Daylight in the Swamp

From the Wall Street Journal (via the EarlyBird):

U.N. Fires Officials At Its Afghan Fund

By Dion Nissenbaum

KABUL—The United Nations fired three officials running its $1.4 billion Afghanistan police trust fund as the first step in what is expected to be a broader shake-up at the program currently facing an internal investigation of mismanagement, according to U.N. and Western officials.

Problems with the Law and Order Trust Fund for Afghanistan became public last month, when The Wall Street Journal reported that international donors were concerned about possible abuses at the fund. The trust fund's main contributors are the U.S., the European Union and Japan.

While UNDP officials initially dismissed Journal reports about mismanagement allegations at Lotfa, the U.N. now says that its own investigation of problems at the fund preceded these articles—and that it is taking allegations of abuse seriously.

In other news, U.N. officials were outraged to discover that Spinal Tap isn’t a real band . . . .

U.S. Companies Confusion over the Applicability of Afghani Tax Exemptions to DOD Contractors

SECRETARY OF DEFENSE CORRESPONDENCE ROUTING SLIP

Action Agency: UNDER SECRETARY OF DEFENSE FOR ACQUISITION, TECHNOLOGY & LOGISTICS Action Required: REPLY DIRECT - COMPONENT HEAD MUST SIGN Coordinate With: GC USP Document Type: INCOMING Special Instructions: FORWARD COPY OF REPLY TO CMD, R00M 3C843 Subject: U.S. COMPANIES CONFUSION OVER THE APPLICABILITY OF AFGHANI TAX EXEMPTIONS TO DOD CONTRACTORS

Suspense Date: July 1 2011 Routing Date: June 13 2011 CONTROL #: OSD 07202-11

INFORMATION DISTRIBUTION OFFICE DEPUTY SECRETARY OF DEFENSE EXECUTIVE SECRETARY EXECUTIVE SECRETARY REAR UNDER SECRETARY OF DEFENSE FOR POLICY UNDER SECRETARY OF DEFENSE, COMPTROLLER UNDER SECRETARY OF DEFENSE FOR PERSONNEL & READINESS DIRECTOR, ADMINISTRATION & MANAGEMENT DEPARTMENT OF DEFENSE GENERAL COUNSEL CHAIRMAN OF THE JOINT CHIEFS ,OF STAFF SECRETARY OF THE ARMY SECRETARY OF THE AIR FORCE SECRETARY OF THE NAVY OSD 07202-11

 

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Marion C. Blakey
President and Chief Executive Officer
AEROSPACE INDOSTRIES ASSOCIATION
1000 Wilson Boulevard, Suite 1700
Arlington, VA 32209-3928
(703) 358-1000
June 8, 2011

The Honorable Hilary Rodham Clinton
U.S. Department of State
2201 C Street, NW
Washington, DC 20520

The Honorable Robert M. Gates
U.S. Department of Defense
1000 Defense Pentagon
Washington, DC 20301

Dear Secretary Clinton and Secretary Gates:

On behalf of the more than 350 members of the Aerospace Industries Association (AIA)I am writing this letter to raise an issue that is having a serious impact on U.S. companies supporting U.S. Government (USG) military operations and foreign policy in Afghanistan. The issue concerns the confusion over the applicability of Afghani tax exemptions to Department of Defense (DOD) contractors. The DOD's position is that the exemptions apply to both DOD prime contractors and their subcontractors, and the Afghani Ministry of Finance (MOF) Is taking the Position that the exemptions only apply to DOD prime contractors. The potential impact has ranged from the detention of contractor personnel and seizure of contractor property, contractors being precluded from performing work and DOD treating the taxes as "unallowable, to otherwise avoidable tax audit compliance costs. We respectfully request that the DOS and DOD move to immediately resolve this issue with the Afghani government. As you are aware, paragraph four of the U.S. - Afghanistan Bilateral Agreement, ratified by the Afghani Government through Diplomatic Note Number 202 on May 281 2003, provides that

The Government of the United States of America, its military and civilian personnel, contractors and contractor personnel shall not be liable to pay tax or other similar charges [landing, navigation, over flight or parking charges or overland transit fee or tolls] assessed within Afghanistan.

Although the language in the Bilateral Agreement (Note 202) seems to imply that USG subcontractors are not liable for taxes, the MOF informed businesses performing work under DOD contracts that they must collect Afghani taxes from their subcontractors or their business 1icerses will be revoked. Once a license is revoked, the MOF can remove the contractor from Afghanistan, detain contractor/subcontractor personnel, and seize equipment. Any of these actions will send a dangerous message to the contractor community and, in turn, will adversely impact our ability to support U.S. foreign policy and military operations in Afghanistan.

Both the DOD General Counsel, In a March 28, 2011 fact sheet, and the Commander of International Security Assistance Force/U.S. Forces - Afghanistan, by letter to the MOF dated March 9, 2011, have confirmed that under the Bilateral Agreement (Note 202) and Military Technical Agreement, DOD contractors, subcontractors and their non-Afghani employees are exempt from taxation by the Government of Afghanistan. This position competes with the position by the MOF. As such, the DOD has instructed its contractors and their subcontractors to ignore Afghani tax bills - effectively making the taxes, when paid, unallowable costs.  As a measure of caution, individual companies may request private letters of rulings from the MO seeking tax exemption status in the hopes that the MOF would agree. This precautionary measure, regardless of how the MOF rules, results in additional contractor costs that the DOD may also view as unallowable. If the taxes are required and are deemed as unallowable there will be a negative financial impact on the DOD contractors.

In addition, DOD contractors and their subcontractors are incurring tax audit compliance costs -- costs that would be avoided if there was a consensus between the MOF and the USG. Simply stated, the confusion has led to go/no go decisions for DOD contractors and their subcontractors.

Finally, certain DOS programs are taxable and contain DOS programs an exempt from Afghani taxation, creating an additional layer of confusion. There is no benefit to the USG when contractors receive different tax treatment depending an the agency they serve. It is our view that the preferred outcome is that all USG contractors have the same tax-free treatment regardless of which USG agency has contracted for their services.

We strongly request that the DOS and DOD work together to resolve this issue with the MOF, including obtaining the MOF's acknowledgement that the USG's position applies to all contractor work in Afghanistan since 2001 and that rulings from or other filings with the MOF are not required to establish tax exemptions for USG work. We would prefer that all USG contractors, both prime and subcontractor, working an behalf of the USG in Afghanistan, be exempt from all Afghani taxes (corporate, business profit, personal, etc.). However, if the USG decision is that USG contractors must pay Afghani taxes, contractors should be reimbursed for those taxes by the USG. Either position is workable, but the current confusion cannot be sustained. I would be happy to discuss this important issue further with you or your designated representatives at your convenience.

Best regards,

Marion C. Blakey

Love, Afghan Style

From a comment at HitCoffee:

Don't know about Africa, but last spring I got tagged to do escort duty for some NGO-types visiting ISAF HQ. I wasn't involved in the substance of their visit, they just needed a warm body to stand out by the front gate to shepherd them in. We wound up waiting a long time because the NGOs got hung up at one of the more outer layers of security. Which surprised me, since whenever I drove through those same checkpoints I had never had to so much as roll down my window. (Which was convenient, since our bullet-resistant windows didn't actually roll down.)

But I digress . . . I don't remember the names of most of the NGOs whose reps visited us, which is too bad, since I would happily rub their names in the mud if I could. But we did have a rep from Save the Children. At some point after the introductions, I said to him, "So, 'Save the Children'. What are you guys doing to keep the Afghans from buggering little boys?"

To my surprise, the answer wasn't dumb looks. StC did in fact have programs of engaging people, and especially community and religious leaders, on this problem. The rep even told me something that I didn't know: some 60% of boys in Afghanistan are raped. We got to talk quite a while about this, but in keeping with the point of your post, what got me was the reaction to my question by the other reps present. It wasn't just that they didn't seem to know anything about pederasty in the country they were supposed to be servicing, let alone have any programs to fight it. It was that, confronted with the facts of the matter, their first reaction was . . .

. . . to laugh.

And the reaction didn't really get any better. They were kind of captive to our conversation (most of it took place in line at the ISAF security check) but mostly stood there in embarrassed silence. But when the StC guy mentioned the 60% number, a woman rep said, "Well, that's an interesting factoid," in a tone of voice that said, no, it really wasn't.

B@stards. Come the revolution, when we put these NGO internationalists against a wall, this will be one of the reasons.

But . . . Save the Children. They do good work.

As an aside:  (possibly) related post at iSteve.

Φ’s Last Post?

Here is the picture of the inside of the aircraft flying into SW Asia:

Here is the picture flying out:

This could mean several things.  None of them are good.

Here is a picture of a C-17 cockpit right before leaving Bagram Airfield:

I had planned to surprise my children at home, who had not been told of the exact day of my arrival.  But it turns out that the TSA allows families of redeploying servicemen to greet them at the gate.  So I was the one surprised.

Thus concludes the first half of my life.  And unless I land a Civil Service job (H.T.:  Prof Hale), I can’t warrant how much free time I’ll have for blogging.  But right now, I’m up to my eyeballs in a combination of out-processing, job hunting, dissertation writing (still, dammit!) and all the home repairs that slipped while I was away.

Ditto for blog reading.  I treasure all of your writing, but as my Google Reader now has 500+ unread items in it, I think it’s time to adjust my expectations.

Meanwhile, I’d like to extend an offer to any of my regular commenters who aren’t presently writing anywhere else to become co-proprietors here at Delenda est Carthago.  I can’t offer any money, but I can offer a built-in readership of north of 100 daily.  Samson is the obvious candidate who comes to mind, but I will consider all offers.

Boo W.

From Fox News:

[Former President] BUSH:  [The U.S.-Afghan Women's Council] is big because it will have an impact over the years. The idea of liberating women, empowering women, encouraging women, educating women in Afghanistan is all part of laying a foundation for lasting peace.

My concern of course is that the United States gets weary of being in Afghanistan, it is not worth it, let's leave. And Laura and I believe that if that were to happen, women would suffer again. We don't believe that's in the interests of the United States or the world to create a safe haven for terrorists and stand by and watch women's rights be abused.

The Republican party, or at least the conservative faction of it, needs to state plainly what you my readers already know:  George W. Bush is a liberal.  He’s a liberal now, he was a liberal as President, and his policies reflected that liberalism.

This is no mere matter of score-keeping.  Loyalty to Bush has kept important segments of the Republican Party from openly identifying the cause of the housing crisis:  the dismantling of lending standards that allowed poor minorities to borrow money beyond their means and inflate the housing bubble in the process.  And the party’s failure to criticize those policies allow the policies to continue even today.

International Women’s Day (Afghanistan Style)

From the Guardian:

Musa Khan, the governor of Ghazni province, once associated with the fundamentalist warlord Abdul Rasul Sayyaf, marked international women's day on 8 March. Unfortunately, he appeared to have missed the point of the event.

According to Alex Dietrich, the head of a US military female engagement team operating in Ghazni, in a morning of speeches, only two women were invited onstage to participate. Instead ranks of burqa-clad women watched a group of men dominate proceedings with speeches on the importance of practising marital obedience.

Khan told them they should not leave their homes without permission from their husbands. "At the end the men sat down for a feast, while the women waited outside in the cold for some of their leftovers," Dietrich said.