U.S. worried Pakistan was misusing war funds

The United States Embassy in Islamabad was extremely concerned about the misappropriation of money given to Pakistan as reimbursement of costs of fighting terrorist outfits such as al-Qaeda and the Taliban.

A number of cables sent between 2007 and 2009 to Washington by U.S. Ambassador Anne W. Patterson called for a thoroughgoing review of the Coalition Support Fund (CSF), set up by the U.S. after the 9/11 attack to reimburse its key allies the costs of providing assistance in the ‘global war on terror.' The cables suggested that money given for providing logistical, military and other support to U.S. military operations were “diverted” and that reimbursement claims made by Pakistan's military were “seriously inflated.”

In a wire (114010: confidential) dated July 2, 2007, Ms. Patterson stated that the Embassy has increasingly engaged the Pakistan government to ensure that CSF reimbursements were “reasonable and credible.” She mentioned that the “areas of greatest concern” were Pakistan's claims relating to helicopter operations ($83 million annually), radar maintenance ($65 million annually) and Joint Staff operations ($5 million annually). She added: “We are also seeking confirmation of the location of bunkers constructed ($35 million) and roads built ($20 million) since July 2006, and we have requested answers to anomalies in the cost of rations, flak vests and accommodations maintenance.”

A cable (223755: confidential) sent on September 4, 2007, recorded Ms. Patterson telling Pakistan Finance Minister Shaukat Tarin that a $500 million CSF transfer that Pakistan was awaiting “could not be disbursed until the Pakistani military had properly accounted for its expenditures.” She drew attention to its “continuing inability to provide receipts.”

The cables were written at a time when the total CSF reimbursements to Pakistan exceeded $6 billion, accounting for 90 per cent of the total funding under the programme worldwide. The fact that the funds were usually channelled into Pakistan's general treasury complicated the problem of identifying their final destination.

Another cable (233602: confidential) dated November 6, 2009, quoted Mr. Tarin as having claimed to have done a detailed analysis. It concluded that of a total of $6.6 billion the U.S. had given Pakistan, only some $250 million had gone to the Pakistan Army: the rest had “gone into the regular budget.” The Finance Minister is said to have stressed that coalition support funds count as income in the budget, thereby “positively affecting the fiscal deficit.”

According to another cable (134295: confidential) sent on December 14, 2007, the two clear areas of misappropriation were helicopter readiness and medical support to the Frontier Corps. Although Pakistan received $55 million for helicopter operations between July 2006 and February 2007, the cable said the Embassy was confident that the Army Aviation Command never received the money.

It recorded that only two to six Cobra helicopters were “fully mission capable” at the time the Pakistan government “desperately need air power to fight spreading militancy.”

Stating that the Pakistan Army had claimed $99 million over the past 12 months for medical operations — a claim that the U.S. had settled or was in the process of settling — the cable stated that “the Frontier Corps still did not receive basic medevac [medical evacuation] support.”

Apart from this, a fully funded $235 million CSF lease assistance was provided for the acquisition of 26 new Bell 412 helicopters; however, the cable noted that “the Inspector General of the Frontier Corps had repeatedly requested U.S. assistance to provide assets for medevac, obviously unaware of the resources the U.S. has provided.

Adding that the $26 million claim for barbed wire and pickets were “highly suspect,” the cable noted that despite repeatedly raising issues relating to CSF disbursement with high-ranking Pakistan officials, including the Prime Minister, the Embassy had “not received satisfactory responses.”

Ms. Patterson listed four “potential options” to address the issue of ensuring that U.S. money was spent on meeting its counter-terrorism objectives.

The first was to “stop approving Pakistan's CSF reimbursement requests until we receive adequate assurances on disbursement” — an option she herself ruled out on the grounds that it would lead to a “major political clash” and damage the U.S.-Pakistan military relationship. The other three options were to earmark CSF money for specific areas, create a CSF “trust fund” that would allow Washington to control reimbursement and to obligate some funds for specific needs, and to convert the CSF into a direct cash transfer programme.

The Pakistan Cables are being shared by The Hindu with NDTV in India and Dawn in Pakistan