The Special Inspector General for Afghanistan Reconstruction (SIGAR) reported on Monday that the Biden administration has overseen $10.9 million in payments to the Taliban junta in Afghanistan since President Joe Biden’s disastrous withdrawal of American forces in August 2021.
SIGAR said the bulk of this U.S. taxpayer funding for the Taliban regime came from “taxes” collected by the terrorists. About half a million dollars of the payments were for “payments for utilities, fees, and customs duties.”
Worse still, the report said the $10.9 million tracked by SIGAR’s auditors was “likely only a fraction of the total amount of U.S. assistance funds provided to the Taliban” because “U.N. agencies receiving U.S. funds did not collect data or provide relevant information about their subawardees’ payments.”
Furthermore, the Special Inspector General complained that many organizations working in Afghanistan simply failed to comply with the U.S. Treasury Department’s minimal recordkeeping requirements.
One of the U.N.’s “implementing partners” told SIGAR investigators that it paid taxes to the Taliban but kept no records of the transactions. Ironically, the very fact that the United States does not recognize the legitimacy of the Taliban regime was cited as a reason for not keeping records of taxes and fees paid because the junta in Kabul does not meet the technical definition of a “host government.”
The United Nations has collected about $1.6 billion from U.S. taxpayers for programs in Afghanistan since the fall of Kabul, with no requirements to “annually report on taxes, fees, duties, or utilities” paid to the Taliban regime.
While the U.N. itself claims it paid no taxes or fees to the Taliban because it was awarded tax-exempt status, SIGAR noted that its agencies “act as pass-through entities for State and USAID awards and use subcontractors to directly implement award activities.”
Since the regime did not grant those subcontractors tax exemptions, it is likely that a good deal of the American funding allocated to them wound up in the coffers of the Taliban.
SIGAR noted that U.N. officials have warned their subcontractors that the Taliban will punish them for failing to pay taxes and fees, with actions ranging from frozen bank accounts and closed offices to “attempts to divert aid or infiltrate NGOs [non-government organizations] and interfere with activities.”
Seventeen of the 65 organizations operating in Afghanistan that responded to SIGAR’s questionnaire said they had experienced “direct pressure from the Taliban,” including demands to hire “Taliban-approved individuals” and orders to divert food and medicine to “populations chosen by the Taliban.” The responding organizations said they were able to resist many of the Taliban’s demands, even though armed thugs menaced them on occasion.
SIGAR warned:
The direct collection of taxes, fees, duties, and utilities from U.S. government-funded activities risks contributing to the legitimization of the Taliban-controlled government in the eyes of the Afghan people. For example, implementing partners reported the Taliban uses aid delivery as propaganda by taking credit for the aid provided to the Afghan people.
Rep. Michael McCaul (R-TX), chair of the House Foreign Affairs Committee, said he was not surprised by the results of the SIGAR audit, which he requested in March 2023.
“It is unacceptable for any U.S. funding to benefit the Taliban. The Biden administration must take immediate action to prevent U.S. taxpayer dollars from going to the Taliban,” McCaul told the Daily Caller on Tuesday.
The State Department issued a remarkable statement to the Daily Caller insisting that “no U.S. government assistance is provided to, or through, the Taliban” because those American taxpayer billions are laundered through the United Nations and its partner agencies.
SIGAR had some specific policy recommendations to reduce the amount of American taxpayer money flowing to the Taliban, including expanded reporting requirements for all recipients of U.S. funding, proper tax reporting on all fees collected by the Taliban regime, and stricter enforcement of the largely neglected Treasury Department Office of Foreign Assets Control (OFAC) rules.
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