Sopko found that USAID also did not provide contractors with a clear understanding of their obligations or enforce the terms of their agreements. He recommended that the mission director modify contracts for the program to better articulate the plans behind those agreements.

The agency largely concurred with that suggestion in its response to the findings.

Sopko also determined that USAID has veered from the so-called Kandahar Model, which lays out the standards for SIKA contracting. He recommended that the agency follow those guidelines more strictly.

Wines disagreed with Sopko’s interpretation of the model, saying the agency needs flexibility to adjust for local conditions. “A bottom-up, community-based approach combined with flexibility at the local level is the essence of the Kandahar Model, and mandating a strict adherence to any one particular approach would be contradictory to the model and inhibit progress in developing grants,” she said.

Sopko also said USAID should require documented proof that Afghan officials concur with SIKA initiatives. Wines said the agency already requires such agreements, but the inspector general noted that those understandings are not always formalized in writing. As reported by Washington Post

This is the first time the U.S. government has attempted to freeze and then seize funds held by an Afghan contractor in an Afghanistan bank, and was the direct result of SIGAR’s investigation. The funds were in Hikmatullah’s accounts in Afghanistan International Bank (AIB), but have since been transferred to other banks outside Afghanistan.

Key Facts from the Case 

SIGAR Investigation Uncovered Scheme to Allegedly Defraud the U.S.:

• Beginning as early as November 2010, and continuing until at least March 2012, Hikmatullah allegedly conspired to obtain illegal payments for transportation of U.S. military supplies.
• Hikmatullah allegedly obtained contracts, through fraudulent means, covering at least 5,421 transportation missions, valued at $77,920,605, to resupply the United States.
• Hikmatullah allegedly paid bribes and kickbacks, and manipulated contract bids, in order to obtain these contracts.

Timeline of Events:

• On November 7, 2012 a U.S. judge issued seizure warrants for more than $77 million held in bank accounts at AIB. These seizure warrants were sent to Afghanistan pursuant to the United Nationals Convention Against Corruption, as a mutual legal assistance request.
• In addition to the seizure warrants, arrest warrants in rem were filed in November, 2012, and received by Afghanistan on December 31, 2012, with a request to freeze the accounts.
• In response to the U.S. request, on or about January 28, 2013, AIB froze two defendant bank accounts at the direction of the Afghan Attorney General’s Office.
• On March 25, 2013, Hikmatullah transferred money out of the AIB accounts to accounts at Bank Alfalah and Emirates NBD Bank in the United Arab Emirates.
• On or about April 4, 2013, the United States learned that the freeze on the AIB accounts had been lifted. Subsequently, the Acting Attorney General of Afghanistan informed the United States that Afghanistan would not comply with the U.S. mutual legal assistance request.
• On May 3, 2013 the United States filed an amended verified complaint for forfeiture of the assets transferred out of AIB bank, and on May 8, 2013, the U.S. District Court, District of Columbia, issued arrest warrants in rem against those funds in the interbank accounts.
• In May, 2013, SIGAR investigators served the arrest warrants on eight banks in New York having interbank accounts with foreign banks to which Hikmatullah had transferred funds.
• To date, SIGAR has moved $10.1 million from the Hikmatullah accounts.
• SIGAR and the Justice Department continue to pursue the rest of the money.

Court Documents: U.S. District Court of the District of Columbia, Case No. 12-cv-01905 (RWR)