Foreign Aid

The State Department is refuting a new federal audit that found U.S. firms improperly paid almost $1 billion in Afghan taxes, calling its conclusions “not supported” and claiming its recommendations “may undercut” bilateral negotiations.

Tuesday's report from the Special Inspector General for Afghanistan Reconstruction (SIGAR) found that Afghanistan over the past five years has levied more than $921 million in business taxes and penalties on 43 U.S. reconstructions contractors, in violation of agreements between the two countries. The report urges the State Department and Congress to take action, if need be by penalizing taxation of U.S. foreign assistance funding to the war-torn country.

“It's disturbing that the Afghan government is targeting American contractors with unjust taxes and intimidation,” Special Inspector General John Sopko said in a statement accompanying the report. “It's even more disturbing that US agencies are letting it happen – all at the expense of American taxpayers, who have already shouldered a heavy burden on Afghan reconstruction. This needs to end.”

Secretary of State John Kerry ripped Congress on Wednesday for preventing President Obama from fulfilling his promise to give the cash-strapped country $1 billion in debt relief.

The Obama administration first made the commitment in 2011 as the country struggled to pay its bills. Kerry gave President Mohammed Morsi the first tranche of that economic aid - $190 million – during his trip to Cairo last month.

“We gave them a promise; and a year later, we've given them zero,” Kerry told House appropriators during a hearing on the president's 2014 budget request. “You don't buy your interests. But if you're not helpful to people in their time of need – if you're not there, part of the process – it's very, very difficult to have the kind of leverage to say [that] a diverse, pluralistic politics is critical to us.”

The top Democrat on a House panel that oversees foreign aid is backing President Obama's call for an overhaul of the nation's $1.5 billion food aid program.

“I am pleased the Administration is working to make food aid more efficient and effective,” Rep. Nita Lowey (D-N.Y.), the ranking member on the House Appropriations panel on State and Foreign Operations, said in an email. Secretary of State John Kerry is scheduled to testify before the subcommittee about the president's budget on April 17, The Hill has learned.

“In a time of tight budgets, it is critical to get the best value possible for services and investments, including relieving hunger," she wrote. "This is an important proposal, and I look forward to working with the Administration and my colleagues to move toward more efficiency in food aid."

President Obama's budget proposes overhauling the nation's $1.5 billion-a-year food aid program, setting up a bruising battle on Capitol Hill that cuts across party lines.

In one corner are farm state lawmakers who want the government to continue buying U.S.-grown food and shipping it abroad. In the other: reform proponents who agree with Obama that the current system is a waste of taxpayer money that only harms poor countries' ability to grow their own food.

“After nearly 60 years of experience, we are encouraged by the president’s proposal to fundamentally alter our food aid program to reach more people, more quickly, at less cost,” Reps. Ed Royce (R-Calif.) and Eliot Engel (D-N.Y.), the chairman and ranking member of the House Foreign Affairs Committee, said in a joint statement. “Several recent studies have highlighted the need for reform. We look forward to working with the Administration and our colleagues in Congress to modernize U.S. food aid programs while ensuring maximum impact and efficiency.”

They'll have a tough time convincing their colleagues on agricultural panels. Twenty-one senators wrote to Obama opposing the overhaul when rumors first emerged. 

“American agriculture is one of the few U.S. business sectors to produce a trade surplus, exporting $108 billion in farm goods in 2010,” they wrote. “During this time of economic distress, we should maintain support for the areas of our economy that are growing.”

The chairman of the Oversight Committee's National Security panel on Wednesday slammed the State Department's efforts to give foreign aid directly to partner nations amid reports of massive corruption in Afghanistan.

The Obama administration and other donors agreed in 2010 to provide more aid directly to the Afghan government to help it learn to manage funds and deliver services. Afghanistan, however, remains one of the most corrupt countries in the world, leading to hundreds of millions of dollars a year being wasted out of the almost $93 billion Congress has appropriated since 2002.

Afghanistan “is the most corrupt nation on the face of the planet,” said Rep. Jason Chaffetz (R-Utah). “And what's the USAID [U.S. Agency of International Development] suggestion on how we do this better? Let's use USAID Forward, a program introduced in 2010, where we give the money directly to them – with less oversight, less accountability.”

Hillary Clinton has joined the National Advisory Council of the U.S. Global Leadership Coalition, the advocacy group for foreign aid announced Friday.  Read more...

The U.S. Agency for International Development managed to cut out the middle man in $745 million of its projects last year – a 50 percent increase from 2010, administrator Rajiv Shah announced Wednesday.

Shah made the comments while unveiling a new report on USAID Forward, an effort launched three years ago to change the agency's approach to development work by emphasizing more collaboration with the private sector, nongovernmental organizations and local governments. The agency is about halfway toward its five-year goal of having 30 percent of its funding support local institutions, Shah said. 

“If the old model was hiring a contractor to build a road, the new model is partnering with engines of American innovation — corporations, foundations, NGOs, and faith-based communities — to help nations build innovation economies and democratic societies connected to our own,” Shah said. 

The international perception of American leadership has fallen to the lowest point of President Obama's tenure in the White House, according to a new survey from Gallup.

According to the poll, which measures attitudes across 130 countries, median approval across the international community of America's leadership was just 41 percent. That figure marked a drop from 49 percent in the president's first year in office, and from 46 percent a year ago.

Lawmakers said they weren't consulted about the decision and demanded to know where the $60 million in aid was going.

Sen. Corker said the misuse of Iraq reconstruction funding demands a “top-to-bottom” review of the State Department.