I put Middle Earth Journal in hiatus in May of 2008 and moved to Newshoggers.
I temporarily reopened Middle Earth Journal when Newshoggers shut it's doors but I was invited to Participate at The Moderate Voice so Middle Earth Journal is once again in hiatus.

Thursday, November 08, 2007

You can't always follow the money

I've been largely silent on the unfolding situation in Pakistan thus far. While I don't often agree with the current administration, in this case I've also been taking a "wait and see" attitude for now because it's hard to see what sort of immediate action could be productive. In hindsight, much could have been done differently and better, but what to do now seems less clear. However, some new information about US funding to Musharraf (some $10B since 9/11) had me raising an eyebrow. This analysis comes from Spencer Ackerman over at TPM.

U.S. Aid to Musharraf is Largely Untraceable Cash Transfers
In fact, however, a considerable amount of the money the U.S. gives to Pakistan is administered not through U.S. agencies or joint U.S.-Pakistani programs. Instead, the U.S. gives Musharraf's government about $200 million annually and his military $100 million monthly in the form of direct cash transfers. Once that money leaves the U.S. Treasury, Musharraf can do with it whatever he wants. He needs only promise in a secret annual meeting that he'll use it to invest in the Pakistani people.

I'm not totally unrealistic. Our government is involved in all manner of deals with people of all stripes around the world. And just as in daily life for most of us, there are doubtless some less well structured situations where nothing will take the place of a good old-fashioned injection of cold, hard cash. But Musharraf isn't some lonely agent of democracy operating in dark alleys and back rooms of the third world. He's been the recognized head of state for some time in a nation replete with its own bureaucracy and attendant functionaries, such as an office of budget and financial accountability. Handing out cash to an established government seems questionable at best, and doing business in this fashion comes with some obvious risks.
While Israel and Egypt get more money, Pakistan and Jordan are the only countries that get U.S. cash from four major funding streams: development assistance, security assistance, "budget support" and Coalition Support Funds. Pakistan, however, gets most of its U.S. assistance from Coalition Support Funds and from budget support. And it's those two funding streams that have minimal accountability at best.

You may recall that we were shipping out truckloads of cash to Iraq for quite a while, and massive amounts of it have just disappeared. And that was during a time when we were running the country. It seems a predictable pattern of basic human behavior that whenever vast amounts of untraceable cash are moving around, people will appear as if by magic to scoop some of it up. Also, when you can't tell where the money is heading, it may wind up at crossed purposes from your original intent. Bad enough if this cash ended up in somebody's pocket, but even worse if some of it is being funneled into the hands of people actively working against us.

I agree with some of the pundits who say we need to be cautious before abruptly cutting off all funding to Pakistan. It could push an already alarming situation further toward disaster. However, since we are being promised a "review" of this funding, it might be time to move a lot of this cash haul out of the shadows and into trackable funding which can be fully accounted for.

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