Unreleased SIGAR Report: “Fraud and Corruption in the Afghan Mining Industry”

PDF: “Fraud and Corruption in the Afghan Mining Industry

>>> This is the previously undisclosed closing memo for the investigation “Fraud and Corruption in the Afghan Mining Industry,” carried out by the Special Inspector General for Afghanistan Reconstruction (SIGAR). Obtained through a FOIA request for multiple closing memos. To see the others, go to the Watchdogs page.

As background, it should be remembered that Afghanistan is brimming with the natural resources that make dollar signs appear in Uncle Scrooge’s eyes:  copper, iron ore, cobalt, gold, silver, and possibly uranium; oil, gas, and coal; emeralds, rubies, sapphires, and lapis lazuli; lithium, beryllium, niobium, and other rare-earth elements needed for consumer electronics.

Main body of the memo:

This investigation was initiated based on information received from [redacted] that there is extensive fraud, theft and corruption in the mining industry in Afghanistan. The information provided has frequently included [redacted] who allegedly corrupt mining contracts and mining activity and then profit from the mining projects. These projects include mines in which contracts were issued by GIROA as well as other mining projects where minerals are being illegally extracted without any type of contract and without any payments to GIRoA for mining taxes, royalties and other fees, thus depriving GIRoA of badly needed revenue.

In the course of this investigation, SIGAR investigators conducted dozens of interviews with industry experts, Non-Governmental Organizations (NGOs), Afghan government officials and various other sources of information. While this effort did develop a great deal of intelligence and confirmation of the systemic corruption in the Afghan mining industry, it did not produce any actionable information that could be used in a U.S. or Afghan criminal prosecution.

Therefore, it is recommended that this case be closed at this time.

One of the purposes for initiating this investigation was to bring matters of corruption in the Mining Industry to the attention of President Ghani for further action by GIRoA. In one instance, it is believed that information provided by SIGAR to President Ghani, via official SIGAR letter, contributed to the dismissal to [redacted] as a result of allegations of corruption against the Minister.

During this investigation, no U.S. or Afghan individuals or companies were identified that would have any American government suspension and debarment potential. As such, no S&D declination or DOJ prosecution declination was sought in this investigation.

It is recommended that this case be closed at this time.

Note: “GIRoA” = Government of the Islamic Republic of Afghanistan.


 

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