for stealing money from some other organization -- >> there are a couple of inner agency task forces and some that are international among all the donors. one being one which looks specifically at issues of afghan corruption and we certainly share information among the inneragency. to take your example, though, of a ministry that we have done the preaward assessment, we would have identified through this task force or through the inner agency collaboration most likely that this individual was of questionable repute and there would have been some mitigation taken to make sure that he did not have access to these funds. i don't -- to the best of my knowledge, there's no situation where one individual in any ministry we work with has signatory authority for funds. it doesn't work that they way. they do the work. they say they've done the work and certify it.

usaid direct hire staff or the third party contractor validate the work was done and then we reimburse the receipts for that work. these are lessons we've learned the hard way, not just in afghanistan, but in other places that usaid works. this isn't the first corrupt place that we've had to work. >> yes. yes. i understand that. i'm going to ask you a little bit about ngos and then back to the point you were just making. so, there was a senior auditor for segar, james peterson, wrote a column for politico yesterday. suggesting that ngos were taking far too much money off the top. of various programs, being given money to do this or that, but they end up having enormous overhead costs. and he suggested in his article,

usaid has struggled to keep ngo overhead costs below 70%. so, is that right? i mean, we are actually looking at the ngos going in and they're only providing the money that's given to them only 30% is ending up trying to achieve the goal? >> i can -- i can reassure mr. peterson, we're successful at keeping overhead below 70%. i don't know where he got that number. i happen -- i can't speak for all ngos, i know the ngo i work for and the ones i've worked with in my ten years, none of them have overhead that anywhere even approaches even 30% to be honest, but certainly not 70%. i did see mr. peterson's article back when i came out i think in january or february and found it not to be particularly credible to be honest. >> that's okay. so, you would suggest that using ngos is an alternative or one of the alternatives that would be a

very viable alternative for usaid to look at and to continue down that road in terms of your development strategies, is that correct? in afghanistan. >> yes. ngos, we have direct assistance. we have contracts with for-profit companies for the most part and we have cooperative agreements and grants. >> you want to give me a little assessment whether ngo approach or giving direct money to specific government agencies, meaning the afghan government agencies, which is the most effective in building the new clinics and schools that you talked about. >> certainly. this is part of i think what makes my job so interesting to be honest, congressman, is there are things that ngos are better able to do, and they are valuable partners all over the world, and they have both international ngos and domestic

afghan ngos. but i constantly remind myself and our staff that our job is to work the international community out of a job, out of business. using international ngos is somewhat effective at that, but it's more effective if we can find afghan partners in whom we can build that capacity from the ground up. >> and you've used these afghan partners and been satisfied at the level of competency and also the level of corruption or lack of corruption that you found? >> if we're not satisfied, we don't use them, congressman. but competency we can train. corruption we can't tolerate. so, if we meet with an organization that needs capacity to be able to do whatever we've asked them to do, the ministry of public health is a great example, the ministry itself needed some work. we created a technical assistance mechanism to help the ministry do this and then the ministry went themselves to ngos and the ministry and usaid

helped build the ngo capacity to execute the programs. we could have done with it with an international ngo, but that would have been not been the same capacity building value of doing it through the after gann afghans. >> when ngos come in, a lot of them have to have drivers, they have to have very secure locations and sometimes luxurious for the country they're in, luxurious location to nest, and it seems to me that there's a lot of ngos going out and roughing it has not necessarily been what i have witnessed. although i am sure there are many ngos that do that, there are a lot of ngos that aren't. >> thank you, congressman. ngos range everything from small faith-based ngops that are supported by one congregation in north georgia all the way up to some very large multinational ngos. >> do you believe that karzai's

brother profited from the bank failure, from the kabul bank scandal? >> all i know about karzai's brother and the bank is what i've read in the press. the most recent story i read he had reached an accommodation with the prosecutor that he would not face jail time as long as he made restitution. that's what the press is reporting. other than that, i don't know. >> have you heard stories about any other member of the karzai family that seemed credible to you that they might have been involved in drugs in some way? >> i have to stop at the credible to me part. congressman, i know you know from your own time in country, it's a country that has an oral tradition as opposed to a written tradition and there are stories to everyone in afghanistan. certainly the stories were rampant. to be clear, though, at no time with my dod time there or isaf or usaid have i ever seen a

credible story that's documented that we could take action on. and i'm confident knowing the people that i worked with -- >> a little caveat that we can take action on leaves a big door open. let me ask you this, do you know of the karzai family owning property in dubai? >> i do not. and i wouldn't know. i go through dubai on the way, but that's all. >> but you are at the same time providing grants, are you not, to the various government officials and agencies in the afghan government that would be responsible for trying to ferret out that type of corruption? >> the most relevant organization that i can think of that we support is the office of -- the office of high oversight which is their equivalent perhaps of an inspector general at the national level. so, yes, we do support the government of afghanistan's attempt to police its own. >> right. and you haven't heard of anything coming from -- about

the karzai family being on their blacklist? >> no. >> or is it just something everybody knows or is it just something that perhaps is probably not true? >> i don't know exactly how to answer that, congressman. the usaid's business is with the government of afghanistan. i'm very comfortable discussing corruption and allegations about the government of afghanistan and about specific ministries. with respect to particular families, be it karzai's or others, i could go back if you wish and find out what we have on our books, but i don't know those answers off the top of my head. >> we did give you a medal and everything. >> he did. and i'm quite proud of it. >> i would be proud of a medal from afghanistan, and he was representing afghanistan at the time, i think you can be very proud of that medal. and we're very grateful for the service that you're providing. >> thank you, congressman. >> and part of that service is

coming up and being cross-examined by member of congress which makes it even more of a drudgery or a tough job. let me ask about this new agreement that we have signed with the afghan government. it is my understanding -- well, first of all, it's tied us into a relationship with an afghan government that i personally would question whether we should be tied into or not. but does this agreement, per your understanding, tie us into a relationship with the afghan government where 50% of our -- of all of our assistance will have go through the afghan government and what you were saying rather than being given to contractors and ngos? >> the agreement does call for a 50% on-budget contribution. we will not do that until we can

assure ourselves that the contribution will be properly managed. so, that is what -- it's set for us as a goal just as we've set goals for the government of afghanistan -- >> so, we've agreed to try to achieve that goal? >> that's correct, congressman. >> but we haven't agreed to do it, we've agreed we're going to try to do it. >> that's right, congressman. >> that's a very interesting interpretation of the agreement. i'll take a look and make sure the wording is sort of that way. i will have to suggest that we have been in afghanistan now for close to ten years. and you're right when you talked about commander mesud and abdul hawke and some of the great leaders that they had. they've lost a million people in the last 20 years. many of them who would be providing, you know, the

leadership, the honest and committed leadership, that afghanistan or any society needs. unfortunately, they're gone and we have got to do our best without them. let me ask a little bit, i have one or two more questions about aid, and you do not have a specific list of people who worked for the government who you are not now who are on your blacklist, who you're not going to deal with? >> usaid other than our suspension and debarment list which is a corporate list, does not have a black lillist of individuals. part of the preventive maintenance or the preventive assessment we would do, the preparatory assessment, would involve be working with the money and who would be the signatory. >> okay. how much of the aid, i have received information that suggests that a large portion of

the aid that we have spent in afghanistan in these ten years has gone to the southern tier of afghanistan which is basically the pashtun territories. is that true? and if it is true, why are we putting the lion's share of our aid there rather than working with those people who actually helped us defeat the taliban who come from more of the northern tier of the country? >> congressman, that's not an uncommon question. the demographic distribution of the funds is somewhat skewed by the fact that kabul is itself in the east of afghanistan. so, in the regions the east and the south have kabul and kandahar. the south and even the southwest, the helmand river valley area, have been identified as particular recipients of assistance primarily in support of the military or the comprehensive

approach to countering the insurgency there. in meetings with the governor of bamianian which is a beautiful part of afghanistan and has not seen much of the war lately, they lamented the fact that they are peaceful, they're law abiding, they have a woman governor, they have a minister, an admirable administration but they don't get the level of resources they think they should get. we constantly realign or portfolio. we did a portfolio review in just the past six months and part of it is focusing on where do the resources need to go. we avoid political distributions. these are not -- the resources are determined primarily by the needs of the u.s. government and then by the priorities of the government of afghanistan. >> okay. your list of things that -- on which we can be proud of, and let me just suggest that shortly after deliberation, i went in

and out of afghanistan, before the liberation and back before the russian times, but i remember right after the liberation, i went in and i drove between kabul and mosar sharif. and halfway through there was a school tent set up. and i have to admit to you one of the most inspiring sights i have ever seen were those kids in that school and where you had little girls and little boys both, and here they had just come from a society where educating a girl would have meant they would cut the head off the teacher, and these people were committed to teaching their children all of their children the basics that would permit them to live a decent life. that was very inspiring. and helping schools and health care can't go wrong in that regard, unless somebody is pilfering all the money like i suggested when i was in vietnam,

i noticed that -- >> congressman you lamented that the house of abdul hawke and commander mesud, and i think a lot of people do, but i'm inspired when i go back by the young people who look up to those men and their peers and who appear to fill their shoes. and one of the things that excites me about the education programs in particular, and it was my words, i wrote the part of my presentation talking specifically about critical thinking skills. young afghan men and young afghan women are not going to be led blindly into bad ideas be they governance ideas are be they some other maligned doctrine. and these schools i think are the hope and the future not just for afghanistan but for the region. they'll be better citizens. they'll be better business people. >> and the schools, are they in the southern part of the country as well? is this something that you're focusing on? and how is that -- i mean, as we know, the southern part of the country where the pashtuns are the dominant force, much of the

taliban's anti-female aspects of them comes from -- are actually the pashtuns agree with some of that, a lot of that. is there resistance in these pashtun areas to that type of education? >> it's vair riries community b community. as you recall they have a very tribal and clan structure society especially in the south and if the leadership of that community have had exposure, if one of their nieces or daughters or a woman in their family has been educated and they seen that this contributes to the well-being of the family, then those patriarchs are able to help push that message out. but the other thing that makes it irreversible i think is the number of young women who have been educated and will not be put back into the dark ages. the radio programs, there are some 15,000 independent radio stations across the country that are quietly but slowly spreading a message that education of women is a good thing, so, yes, there is resistance.

in some cases it's been brutal resistance, but i think that's on the wane in general. >> you mentioned kandahar. and that, of course, has been a priority area. but it has also been a priority area that has been dominated by the karzai family. and what has been your experience with the karzai family in kandahar? >> i have no personal experience with the karzai family in kandahar. when i was the chief of staff at the u.n. mission, i spent a fair amount of time there. and i would be able to say that the karzai's tribe was a prominent tribe but not the only dominant tribe in that part of the country. and during my time there, that would have been 2004 to '6, their clan or their tribe was competing with others for resources and for dominance. but i was not in kandahar at a

time when anything like the karzai family ran the city. i didn't experience that. >> and what else is prevalent in kandahar? is there something that grows out in the countryside that -- >> you're probably speaking of opium. and helmand is probably quite a bit more -- >> yes, i understand that. but kandahar, isn't that part of that whole swath of the country where opium is grown? >> across the south if there are not strong institutions and if there are not alternatively livelihood and value chains and access to market, opium will certainly be grown. >> okay. and i know that you have got a list, and i hope you'll provide for me a list, and i know you've got it because it's -- and it's good, of enterprises that we are trying to use as alternatives to the opium trade. and i won't ask you to detail it for us now, but i'm sure that that's part of what we're trying

to do. >> it is. >> but if you could send that to me in writing, that will be deeply appreciated. >> we would be happy to do that, congressman. >> do you have anything you would like to add? >> just one thing i'd like to address with respect to the gao, and i don't know if they stayed, i speak sincerely when i say we appreciate the oversight they provide. i don't take great umbrage when the gao finds mistakes. i take and pay particular attention to open recommendations that we have not closed. so, the gao finding a problem is not great news for us, but it's not a failure on our part. not addressing their recommendation and not closing the recommendation is. and that's where i think we have such a good relationship, not just with gao, but also with segar and in particular with the usaid igs, we'll argue with them vociferously about points of art and about the state of how we do this, but at the end of the day

their job is to point out weaknesses and our job is to address the weaknesses. so i think hearings like this are very useful and i certainly think the gao and the two igs m we've had over 248 recommendations from r.i.g. over the course of the ten years we have been in afghanistan, and of those, all but about 49 of them have been closed, and i know some of the 49 because they cross my desk regularly. the i.g. said that we needed to do x but for reasons y, we can't do that yet. so that would be the only point i would make is that i view this as not antagonistic and certainly not adversarial but as parts of a whole in making sure that we are good stewards with taxpayer resources. >> okay. so you've been in and out of afghanistan now for quite a few years, and you know about our struggles to develop that country. is the government structure that we helped put in place, that we

actually pressured people to adopt, is that so centralized that number one, it encourages corruption. we have now a presidential system in which the president of the central government appoints all of the provincial governors and then the governors then appoint the other officials down under them, so basically, we have set up a system that if it was in the united states, the president of the united states would be controlling all the governments all the way down to the local city hall. do you think that system lends itself to corruption? >> i'm smiling, congressman. that's a great question and it's one that actually i think during the constitutional jurga, we in

the international community debated almost constantly. what we fell back on to in the end is it was not our decision to make. we did have and there's no question the international community influenced the afghans in the shape and form of their government. answering from a developmental academic perspective, i don't think that a centralized government fosters corruption more than say a decentralized government would. what prevents corruption is robust institutions, and if the afghans had the capacity and the provinces and the districts for robust institutions, there would be more room for decentralization. it's my experience, my personal experience, not the agency's, that in afghanistan, that capacity's not there universally yet. it's growing and again, the schools are growing it fast, and as these provincial centers are able to absorb capacity and absorb resources, they should. if you're asking me whether or not having -- whether the afghan constitution having the

president appoint and the governors appoint is the best system, the only comparison that i can make is it took us 12 years to go from the articles of confederation to a constitution that was the best i think in the world, and even then, our constitution took 114 years as of yesterday to give women the right to vote. i think it's important that we hold the afghans accountable to a high standard but it has to be an achievable standard. you know better than i, perhaps, because you roam that country with less security details and less constraints, their culture is incredibly entrenched and it's not going to be something that we can change in a decade, which is one of the reasons i have been so encouraged to hear discussion about a longer term investment. certainly at diminished levels but that the united states is going to stay the course in afghanistan so that we don't make mistakes that we made after the last time we were working in that part of the world. >> the opposition to the current

government from the northern sector of the country is suggesting that they have -- by the way, people have claimed that i believe in some sort of segmentation of the country and dividing the country, which i do not, just for the record. and where they get that is that i believe we have to have a system that does in some way address their basic culture, which is decision making needs to be made at the tribal and village level as much as possible, but in terms of -- so mr. karzai has covered himself by suggesting that means i believe in cutting the whole country apart. also, i happen to believe that in afghanistan, it might be better or whatever i believe is irrelevant, but the people may want this and they should be given the choice of deciding, and a lot of people in the northern part of the country would rather have a

parliamentary system in order to make sure that you just don't have all the power in one man, and if you do have the president or prime minister of the country, that at least that person has to rely on a coalition instead of everything from the top down. any thoughts on that? >> congressman, i think your recognition of local decision making is just as relevant today as it was when you were there. one of the lessons that we've learned in our ten years there was focusing for example on rule of law issues. rule of law to us means judges, it means prosecutors, defense attorneys, it means courtrooms. rule of law to afghans means sitting down with the elders in the two villages that are in dispute and coming to a sensible resolution and then everyone agreeing to it and walking away. that's a lot less expensive than courts and in afghanistan, it's a lot more effective and it's sensitive and recognizes the leadership that they have in their own communities.

just an anecdote about illustrating the differences in how we see the world and how they see the world, after the emergency jurga, i sat with elders and one of the gray beards from one of the communities said mr. larry, i fought with the muj, i'm the water master in my village, i've been on the hajj. this is my grandson. why should his vote count the same as mine. and i was a recent graduate from an excellent university in the united states and i didn't have an answer to that. what i have come to realize is afghan systems aren't worse than ours in some cases, they're just different. we need to identify their strengths and their weaknesses and we need to make sure that we protect our equities, be it taxpayer dollars or people, and then we need to let the afghans get on with doing business in ways that are transparent and accountable. >> let's just note that the only time period that i have been able to discern from their history where they had decades

long of relative stability happened under the leadership of shah, one of the beloved figures of afghan history, and the reason why he was beloved and able to be the leader of the country is he left people to govern themselves at the local level, and let the village and the tribal leaders have their meetings and make their decisions. he did not try to govern the country by having a centralized army forcing everybody to do what his appointee in that area was insisting. that's how he succeeded and afghanistan had decades of relative stability, and after the communist efforts to unseat him, and he was in exile in rome, i believe the greatest mistake we ever made was not

bringing him back, and pressuring him to bring karzai into a position of being able to be in power and so right now, my analysis of what this structure looks like is i find it difficult to tell the difference between the structure that we've set up, a centralized structure where one person is making the appointments, and they are trying to build a strong army in the center and having foreign troops there to give added strength to the central government. i don't see where we're any different than what the soviets were in when i first went to afghanistan 25 years ago. and the soviets did not succeed and we won't succeed if that's what it's all about.

so i respect the fact that you and others are doing your best to try to help our country succeed there. you're doing your very best and i know our military people are doing their very best. i don't think that we have given -- laid down the ground rules in a way that will permit them to succeed, and the american people can't go on like this. we may have signed a contract to be with them for another ten years. the american people don't want to be in afghanistan another ten years. we don't want to be providing foreign military advisors there, we don't want to be providing foreign aid there, we want to let those people govern themselves, work in the systems that work with their culture, not try to super impose things and leave with a smile and say we're your friends but we're not your keepers.