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Pentagon Official Defends Wasteful $800 Million Effort to Build Business in Afghanistan

The US Department of Defense's Task Force for Business and Stability Operations has been an unending source of scandal after audits found that it spent $43 million on a gas station and $150 million on private villas and associated security.
Photo via Flickr

A Pentagon official acknowledged on Wednesday that the Defense Department's $800 million program to restore Afghanistan's business infrastructure might not have been the brightest idea.

"I personally am skeptical that the Department of Defense is the natural home for that mission," Deputy Undersecretary of Defense Brian McKeon told the Senate Armed Services Subcommittee on Readiness and Management Support on Wednesday. He nevertheless disputed some of the findings by a government auditor that have implicated the Pentagon in massive waste within the country.


McKeon faced off before the subcommittee against John Sopko, the Special Inspector General for Afghanistan Reconstruction (SIGAR), who described the Defense Department's Task Force for Business and Stability Operations, known as TFBSO, as a "scattershot approach."

"It sounded like they just got together and they said, 'Hey, this sounds like a great idea, and we have an unlimited budget. Let's just do it and see if it works.' And that's why no one could really say with any credibility that the programs were effective," Sopko remarked.

McKeon, for his part, said that the costly effort "had mixed results, with some successes and some failures." He urged patience before branding TFBSO as entirely misguided.

"It's a little early to say," he offered, adding that "the jury is still out" on the fate of various projects.

Sopko's office has unleashed a barrage of critical reports about Pentagon spending in Afghanistan — especially TFBSO, which was disbanded last year. Financial records show that the task force spent $43 million on a compressed natural gas filling station that has been widely mocked as the world's most expensive. It also spent upwards of $150 million on private villas and associated security, bankrolled a multi-million dollar Afghan start-up incubator that is now defunct, and even paid to import Italian goats in order to jumpstart the country's cashmere industry.

Related: The Pentagon Blew $43 Million on 'The World's Most Expensive Gas Station'


Senator Claire McCaskill zeroed in on the gas station project in her questioning, and tried unsuccessfully to identity the person who had approved it.

"Now what I want to know, Secretary McKeon, is who made this decision," she asked. "Who decided it was a brilliant idea when the people of a country make $690 a year that we're going to spend — I don't care if it was $2.9 million or $200 million — who made the brilliant decision that this is a good idea, to put a natural gas gas station in Afghanistan?"

McKeon wasn't prepared to answer that question.

"Senator, it was a unique task force, as we discussed. It's far from the core competency of the Department of Defense," he said. "I'm not a businessman. You make a lot of valid points. What I said at the outset is I think there was an understandable imperative and desire on the part of the commanding generals to get something going, and recognizing that it was high cost."

Last week, Senate Judiciary Committee Chair Chuck Grassley called for a full audit of the task force. "I need assurance that all this money was spent in accordance with the law," Grassley wrote in a public letter.

SIGAR has confirmed that there are currently several criminal investigations connected with the task force that are underway, though the details of those investigations have yet to be released.

One of TFBSO's most embarrassing ventures was the nearly $150 million expenditure on villas. Though the accommodations and guards were intended to attract foreign investors, McKeon told the subcommittee that he couldn't "tie a specific visit of an executive in one of these houses to a later investment."


The Pentagon, he noted, is still preparing a response to SIGAR inquiries about the wisdom of renting out villas and contracting out security.

"The costs sound quite exorbitant, and we're digging into this villas question," he said.

Related: The US Just Can't Stop Blowing Billions in Afghanistan

Since the TFBSO was shut down, SIGAR and the Pentagon have been involved in a high-profile battle over its legacy. SIGAR has accused the Pentagon of covering up profligate spending, refusing to provide documents, and generally stonewalling its oversight efforts.

The Pentagon has meanwhile accused SIGAR of releasing sensitive details to ProPublica in fulfilling a Freedom of Information Act request concerning discretionary spending in Afghanistan. ProPublica's report included the names of those who had approved various expenditures. In apparent retaliation, the Pentagon insisted that SIGAR access documents in a secure reading room "due to SIGAR's actions that revealed Personally Identifiable Information in an unrelated incident."

As both sides dug in, SIGAR had to appeal to Grassley to intervene. He eventually ordered the Pentagon to turn over documents on a hard drive.

Colonel John Hope, TFBSO's last director in Afghanistan, has meanwhile turned whistleblower, publicly excoriating the Pentagon for its waste.

"There were so many things about the task force that were so screwed from the get-go," he told VICE News. "You can't get your hand around a single success story."


Before reaching out to SIGAR, Hope tried to sound the alarm within the Pentagon. As director of operations in Afghanistan, he was asked to draft a report about the "termination" of the task force back in February 2015. He wrote a scathing review that said "TFBSO lacked property accountability practices and methodologies," adding that task force personnel "were relegated to 'making it up' as they went along."

Hope told VICE News of a meeting in January 2015 in which the outgoing director of the task force, Joe Catalino, encouraged Pentagon employees to "slow roll" SIGAR investigators and delay the release of any sensitive documents. That's when he decided to turn whistleblower.

Hope recounted his experience to SIGAR and has accused the Pentagon of acting against him, delaying his performance review for months and ultimately giving him an unfair negative review that, he said, "ends my career."

The Pentagon did not answer questions from VICE News about Hope's allegation.

When McKeon was asked by Senator Kelly Ayotte, who chairs the subcommittee, if he had retaliated against Hope as a senior rater, he blamed the delay in his review on a computer error.

"I'm a little embarrassed to say this," he said. "When I filled out the form, in filling out one part of the form I didn't completely fill it out. But the computer program that the Army has for its personnel allowed me to hit the signature blocks, even though I hadn't completed the forms."

"That's on me," he added. "It's my fault."

Follow Avi Asher-Schapiro on Twitter: @AASchapiro Photo via Flickr