Quarterly Report - April To the President and the People of Afghanistan INDEPENDENT JOINT ANTI-CORRUPTION MONITORING AND EVALUATION COMMITTEE

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1 x Quarterly Report - April 2017 To the President and the People of Afghanistan INDEPENDENT JOINT ANTI-CORRUPTION MONITORING AND EVALUATION COMMITTEE

2 Table of Content 1. Chairman s Letter: The corruption balance sheet according to MEC MEC s 22 nd Mission: MEC findings this quarter:..10 a. Ministry of Communication, Information and Technology (MCIT) Review of Anti-Corruption Plan b. Ministry of Finance (MOF) Review of Anti-Corruption Plan c. Ministry of Commerce and Industries (MoCI) Review of Anti- Corruption Plan d. MOPH 2nd follow up report e. Status of Asset Recovery of Kabul Bank 5. MEC Current Activities..14 a. Analysis of Corruption Vulnerabilities in the Attorney General s Office b. Analysis of Corruption Vulnerabilities across the Ministry Of Education. c. Corruption Analysis of Breshna and Electricity d. Vulnerability to Corruption in the Afghanistan Revenue Department e. CARD-F Inquiry f. Bamyan Trip Report g. Assessments based on Presidential orders 6. Acronyms:

3 ''And do not consume one another's wealth unjustly or send it [in bribery] to the rulers in order that [they might aid] you [to] consume a portion of the wealth of the people in sin, while you know [it is unlawful].'' --2:188, The Holy Quran-- 2

4 Chairman s Letter: Sometimes you cannot see the wood for the trees. This is a well-known proverb in my country. In relation to corruption, the trees' are the thousands of ways in which corruption invades daily life in Afghanistan. Everyone knows this and is used to it, even when they hate participating in it. These trees have a formal definition in Afghan law: the legal definition of corruption covers eighteen acts, such as bribery, embezzlement and abuse of power The wood is the bigger picture. And the bigger picture on corruption is about the illegal actions of powerful individuals, placing their people and stealing large sums of money. Large scale corruption is a terrible crime against the future of this country. It is the theft of the education of millions of young Afghans by only a few hundred people. What is the name of this wood? It is very simple: Large scale corruption is treason to the homeland. In Afghan law, treason is defined as Intentional acts by a citizen of the Democratic Republic of Afghanistan against the people, and joining the enemy. Engaging in largescale corruption means joining the enemies of Afghanistan. At MEC, we are stepping up our actions to identify where the government s anti-corruption efforts are insufficient and giving our advice on how to fix it. We are also stepping up our actions on where the international community s efforts are insufficient or showing corruption. Since January 2017: MEC has reviewed the Anti-Corruption plan of the Ministry of Telecommunications and Information Technology (MCIT). MEC has reviewed the Ministry of Finance s Anti-Corruption plan MEC has reviewed the Anti-Corruption plan of the Ministry of Commerce and Industry (MOCI). MEC has completed, but not yet published, a detailed analysis of the corruption vulnerabilities in the Attorney General s Office. MEC has completed its second and third follow up reports of anti-corruption actions in the Ministry of Public Health (MOPH). There has been one big positive area of progress against corruption in the country: the Anti-Corruption Justice Centre is now really starting its work. These people are immensely brave: just one week ago two of them were killed. The whole country should salute and support the work of the ACJC. 3

5 MEC s work during the coming quarter continues this more aggressive strategy: MEC is in the middle of a detailed study on corruption in electricity (Breshna) MEC is doing a study of corruption vulnerabilities in the tax offices in MOF MEC is starting a study on CARD-F, a major donor-funded agriculture programme MEC is starting a study on the corruption vulnerabilities in the Independent Electoral Complaints Commission MEC will be initiating a study of corruption in mining contracts and the vulnerabilities in the Ministry of Mines and Petroleum MEC will be reviewing the Anti-Corruption plans of the Ministry of Transport, Ministry of Foreign Affairs and Ministry of Refugees and Repatriates. A powerful element of MEC s structure is that the MEC Committee comprises equal numbers of Afghan and international Commissioners, three of each. This makes it easier for MEC to act independently of partisan national interests, and equally independently of international community special interests. In this last quarter, two of our Commissioners stepped down: Dr. Yama Torabi and Dr. Shaukat Hassan. I would like to thank them both for their tireless work on MEC s behalf, and for their steadfast and continuing support for MEC. MEC exists to speak the truth about corruption and progress against corruption - to the President and to the people of Afghanistan, and to the international community. This is our role and we will carry it out to the best of our capability. Dr. Mark Pyman Chair, Committee of MEC May 7 th,

6 First quarter the corruption balance sheet according to MEC: The positive The evolution of the Anti-corruption Justice Center (ACJC) which had begun its work in November 2016 with a few hiccups into an effective judicial device was the most encouraging development of this quarter. In January alone, the ACJC processed at least 60 cases involving government officials who were accused of embezzlement, bribery, usurpation of public land and illegal mining, according to the Attorney General s Office. On January 9th, the ACJC court sentenced General Abdul Wasey Raofi, the head of monitoring for the Procurement Department of the Ministry of Interior Affairs, to 12 years imprisonment on charges of bribery. The Center also convicted 5 Ministry of Finance employees for bribery and in March, sentenced 4 officials to prison for their involvement in embezzling funds in the Khawja Rawash Housing Project. The corruption case of Kamran Alizai, Chairman of Herat Provincial Council received much media attention. The ACJC primary court gave Alizai two years and six months jail term for misuse of authority, interference in the affairs of Herat Attorney General s Office and in the appointments of high-ranking provincial and for insulting prosecutors. Picture copyright@ 5

7 A number of other corruption-related detentions, dismissals and suspensions of highranking officials occurred in the first months of 2017: In January, Abdul Razaq Wahidi, the Minister of Communications and Information Technology, was suspended Later in the month, President Ghani ordered dismissal of heads of the Procurement Department of the Ministry of Interior Affairs who had worked in that department in the past ten years and the AGO announced the opening of all MoI contract-related corruption cases for the years 2012 to The Ministry of Defense said at the end of March that in the last six months it had dismissed about 1400 officials on corruption charges and had replaced them with young and committed individuals. At the end of January, the AGO ordered suspension of at least 17 officials of the Ministry of Justice s Directorate of Law (Huquq) over their misuse of authority. Three customs officials in Herat, a District Chief in Paktika, a former shareholder of Kabul Bank and an army corps commander with the rank of Lt. General were arrested on various corruption charges. Perhaps the most hopeful sign of Afghanistan s fight against corruption was embodied in a public rally in Herat, where demonstrators, organized by provincial civil society groups, conveyed their condemnation of corruption by burning a symbolic corruption dummy in front of the governor s office. The negative While some anti-corruption announcements appeared positive, they raised concerns about appropriate and result-based follow-up action. For instance, on January 10, the High Office of Anti-Corruption Oversight announced that it would ask high-ranking government officials to register their assets. The identification of those who fail to comply, the HOO said, will be shared with the public. No progress report on the asset registration process has been made public, nor any non-compliant official has been named so far. A Wulusi Jirga (lower house of the Parliament) member claimed on February 27 that 70 percent of appointments at the Ministry of Foreign Affairs during the past two years were made illegally. No apparent follow-up action has so far been taken on this significant claim of corruption in the MoFA s recruitment process. On March 25, the Ministry of Defense announced that it has swapped posts of at least 1000 officials accused of corruption in MoD s Procurement and Finance departments. While the MoD should be commended for identifying its corrupt officials, its choice of remedy is highly questionable. Officials at the Ministry of Communications and Information Technology said in March that nearly Afs 5.9 billion have been collected from the 10 percent levy on top-up telecom 6

8 cards, but the method of tax collection remains to be vulnerable to embezzlement. While identifying the problem is a positive step at MoCIT, taking corrective action is still not in sight. A number of reports that were published last quarter highlighted the continued gravity of corruption in Afghanistan. The Afghan Anti-Corruption Network s March report reveals increased corruption in the mining sector. The report states that at least 217 mining contracts will be given to powerful figures and those connected to MPs and government officials in exchange for bribes of at least USD 100,000 for each contract. Integrity Watch Afghanistan s biennial National Corruption Survey released at the end of 2016 reflects an increased perception of corruption among the public, with 71 percent of those surveyed saying that corruption has worsened in the past two years. IWA estimates that Afghans paid USD2.9 billion in bribes in 2016, an increase from USD1.9 billion estimated by the organization for A report released in mid-march by Construction Sector Transparency Initiative Afghanistan (CSTIA) revealed that over the past 15 years, billions of dollars have been embezzled in infrastructure projects due to lack of transparency. According to this report, the awarding of contracts based on favoritism has greatly contributed to the problems that plague implementation of construction projects. On the correlation of corruption and security, the Special Inspector General for Afghanistan Reconstruction, John F. Sopko bluntly stated in March that, Without question, the top two challenges in Afghanistan are corruption and the lack of capacity in the Afghan Security Forces. Meanwhile, the European Union took on the slow pace of reform in the Afghan justice sector. Today the judiciary is too often a tool for the powerful and rich and it is not serving ordinary Afghan citizens who suffer from injustice fed by corruption, stated EU ambassador Franz-Michael Mellbin on March 26 th. And finally, in March, on the occasion of the 2 nd anniversary of Farkhunda Malikzada's mob lynching in Kabul, the Center for Investigative Journalism published a report detailing the failure of the system in bringing the culprits to justice. The report claims that despite the findings of the Independent Association of Defense Lawyers, corruption in its various forms and in all relevant state institutions, has prevented the Supreme Court to finalize this case. 7

9 ''The biggest challenges facing Afghanistan next year are leadership and corruption in the Afghan military.'' --General John Nicholson, -- Head of NATO and U.S. forces in Afghanistan 8

10 MEC s 22 nd Mission The MEC Committee convoked its 22nd quarterly meeting from January 22 to February 3rd in Kabul. Committee Members reviewed MEC s on-going and final reports, made decisions on the future role, strategy and operational aspects of MEC and also had several external meetings, which included; beneficial discussions with CEO Dr. Abdullah, Ministers, the SRSG, Chief Justice, Attorney General, Ambassadors, Head of SIGAR, World Bank, Civil Society and Private Sector. MEC released its Second Quarterly Monitoring Report on following up the implementation of recommendations of MEC s report Vulnerability to Corruption in the Afghan Ministry of Public Health MEC committee visited Indira Gandhi Hospital and met its management board MEC held its 2nd External Anticorruption Forum with high-level state officials MEC Committee Members, Dr. Taseva and Dr. Hassan, participated in a ACJC public trial MEC committee met with head of IDLG MEC committee met with UN Secretary-General's Deputy Special Representative for Afghanistan MEC Committee Member, Dr. Pyman, led an internal anticorruption brainstorming session with MEC Secretariat staff 9

11 MEC findings this quarter: Almost all Ministries have developed anti-corruption plans. MEC is carrying out reviews of these ministry plans. In the first quarter of 2017 MEC reviewed the following anticorruption plans and made recommendations: a. Ministry of Communication, Information and Technology (MCIT) Review of Anti-Corruption Plan During the year 2016, The Ministry of Communication, Information and Technology committed to implementing an Anti-Corruption Plan. MEC s assessment of the MCIT plan began in December 2016 and was completed in early February The main findings of the review are --. MCIT is so far almost entirely failing to implement its Anti-Corruption Plan. (Full Report Link) 10

12 b. Ministry of Finance (MOF) Review of Anti-Corruption Plan Progress as measured by indicators is at 34%. However, the plan itself is not proportionate to the large scale of the Ministry and does not cover all aspects and vulnerabilities of MOF. The plan contains only 15 activities, while MOF is a large ministry and one of the most susceptible to corruption for example, the scope of activity in ARD, which is the largest domestic source of revenue, is limited to two objectives and five activities. The Deputy Ministry for Admin with 3 General Directorates and 13 Directorates has only one activity in the plan. In the Customs Department, seven activities identified by MOF Internal Audit Directorate are not even included in the plan. Moreover, many of the actions in the plan were already largely complete before the plan was started. For example, Out of the 17 fully implemented indicators, four had been largely implemented before 2016, as were many activities related to Afghan Customs and Revenue Departments (two thirds of all activities). The MOF Anti-Corruption Plan was devised for the year This plan is too small and incomplete. MOF needs to develop a second generation plan based on its existing realities. 34% Not Implemented No Evidence Fully Implemented 20% 6% 16% 24% 25-50% Implemented 50-75% Implemented c. Ministry of Commerce and Industries (MoCI) Review of Anti- Corruption Plan MEC s team reviewed the Anti-Corruption Plan of MoCI from early February to April 26th. The key findings of the review focus on the Anti-Corruption Plan and its impact, particularly on the revenue of MoCI. The purpose of the report is to determine whether or not MoCI can fight against corruption through its ACP, and subsequently, increase its revenue. Based on the conclusion of the report, the answer is not affirmative. The MOCI plan is seriously deficient, ignoring several well-know areas of corruption. 11

13 d. MOPH 2 nd follow up report MEC has been regularly monitoring the implementation of its recommendations as outlined in our MVCA of MOPH Report published on June 7 th In the second followup report issued on February 2nd 2017, MEC found that significant progress has been made. There has been credible progress in several areas, for example: Out of 115 recommendations issued by MEC, 14 recommendations have been fully implemented, 63 recommendations have been partially implemented and no actions have been taken regarding the remaining 40 recommendations by MOPH. In addition, there are some challenges in implementing the MEC s recommendations in MOPH. MEC considers the actions of MOPH as positive in the past three months and appreciates its efforts. (Full Report Link) Picture copyright@ fb.com/afghanistan-supreme-court- Picture copyright@ e. Status of Asset Recovery of Kabul Bank MEC has been following up the Kabul Bank case since the time the scandal unfolded. We issued a Public Enquiry Report in 2012, a Follow-up Report in 2014 and an update of 12

14 the case in According to our new findings, the process of the recovery of stolen assets of Kabul Bank has been very slow from the beginning and has further slowed down in recent mounts, reducing the average monthly recovery from 500, ,000 USD to only 80, ,000 USD. The reason for that reduction is largely the illegal interference and influence of high-ranking officials in the affairs of the Kabul Bank Receivership, the body which is responsible for collecting the stolen money. The chart below shows the status of the asset recovery since the establishment of the NUG Recovery/Settlement since Establishment of the NUG in Million USD Cash Recovery Instalment agreement backed by colleterals Interest dicounted according to the Incentive Procedure 31.9 A number of debtors decline to pay back their debt or are trying to renegotiate the amount of their outstanding liability with the receivership, thereby undermining the verdict of the Supreme Court and the Incentive Procedure. In some cases these debtors are backed or supported by high-ranking officials. MEC expects a complete and transparent implementation of the court order and seizure of all the assets of those who do not pay their outstanding debts, in accordance with the Incentive Procedure. The recovery of assets from Kabul Bank has slowed down considerably 13

15 MEC Current Activities a. Analysis of Corruption Vulnerabilities in the Attorney General s Office In October 2016 MEC launched the Vulnerability to Corruption Assessment (VCA) of the Attorney General Office. The initiative was welcomed by the Attorney General, His Excellency Farid Hamidi. The data collection consisted of over 230 interviews in Kabul and a number of provinces with AGO officials, law enforcement officials, defense attorneys, end users, legal aid providers, legal educators, and detention centers. The reform initiatives of the Attorney General since his appointment offer an opportunity to pursue implementation of a more rigorous reform plan required to strengthen the AGO s ability to address crime and fight corruption. This report is currently in its final stages. b. Analysis of Corruption Vulnerabilities across the Ministry Of Education. The Minister of Education, H.E. Dr. Assadullah Hanif Balkhi, invited MEC to conduct this analysis. The work started on January 23rd, 2017, and will be completed in July This is a major analysis covering all substantial parts of the ministry and schools in a wide range of provinces. The work is currently about 40% complete, with the bulk of the effort coming in the next three months. 14

16 c. Corruption Analysis of Breshna and Electricity This analysis was launched at the end of 2016 and will be completed in July The assessment in the project is on the following sections: The legal structure of Breshna, the corporate governance and accountability within the company, the recruitment process, anti-corruption policy, power distribution, financial management system, and procurement system and customer satisfaction. The assessment is currently 60% completed. d. Vulnerability to Corruption in the Afghanistan Revenue Department At the request of His Excellency the Minister of Finance, Eklil Hakimi, MEC started a Vulnerabilities to Corruption Assessment (VCA) in the Ministry of Finance - Customs and Revenue Department (CRD), previously known as the Afghanistan Revenue Department (ARD). The assessment will have a concentrated focus on the Large Taxpayers Office (LTO), Medium Taxpayers Office (MTO) Small Taxpayers Office (STO) in Kabul and to a lesser extent on the Kabul districts and Provincial offices. The VCA will focus on the identification of key governing vulnerabilities within the Revenue Department and will recommend changes or improvements to policies and procedures that can further assist the Revenue Department in corruption prevention and deterring measures. The report will be published in July. e. CARD-F Inquiry MEC started preliminary work on an assessment of the Comprehensive Agriculture and Rural Development Facility (CARD-F). CARD-F is an inter-ministerial development program funded by donors and managed by an Afghan management unit. The program was initiated in 2009 to improve the licit rural income in Afghanistan by commercializing the agriculture sector, strengthening agricultural production and processing and reducing opium cultivation. f. Bamyan Trip Report The committee in their 22 nd mission had a provincial visit to Bamyan and had at least sixteen meetings with Bamyan officials, UNAMA, civil activist, journalists and university students. The main corruption challenges in Bamyan were in education, health, the courts, agriculture, the municipality, the police, recruitment of government officials at all levels, contracts, and the influence of Members of Parliament. 15

17 But at the same time, MEC found many positive factors in the province, such as the strength of civil society, the official support for civil society, the personal commitment of many of the individuals, and the passion of Bamyan s citizens and students for tangible progress against corruption. Conclusions: Will conduct larger studies about recruitment process of the state The issue of theft and sale of equipment allocated to police is a serious case and MEC needs to demand through an official letter an enquiry into the cases of corruption in Bamyan Police. The Arazi must make a registry of all government and private land and be able to reclaim the land usurped by powerful people in the province. MEC must submit a letter to ministry of information and culture, demanding an enquiry into the use of restricted land for commercial use by powerful individuals in Bamyan. As part of its advocacy, MEC must inform AGO and engage in the cases of corruption in the departments of education, health, mining, police, Arazi and culture. g. Assessments based on Presidential orders As part of MEC s mandate and Strategic Plan, during this quarter, MEC has been tasked to be part of a number of ad-hoc assessment teams consisting of different governmental institutions based on separate Presidential Orders. Assessment of Allegations / Complaints in regards to Illegal activities within the MCIT in the Recruitment Process of CBR, February- March 2017 Assessment of the amounts and types of investments in the country and the implementation status of private sector s suggestions, February- on going 2017 Assessment of allegations regarding the illegal practices in Finance / Administration areas of MOLSAMD, February- March

18 Acronyms: AFN AGO ACJC AOP ARAZI AREU ARD CARD-F CEO CRD HMIS HOO IDLG IWA KBR MEC MCIT MOCI MOF MOI MOLSAM MOPH MTO MUD NGO NSC LTO VCA SAO SRSG STO TI UNAMA USAID USD Afghani (currency) Attorney General s Office Anti-Corruption Justice Center Administrative Office of the President Afghanistan Independent Land Authority Afghanistan Research and Evaluation Unit Afghanistan Revenue Department Comprehensive Agriculture and Rural Development Facility Chief Executive Officer Customs and Revenue Department Health Management Information System High Office of Oversight Independent Directorate of Local Governance Integrity Watch Afghanistan Kabul Independent Joint Anti-Corruption Monitoring and Evaluation Ministry of Telecommunications and Information Technology Ministry of Commerce and Industry Ministry of Finance Ministry of Interior Affairs Ministry of Labor Social Affairs, Martyrs and Disabled Ministry of Public Health Medium Taxpayers Office Ministry of Urban Development Non Government Organizations National Security Council of Afghanistan Large Taxpayers Office Vulnerabilities to Corruption Assessment Supreme Audit Office (SAO) Special representative of Secretary General, UN. Small Taxpayers Office Transparency International (TI) United Nations Assistance Missision in Afghanistan United States Agency for International Development US Dollar (currency) 17

19 x Quarterly Report Published Date: April 2017 Published By: Phone: Website: Facebook: Twitter: