Afghan Co. With Terror Ties Gets US Money, Sensitive Access: Report

Special inspector general sends letter of warning to Defense Secretary.

November 13, 2013, 12:11 PM

Nov. 13, 2013— -- Employees from an Afghan engineering company identified by the U.S. government as "supporting the insurgency in Afghanistan" were able to gain access to the construction site of a new justice center in Kabul last November, according to an investigation by the Special Inspector General for Afghanistan Reconstruction (SIGAR).

"Unless immediate action is taken… this contractor and other supporters of the insurgency could continue to gain access to U.S. and coalition controlled facilities in Afghanistan," the inspector general, John Sopko, wrote in an alert letter sent to the Secretary of Defense.

The company hired to do engineering tests at the sensitive Justice complex construction site is a subsidiary of one on a list of 43 companies in Afghanistan that are accused of helping to finance al Qaeda and Taliban attacks on American soldiers and facilities.

Speaking from Afghanistan today, Sopko told ABC News that after seeing how seriously military commanders and embassy staff takes security there, "I only wish the Army bureaucrats in Washington were as serious."

"I hope to God it doesn't take a tragedy to convince them to act on these recommendations," he said.

The SIGAR's office has repeatedly requested the Pentagon take legal steps to prevent the companies on the list from receiving U.S. government contracts. So far the Pentagon has not complied, as reported in an ABC News "World News With Diane Sawyer" investigation broadcast earlier this week, though the Army says "measures" are in place to combat the problem.

"Until action is taken on all 43 related insurgency cases SIGAR has referred to the Army for debarment, the safety of our troops could still be at risk and the U.S. government funds could be diverted to supporters of the insurgency," Sopko argued in his letter, made public today. The letter was sent Nov. 8.

DOWNLOAD: SIGAR Letter to Defense Secretary

The list of 43 companies was compiled by the SIGAR's office from investigative reports done by both U.S. Central Command and the Department of Commerce which cite the companies as having ties to terrorism.

Sen. Jeanne Shaheen, D-N.H., a member of both the Senate's Armed Services and Foreign Relations committees, said today that the revelation about facility access in the SIGAR's letter was "disturbing."

In a statement that referenced the ABC News report, Shaheen said of the broader findings, "The idea that U.S. taxpayer dollars are flowing into the hands of terrorist groups bent on killing Americans is unthinkable and unacceptable.... This type of activity endangers the lives of our troops and represents a glaring and dangerous security gap."

Also on the list is a road construction company the U.S. says is partly owned by the leader of the brutal Haqqani network, which was blamed for an attack on the U.S. Embassy in Kabul that claimed 16 lives in 2011.

The cover letter of a classified investigation by the U.S. Army found evidence that both the owner individually and the company "were providing material aid to the insurgency -- with millions of dollars flowing every month."

But despite the broader findings, the Pentagon has resisted permanently blocking the companies from getting more U.S. contracts because, its lawyers say, it would violate the "due process" of the companies which would not be able to see the classified information that details their alleged ties to terror groups.

"The reason they've given us is that it's not fair to these contractors that the evidence that we've presented, and this is evidence collected by the United States government, is classified," Sopko told ABC News . "That's the absurdity of it. We can probably attack them via drone on Monday and we'll issue them a contract on Tuesday."

Sen. Shaheen was one of a bipartisan group of Senators that sent a letter to the Army in late 2012 "expressing concern" about a backlog at the Army's Suspension and Debarment office, noting the 43 cases involving alleged terrorist groups.

"We believe that these 43 cases deserve special attention from the Army due to the nature of their allegations," the letter said, according to a copy posted on the website for Sen. Richard Blumenthal, D-Conn.

For the broadcast report, the Pentagon had arranged for ABC News to interview Lt. Gen. William Phillips of Army acquisition about the concerns, but later canceled, his staff saying "they will be declining an interview for some time in the foreseeable future."

When ABC News appeared at the Pentagon office that handles the debarment of contracts, the officer in charge said he was not allowed to answer questions without permission.

"Well, there are certain regulations that have to be followed, due process regulations," he began, presumably referring to the contract debarment process. "That gets into things that I cannot discuss. In fact, I'm not allowed to talk to you unless I have the permission of the Army so I'll have to end this interview at this time."

In a previous statement to ABC News, the Army said it has "extensive vendor vetting procedures to prevent the awarding of contracts to such vendors." It said most of the 43 companies were not awarded any new contracts "as a result of measures currently in place."

"The army takes seriously any allegations of improper contractor activities and has vigorous processes to ensure that those with whom we do business are not supporting the insurgency or otherwise opposing U.S. and collation forces in Afghanistan" the statement said.

Sopko's newly released alert letter calls into question those assurances. The Pentagon did not immediately respond to a request for comment about the letter.

Inspector General Sopko says the Army needs to permanently block the companies from receiving any more U.S. taxpayer money, given the seriousness of the information.

"I am a former prosecutor, I've seen the information and it made my hair stand on end," Sopko told ABC News.

Representatives for the two companies referenced in this report separately told ABC News the companies denied any ties to terrorism and were contesting their inclusion on the SIGAR's list.

While the evidence against all the companies remains classified, the SIGAR told ABC News it is very specific and overwhelming.

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