How America Is Funding Corruption in Pakistan

"When [Musharraf] looks me in the eye and says, … ‘there won’t be a Taliban and won’t be al Qaeda,’ I believe him, you know?" So said George W. Bush of then Pakistani President Pervez Musharraf in September 2006. The U.S. president’s trust had been forged in a deal made five years earlier: Pakistan would train, equip, and deploy its Army and intelligence service in counterterrorism operations, and Washington promised to reimburse its partner with billions of dollars in weapons, supplies, and cold hard cash. The plan was simple enough, and since 2001, the United States has lived up to its pledge, pouring as much as $12 billion in overt aid and another $10 billion in covert aid to Pakistan.

But today, as the Obama administration re-examines the deal, there is devastating evidence that the billions spent in Pakistan have yielded little in return. For the last eight years, U.S. taxpayers’ money has funded hardly any bona fide counterterrorism successes, but quite a bit of corruption in the Pakistani Army and intelligence services. The money has enriched individuals at the expense of the proper functioning of the country’s institutions. It has provided habitual kleptocrats with further incentives to skim off the top. Despite the U.S. goal of encouraging democratization, assistance to Pakistan has actually weakened the country’s civilian government. And perhaps worst of all, it has hindered Pakistan’s ability to fight terrorists.

How could so much money do so much harm? The first answer is simply that the Pakistani civilian government, with whom Bush signed his agreement, barely controls the Army and intelligence services — the very institutions meant to receive the bulk of U.S. funds. Until last year, the closest the Army came to accounting for its work was its annual budget submission: a single, bottom-line dollar figure that the government was constitutionally bound to approve. Even now, after a much-hailed move toward more oversight, the Army’s most recent annual budget submission was just two pages. And Pakistan’s Inter-Services Intelligence (ISI) — a powerful and independent military agency — is no better. Last year the Interior Ministry requested that it report to the government; the ISI declined the invitation.

Long before the Bush-Musharraf agreement, money from such unsupervised budgets had enabled the Army to become one of the richest and largest industrial, banking, and landowning bodies in Pakistan. The military formed its own networks of political patronage, co-opting existing political parties with threats and bribes. With the injection of the U.S. cash, this already prevalent military corruption was thrust into high gear. The extra money further discouraged the military and intelligence services from submitting to civilian control — a precondition for the country’s democratization.

From the U.S. taxpayers’ point of view, that’s the least of the bad news.

Pakistan did not use the majority of the funds for the agreed objective of fighting terrorism. Instead, the money was used in the way it has been for the last six decades: to train and stock the Army for conventional warfare, with India viewed as the main threat. The Army spent the vast majority of U.S. funds on types of military equipment that are practically useless against terrorists. It bought an air defense radar system costing $200 million, for example, even though the terrorists in the frontier region have no air capability. The military bought F-16 fighter jets, aircraft-mounted armaments, and anti-ship defense systems. And the U.S. Department of Defense signed off on it.

Another chunk of the money fed corruption, as is clear from the fact that money was not often spent on the purposes for which it was intended. Of the $920 million in military support that the United States gave Pakistan in 2008 alone, only $300 million reached the Army. The Washington-based Atlantic Council estimates that "the great majority" ended up in the coffers of the Ministry of Finance.

The rot goes still deeper. U.S. taxpayers paid $1.5 million to repair damage to Navy vehicles that did not see combat (the terrorists don’t have navies, either). Another $15 million went for bunkers that were never dug; $30 million paid for roads that were never built; $55 million went to maintain helicopters that were not, in fact, maintained; and $80 million per month was paid for soldiers to fight during periods when there was a cease-fire.

Meanwhile, U.S. officials visiting the frontier areas, where militants including the Taliban are most entrenched, found that the paramilitary Pakistani Frontier Corps was poorly equipped, even "standing there in the snow in sandals," according to one report. Several soldiers were equipped with World War I-era pith helmets and barely functional Kalashnikov rifles with "just 10 rounds of ammunition apiece." In an interview with the New York Times in November 2007, Musharraf complained that Pakistan’s helicopters needed more U.S. spare parts and support, despite the United States’ having given his country $8 million worth of helicopter parts over the previous six months.

There’s plenty of blame to go around for such dreadful mismanagement. Part of it, of course, goes to Pakistan. But another chunk falls squarely on U.S. shoulders. From the start, there were few concrete goals for how the funds should be spent. Officials who saw the objectives admitted that they often lacked concrete bench marks, sometimes even concrete figures, and were too vague to be effective.

And until 2006, the U.S. Embassy staff in Pakistan was not required to follow up on how the Pakistani military actually spent U.S. funds. The problem was compounded when the Pakistani Army insisted that the Federally Administered Tribal Areas — where much of the money was to be spent — were too dangerous to visit, making sustained oversight there impossible. Finally, the U.S. Department of Defense refused to release detailed figures on Pakistan military aid until 2009, making public scrutiny impossible.

Whomever you impugn, the bottom line is that the U.S.-Pakistan compact of the last eight years has been a disaster. It is essential to ensure that the same mistakes do not happen again. U.S. taxpayers have funded Pakistani corruption and undermined the fight against terrorism and militancy. And for the sake of both countries, it simply has to stop.