A year after the US withdrawal from Afghanistan, the world is still coming to terms with the full extent of the costs of that war — not only the budgetary costs, but also the lost human lives, the destruction of health facilities and other infrastructure, and the impacts on the environment. At first glance, it seems like a war in which everyone lost. Yet, one small group did not: the contractors who received funding from the US Department of Defense.
Over the 20-year period that the United States intervened in Afghanistan, the Pentagon spent over $108 billion on contracts for work performed in that country. Of that, over 40% went to the largest 14 companies, who each received over $1 billion in contract funding, as laid out in a recent paper that I wrote with the Costs of War Project. The largest contractor, Fluor, received over $13.5 billion. These contracts included everything from operating dining facilities and mail services to providing fuel, maintaining weapons, providing security, and training the Afghan National Security Forces. In some cases, the contracts supplemented, and in other cases replaced, the work done by the US military itself.
Why should we care about this now, especially since US forces have withdrawn from Afghanistan?
WASTE AND CORRUPTION IN CONTRACTING
The Department of Defense Inspector General (DODIG) has repeatedly found that contracts in Afghanistan were rife with waste, fraud, and abuse. In some cases, work was paid for but never performed, in other cases DOD staff were given kickbacks for giving contracts to certain vendors. In other instances, work was determined as unnecessary but was completed anyway. The congressional Committee on Wartime Contracting determined in its 2011 final report that at least 30% of contract funds were lost to waste, fraud, and abuse, sometimes ending up in the hands of the insurgents that the United States was there to fight.
When identifying information of the companies aren’t accessible at all, how can taxpayers and policymakers possibly know whether the funds are well-spent or used for their intended purposes?
A 2018 report by DODIG found that work was paid for without being verified that it was done and that later investigations revealed that the work had not in fact been completed. Another issue reported by the government, in this case, a 2021 report by the Government Accountability Office, is that contract performance was being overseen by other contractors, rather than the military or government itself, with a “potential loss of government control and accountability for mission-related policy and program decisions…” which increased vulnerability for waste, fraud, and abuse.
There are numerous examples that are further corroborated by lawsuits and by journalists. The 2019 “Afghanistan Papers” published by the Washington Post refer to various instances of and reasons for corruption. The Post showcases interviews and other correspondence with government officials who discuss how surges in spending led to too much money flowing too quickly, often into the wrong hands.
Military contracting can also be referred to as the “Camo Economy” because it lacks transparency. Where the money goes, who is employed, how many people are injured or killed: the data on all these issues is shadowy at best and often non-existent. For example, in the $108 billion in contracts I analyzed in a 2022 report for the Costs of War Project, over one-third are labeled as “undisclosed” or “miscellaneous.” The contracts are given a generic business identification number and a generic address.
The DOD is allowed to label a contract as “undisclosed” or “miscellaneous” for a number of reasons, including if there is a security risk to the contractor. Part of the problem is that this “security” reason can be used ad hoc and prevents any kind of oversight or transparency. It already is challenging or impossible to follow the money when a DOD contractor subcontracts to another company, which subcontracts again. When the names and identifying information of the companies aren’t accessible at all, how can taxpayers and policymakers possibly know whether the funds are well-spent or used for their intended purposes?
TOO MUCH SPENDING, TOO LITTLE OVERSIGHT
Contracting has long been a part of government operations but has grown significantly in the post-9/11 era. Military contracting now accounts for a full one-half of the Pentagon’s budget. Hundreds of billions of tax dollars are spent each year on contractors both within the United States as well as in other countries. The $108 billion spent in Afghanistan was just a small piece, yet it showed just how much waste and corruption is in the system.
Contracting was supposed to be a way to find efficiencies and save taxpayer dollars, and was intended only for activities that were not “inherently governmental.” Yet, as contractors take on more of the military’s responsibilities, including weapons maintenance and providing security, the line is increasingly being blurred between what is governmental and what is not. And as the scale of contracting has increased, the opportunities for waste and corruption have increased concomitantly, leading not to savings but to overspending.
Heidi Peltier is a Senior Researcher at Brown University’s Watson Institute for International and Public Affairs and is the Director of Programs at the Costs of War Project. She is an economist with expertise in federal spending and employment and clean energy policy.