Forget opium poppies for a moment. The Taliban has another huge source of revenue, worth up to $1 billion a year, which generously supplements its heroin-trafficking income and the cash-flow from rich oil sheiks in the Persian Gulf.


This money comes from you.


The allegation that millions of dollars of U.S aid and military funds have been siphoned off by the Taliban through elaborate extortion rackets is not something government officials readily discuss. But the departing head of the Army Corps of Engineers recently conceded that there was little his agency could do to stop it, and the U.S. State Department launched an investigation after reports of the scandal finally penetrated the mainstream news.

The Pentagon did not respond to TAC’s inquiries about charges that local contractors who deliver supplies and equipment to remote NATO bases in Afghanistan are charging Western governments “protection money” to pay off the Taliban, or Taliban-connected middlemen, to protect convoys along dangerous overland supply routes. Yet a growing consensus supports a fearsome prospect: U.S. taxpayers are funding the enemy.

“If you don’t pay, you will get attacked, you will not get through,” says Peter Jouvenal, a British expat and former BBC journalist who has been living and working in Kabul for nearly 30 years. He has operated several businesses in Afghanistan, including a small trucking company. “Everybody wins in the short-term,” he tells TAC. “The Taliban get their money, and the contractors get their money, and the soldiers get their food and fuel supplies. The only one that loses out is the United States taxpayer, who has to foot the bill for all this. That would be acceptable if we were achieving something, but we’re not.”


In late August, McClatchy News reported that the Taliban now controls districts in two key northern provinces along the new major supply route coming in from Tajikistan and Uzbekistan, running through the Hindu Kush mountains and toward the U.S. military’s massive Bagram Air Base.


Yet supplies are getting through. Reports suggest that contractors big and small are paying the price for secure delivery, then off-loading that cost to their clients—the military, USAID, or whatever Western aid organization is footing the bill. There is lots of money to be made. At the beginning of this year, Washington announced it would be spending upwards of $4 billion to construct new facilities and upgrade old ones in order to support the Af-Pak “surge. ” The strategy included three new combat brigades, as well as new facilities for Afghan soldiers, not to mention the accompanying army of private contractors supporting them.

And that’s only part of the story. The U.S. has already appropriated $38 billion since 2001 in humanitarian aid and reconstruction funding for its post-invasion nation-building exercises, and the Obama administration wants to increase spending. According to recent reports, much of this money has already disappeared into the pockets of Taliban racketeers, calling into question the success of Western investment over the past eight years. “Virtually every major project includes a healthy cut for insurgents. Call it protection money, call it extortion, or, as the Taliban prefer to term it, ‘the spoils of war,’ the fact remains that international donors, primarily the United States, are to a large extent financing their own enemy,” wrote Jean MacKenzie, Kabul correspondent for the GlobalPost, in August.


MacKenzie is one of the few reporters who have tried to run the numbers: the manager of an Afghan firm with “lucrative construction contracts with the U.S government” builds in a “minimum” charge of 20 percent for Taliban payouts, she writes. He tells his friends privately that he makes upwards of $1 million per month, $200,000 of which goes to Taliban heavies.


“It adds up, of course,” says MacKenzie, estimating that the “outside limit” of the Taliban’s extortion earnings comes to roughly $1 billion a year. Add to that other sources of corruption in Afghanistan—whether it is the police, the politicians, the elections, or abusive Western contractors—and the picture of the Af-Pak effort starts to look pretty bleak.


Even worse, it seems that insurgents might be ripping off some contractors, allowing them to proceed with their business, only to turn and use their ill-gotten gains to attack other allied convoys. In the Sept. 7 issue of Time magazine, Aryn Baker and Shah Mahmood Barakzai reported from Kabul that a week before a deadly Taliban blast in Kunduz killed four American soldiers, a local businessman, who had been subcontracted by a firm working for the German government, admitted to paying a cash bribe of $15,000 to a “Taliban middleman.” No one can prove that any of that money went toward assembling the makeshift bomb that killed the troops. “Nevertheless,” conclude Baker and Barakzai, “it is likely that a substantial amount of aid money from many countries—including the U.S.—has made its way, directly or indirectly, into the Taliban’s coffers.”


As the Obama administration struggles to come to terms with the looming reality that the Taliban might have the upper hand in this war, the last thing that government officials and members of Congress want to talk about is the idea that the enemy has his hand in the American purse. Requests for comment to key members of the Senate Foreign Relations Committee went unanswered. Requests to House members who had just returned from Afghanistan were met with similar silence.


Assistant Secretary for Terrorist Financing David Cohen has admitted there is a problem, but will not talk about specifics or scope. In a statement consisting of just two lines, he said, “The Taliban obtains revenues from a variety of sources, including extortion of funds from both legitimate and unlawful activity in Afghanistan and Pakistan.” He finished by saying that an interagency task force had been convened to combat “funding for violent extremist groups.”


Special Envoy Richard Holbrooke, overcoming the American chain of command’s habitual preoccupation with opium poppies, has acknowledged that the Taliban does not just make money from the country’s $4 billion drug trade. “In the past there was a kind of a feeling that the money all came from drugs in Afghanistan,” he told reporters in Pakistan in June. “That is simply not true.”

“Rackets, extortion, kidnapping and bank heists are all helping the Pakistani Taliban pay the bills,” wrote Shahan Mufti for GlobalPost in August. In an April report about the NATO supply lines through Pakistan into Afghanistan, private intelligence provider Stratfor said:


The Taliban and their jihadist affiliates are ideologically driven to target Western forces and increase the cost for them to remain in the region. There are also a number of criminally motivated fighters who adopt the Taliban label as a convenient cover but who are far more interested in making a profit. Both groups can benefit from racketeering enterprises that allow them to extort hefty protection fees from private security firms in return for the contractors’ physical safety.


Holbrooke preferred to steer clear of that particular angle. Instead, he used the apparently candid moment to try to shift attention toward the shady international donors who send gifts to the Taliban through tenebrous charities and the like. It is true that foreign donations represent a thorny problem, though the issue is clearly not as embarrassing for the U.S. government as the thought of some Taliban middleman becoming $10,000 richer so that German International Security Alliance Forces could refill their watering holes.


Over the summer months, the Taliban has revealed, once more, what a cunning adversary it can be—busily skimming off cash from our altruism and manipulating the supply chain, either by bombing our convoys or shaking them down. Thus the destructive cycle evolves. Profiteers and insurgents thrive as long as the payoffs exceed the risks. We deploy more troops, who need more supplies, more fuel, more shelter, which in turn provide more targets for extortion and more revenue for the insurgency.


Jouvenal, a seasoned commentator on Afghanistan, calls it “business as usual.” “Afghans all know the West has failed,” he says. “This time, when the West packs up … the Taliban will come back and a lot of people will become refugees again. The thought is to make as much money as you can because you don’t know when you will be a refugee again.” The scramble to extort money, he explains, “increases, as time runs out.”

The Afghans seem able to grasp the reality of things. How long will it take us to get wise to this self-perpetuating disaster? 
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Kelley Beaucar Vlahos is a Washington, D.C.-based freelance reporter.

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