The Afghan National Army may have broken the U.S.-led economic embargo against Iran by using American aid to buy Iranian fuel for its military vehicles, generators and cooking processes, according to a military audit and experts on the region.
Recent safeguards installed to stop the possibility of the practice might not be enough, according to the audit, which came out in January.
While there is no direct evidence that the Afghan army actually purchased Iranian oil with American tax dollars, the report by the Special Inspector General for Afghanistan Reconstruction describes the possibility as a cause for concern.
Between a third and half of all fuel bought by Afghanistan comes from Iran, the audit stated, citing figures compiled by the Department of State. Another quarter of its supply comes from Turkmenistan, and is commonly mixed with Iranian fuel.
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The report notes that the U.S.-funded fuel purchasing program between 2007 and 2012 provided at least $1.1 billion to the Afghan army. But the money has been so poorly tracked, the audit notes, that it is impossible to determine the origin of the fuel.
“The fact that the United States paid for the acquisition and delivery of imported fuel for the Afghan National Security Forces … raises concerns that U.S. funds could have been used to pay for imports of fuel potentially in violation of U.S. economic sanctions against Iran,” the audit stated.
In a related development, the U.S. Government Accountability Office on Monday issued a wide-ranging report on Afghanistan funding that noted, "Persistent corruption in Afghanistan undermines security and the people’s belief in the government, as well as effective accountability of U.S. funds provided directly to the Afghan government."
Afghanistan gets around international sanction requirements on Iranian goods for reasons of economic necessity, and – on a more practical level – because the countries share a long border, and goods into Afghanistan increasingly pass through Iranian ports.
Jamie Graybeal, deputy public affairs officer for the International Security Assistance Force in Afghanistan, said the Combined Security Transition Command responsible for overseeing the fuel program “recognizes and appreciates” the concerns of the report.
“Despite actions taken by the Department of Defense to prevent the purchase of Iranian fuel with U.S. funds, risk remains for the potential violation of U.S. economic sanctions,” he said by email.
He added that the command has conducted a review, but found no support for allegations that “DOD funds were used to support the Iranian petroleum industry, but we will continue to work closely with (the special inspector general) on this and other issues.”
The report, however, raises questions about whether the primary means to address this concern – a requirement that all Afghan companies selling fuel to the Afghan National Security Forces certify that their fuel does not come from Iran – lacks the investigative teeth to ensure that it occurs.
Drew Pusateri, a spokesman for Sen. Claire McCaskill, D-Mo., who leads the Senate Subcommittee on Contracting Oversight, said by email that the senator was “concerned by the lack of oversight and accountability detailed in the report and will be reviewing it with her policy staff in the coming days.”
A House Oversight and Government Reform subcommittee will hold a hearing Wednesday on concerns with the fuel program, including the failure to be able to account for $475 million in 2012.
The audit also questioned whether the fuel program was excessive. It also said that Iranian fuel is less refined than fuel from other sources, and if used to power machines and vehicles provided by the United States and the international community, could lead to premature deterioration of the equipment.
Another major concern was that as the mission in Afghanistan begins to shrink, cash for the fuel program is supposed to expand to an estimated $2.8 billion between now and 2018. The report reflects a fear that without a reliable system in place by the end of 2014 to track the money, it’s unlikely after that point that Afghan government officials will heed American concerns.
A recent United Nations report on corruption in Afghanistan, notes: “While corruption is seen by Afghans as one of the most urgent challenges facing their country, it seems to be increasingly embedded in social practices, with patronage and bribery being an acceptable part of day to day life.”
Ahmad Majidyar, an expert on Iran and Afghanistan at the American Enterprise Institute, a conservative Washington think tank, said that it was difficult to imagine what it would take to stop Afghan officials from buying Iranian fuel, regardless of certification requirements.
He noted that as global sanctions against Iranian oil have intensified, the rogue nation has focused intensely on trade with neighbors, and trade with Afghanistan has increased from $800 million in 2008 to $2.5 billion last year, heading toward an expected $6 billion in the near future. Iranian oil, he said, would have to be a large part of that.
“Iran can’t compensate for their losses in oil sales to China and India with sales to Afghanistan, but Afghanistan is the only alternative they’ve got,” Majidyar said.