Tax Payer Money at Work

Preliminary Observations on the Use and Oversight of U.S. Coalition Support Funds Provided to Pakistan

According to U.S. embassy officials in Islamabad and unclassified U.S. intelligence documents, since 2002, al Qaeda and the Taliban have used Pakistan's Federally Administered Tribal Areas (FATA) and the border region to attack Pakistani, Afghan, U.S. and coalition troops; plan and train for attacks against U.S. interests; destabilize Pakistan; and spread radical Islamist ideologies that threaten U.S. interests. Since October 2001, the United States has provided Pakistan with over $10 billion for military, economic, and development activities in support of the critical U.S. national security goals of destroying terrorist threats and closing terrorist safe havens. A major component of this effort has been U.S. Coalition Support Funds (CSF) reimbursed to Pakistan. The purpose of CSF is to reimburse coalition countries for logistical and military support provided to United States military operations in the global war on terror. In Pakistan, reimbursements through CSF are intended to enable the government of Pakistan to attack terrorist networks in the FATA and stabilize the border areas. It is structured as a reimbursement mechanism in which the U.S. Department of Defense (Defense) policy is to validate that support was provided, costs were incurred, and these costs were incremental to normal Pakistani military operations. We were asked to assess how CSF reimbursements have been used to meet U.S. goals in Pakistan, and what controls exist to ensure that reimbursements are for legitimate claims.

For the period covering October 2001 through June 2007, the United States reimbursed Pakistan about $5.56 billion in CSF for military operations in FATA and other support in the war on terror. CSF reimbursement funds are paid directly into the Pakistani government treasury and become sovereign funds. Once they become sovereign funds, the U.S. government has no oversight authority over these funds. In response to a Defense Inspector General review conducted in 2003, DOD implemented additional guidance to improve oversight of the CSF reimbursed to Pakistan. Moreover, in 2007, the Office of the Defense Representative to Pakistan (ODRP) began playing a larger role in overseeing CSF reimbursement claims. In performing oversight, ODRP reviews the Pakistani claims and indicates that to the best of their knowledge military support was provided and expenses were actually incurred. U.S. Central Command (CENTCOM) then validates that Pakistani operations listed were essential to support U.S. military operations in the theater. The claims are sent to the Office of the Under Secretary of Defense for Comptroller, who (1) performs a macro-level review comparing the cost to similar operations, and (2) assesses whether the cost categories are reasonable, selected subcategories are reasonable compared to U.S. costs, and costs are consistent with previous claims. In addition, both the Undersecretary of Defense for Policy and the State Department verify that the reimbursement is consistent with the U.S. government's National Security Strategy and that the CSF payment does not adversely impact the balance of power in the region. In recent months, Defense has disallowed or deferred a significantly greater amount of CSF reimbursement claims from Pakistan.

Related;
Sharif's party pulls out of Pakistan government

Value for Tax Payers Money?

The Bush administration has spent $1.3 billion over the past two years to prop up Siniora's government, with about $400 million dedicated to boosting Lebanon's security forces.

-Fighting in Beirut Threatens a Top Bush Administration Priority

GAO's view on fighting terrorism

Combating Terrorism: The United States Lacks Comprehensive Plan to Destroy the Terrorist Threat and Close the Safe Haven in Pakistan's Federally Administered Tribal Areas

Since 2002, destroying the terrorist threat and closing the terrorist safe haven have been key national security goals. The United States has provided Pakistan, a key ally in the war on terror, more than $10.5 billion for military, economic, and development activities. Pakistan's Federally Administered Tribal Areas (FATA), which border Afghanistan, are vast unpoliced regions attractive to extremists and terrorists seeking a safe haven. GAO was asked to assess (1) the progress in meeting these national security goals for Pakistan's FATA, and (2) the status of U.S. efforts to develop a comprehensive plan for the FATA. To address these objectives, GAO compared national security goals against assessments conducted by U.S. agencies and reviewed available plans.

The United States has not met its national security goals to destroy terrorist threats and close the safe haven in Pakistan's FATA. Since 2002, the United States relied principally on the Pakistan military to address U.S. national security goals. Of the approximately $5.8 billion the United States provided for efforts in the FATA and border region from 2002 through 2007, about 96 percent reimbursed Pakistan for military operations there. According to the Department of State, Pakistan deployed 120,000 military and paramilitary forces in the FATA and helped kill and capture hundreds of suspected al Qaeda operatives; these efforts cost the lives of approximately 1,400 members of Pakistan's security forces. However, GAO found broad agreement, as documented in the National Intelligence Estimate, State, and embassy documents, as well as Defense officials in Pakistan, that al Qaeda had regenerated its ability to attack the United States and had succeeded in establishing a safe haven in Pakistan's FATA. No comprehensive plan for meeting U.S. national security goals in the FATA has been developed, as stipulated by the National Strategy for Combating Terrorism (2003), called for by an independent commission (2004), and mandated by congressional legislation (2007). Furthermore, Congress created the National Counterterrorism Center (NCTC) in 2004 specifically to develop comprehensive plans to combat terrorism. However, neither the National Security Council (NSC), NCTC, nor other executive branch departments have developed a comprehensive plan that includes all elements of national power--diplomatic, military, intelligence, development assistance, economic, and law enforcement support--called for by the various national security strategies and Congress. As a result, since 2002, the U.S. embassy in Pakistan has had no Washington-supported, comprehensive plan to combat terrorism and close the terrorist safe haven in the FATA. In 2006, the embassy, in conjunction with Defense, State, and U.S. Agency for International Development (USAID), and in cooperation with the government of Pakistan, began an effort to focus more attention on other key elements of national power, such as development assistance and public diplomacy, to address U.S. goals in the FATA. However, this does not yet constitute a comprehensive plan.

The Program Assessment Rating Tool (PART) of US Government

A brown bag at World Bank on US performance budgeting;

One of the U.S. Government's main initiatives to strengthen its performance is the Performance Assessment Rating Tool (PART). This is managed by the Office of Management and Budget (OMB). The PART provides a standardized methodology for rating all 1,000 government programs, and for identifying needed improvements to these programs. The PART also provides an information base to assist government decisions on program budgets.

Assessing Program Performance

Assorted on Budget Support

Is Providing Budget Support to Developing Countries Effective? -- Evaluation of DFID's Direct Budget Support by UK's National Audit Office


Budget support as more effective aid? Recent experiences and emerging lessons

Making Aid More Effective Through Budget Support

Shantayanan Devarajan, Bank Chief Economist, posed a question: given that public sector reform is needed, that old-style conditionality doesn’t work, and that aid is more or less fungible, what is the best instrument to achieve development and poverty reduction? He also illustrated these three facts with his experiences in the Punjab, Pakistan. Andrew Lawson, Head of the Centre for Aid and Public Expenditure, made the case for providing budget support in a coherent way and in the right context. Steve Radelet, Senior Fellow at the Center for Global Development, suggested a ratings method to encourage countries to improve overall policy and governance stance and quality of public financial management to qualify for budget support. Nicolas van de Walle, Associate Dean for International Studies at Cornell University, pointed out that a critical mass of support is needed. Scholar then asked panelists how they would select appropriate circumstances for budget support, and how they derive the most benefit from it. Panelists also responded to audience questions. Scholar summed up by noting that budget support offers benefits, but the circumstances must be chosen correctly.

PFIs- good, the bad and ugly

Private Finance Initiative

Related;
A primer on Public-Private Partnerships
Public-Private Partnership in Infrastructure

Take Credit, Avoid Blame- the politics of budget

A good background for students of government budgeting- see how law makers think of the Nations priorities.


U.S. House of Representatives, Committee on the Budget, grilling Treasury Secretary Henry M. Paulson, Jr., Secretary on the budget (Year 2008 budget)

Two good books;

America's Priorities: How the U.S. Government Raises and Spends $3,000,000,000,000 (Trillion) Per Year
by Charles Konigsberg

The Federal Budget: Politics, Policy, Process
By Allen Schick, Felix LoStracco

Related;
Dr. Allen Schick on Budget Tools and Rules

A Primer on Accrual and Cash Deficits--Understanding Similarities and Differences

The Citizen's Guide to the 2007 Financial Report of the United States Government

Management Lesson of the Day- ‘You go with what you have’

One way to look at a ComStat meeting is as a live audit of overall police performance, one in which the leadership’s goals sometimes borders on the unreasonable because that’s the only way to ensure at least reasonable results. But before that, a ComStat meeting is a way of sharing crime data that recognizes why the first step to crime reduction itself- the gathering and analyzing of accurate, timely intelligence- has to be quickened by the heat of accountability.

The reason is simple: Most people in the world learn things faster when they know they’re going to be tested on them. Cops are no different. If we had been satisfied to just sit in a circle and chat about the intelligence we all had (which is the way some departments run their knock-off versions of Comstat), a lot of cases in New York would never have been solved and a lot of more people would have been victimized….

When the process started, kids in the suburbs were doing their homework on Pentium machines, but Yohe was punching in crime data from all seventy-six precincts and writing his own code for a simple spreadsheet into a borrowed 386. When we started moving from hand maps to computerized mapping, Yohe quickly found out even the best mapping software around couldn’t plot multiple crimes at any single address. Here we relied on Yohe’s creative ability, because he was able to devise a way to get around the software’s logic and make out hot spots look like real hot spots...

In New York City, we were eventually able to establish drug motive in about 25 percent of all the city’s murders, but we knew that a lot of other people were being gunned down in street disputes in which the drug connection was never firmly established. In the end, the consensus was that, at the very least, 40 percent of the city’s homicides were by-products of the drug trade.

-The Crime Fighter: How You Can Make Your Community Crime Free
by Jack Maple , Chris Mitchell

Is political morality on the decline?

NYT has an Q&A everything you want to know about Spitzer.

Q. Why did Eliot Spitzer’s banking activities prompt the attention of authorities?

A. Under the Bank Secrecy Act, all financial institutions are required to file currency transaction reports with the Treasury Department for any deposit or withdrawal of more than $10,000 or questionable banking activities of any kind. As articles in The Times by David Johnston and Stephen Labaton and Don Van Natta Jr. and Jo Becker have reported, bank employees detected that Mr. Spitzer was moving around thousands of dollars in what they thought was an effort to conceal the fact that the money was his own. An audio interview conducted by Jane Bornemeier on Tuesday (available to listen online here) with Gerald L. Shargel, a criminal defense lawyer in New York, explains why the crime known as structuring, or making payments in such a way as to conceal their purpose and source, is illegal.

Q. What was the nature of the “unsafe” sexual practices that Client 9 — identified by officials as Mr. Spitzer — is said to have requested in the court affidavit unsealed last week?

A. The Associated Press has reported that the unsafe sexual practices referred to Mr. Spitzer’s preference not to use a condom, contrary to the prostitute’s wishes, but The Times has not independently confirmed this.

Q. Mr. Spitzer was a superdelegate supporting Hillary Rodham Clinton. What happens to his vote?

A. She loses it. David A. Paterson, the governor-designate, was already a superdelegate because he is a member of the Democratic National Committee. He has endorsed Mrs. Clinton. As governor, he still gets to vote at the convention, but only once.

Selective use of overbroad criminal statutes?

The federal criminal investigation that has led to Eliot Spitzer's resignation as governor of New York illustrates the great dangers all Americans face from vague and open-ended sex and money-transaction statutes.

Federal law, if read broadly, criminalizes virtually all sexual encounters for which something of value has been given. Federal money-laundering statutes criminalize many entirely legitimate and conventional banking transactions. Congress enacted these laws to give federal prosecutors wide discretion in deciding which "bad guys" to go after.

Generally, wise and intelligent prosecutors use their discretion properly -- to target organized crime, terrorism, financial predation, exploitation of children and the like. But the very existence of these selectively enforced statutes poses grave dangers of abuse. They lie around like loaded guns waiting to be used against the enemies of politically motivated investigators, prosecutors and politicians.

There is no hard evidence that Eliot Spitzer was targeted for investigation, but the story of how he was caught does not ring entirely true to many experienced former prosecutors and current criminal lawyers. The New York Times reported that the revelations began with a routine tax inquiry by revenue agents "conducting a routine examination of suspicious financial transactions reported to them by banks." This investigation allegedly found "several unusual movements of cash involving the Governor of New York." But the movement of the amounts of cash required to pay prostitutes, even high-priced prostitutes over a long period of time, does not commonly generate a full-scale investigation....

Even if Mr. Spitzer's derelictions were serendipitously discovered as a result of routine, computerized examination of bank transactions, the dangers inherent in selective use of overbroad criminal statutes remain. Money laundering, structuring and related financial crimes are designed to ferret out organized crime, drug dealing, terrorism and large-scale financial manipulation. They were not enacted to give the federal government the power to inquire into the sexual or financial activities of men who move money in order to hide payments to prostitutes.

Once federal authorities concluded that the "suspicious financial transactions" attributed to Mr. Spitzer did not fit into any of the paradigms for which the statutes were enacted, they should have closed the investigation. It's simply none of the federal government's business that a man may have been moving his own money around in order to keep his wife in the dark about his private sexual peccadilloes...

In this case, if the serendipitous bank audit really led federal agents to Mr. Spitzer, and Mr. Spitzer led them to the Emperor's Club, and federal prosecutors really wanted to get the Club, they could easily have sent an undercover cop to pose as a john, instead of tapping phones and reading emails -- tactics designed to catch and embarrass Mr. Spitzer with his own recorded words, which could be, and were, leaked to the media. As this newspaper has reported: "It isn't clear why the FBI sought the wiretap warrant. Federal prostitution probes are exceedingly rare, lawyers say, except in cases involving organized-crime leaders or child abuse. Federal wiretaps are seldom used to make these cases . . ."

Lavrenti Beria, the head of Joseph Stalin's KGB, once quipped to his boss, "show me the man and I will find the crime." The Soviet Union was notorious for having accordion-like criminal laws that could be adjusted to fit almost any dissident target. The U.S. is a far cry from the Soviet Union, but our laws are dangerously overbroad.

Both Democrats and Republicans have targeted political adversaries over the years. The weapons of choice are almost always elastic criminal laws. And few laws are more elastic, and susceptible to abuse, than federal laws on money laundering and sex crimes. For the sake of all Americans, these laws should be narrowed and limited to predatory crimes with real victims.

-The Entrapment of Eliot, by ALAN M. DERSHOWITZ

Discrimination in the Prostitution Industry

Interesting comment someone had posted on the Blogging Head's The Spitzer Edition;

Around 38 minutes, they ask about skill levels and different "tournaments" for prostitutes. My sense from observing and fighting prostitution while working in the hotel industry is that they are in different tournaments. The high end prostitutes are professional. Lots of low end prostitutes are there because they lack even the most basic level of human capital. They don't even have the work ethic, reliability, personal skills, etc. to really have a professional job. (I've seen prostitutes resumes). This bears on the feasibility of legalization of prostitution, because I seriously doubt that some of these women for whom black market prostitution is the best option would be able to participate well in white market prostitution.

See also the following comment;

Please follow the Justice Dept. narrative to the bitter end. It is implausible that such relatively minor transactions would trigger an investigation of this magnitude. I have trouble buying the "we got very lucky" cover story from the Bush Justice Dept.

The IRS apparently receives millions of "suspicious transaction" reports from banks and investigates only a very small fraction of such reports. This is especially true in the post-Patriot Act era when banks are under pressure to err on the side of excessive reporting.

Is this selective and political prosecution? Let's find out. That's more important than psychoanalyzing Spitzer.

Related;
This Defense Won’t Rest;

Similarly, leaking to the press the details of an investigation has also become commonplace in prosecutions in recent years. An article in this newspaper on Wednesday included information from federal officials who insisted on anonymity because “it can be a crime to disclose the contents of a suspicious activity report.” That federal officials would reveal such information is simply inexcusable. Unfortunately, the Justice Department has been loath to investigate such leaks, and Mr. Spitzer’s supporters are right to criticize them.

Less persuasive, however, is the conspiracy theory that the Justice Department went after Mr. Spitzer to get rid of a high-profile Democrat. It is entirely plausible that, as reported, Mr. Spitzer’s banks reported some suspicious transactions in his accounts to the Treasury Department’s financial crimes network. That is a bank’s obligation under federal law. And the Treasury Department, F.B.I., Internal Revenue Service and Justice Department all seem to have followed proper procedure. Any conspiracy theory seems far-fetched at best.

As enticing as an attack strategy will seem to Mr. Spitzer and his supporters, and however unfair the disclosures to the press have been, no offensive strategy will work in these circumstances. The governor’s alleged conduct was too brazen. In paying to have sex, and to transport a prostitute to Washington to engage in sex, and in moving money to facilitate this illegal conduct in amounts that seemed structured to avoid reporting requirements, Mr. Spitzer apparently engaged in conduct that could support several lines of prosecution.

One involves the Mann Act of 1910, which prohibits transporting people across state lines to engage in prostitution, although I agree with those who feel that Mann-related charges would be inappropriate, as such cases are typically brought against brothel owners, not customers.

But other approaches — illegal structuring of financial transactions, and basic laws against engaging in sex for money — are legitimate prosecutorial avenues. Seen in this light, any complaints about unfairness in the process ring hollow.

A second, more viable, approach for Mr. Spitzer is to play defense and negotiate with federal law enforcement. Speculation is widespread that his resignation might have been in exchange for the government giving up prosecution or for a guilty plea to a minor charge. I have little doubt that such discussions have occurred, but I believe the United States attorney’s statement that no agreement has been reached.

Legalization of prostitution

More on Prostitution and the Law

How does the Iraq War bill add up

The Iraq war caused the global credit crisis?

Quote of the Day

"The Iraqis have a budget surplus," said U.S. Comptroller General David Walker. "We have a huge budget deficit. . . . One of the questions is who should be paying."


Related;
Iraq: War and Reconstruction