Friday, December 6, 2013

Sopko Seeing Cash Cow in $34M White Elephant?


Why would Pentagon brass soldier on with construction of a multimillion dollar building in Afghanistan for a U.S. military that did not want it or had no reasonable expectation of taking up beneficial occupancy as America was announcing plans to withdraw from Afghanistan? John Sopko, Special Investigator for Afghanistan, raised this question before and, after being stonewalled with a perfunctorily report of the military's own inquiry into this matter, Sopko is back. (For details, see http://www.foxnews.com/politics/2013/12/05/miltary-watchdog-to-re-open-investigation-into-millions-wasted-afghanistan-hq/?intcmp=trending) Sopko's probe is no small task, and the answers and support that have eluded his efforts to date may signal a greater deception than mere bureaucratic stonewalling.

A look at the built-out but unoccupied facility cannot help raise eyebrows. If pictures shown in an unintelligible mangling of the original news story are better than the story's atrocious English (at http://www.daytodaynews.com/topstories/34m-white-elephant-watchdog-to-re-open-probe-of-unused-military-facility.html ), then the building looks like an ordinary administrative facility, rather than some exotic laboratory or production plant whose price tag traces more to the contents than to the structure of the complex.

Let us thread together some logical premises and conclusions to infer what dark current may be running beneath the glittering surface of what looks like a $34M waste of construction funds.

First, if the story Sopko unearthed so far is true, one military general has already gone on the record to rate this facility unneeded and undesired. That it also remains unoccupied only adds to this general's credibility.

Counterbalancing this general officer's doubts over the operational value of the facility, the Pentagon's internal probe of this expenditure apparently concluded that the construction was warranted and the expense justified. Now, assuming that generals do not reach flag rank by being stupid or demonstrably disingenuous in the face of legitimate audits, what legitimate reason could there be for one general's studied and fully staffed report to contradict a field general's unvarnished assessment of operational value?

The only category of answer that makes sense is this: There must be a higher, prevailing national interest at stake. And what might the face of that overriding national interest look like? It could very easily look like what may be variously called, on a scale of euphemistic intensity, offsets, facilitation payments, bribes, payoffs, kickbacks, or extortion payments.

In the United States and for U.S. companies, the Foreign Corrupt Practices Act exists to curb the predatory impulse that leads some businesses to win contracts by lining the pockets of the entity awarding the contract and some customers to deny business to any entity that refuses to supply some kind of requested kickback. At its most benign, this process results in U.S. sales to foreign clients on condition of offering certain offsets to the high cost of items sold. Such offsets could take the form of assembling some components of a U.S. product in the buyer's country or accepting as partial payment some natural resource or manufactured goods that the buying country has in abundance. Thus, the buyer's sticker shock is offset with local benefits, like jobs for its citizens or an artificial market for goods that are not selling well on their own. Such arrangements could, at least theoretically, explain why a struggling Latin American country bought its jet engines from France instead of Britain or the U.S. because the French were willing to buy more bananas and set up an assembly facility in-country, whereas their competitors were slow to warm to such an arrangement. So much for the benign approach to offset, which may well be structured in legitimate and transparent terms.

Where does the ethically challenged version creep in? Countries run by plundering oligarchs are notorious for giving bidders to understand that it is impossible to do business in their country without having a local office run by a local national. Unsurprisingly, the best if not only such local office invariably ends up being operated by a government official's family member or tribesman. A commission, or facilitation payment, is expected to go to such an office, and woe to the international business that tries to compete only on the basis of product quality and competitive pricing. It soon becomes clear to serious business people from the outside that the only way to obtain business in such an arena is to pay. Such payment may take the palatable form of facilitation fees charged by a local office acting as middleman and perhaps even providing actual value. However, it may equally transpire that the business finds itself compelled to pay the same fees for no service at all. This becomes the cost of doing business in that particular market, no matter how unpalatable it may be. And some of the recipients of such payments are less subtle and more demanding than others.

Look to the contract and to where the bulk of the $34 million has gone since this white elephant of a building was commissioned. Was this a glorified cash-for-poppies program crafted to supply Afghani villagers with an alternative means of making a living in exchange for backing down from their opium trade? Was it a payoff to regional panjandrums to buy their cooperation or at least reduce their targeting of American combat troops? Or was it part of a quieter, national leadership arrangement to "facilitate" arriving at a desired level of cooperation with Afghani officials in positions of influence?

The Sopko probe may have been stalled, but it appears as unyielding as the Chinese water torture and, as long as it is not completely halted or undermined, it will eventually bring to light some instructive findings.

-- Nick Catrantzos