Senator: US Soldiers Being Killed by Terror Groups Backed With US Money DoD lawyers cite "due process" in failing to permanently bar Afghan contractors.

Nov. 11, 2013  -- The United States has paid more than $150 million to companies in Afghanistan that are accused of helping to finance terrorist attacks on American soldiers and facilities, according to the Special Inspector General for Afghanistan Reconstruction.

"It's like the United States government subsidizing the Taliban, al Qaeda, the Haqqani network, those groups that are trying to shoot and kill our soldiers," said Sen. Jeanne Shaheen, D-N.H., a member of the Senate's Armed Services and Foreign Relations committees, in an interview to be broadcast tonight on ABC News' "World News with Diane Sawyer".

A list of 43 companies in Afghanistan was compiled by the Special Inspector General for Afghanistan Reconstruction (SIGAR) using data from both classified Pentagon investigative reports and Commerce Department lists of terror-connected companies.

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Among them is a road construction company the U.S. says is partly owned by a leader of the brutal Haqqani network, which was blamed for an attack on the U.S. Embassy in Kabul that claimed 16 lives in 2011.

The cover letter of a classified investigation by the U.S. Army said there was evidence of a direct role of both the company and its owners "in the facilitation and operation of the Haqqani Network" and that "approximately $1-2 million per month flow[s] to Haqqani Network to finance its activities."

A representative of the company said it denies any ties to terrorists and is contesting its inclusion on the U.S. government lists. The representative suggested it might be a case of mistaken identity.

But despite the broader findings, the Pentagon has resisted permanently blocking the companies from getting more U.S. contracts because, its lawyers say, it would violate the "due process" of the companies which would not be able to see the classified information that details their alleged ties to terror groups.

"The reason they've given us is that it's not fair to these contractors that the evidence that we've presented, and this is evidence collected by the United States government, is classified," John Sopko, Special Inspector General for Afghanistan Reconstruction (SIGAR), told ABC News. "That's the absurdity of it. We can probably attack them via drone on Monday and we'll issue them a contract on Tuesday."

Sopko, along with U.S. commanders in the field and members of Congress have all urged the Pentagon to take action, but to no avail.

Sen. Shaheen was one of a bipartisan group of Senators that sent a letter to the Army in late 2012 "expressing concern" about a backlog at the Army's Suspension and Debarment office, noting the 43 cases involving alleged terrorist groups.

"We believe that these 43 cases deserve special attention from the Army due to the nature of their allegations," the letter said, according to a copy posted on the website for Sen. Richard Blumenthal, D-Conn.

The Pentagon had arranged for ABC News to interview Lt. Gen. William Phillips of Army acquisition about the concerns, but later canceled, his staff saying "they will be declining an interview for some time in the foreseeable future."

When ABC News appeared at the Pentagon office that handles the debarment of contracts, the officer in charge said he was not allowed to answer questions without permission.

"Well, there are certain regulations that have to be followed, due process regulations," he began, presumably referring to the contract debarment process. "That gets into things that I cannot discuss. In fact, I'm not allowed to talk to you unless I have the permission of the Army so I'll have to end this interview at this time."

In a statement to ABC News, the Army said it has "extensive vendor vetting procedures to prevent the awarding of contracts to such vendors." It said most of the 43 companies were not awarded any new contracts "as a result of measures currently in place."

"The army takes seriously any allegations of improper contractor activities and has vigorous processes to ensure that those with whom we do business are not supporting the insurgency or otherwise opposing U.S. and collation forces in Afghanistan" the statement said.

Inspector General Sopko says the Army needs to permanently block the companies from receiving any more U.S. taxpayer money, given the seriousness of the information.

"I am a former prosecutor, I've seen the information and it made my hair stand on end," Sopko told ABC News.

In a quarterly report to Congress last July Sopko wrote, "I am deeply troubled that the U.S. military can pursue, attack, and even kill terrorists and their supporters, but that some in the U.S. government believe we cannot prevent these same people from receiving a government contract."

"I feel such a position is not only legally wrong, it is contrary to good public policy and contrary to our national security goals in Afghanistan," he said.

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