U.S. wants to see results in Pakistan aid

By Peter Spiegel

Nov. 18, 2007 12 AM PT

Times Staff Writer

WASHINGTON —

With the Pakistani government in turmoil, senior Pentagon officials are quietly moving to overhaul the system of massive U.S. military aid to the country by more directly tying the payments to Islamabad’s success in combating Islamic militants.

Defense Department officials also want to require detailed accounting of how Pakistan spends about $1 billion in annual payments and greater control by Washington over spending.

The steps would fundamentally change one of the Bush administration’s signature relationships of the post-Sept. 11 era, when it forged an alliance with the military regime of President Pervez Musharraf against Islamic extremists and began providing huge sums with little oversight.

The Pentagon is focusing on the largest and most controversial aid program, known as the Coalition Support Funds. The proposal to link payments to specific objectives would revamp the current practice of reimbursing Pakistan for money it says it spent.

In more traditional military aid programs, U.S. aid is subject to a series of legislative controls that occasionally require presidential action for money to be released. By contrast, the post-Sept. 11 Coalition Support Funds have few reporting requirements, beyond the claims submitted by the Pakistanis.

“Backdoor subsidies is what it can look like to some more skeptical observers, because there hasn’t been good oversight and the amounts involved have been so great,” said a government official who tracks military payments to Pakistan. “There is suspicion that it’s a slush fund.”

The questions about accountability for the program come amid concerns about U.S. aid to Pakistan spent on weaponry and equipment that U.S. military and intelligence officials have said seem ill-suited to fight the militants.

The Pentagon effort to change the Washington-Islamabad relationship comes at a particularly tricky juncture, when the U.S. also is trying to force Musharraf to make other changes, including ending the state of emergency he imposed two weeks ago.

But Pentagon officials have been frustrated for months by their limited knowledge of how Pakistan was spending the U.S. aid. And they’re being pushed by congressional criticism and revelations that Islamabad is not using the money as the administration intended.

U.S. officials must know “exactly where it goes” and “have more say” in Pakistan’s use of aid, said a senior military official directly involved in the program.

“If I could craft it to allocate those resources to do specific things, I’d have a priority list of where I’d like to see it applied to,” the official said.

The official and others described the Pentagon’s efforts on condition of anonymity because of the sensitivity of the U.S.-Pakistan relationship.

However, proposals to cut back U.S. assistance to Pakistan are not universally popular in the Bush administration, where many view Musharraf as a valuable ally who is committing his military forces to U.S. objectives, often with heavy costs.

Pentagon officials emphasized that their concerns and the push to overhaul the military aid program predated the current upheaval in Pakistan.

The senior military official insisted that there were no indications that Musharraf was improperly using the money in the crackdown. “I’m not really concerned about it being spent for beating the political opposition,” the official said.

Regular army troops have not been involved in breaking up street demonstrations against Musharraf’s emergency decree; that task has been carried out by Pakistani police and paramilitary troops. The intelligence services, however, have been involved in drawing up lists of candidates for arrest as “troublemakers,” and in providing information on their whereabouts.

The push for greater oversight has been given new urgency by calls from congressional Democrats for more accountability. Sen. Robert Menendez (D-N.J.), chairman of the subcommittee responsible for foreign aid, said he planned a hearing to press the Bush administration to explain how money is being spent in Pakistan. In an interview, Menendez said State Department officials provided “unacceptable” answers.

“The administration hasn’t been overly forthcoming, and I don’t know why,” he said. “If they’re not forthcoming because they don’t really have the type of accountability that we should be getting from the Pakistanis, then we need to deal with that.”

On Friday, Menendez wrote to R. Nicholas Burns, undersecretary of State for political affairs, asking for any detailed audits of the Coalition Support Funds program.

The Bush administration set up the program as a way to reimburse Pakistan for military action against Islamic radicals operating in areas bordering Afghanistan. Since then, it has become the single largest source of military aid to Pakistan, totaling about $5.3 billion since its inception in early 2002 -- or about $80 million a month. Money from the program accounts for about three-quarters of all U.S. military aid over the last six years.

A senior Defense official said efforts to gain more accountability over Pakistan’s spending began in earnest last year when officials from the Pentagon’s comptroller’s office made three trips to Islamabad for meetings with Pakistani finance officials.

In the meetings, each of which lasted several days, U.S. officials tried to get Pakistan to detail how Coalition Support Funds money had been spent. Afterward, Pakistani officials visited the Pentagon for similar talks.

The efforts fell short, however, as Pakistan resisted U.S. pressure to become more open. The Pakistanis chafed at demands to begin complying with more stringent accounting requirements than those already in use, the senior Defense official said.

The efforts were temporarily halted after Ryan C. Crocker, who was U.S. ambassador to Islamabad at the time, left to become Washington’s envoy to Iraq. But Pentagon officials said they had since renewed talks with Pakistan in an attempt to revamp the program.

Part of the difficulty in achieving greater accountability and other reforms, Western observers say, is that the Pakistani military is hamstrung by its highly centralized bureaucracy.

One Western military official said it takes inordinate amounts of time to accomplish straightforward tasks such as scheduling meetings or conducting equipment inventories. He blamed the Pakistani military’s “antiquated” and top-heavy command-and-control structure.

Exactly how the money from the Coalition Support Funds is distributed to the Pakistani military is still largely shrouded in secrecy. According to current and former Pentagon officials, Pakistan submits claims to the U.S. Embassy in Islamabad for reimbursements for military operations against militant groups, as well as assistance to U.S. forces in Afghanistan and elsewhere.

The claims are verified by the U.S. Central Command, which is responsible for military operations in the Middle East and Central Asia, before they are sent to the Pentagon comptroller’s office for final vetting.

But the level of detail provided by the Pakistanis remains an issue of dispute within the Pentagon and among foreign aid experts tracking the program.

“I would have probably constructed this thing a little differently and done a lot of things differently,” the senior military official said.

Dov Zakheim, who served as the Pentagon’s top financial official until 2004 and helped set up the program, said that while he was at the department, U.S. military officials constantly reviewed whether Pakistan had conducted the missions it claimed in the invoices.

“The payment was issued based on confirmation from the field that they conducted the operation they said they conducted,” Zakheim said.

But the lack of detailed accounting has been central to congressional objections. Army Lt. Col. Brian Maka, a Pentagon spokesman, said Congress has 15 days to object to payments made through the Coalition Support Funds. In addition, the Pentagon comptroller’s office submits quarterly reports to Congress outlining how much has been spent.

But copies of the reports, obtained through the Freedom of Information Act by the Center of Public Integrity, a Washington-based watchdog group, show that Congress is given only broad descriptions of spending.

Occasionally, specific expenditures are detailed, such as the two-year lease of 26 Bell helicopters in 2003 for $235 million. But most descriptions are more general.

“This payment is based on the bills submitted from the government of Pakistan for the support it provided to U.S. military operations during January through March related to the global war on terrorism,” read one typical disclosure, from the August 2004 report.

Menendez, the Democratic senator, said he was concerned that the program might be evading congressional oversight.

“I’m not satisfied we have accountability and transparency,” he said. “The question is whether the process itself undermines the oversight of Congress.”

peter.spiegel@latimes.com

Times staff writers Greg Miller and Julian E. Barnes in Washington and Laura King in Islamabad contributed to this report.

(BEGIN TEXT OF INFOBOX)

U.S. aid to Pakistan, 2002-07

* Economic and development aid (most is traditional development funds supervised by USAID): $2.52 billion

* Foreign Military Financing (traditional military aid, grants and loans to acquire weaponry): $1.23 billion

* Other security aid (e.g., military colleges, transfer of used weapons):

$334.4 million

* Coalition Support Funds:

$5.92 billion (estimated through year’s end; currently about $5.3 billion spent)

* Total: About $10 billion

(Note: Excludes any covert funding the U.S. may provide)