Pakistan kept billions in US aid from military

Generals say misuse of funds common, costly

ON HIS WATCH Pervez Musharraf diverted money to bolster his sagging image through economic subsidies, generals suggest. ON HIS WATCH
Pervez Musharraf diverted money to bolster his sagging image through economic subsidies, generals suggest.
By Kathy Gannon
Associated Press / October 5, 2009

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ISLAMABAD, Pakistan - The United States has long suspected that much of the billions of dollars it has sent Pakistan to battle militants has been diverted to the domestic economy and other causes, such as fighting India.

Now the scope and longevity of the misuse is becoming clear: Between 2002 and 2008, while Al Qaeda regrouped, only $500 million of the $6.6 billion in American aid actually made it to the Pakistani military, two army generals said.

The account of the generals, who asked to remain anonymous because military rules forbid them from speaking publicly, was backed up by other retired and active generals, former bureaucrats, and government ministers.

At the time of the siphoning, Pervez Musharraf, a Washington ally, served as chief of staff and president, making it easier to divert money intended for the military to bolster his image at home through economic subsidies.

“The army itself got very little,’’ said Mahmud Durrani, a retired general who was Pakistan’s ambassador to the United States under Musharraf. “It went to things like subsidies, which is why everything looked hunky-dory. The military was financing the war on terror out of its own budget.’’

Generals and ministers say the diversion of the money hurt the military in several ways:

■ Helicopters critical to the battle in rugged border regions were not available. At one point in 2007, more than 200 soldiers were trapped by insurgents in the tribal regions without a helicopter lift to rescue them.

■ The limited night vision equipment given to the army was taken away every three months for inventory and returned three weeks later.

■ Equipment was broken, and training was lacking. It was not until 2007 that money was given to the Frontier Corps, the front-line force, for training.

The details on misuse of American aid come as Washington again promises Pakistan money. Legislation to triple general aid to Pakistan cleared Congress last week.

The legislation also authorizes “such sums as are necessary’’ for military assistance to Pakistan, upon several conditions. The conditions include certification that Pakistan is cooperating in stopping the proliferation of nuclear weapons, that Pakistan is making a sustained commitment to combating terrorist groups, and that Pakistan security forces are not subverting the country’s political or judicial processes.

The United States is also insisting on more accountability for reimbursing money spent. For example, Pakistan is still waiting for $1.7 billion for which it has billed the United States under a Coalition Support Fund to reimburse allies for money spent on the war on terror.

But the United States still can’t follow what happens to the money it doles out.

“We don’t have a mechanism for tracking the money after we have given it to them,’’ said Lieutenant Colonel Mark Wright, a Pentagon spokesman.

Musharraf’s spokesman, Rashid Quereshi, also a retired general, flatly denied that his former boss had shortchanged the army. He did not address the specific charges. “He has answered these questions. He has answered all the questions,’’ the spokesman said. Musharraf took power in a bloodless coup in 1999 and resigned in August 2008.

The misuse of funding helps to explain how Al Qaeda, dismantled in Afghanistan in 2001, was able to regroup, grow, and take on the weak Pakistani army. The army still complains of inadequate equipment to battle Taliban entrenched in tribal regions.