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$43 Million Gas Station a “Can of Worms” Says Sen. Grassley

Senator Charles Grassley (R-IA)

The controversial gas station in Afghanistan, which cost taxpayers either $42.7 million or less than $10 million depending on whom you ask, has become a “can of worms,” according to Senate Judiciary Committee Chairman Chuck Grassley (R-IA).

Last week, Grassley sent a letter to Defense Secretary Ashton Carter requesting clarification about the gas station’s price tag and other matters involving the Pentagon task force responsible for that and other questionable reconstruction projects in Afghanistan.

The Task Force for Business and Stability Operations ceased operations in 2015, and watchdogs are scrambling for answers regarding over $630 million the task force spent between 2009 and 2015 to revive Afghanistan’s economy. The Special Inspector General for Afghanistan Reconstruction (SIGAR) has audited the gas station and several other multi-million dollar task force projects. The audit reports paint a troubling picture of the management, operation, and overall effectiveness of the task force.

SIGAR alleges it has received more complaints of waste, fraud, and abuse relating to the task force than for any other program in Afghanistan. Unfortunately, SIGAR has been stymied in its attempts to investigate those complaints, while anonymous critics take to the media to slam the watchdog agency.

Grassley’s letter to Secretary Carter concerns Principal Deputy Under Secretary of Defense Brian McKeon’s testimony at a Senate Armed Services Committee hearing last January. As we blogged back in May, McKeon refuted SIGAR’s $42.7 million cost finding, claiming the cost of the gas station was “well under $10 million.” McKeon’s figure came from a two-page memorandum authored by Robert Schraven, CEO of the consulting firm that had also been the source of SIGAR’s cost figure. Probing this discrepancy, SIGAR discovered that Schraven “strongly disagreed” with McKeon’s testimony, and that the reduced cost estimate had actually been inserted into the memo—which was provided to the committee before the hearing but not to SIGAR—by a former employee of the task force. Grassley identified that individual as Kris Haag, the task force’s former director of energy sector development.

“I am afraid Secretary McKeon’s testimony may have opened a real can of worms,” Grassley wrote. “I am concerned that some of Secretary McKeon’s answers appear to contain errors and omissions.”

Grassley gave Secretary Carter until August 19 to answer several questions about McKeon’s testimony, including the circumstances surrounding the drafting of the memo containing the revised cost estimate. As it stands now, the original $42.7 million estimate remains “the only…thoroughly and carefully vetted” figure for the gas station, according to Grassley.

“SIGAR’s post hearing investigation clearly indicates that Secretary McKeon’s testimony does not constitute the last word on the project’s cost—not by a long shot,” Grassley warned.

The sad truth is that we may never know the actual cost of the gas station—or any other task force project, for that matter. Grassley cites a Pentagon comptroller finding that the task force’s poor records management practices make it all but impossible to accurately allocate direct and overhead costs.

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: National Security, Contract Oversight

Related Content: SIGAR, Congressional Oversight, Cost Accounting Standards, Inspector General Oversight, Iraq & Afghanistan Reconstruction Contracts, DOD Oversight, Wasteful Defense Spending

Authors: Neil Gordon

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