Money laundering on an epic scale

One of the main activities of liberal governments is to extract money in taxes from the populations they control. Nominally this is in order to provide “essential services”. Arguably, they do provide some essential services. However, a secondary aspect has developed. Providing these essential services turns out to be massively enriching for rather non-visible elites – people who control companies who benefit from state contracts. In fact this enrichment process is so wonderful that governments look for new opportunities to operate this model. Wars being a case in point. Of course it doesn’t work if the services are provided directly by the state through state owned enterprises. This is “inefficient” (fall about laughing). No – the “efficient” solution is to contract out as much as possible the actual provision of the services. This is the modern model of neo-liberal government.

The US has just left Afghanistan. The UK is also departing. You might have missed this event given how quiet it is being kept. That is hardly surprising. No one can possibly avoid seeing that the West’s involvement in Afghanistan has been a total disaster. According to the UK government 454 soldiers and MOD personnel have died in Afghanistan. Over 2000 US troops. And, of course, tens of thousands of Afghans, many of them civilians. In terms of financial costs the figures are truly staggering. A US academic-run projects puts the total US expenditure at USD 2.26 trillion. [1] Some of that went on military expenditure. Tens of billions of dollars went on nation building. [2] And what is the end result? The Taliban are resurgent. They are taking ground. [3] There will likely be civil war between regional militias and the Taliban (as there was after the Soviets left). The Taliban will likely end up controlling vast swathes of the country – as they did before the US invasion in 2001. Billions of dollars and hundreds of deaths and the end-result is a big zero. Even from a purely self-centred perspective (in which the deaths of Afghans don’t count) this doesn’t seem like a good result.

Much of that USD 2.26 trillion – which was partly raised by borrowing – has found its way onto the balance sheets of private (or publicly traded) corporations. Not just arms companies who are obvious beneficiaries. But a multitude of other companies contracted to provide, for example, infrastructure building projects. Tens of billions have been identified as going to waste or fraud by a US Commission set up to investigate the use of funds. (SIGAR). [4] But this is just “waste” and “fraud” in the conventional sense. The billions which have not been identified as “fraud” or “waste” have in fact also been ‘wasted’ if, as turns out to be the case, the whole absurd nation-building exercise which they were being spent on has failed. And this does appear to be the case – as the Taliban rapidly take territory.

In reality of course this operation has been a success of astronomical and indeed unmentionable proportions. Which is why it is hardly being mentioned. Many, many, fortunes will have been made. Some Afghan middlemen have benefited but the true beneficiaries are likely to be the shareholders of the US contracting firms who undertook and supported the failed nation-building exercise. This table by Bloomberg gives some idea of the billions involved. At the top of the table is publicly traded engineering and infrastructure company Fluor Corp which, according to Bloomberg, received USD 3.1 billion from the US government between 2016 and 2021 for work in Afghanistan. As far as I can see Fluor Corp has been building and running military bases for the US in Afghanistan. [5] Bases which have now presumably been abandoned by the US military – with nothing to show for their presence there.

The following is an extract from a US Congress hearing in 2011 into Afghan reconstruction contracts. The speaker is Senator Mccaskill:

  This is the tenth year and we have spent over $61 billion 
total already on reconstruction, and the vast majority of the 
spending has been through contractors. The Défense Department 
(DOD) and the U.S. Agency for International Development (USAID) 
are primarily responsible for this and part of our problem that 
we will talk about today is that no one is totally responsible. 
There is no one that I can really find that wants to say, I am 
    In fact, I will be surprised if I do not hear testimony 
today from people that say, I am not really responsible. It is 
time that somebody is responsible for money that is spent on 
roads that will not ever be sustained and for buildings and 
electrical power facilities that are built that no one there 
even knows how to use, much less access the power that 
supposedly we are going to provide. [6]

That was in 2011. “No one who wants to take responsibility”. But they took the money. The Afghan “war” was the biggest money laundering exercise in modern corporate history. Billions of dollars transferred from US tax-payers to US corporations. This is probably why the “war” went on so long. Just a machine to transfer money from tax-payers to corporate shareholders.

Update – education and money laundering

While researching another article I found this interesting piece on Buzzfeed. It details some of the ways that money was spent by US Aid (a US government agency) on education projects in Afghanistan. It details how money was spent – much of it going to warlords. Figures were inflated and quoted by US officials and politicians as evidence of success. Some of the money went to private contrators. The article is also evidence of the almost insane level of ignorance of some American soldiers; did they really not grasp that making friends with the local kids and building them a school and getting them to war baseball caps instead of their traditional caps and tying them into the American occupying presence in the heart of Taliban country was really a good idea? I thought that we had moved on from these 19th century missionary ideas.

Overall US Aid spending in Afghanistan seems to have been 3.9 billion USD since 2002. This page (interestingly no longer available on the US AID website) lists some of the “implementing partners” for Afghanistan. The list includes some charities (who may of course have further subcontracted the work) and plenty of profit-making corporations.



Author: justinwyllie

EFL Teacher and Photographer