The Battle for Pakistan
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Step 5: Once satisfied, US CENTCOM HQ forwards these bills to Comptroller Office in the DoD where these claims are processed.
Step 6: DoD at the same time sends these claims for review to
(i) OMB Coord [Office of Management and Budget Coordination]
(ii) US State Department
(iii) Office of General Counsel in DoD.
Step 7: Once these are cleared, the claims are processed and submitted to the Deputy Secretary DoD through normal hierarchy, for authorization.
Step 8: After authorization by the Deputy Secretary, Defense, and clearance from the US State Department, Comptroller Office notifies the Congress and waits for full two weeks.
Step 9: In case of no objection or observation within two weeks after notifying the Congress, Comptroller Office transfer funds to the State Bank of Pakistan through the Federal Reserve Bank New York. 12
So much for the theory. The practice was much more convoluted and subject to delays, resulting in constant arrears in payment and huge battles within the systems on either side.
The GAO caught many instances of questionable billing, including for radar, considering that the Taliban did not have an air force. ODRP explained that this may be related to assistance in overflights of US aircraft supporting the war effort in Afghanistan.
Two other specific examples were noted by the GAO:
Approximately $30 million for army road construction and $15 million for bunker construction without evidence that the roads and bunkers had been built; and
An average of more than $19,000 per vehicle per month for Pakistani navy reimbursement claims that appeared to contain duplicative charges for a fleet of fewer than twenty passenger vehicles.
The Pakistan Navy, for some reason, figured often in the questionable claims. The GAO found that ‘Navy claims for food rapidly increased from approximately $445 per sailor in June 2005 to $800 per sailor in December 2005, while Air Force and Army food costs per person remained stable.’ The Air Force cost was $800 per person in 2004, then dropped to $400. The Army cost per person was steadily at $200. The GAO also found that ‘On average, Defense paid the Pakistani navy more than $5,700 per vehicle per month in damages, in comparison with the army’s average claim of less than $100 per vehicle per month’. And the navy continued to charge a high amount for its vehicular costs. ‘Defense paid the Pakistani Navy an average of over $19,000 per vehicle per month (more than $3.7 million per year) to operate, maintain, and repair a fleet of fewer than 20 passenger vehicles without sufficient information to determine that these costs were not duplicative’. 13 It was almost as if the three services inside Pakistan were competing to see who would garner more US payments as reimbursements.
The Tierney Report Focus on Military Aid
As discussed earlier, the US Congress also piled on to both the US administration and the Government of Pakistan in the mismanagement of the war against terrorism in the region. It also criticized the CSF system in place to help Pakistan defray its costs of doing battle in its marcher regions abutting Afghanistan: ‘The Coalition Support Funds program encapsulates much of what is currently problematic about the US’s ad hoc policies when it comes to securing our national security interests in Pakistan . . .’ The Committee on Oversight and Reform’s Subcommittee on National Security and Foreign Affairs released its report on 25 September 2008 that examined CSF ‘from perspectives of efficacy, accountability, and diplomatic complications’. It concluded, ‘By the metrics that ought to matter most from the United States perspective—success at defeating al Qaeda and dismantling the Taliban—United States efforts to date have amounted to costly, strategic failure. Coalition Support Funds, as the backbone of United States security activities, deserve strict scrutiny.’
The Tierney Report highlighted the intrinsic problems of the CSF system that had been seen originally as ‘an ad-hoc, short-term, emergency method’ [emphasis added] of paying for services in support of US war efforts, and was explicitly created outside of any existing programme or accountability measures. It would appear that, with respect to accountability, the Defense Department has been playing catch-up ever since.
During the course of this investigation, the subcommittee took testimony, received information and reviewed documents related to the reliability of invoices submitted by the Pakistani military, and the ability of US officials to verify these claims. For example, the US has been repeatedly invoiced for medical evacuation costs for the Pakistan Army and FC, while the FC leadership has suggested its units have not received the medical support on the battlefield. In another instance, the US was invoiced for helicopter maintenance in an amount that, US military officials later learned, vastly outstripped the entire budget of the relevant Pakistani air wing component.
In December 2007, the New York Times published a significant investigative article quoting unnamed Bush administration and military officials that the CSF programme was rife with waste. The article cites US military officials in their concern that the funds were not reaching the frontline Pakistani soldiers in need, with vast amounts being siphoned off for other purposes. 14
Another report—this one by the Guardian—details allegations that ‘as much as 70%’ of the then-over $5 billion in CSF claimed by Pakistan had not been for legitimate expenditures. The subcommittee has not found evidence of waste, fraud or abuse rising to the level suggested by the Guardian. 15 However, anecdotal evidence, coupled with the GAO reporting on lack of documentation, leaves matters in doubt.
CSF were paid directly into the Pakistan government’s treasury and became sovereign funds, for which the US was not able to determine the final destination or application of CSF reimbursements. Internal DoD guidance noted that the ‘Department does not track how countries spend the reimbursements’. A senior US military official told a subcommittee-sponsored Congressional delegation that he believed approximately 40–50 per cent of the CSF have not reached the military components that provided the services rendered, and instead have been used for other Pakistani government priorities such as food and energy subsidies. 16
Noting that the US brand in Pakistan had become ‘toxic’ over time, the Tierney Report laid the blame at the feet of the US administration cosying up to a military dictator, Gen. Pervez Musharraf, at the expense of the Pakistani people. Military aid to Musharraf rather than economic aid to improve the lives of average Pakistanis fed the animus.
This dynamic is borne out by the fact that the United States’ effective response to the earthquake disaster in Kashmir resulted in the only significant spike in United States popularity during the post-9/11 period. Over the last fiscal year, the United States government has done a better job of programming US aid programs and, when applicable, using a shared objectives process to influence Pakistan’s use of US budgetary support for critical societal needs, like education and health care. However, nonmilitary aid to Pakistan is dwarfed by security assistance and Coalition Support Funds reimbursements.
Some of the US image problems in Pakistan are more resistant to near-term programmatic changes. The war in Iraq, nuclear arrangements with India, and the perception that the war on terror is fundamentally anti-Islam are more structural obstacles to any public relations battle. 17
The Tierney Report also recognized that the CSF further strengthened the view among ordinary Pakistanis that the US favoured relations with the military over the civilians in Pakistan and also criticized the US for the wrong emphasis. ‘The Department of Defense budget justifications for Coalition Support Funds do little to promote any notion of Pakistan’s own interests at stake in the fight against terrorist networks, the pacification of destabilizing militant forces within its own borders, and the benefits of regional stability.’ 18
The report then proceeded to produce a comprehensive series of proposals dealing with military, strategic and economic issues that pointed to the need for a new approach to CSF and for overall US assistance to Pakistan as well as US policies in the region. The focus was on engagin
g with Pakistan to help it reorder its own priorities for its own benefit. The ‘Keys to Success’ of the road map suggested by the report involved a major shift in priorities:
Enhance non-military, programmed foreign assistance to Pakistan for the public education, health, energy and economic sectors by orders of magnitude. This type of aid should be visible and will be meaningful to the Pakistani populace.
Strengthen the democratically elected government. This can be done by assisting it in its efforts to improve the quality of life of its citizens. In addition, skilful diplomacy could help establish an environment in which the new government can credibly claim credit for redefining the Pakistan–US relationship in a manner that is advantageous to Pakistani citizens and consistent with Pakistan’s standing as a mutual ally.
Offer the government of Pakistan an immediate and dramatic infusion of assistance designed to help Pakistan deal with its two current crises of energy production and food prices. 19
All these were desirable changes and made sense for the US to help build Pakistan’s polity. But US policymakers seemed to be myopic, and failed to appreciate the nature and role of aid from Pakistan’s perspective. The Pakistani establishment, civil and military, also failed to come up with a clear long-term view on aid. For ten years, the Tierney Report proposals lay effectively dormant, as the US policy lurched from one fighting season to the other in Afghanistan, and Pakistani governments lived from day to day, fighting the battle with other political parties and with their own military that sought to operate autonomously as far as possible, except when it came to funding its operations.
The Original Sin
The specific details of the problems in the CSF system were overshadowed by a bigger and more fundamental issue. Under the mistaken mantra of ‘Yes, we can!’, Pakistan had made a serious error in accepting CSF when it signed up for the Global War on Terror of the Bush administration. Then President Musharraf was keen to rapidly accede to US demands for help in Afghanistan. His finance minister at the time, Shaukat Aziz, told me that he supported the arrangement. In retrospect, it appears the agreement may have been based on faulty Pakistani assumptions: first, that the conflict would be of a short duration; and second, that a marginal cost pricing applied to the expenditures related to moving Pakistani forces into the border region would more than cover the costs to Pakistan, leaving a profit of some kind. In fact, the conflict became prolonged, and the real costs of the movement and placement of troops to the army and the general economy, through damage to equipment, infrastructure and morale, was much higher than calculated.
The Pakistan military may have tried to save by cutting back on maintenance. For example, the helicopters were overused in the operations in the border region. The GAO reported that ‘ODRP found that even though the US had paid Pakistan $55 million in CSF reimbursements for maintenance of helicopters in the border area, only a few of these helicopters were fully operational. According to ODRP officials, the Pakistani army was not maintaining the helicopters, causing essential systems to malfunction.’ 20
Military Supplies
Pakistan generally prefers the latest US military equipment and training over all others, despite its long and growing relationship with China. This is reflected in the fact that it was willing to use its own resources for the purchase of most of the US arms and equipment since 2001, though US grants gradually overtook that total in recent years. The armed forces Capital Fund of Rs 100 billion in 2006–07 helped with military purchases. Some $2.9 billion of military equipment was purchased from the US out of Pakistan’s own funds. 21
Between FY2002 and FY2015, the DoD reported some $6.7 billion of military sales to Pakistan, mainly via the Foreign Military Sales of the FMF (Foreign Military Financing) programme. Congress appropriated some $3.8 billion in FMF since 2001, allowing to Pakistan to modernize its equipment and systems. FMF is a programme that allows eligible partner nations to purchase US defence articles, services and training through either Foreign Military Sales or, for a limited number of countries, through the FMF or direct commercial contracts (FMF/DCC) programme, either as a grant or as a direct loan. In addition, under the Excess Defense Articles heading, Pakistan received defence supplies, including thirteen F-16A/B Fighting Falcon combat aircraft, fifty-nine T-37 Tweet military trainer jets and 500 M113 armoured personnel carriers.
Among the major defence materiel provided to Pakistan by the US after 2001 were the following:
Under FMF:
eight P-3C Orion maritime patrol aircraft and their refurbishment (valued at $474 million, seven delivered, three of which were destroyed in a 2011 attack by Islamist militants);
2007 TOW anti-armour missiles ($186 million);
at least 5750 military radio sets ($222 million);
six AN/TPS-77 surveillance radars ($100 million);
six C-130E Hercules transport aircraft and their refurbishment ($88 million);
the Perry-class missile frigate USS McInerney (now PNS Alamgir), via special EDA authorization ($65 million for refurbishment);
twenty AH-1F Cobra attack helicopters via EDA ($48 million for refurbishment, twelve delivered); and
fifteen Scan Eagle unmanned aerial reconnaissance vehicles ($30 million).
Supplies paid for with a mix of Pakistani national funds and FMF included:
forty-five Mid-Life Update kits for F-16A/B combat aircraft valued at $891 million (with $477 million of this in FMF); and
115 M-109 self-propelled howitzers ($87 million, with $53 million in FMF).
Notable items paid or to be paid for entirely with Pakistani national funds included:
eighteen new F-16C/D Block 52 Fighting Falcon combat aircraft (valued at $1.32 billion);
F-16 armaments including 500 AMRAAM air-to-air missiles, 1450 1-ton bombs, 500 JDAM Tail Kits for gravity bombs and 1600 Enhanced Paveway laser-guided kits, also for gravity bombs ($629 million);
100 Harpoon anti-ship missiles ($298 million);
500 Sidewinder air-to-air missiles ($95 million); and
seven Phalanx Close-In Weapons System naval guns ($80 million).
According to the intrepid Congressional Research Service specialist, Alan Kronstadt, who has made a lifetime’s work in tracking and analysing these flows for Congress and Pakistan watchers, Pakistan also received via CSF (in the DoD budget), twenty-six Bell 412EP utility helicopters, with related parts and maintenance, valued at $235 million. Under Section 1206 and Pakistan COIN fund authorities, the US has provided four Mi-17 multirole helicopters (another six provided temporarily at no cost), four King Air B-350 surveillance aircraft, 450 vehicles for the FC, twenty Buffalo explosives detection and disposal vehicles, helicopter spare parts, night-vision devices, radios, body armour, helmets, first-aid kits, litters and other individual soldier equipment.
Through International Military Education and Training (IMET) and other programmes, the US has funded and provided training for more than 3,800 Pakistani military officers. The ODRP managed to expand opportunities for such training and visits by diving into dozens of pots of money that were available to the DoD so it could go beyond the IMET funding available via the programme operated by the State Department. Col. Robin Fuentes, later a Defense Attaché in India, and rumoured to be heading to the NSC under the Trump administration when the NSA Lt. Gen. Michael Flynn got fired, was particularly adept at finding such funding, according to Vice Admiral Mike LeFever, her boss at ODRP. In 2018, the Trump administration ended IMET for Pakistan, repeating the mistake made by the US in the 1990s.
Three noteworthy defence sales approved by the State Department and notified to Congress were pending in early 2017: an estimated $952 million for fifteen AH-1Z Viper attack helicopters, 1000 Hellfire II missiles, thirty-two T-700 helicopter engines, and advanced avionics; $100 million for 100 Mine Resistant Ambush Protected vehicles; and $62 million for three additional Bell 412EP utility helicopters. The future sale of naval surface vessels was still being studied. In 2014, the DoD notified Congres
s of a possible $350 million deal for eight GRC43M Global Response Cutters, along with naval guns, navigation and other systems. A proposed sale of eight additional new F-16 Block 52 Fighting Falcons and related avionics for $699 million (notified in February 2016) foundered when Congress declined to allow the partial FMF financing sought by the administration and the government of Pakistan. 22 Pakistan then declined the offer.
Pakistan had been demanding more helicopters to battle the militants inside Pakistan in the rugged terrain of the FATA abutting Afghanistan. The US was parsimonious in providing it the helicopters it needed, citing paucity of spare helicopters. After a meeting with and briefing of Chairman JCS Admiral Mullen in 2010, I was informed by a senior aide to Mullen that helicopters were in short supply. 23 ‘We deal in onesies and twosies and call it strategic.’ However, the entire Blackhawk fleet of Belgium was up for replacement, according to one of my sources in the US defence industry whose firm provided the engines for those aircraft. When I conveyed this to Mullen’s aide, I was told those aircraft were due for ‘refurbishment’. Well over 200 Blackhawks were available at that time in various National Guard units in the continental US—units that were not involved in any overseas action. It appeared that the US was not approaching Pakistan’s needs for helicopters on a war footing.
What if it had provided these resources? The Pakistani forces would not have had any excuse to delay clearing operations in FATA, something that was only done over six years later. The US also feared that Pakistan might shift attack helicopters to its eastern border, an eventuality that could have been prevented by putting them under a lease agreement that the US could have ended at will. Pakistan did test the boundaries of its leasing rules later though, by shifting some of the MI-17s the US had leased to it to a UN peacekeeping operation in Africa, provoking a US protest. In contrast, 150 helicopters were found for Afghan forces in 2017. Uncle Sam did not play with a straight bat either, in Pakistani eyes.