Pentagon doesn’t know if it’s buying Iranian oil in Afghanistan

The Defense Department has no idea whether or not it is violating U.S. sanctions by indirectly purchasing Iranian oil for the Afghan security forces, according to a new report by the Special Inspector General for Afghanistan Reconstruction (SIGAR).

The United States paid for the purchase and delivery of fuel to the Afghan security forces for years, totaling $1.1 billion for just the Afghan army since 2007. But the Pentagon’s lack of internal controls means that some of that fuel might have come from Iran, the SIGAR office found. New checks and balances were put in place last year, but there is still a risk that U.S. taxpayer funds are being sent to Iran.

"DOD’s lack of visibility-until recently-over the source of fuel purchased for the ANSF raises some concerns," the new report stated. "DOD lacked certification procedures prior to November 2012 and had limited visibility over the import and delivery sub-contracts used by fuel vendors. As a result, DOD is unable to determine if any of the $1.1 billion in fuel purchased for the ANA between fiscal year 2007 and 2012 came from Iran, in violation of U.S. economic sanctions."

The SIGAR office was following up on a few allegations of improprieties with the purchase of fuel for the Afghan forces from undisclosed sources. SIGAR didn’t find any direct evidence that sanctions against Iran were being violated, but rather issued the report as a warning that the risk of sanctions violations exists.

Between 2007 and 2012, there is no information on where the fuel that America was buying for the Afghan security forces was coming from, the report notes.

"During that time, [the Defense Department] did not require vendors to provide information on the sources of fuel or certify that their fuel purchases complied with U.S. sanctions prohibiting transactions with Iran," the report says.

New purchasing agreements signed last year included a new certification process that requires the contractors who use American money to purchase fuel for the Afghan forces to certify where that fuel is coming from. But there’s no clarity on what exactly those contractors must do to validate their certifications and what oversight the U.S. government can perform to make sure the certifications are accurate, SIGAR officials told The Cable.

"Our report again demonstrates the critical importance that oversight plays in the contracting process," Special Inspector General John F. Sopko told The Cable in a statement. "It is essential that the Department of Defense continues to implement strict controls over the fuel supply process to ensure taxpayer funds are not used in violation of Iranian sanctions."

Funding for fuel for the Afghan security forces comes from the Afghan Security Forces Fund, which cost U.S. taxpayers $47.7 billion between 2007 and 2012. The Pentagon plans to give the Afghan security forces another $2.8 billion for fuel between 2014 and 2018, the SIGAR report states.

In a response to SIGAR, two Defense Department agencies noted that they have not uncovered any direct evidence that vendors are acquiring fuel from Iran but the department intends to implement additional inspection measures and oversight of contractors.