruction for Investigations.  In other words, he is our Chief Investigator.  He is a 23-year veteran of the Federal Bureau of Investigation, the FBI of the United States.  He is also a Certified Public Accountant and he is also a cyber-crime expert.  So he has many means by which to determine those who are misusing the funds made available for this reconstruction effort in Afghanistan.

At this moment I wish to present to you my colleague, Mr. Ray DiNunzio.

Mr. Dinunzio:  Thank you, General Fields, for that introduction.  Welcome to everybody here.  Thank you for giving us the opportunity to speak before you.

As the Inspector General mentioned, as the head of Investigations I'm responsible for all criminal investigations involving the investigation of U.S. reconstruction money being spent in Afghanistan.  In that capacity I currently oversee eight investigators and hotline analysts who are stationed, deployed here in Afghanistan, as well as four special agents in the United States.

One important thing to note is that as a result of funding availability and priorities of the Inspector General, the Inspector General has just recently begun to build the capacity of its Investigative Directorate beginning with my coming on board in September of last year. 

The Investigations Directorate has a two-pronged mandate.  One is criminal, and that is to deter corruption and prevent fraud, waste and abuse through the investigation and support of prosecution of such activity through the U.S. Department of Justice as well as the U.S. Military Judicial System.

The second prong of our mandate is civil, in that we are responsible for investigating fraud, waste and abuse that may not be the result of criminal activity.  However, we have remedies in the United States to recover U.S. taxpayer money that was either wasted through negligence or incompetence.

Another important thing to note is that we are not focused on the Afghanistan people and we are not focused on U.S. involvement in Afghanistan.  We are focused on criminal activity involving the use of the reconstruction money here, wherever those leads may lead us.  So we have targets not only in Afghanistan but in the U.S., as well as other foreign nationals who are participating holistically in the reconstruction of Afghanistan.

As I mentioned, we are just now building our investigative capacity and we're comprised of experienced law enforcement investigators from a number of law enforcement community agencies in the United States as well as the inspector general community in the United States.  So we have on board investigators who are experienced in the FBI as well as in the U.S. Treasury, through criminal investigations involving financial crimes.  We have in the inspector general community members of USAID, of the Department of Defense, the Defense Criminal Investigative Service and a vast number of criminal investigators from the Army, the Navy, as well as the Air Force Office of Special Investigations on board.

The primary focus of our criminal investigations is in the area of procurement fraud and contract fraud, so these investigators that I've brought on board have vast experience in these areas and have conducted these types of investigations with their former organizations.  In fact, we have more than 60 percent of our on-board investigators with experience in Iraq as they've come over from our sister agency responsible for Iraq reconstruction, as the U.S. winds down its involvement in that country.

So in support of that mission Special Agents of SIGAR are being deployed throughout Afghanistan provinces where the highest volume and the highest value of reconstruction money is being managed.  In fact, approximately 40 percent of our current investigations involve program fraud, procurement fraud or contract fraud; 30 percent are in the area of bribery or solicitation for bribery, or even up in the front end of the contracts being awarded where we have collusive bidding and the trading of insider information before contracts are let.  The remaining 30 percent are split between matters involving theft of Commander Emergency Response Program funds or strictly false statements to U.S. government officials in the participation and the proposal for these awards.

In conjunction with those investigations, we're working jointly with the International Contract Corruption Task Force, which is a consortium of federal law enforcement agencies in the United States.  We are the newest member of that organization.  The Deputy Assistant Inspector General for our organization is on the Board of Governors for that organization, and we have a full time representative on the Joint Operations Center which is hosted by the FBI. 

The task force concept in the United States is to leverage resources of a multitude of investigative agencies and inspector general offices so that we are as effective and efficient as we can be with the resources that we've provided to Afghanistan investigations.

Regardless of the investigative expertise that we have on board, it's impossible to be effective without information from the public, so we have a very aggressive hotline which I would like to take the opportunity to promote here.  We have flyers that we will pass out.  What we are interested in in Afghanistan as well as outside of the country is information regarding knowledge of fraud, waste and abuse where there's involvement of U.S. reconstruction money.

There are a number of ways with which SIGAR can be reached by the public -- through email, telephone, and we have offices here and in the United States where walk-in complaints are welcome.  However, the easiest way to contact us is through our web site, through the internet, at www.sigar.mil.

Just to give you a sense...I spoke briefly about how our investigations are comprised...but to give you a sense as to where we're seeing the targets in terms of those responsible for the types of investigations we're currently investigating, approximately only 25 percent of those involved Afghanistan nationals alone.  Of the 40 investigations that we currently have pending, 2 are civil matters; but of the 38 criminal matters that are pending, there are 10 targets that are Afghanistan nationals.

I can provide different details regarding the investigations and different aspects of those, but the Inspector General and I really wanted to give you a quick overview of our organization and what our mission was, and how the Afghanistan people can help us.  But we also wanted to be available to answer any questions that you may have.  We've set aside some time this morning to do that.

With that, I'd like to turn it over to the table, and anyone who may have questions for us.

Question:  (in Dari via translator) You talked about the investigation of a number of cases.  Can you tell us that the cases are individuals that you have investigated, are there any people from the government officials?  How many of them are there?  What will be your act towards them since they are holding high ranking positions, they are powerful people as well?

Mr. Dinunzio:  That's a very good question. As I said, we are not focused on any specific individuals.  We take our investigations where the leads lead us.  We are currently investigating matters of corruption.  We are working very closely with the administration, hence the reason for the Inspector General's quarterly visits here.  So, to the extent that we identify corrupt officials within the Afghanistan government we have the reach-back and the means with which to address those investigations and the full cooperation of the Afghanistan government.

As a quick follow-on to that question, during our meeting here this trip, we have met with the Deputy Director of the High Office of Oversight who has pledged his cooperation with any investigations that may lead to corruption within the government here.

Question:  (in Dari via translator) His question is that the Afghan government also confirmed that there is corruption within the government of Afghanistan.  But you also state there is also corruption within the international community.  And do you confirm this, that there is also corruption in the international community?  And what's the level of corruption?  And what are your measures and reactions and so forth?

Mr. Dinunzio:  As I said, only about 25 percent of our criminal investigations involve Afghanistan nationals.  To the extent that those rise to within levels of government, I wouldn't be authorized to speak at publicly.  However, the remainder of those investigations involve U.S. officials and other foreign nationals.  To the extent that those bring us to the level of government officials in a corrupt capacity, we are actively pursuing those leads as well.

Corruption takes on somewhat of a different meaning in different cultures, and corruption as we speak here, we're talking about those who abuse public trust through either appointment or elected office.  So we have investigations that may ultimately lead us to those levels.  We have the means with which to investigate those matters and hold people accountable, and we're pursuing all of those means.

As a quick follow-on to that answer as well, I want to emphasize that although we have 40 criminal investigations and we're responsible for investigating corruption, that we don't characterize the vast majority of those as involving corrupt public officials.  Much of that investigative effort is spent in investigating routine criminal activity involving fraud, and that's the theft of U.S. reconstruction money through criminal means.

Question:  General, regarding the 177 -- I believe is the exact number -- planned police stations across the country.  We have had several police chiefs tell us that they were not pleased with the design of the planned stations.  They resemble airplane hangars with corrugated metal.  They tell us they think they're very susceptible to an RPG attack and that they have brought these concerns to American authorities. My question is, has this matter been researched by your office?  Has it been addressed?

General Fields:  Thank you.  In answer to the last part of your question, these matters have not thus far been completely examined by the Special Inspector General.  However, we are examining these matters, and of course we cannot examine every...we don't have the capacity, if you will, to examine every detail of everyone's concerns, but we will examine enough of them so that we bring appropriate attention to these matters so that corrective action can be taken where appropriate.

I want to tell you, sir, while we have not thus far looked at a police facility, we are in the process of looking at an Afghanistan National Army facility and in fact I just visited one yesterday, the garrison that I mentioned earlier out in Farah.  The audit is underway, but already we have identified by way of what has been reported to us by the commander and his commanders...there are some issues and we will formalize those issues to the extent that our findings might otherwise suggest.

Question:  These issues, are they along the lines of what I'm talking about?

General Fields:  Some of them may be, but from what we were told yesterday, they would not necessarily rise completely to the level of danger that you are suggesting.

Question:  If I can follow up on something you just said.  As the U.S. starts to ramp up the civilian surge here and more money is going to pour into here, I'm wondering if there is some concern that the country may not have the capacity to absorb this amount of money coming in, and are you going to have to ramp up the number of people working for you to keep track of all of this?  I'm from the Washington Post.

General Fields:  Thank you, sir.  The first part of your question: we suspect from our knowledge and from what we have been told that there may not necessarily be the capacity here to absorb additional funding when it comes to the government of Afghanistan, but we are not sure yet.  That is why we have a series of audits underway to help determine the extent to which the government of Afghanistan can absorb more of that capacity.

Question:  Will you ramp up the number of people you've got to look at all of this?

General Fields:  A very good question, sir.  We are ramping up.  We started out in 2008 with a personnel objective of 90.  In 2009 we advanced that number just a bit.  Here in 2010 we, by the end of this year, will have reached 118 on our staff.  For 2011 our budget has already been approved at least at the first stage, which is a very important stage, and that's the Office of Management and Budget, to bring aboard 132.  So yes, sir, we are ramping up commensurate with the increased numbers and spending expected here in Afghanistan.

Question:  (in Dari via translator) His question, you mentioned, sir, in your briefing that you are focusing on 25 percent of the Afghan nationals and you are currently, investigating 40 cases.  You said that you are not focusing on individuals.  If you do not disclose the names of those individuals who are involved in the fraud, waste and other activities, then do you think your investigation will be complete or not complete?  Will it be worth it to investigate something where you do not intend to disclose the name of those individuals who are involved in the fraud?

Mr. Dinunzio:  Good question.  I may have miscommunicated in that we're not focusing on individuals.  When I said we're not focusing on individuals, I meant that with regard to the development of our cases.  In other words, we haven't come to Afghanistan with an agenda of specific investigations that we plan on conducting.  We are developing intelligence as we establish a presence here and allowing those investigations to lead us where they do.

The nature of criminal investigations is such that it's improbable and unlikely that the name of an individual that is the target of an investigation would be released until that investigation is successfully prosecuted, to protect those who may actually be innocent before they're proven guilty in a court of law.

So at the conclusion of a prosecution then, it is U.S. tradition that the names of those who were responsible for fraud are released publicly and disseminated through the media.  In the event the criminal activity or the prosecution isn't relevant to merit media attention, this information is all publicly available upon request within the U.S.

Question:  I wondered if you'd be able to let us know what portion of the development of reconstruction funds in Afghanistan are being spent on security for U.S. personnel here.  And can you let us know what the maximum permitted security budget for, sorry, the percentage of the... What portion of the project budget can be spent on security?  Is there a maximum limit to the extent that you spend?   I know that's [inaudible].

General Fields:  I want to make sure I understand the essence of your question.  When you say security, are you speaking of personal security of individuals conducting reconstruction here in the country? Or are you speaking of security in terms of security as one of the three elements of the National Development Strategy?

Question:  Sir, I meant the individuals involved.

General Fields:  I unfortunately do not have a figure to ascertain the amount of money actually being spent for the security of individuals conducting work here.  I will tell you that it's a pretty large number, I'm confident.  But I will not be able to give you an absolute number in that regard.

Question:  Do you have a percentage?

General Fields:  Once again, it depends upon with whom one has a dialogue on this.  I've heard as much as 30 percent just to provide security, but that's a speculative figure, so please do not quote me on that as an actual figure.  I will tell you, though, that it is expensive to reconstruct in a country as dangerous as Afghanistan is at this time.

Question:  But I understand that when the [inaudible] development projects that there's a limit that people are allowed to spend on security.  When you make a proposal, a USAID project, you're allocated a certain amount of your bid to security.  That amount has varied from region to region.  I'm just wondering if this would be something you would be looking into, the portion of taxpayers' money that's actually going on development and the portion that's going on guys with guns is important.  That [inaudible] budget proposal, would you, if you don't know it, are you going to ask about it?  Are you going to make it public? It's a matter of concern when you're talking about waste.

General Fields:  We are currently conducting some work associated with private contract security and I think that once that audit will have been completed and others that we may plan, we will bring more light to bear upon this particular issue.

Question:  (in Dari, via translator) His question has two parts.  The first part is: can you tell us that the corruption in the government of Afghanistan, what level the corruption in the government of Afghanistan is?  As you are working on your report, the sixth report, can you tell us that in what level the corruption in the government of Afghanistan is?

Secondly, as you are investigating the development and construction money paid by your taxpayers, can you tell us how much of this money you have [inaudible] which is [whispered] in Afghanistan or how much of this money is not spent on the right place or on the goal that they were supposed to achieve?

General Fields:  Let me address the second part of your question and I will leave it to my colleague to address the issue of corruption within the, the level within which it may be taking place within the government of Afghanistan.

In terms of money associated with development in Afghanistan, first off let me give a little bit of background.  We, the United States alone, have invested thus far $40 billion in the reconstruction of Afghanistan.  The international community, including the United States of America, has invested well above $60 billion since 2002 for the reconstruction of Afghanistan.

Within the spending of that money, it is addressed essentially to the three elements of the Afghanistan National Government Strategy.  Security, which takes up about, or has taken up about $20 billion of the $40 billion that the United States has invested.  Then there is a governance piece designed to address all elements, really, within the governance community of Afghanistan.  Inclusive of that are matters associated with corruption, for example, building the institutions within the government to help ensure that corruption does not take place; then there is the development piece.  These are schools, medical facilities, water and matters like that.  I don't have an actual figure for that amount, but I do know that over the course of the last eight years the United States has invested about $10 billion in that regard.

Question: (in Dari, via translator) Sorry, $20 million from the international?

General Fields:  Over $60 billion including the $40 billion that the United States has invested.

Mr. Dinunzio:  I'd like to address the first part of your question with regard to corruption.  Unfortunately, I would be unable to discuss specific names of companies or individuals or government officials that are the subjects of our investigations, but I can say this.  We are an independent investigative agency and we go where the investigations lead us.  With the result of the recent election there is a dramatic transition in terms of government oversight in this country.  There are new ministry offices being nominated, there are new provincial governors being appointed.  So in terms of transition and changes in office, we have our work cut out for us.  There's a lot of information that is available to us from incoming as well as outgoing government officials regarding activity that has occurred during the reconstruction period.

Although I can't identify specific investigative interests in terms of government level, I want you to leave this conference rest assured that we will take those investigations to the highest levels of government that they will lead us to.

Question:  (in Dari, via translator) Do you have a list of concerns?  Can you tell us what the list of concerns is?  And is it, you talked about 25 percent of Afghan nationals.  Can you tell us a little bit more about what does this mean?  Are there individuals involved in this?  And can you disclose their names?

Moderator:  Can we be a little bit more specific n the list of concerns?  List of concerns about what?

Question:  I have a list of concerns that I don't want to discuss about this, but I want to discuss, you said, a list of concerns when you began your conversation?

General Fields:  If I said such a thing it would have been borne out of our coverage and our interest in matters associated with waste, fraud and abuse.  The concerns, if I said such a thing, are associated with waste, fraud and abuse.  I don't recall specifically addressing a list of particular concerns, because waste, fraud and abuse from our vantage point cover a whole lot of matters associated with reconstruction in Afghanistan.

Mr. Dinunzio:  Let me provide clarity on the 25 percent.  We are not investigating 25 percent of Afghanistans, nor are we investigating 25 percent of Afghanistan nationals that are participating in the reconstruction.  That statement was simply made to give you a measure or a gauge of how many of our ongoing investigations involve Afghanistan subjects. So of our 40 investigations, of which 38 are criminal, only 10 of those involve Afghanistan alone subjects.

Question:  You mentioned that 60 percent of your inspectors came from Iraq, from [inaudible] in Iraq.  I'm wondering if you can talk a little bit about lessons learned from the reconstruction effort in Iraq and how that's affected your operations in Afghanistan.

General Fields:  Please feel comfortable chiming in whenever you would like [pointing to Mr. DiNunzio]. There are a number of lessons learned, or at least should have been learned from our interest in Iraq.  I'm asked this question often, actually.  Let me just address a couple.

One is the mere organization of which I am the head at this point.  We commenced this reconstruction effort in Afghanistan essentially back in 2002.  My office wasn't stood up to provide oversight of the investment of the American taxpayer until 2008.  So the lesson learned is if we're going to invest this much money and pay this much attention to a nation -- Afghanistan in this case -- and our strategic interests therein, then probably we should have stood this organization known as SIGAR up about eight years ago.

Another issue that has emerged from a lesson-learned standpoint, I feel and have found and have been told, that we have been slow to involve the people of Afghanistan in the reconstruction of their own country.  This was an issue associated with Iraq, and everywhere that I have gone in my work as a Special Inspector General I have heard this, and now I'm beginning to believe it because there is evidence to prove it. 

So those are two lessons learned that I think if we engage in something like this at some point in the future, and hopefully we will not need to do this kind of thing, but should that come to pass, that we involve the respective nation early on in the process.

Question:  We're here now, and Iraq is winding down.  There were a lot of reconstruction disasters in Iraq.  Can you...what lessons from Iraq are being done now?

General Fields:  It's my job, the job of my team, to help ensure that we find out issues early on by way of our audits and, as appropriate, our investigations.  We bring those matters to the appropriate level.  As I mentioned earlier on in my dialogue with you today, I report directly to the Congress, so I report those matters to the Congress.  I also report to the Secretary of State and Secretary of Defense.  So it's my job to help identify early on or as early as possible where there are issues.

In my dialogue last evening, for example, with General McChrystal, he specifically asked if we would advance to him as absolutely early as possible issues about which he should be aware so that he might energize mechanisms under his control to head off disasters at the path, if you will.

Question:  (in Dari, via translator) A follow-up question: the Afghan people expect that such a high-ranking and powerful authority, inspection, need to fight and react towards those who are involved in the fraud and a waste of money of the U.S. taxpayer in Afghanistan, even if they are high ranking position in the government of Afghanistan.  What's your methods?  How do you react or act towards these people?

Mr. Dinunzio:  As I stated earlier, we are an independent investigative arm of the government.  We answer directly to Congress.  Although we work very closely with the High Office of Oversight, with the Attorney General and the Chief Justice of the Supreme Court here, our investigative authority does not preclude us from taking our investigations to the highest level of the government here that are necessary to hold those accountable who are responsible for fraud, waste, abuse, corruption.  So we do just that. 

Please don't leave under the misconception that our investigations stop or hit a wall when it rises to the level of a government official that may carry some clout in the government.  So we take those investigations to the end.  We hold those responsible and accountable for the corruption that they're involved in, and to the extent that we can do so in Afghanistan courts of law, we are attempting to do so.  We do not participate in the reconstruction, but we do assist our colleagues who have a participation role, such as the FBI in mentoring law enforcement officers and judges and prosecutors -- working very closely with them.  To the extent that we develop investigations that successfully target government officials, they will be brought to justice.

General Fields:  Thank you very much, ladies and gentlemen.