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Waste of the Day: Unknown Amount of U.S. Aid to Afghanistan Went to Taliban

April 03, 2024

Topline: The United States has sent $2.6 billion of humanitarian aid to Afghanistan since August 2021, some of which wound up in the hands of the Taliban terrorist organization, according to a recent Inspector General report.

Key Facts: Afghanistan does not have the infrastructure to support electronic money transfers, so the United Nations flies stacks of physical U.S. cash into the country. The money goes to groups fighting the drought and famine in the region.

Open the Books
Waste of the Day 4.03.24

Sometimes the groups can use the U.S. dollars, but they also need afghanis — Afghanistan’s currency — to pay employees and vendors. So, the groups exchnage their cash through private banks.

But many private banks in Afghanistan do not have enough afghanis to support the U.N., since the Taliban controls the money supply.

To get more afghanis, the private banks auction off the U.N. cash to the highest bidder. Oftentimes, that’s the Taliban-controlled Da Afghanistan Bank, which makes a profit for the Taliban because of the currency exchange rate.

Once the exchange occurs, the same physical U.S. dollars flown in by the U.N. are now held in the Taliban’s bank.

The Taliban sometimes removes money from circulation to inflate the value of the afghani, helping them make even more profit from the exchange.

The U.N. has released statements that it does not provide cash to the Taliban or DAB. Yet the exchange process happens with the U.N.’s knowledge, according to the Inspector General.

Background: The international community paused all funding to Afghanistan when the Taliban returned to power in 2021 but restarted it in early 2022 when the humanitarian crisis worsened.

The U.N. has sent $2.9 billion to Afghanistan since 2021. $2.6 billion of it came from the American government, including $1.7 billion from the U.S. Agency for International Development.

The report did not specify how much of the money went to the Taliban.

Critical quote: “Most of the money that’s going in cash through the U.N. is ultimately coming from U.S. taxpayers,” John Sopko, the inspector general, said in an interview with ProPublica. “It’s going to a terrorist group. The Taliban are a bunch of terrorists.”

Supporting quote: “The UN seriously considered the risks of money laundering and terrorist financing in deciding to cease the use of international wire transfers and instead to physically transport U.S. currency to Afghanistan for payment to implementing partners,” the State department wrote in their response to the report. “No electronic financial delivery systems are currently scalable and able to meet the liquidity needs of the UN so that it may deliver assistance responsibly to benefit the millions of Afghans in need.”

Summary: As taxpayer spending increases with new crises in Israel and Ukraine in addition to Afghanistan, it’s more important than ever that foreign aid is tracked and safeguarded.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

This article was originally published by RealClearInvestigations and made available via RealClearWire.
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