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entitled 'Securing, Stabilizing, and Developing Pakistan's Border Area 
With Afghanistan: Key Issues for Congressional Oversight' which was 
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Report to Congressional Requesters: 

United States Government Accountability Office: 
GAO: 

February 2009: 

Securing, Stabilizing, and Developing Pakistan's Border Area With 
Afghanistan: 

Key Issues for Congressional Oversight: 

GAO-09-263SP: 

Contents: 

Letter: 

Enclosure I: Pakistan Facts and Figures: 

Demographics and Development Indicators: 

Economy: 

The FATA and the Pakistan-Afghan Border: 

U.S. Funding to Pakistan: 

Enclosure II: The United States Needs to Develop a Comprehensive Plan: 

Prior Recommendations and Agency Responses: 

Efforts Underway to Improve Interagency Coordination: 

Oversight Questions: 

Enclosure III: Use of Military Element of National Power: 

U.S. Military-Related Programs in Pakistan: 

Training and Equipping of the Frontier Corps: 

Enhancement of Pakistani Military's Helicopter Capability: 

Border Coordination Centers: 

The Security Development Plan May Face Funding Shortfall in Fiscal Year 
2009: 

Oversight Questions: 

Enclosure IV: Use of Law Enforcement Element of National Power: 

State's Border Security Program Focused on the FATA: 

Border Security Program Accomplishments: 

Border Security Program Faces Implementation and Monitoring Challenges: 

Other U.S. Government Law Enforcement Training Efforts in Pakistan: 

Oversight Questions: 

Enclosure V: Use of Development and Economic Assistance Elements of 
National Power: 

U.S. Development and Economic Assistance Programs: 

U.S. Efforts to Support Pakistan's Sustainable Development Plan for the 
FATA: 

U.S. Considering Establishment of Reconstruction Opportunity Zones in 
Pakistan: 

Oversight Questions: 

Enclosure VI: Use of the Diplomatic Element of National Power: 

U.S. Embassy Plans for Diplomacy: 

Diplomacy Efforts for the FATA: 

Oversight Questions: 

Enclosure VII: Oversight and Accountability of CSF and Other Funds 
Provided to Pakistan: 

Previously Reported Deficiencies in Oversight and Accountability of 
CSF: 

Prior Recommendations Regarding Oversight of CSF: 

Efforts Undertaken to Improve Oversight and Accountability of CSF: 

Oversight Questions: 

Related GAO Products: 

Tables: 

Table 1: U.S. Funding to Pakistan by Element of National Power, FY 2002-
2008: 

Table 2: U.S. Military-Related Funding to Pakistan, FY 2002-2008: 

Table 3: U.S. Law Enforcement-Related Funding to Pakistan, FY 2002- 
2008: 

Table 4: USAID Development and Economic Funding to Pakistan, FY 2002- 
2008: 

Table 5: ESF-Funded Emergency Economic Assistance to Pakistan, FY 2002- 
2008: 

Table 6: State Public Affairs Funding to Pakistan, FY 2002 to 2008: 

Figures: 

Figure 1: Pakistan and the FATA: 

Figure 2: Village in the FATA: 

Figure 3: Percentage of Funding Devoted to Military Activities: 

Figure 4: Frontier Corps Checkpoint in the FATA: 

Figure 5: MI-17 Troop Transport: 

Figure 6: Percentage of Funding Devoted to Law Enforcement Activities: 

Figure 7: Village Spanning Both Sides of the Pakistan-Afghanistan 
Border: 

Figure 8: State/INL-Funded Road in the FATA Next to a Highway: 

Figure 9: Percentage of Funding Devoted to Development and Economic 
Assistance Activities: 

Figure 10: Beneficiaries of a USAID Health Project: 

Figure 11: Beneficiaries of a USAID/Pakistan Education Project: 

Figure 12: Percentage of Funding Devoted to Diplomatic Activities: 

Figure 13: Pakistani Exchange Students' Pre-Departure Orientation: 

Figure 14: Lincoln Corner Children Gathering to Gain a Better 
Understanding of American Culture: 

Figure 15: Revised CSF Oversight Process: 

Abbreviations: 

ATA: Department of State's Antiterrorism Assistance: 

CENTCOM: U.S. Central Command: 

CSF: Coalition Support Funds: 

DEA: Drug Enforcement Administration: 

ESF: USAID's Economic Support Fund: 

FATA: Federally Administered Tribal Areas: 

FBI: Federal Bureau of Investigation: 

FCR: Frontier Crimes Regulations: 

FY: fiscal year: 

GDP: Gross Domestic Product: 

IMF: International Monetary Fund: 

INL: Department of State's Bureau of International Narcotics and Law 
Enforcement: 

NWFP: North West Frontier Province: 

OPDAT: Department of Justice's Office of Overseas Prosecutorial 
Development, Assistance and Training: 

USAID: U.S. Agency for International Development: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

February 23, 2009: 

Congressional Requesters: 

Since 2002, destroying the terrorist threat and closing the terrorist 
safe haven along Pakistan's border with Afghanistan have been key 
national security goals. The United States has provided Pakistan, an 
important ally in the war on terror, with more than $12.3 billion for a 
variety of activities, in part to address these goals. About half of 
this amount has been to reimburse Pakistan for military-related 
support, including combat operations in and around the Federally 
Administered Tribal Areas (FATA). Despite 6 years of U.S. and Pakistani 
government efforts, al Qaeda has regenerated its ability to attack the 
United States and continues to maintain a safe haven in Pakistan's 
FATA. As the United States considers how it will go forward with 
efforts to assist Pakistan in securing, stabilizing, and developing its 
FATA and Western Frontier bordering Afghanistan, it is vital that 
efforts to develop a comprehensive plan using all elements of national 
power be completed and that continued oversight and accountability over 
funds used for these efforts are in place. As such, we have enclosed a 
series of issue papers for your consideration.[Footnote 1] These papers 
focus on U.S. efforts in Pakistan's FATA and the Western Frontier and 
are largely based on GAO reports, briefings, and testimonies provided 
to Congress in 2008. 

In 2008, we issued three products and delivered two testimonies before 
Congress on Pakistan covering various aspects of U.S. efforts to combat 
terrorism in the FATA.[Footnote 2] In summary, we reported that: 

* The United States had not met its national security goals to destroy 
terrorist threats and close the safe haven in Pakistan's FATA; 

* The United States lacked a comprehensive plan to meet these goals 
that included all elements of national power--diplomatic, military, 
intelligence, development assistance, economic, and law enforcement 
support--called for by various national security strategies and 
Congress, as well as key components we have previously reported as 
being needed to improve the effectiveness of plans involving multiple 
departments; and: 

* Increased oversight and accountability was needed over Pakistan's 
reimbursement claims for Coalition Support Funds (CSF). 

Based on our work, we made recommendations to the National Security 
Advisor and the Director of the National Counterterrorism Center 
relating to the development of a comprehensive plan to combat the 
terrorist threat in the FATA, and to the Department of Defense 
(Defense) on the improvement of oversight of CSF reimbursements to 
Pakistan. 

Responsiveness to our recommendation to develop a comprehensive plan 
has varied. For example, officials from Defense and the U.S. Agency for 
International Development (USAID) generally concurred with our April 
2008 recommendations on the need to develop a comprehensive plan using 
all elements of national power to combat the terrorist threat and close 
the terrorist safe haven. The Department of State (State) asserted that 
a comprehensive plan exists, while the Office of the Director of 
National Intelligence and the National Counterterrorism Center stated 
in their April 2008 comments, as well as in an August 2008 follow-up 
letter, that plans to combat terrorism exist.[Footnote 3] We do not 
assert that the United States lacks individual agency plans to destroy 
the terrorist threat in the FATA; rather, we found that there was no 
comprehensive plan that integrated the combined capabilities of 
Defense, State, USAID, the intelligence community, and others, and 
included key components we called for in our report to meet U.S. 
national security goals in Pakistan. As of January 2009, neither the 
National Security Council, the National Counterterrorism Center, nor 
Defense, State, or USAID, has produced for our review a comprehensive 
plan as recommended in our April 2008 report. Defense concurred with 
the recommendations in our June 2008 CSF report on accountability over 
CSF reimbursements. In response, Defense issued new guidance and 
traveled to Pakistan to begin working with Pakistani and U.S. Defense 
officials to implement this guidance. 

The enclosures that follow provide background information on Pakistan; 
the status of U.S. government efforts to develop a comprehensive plan; 
and information on the goals, funding, and current status of U.S. 
efforts to use various elements of national power (i.e., military, law 
enforcement, development and economic assistance, and diplomacy) to 
combat terrorism in Pakistan. The scope of this report does not include 
the plans, goals, operations, activities, and accomplishments of the 
intelligence community. Included in these enclosures are oversight 
issues for Congress and the new administration to consider. The final 
enclosure discusses oversight and accountability issues relating to 
U.S. funds or assistance provided to Pakistan. 

These enclosures incorporate updated information from agency program 
documents through February 2009 as well as budget information through 
fiscal year 2008. We discussed the updated status of our prior findings 
and recommendations with Departments of Defense, State, Justice, and 
USAID officials involved in efforts to meet national strategic goals in 
the FATA and Western Frontier, as well as the status of the U.S. effort 
to implement the various elements of national power. We conducted this 
performance audit from August 2008 through February 2009, in accordance 
with generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our audit objectives. 

We requested comments from the National Security Council, the Office of 
the Director of National Intelligence, Defense, Justice, State, and 
USAID. The National Security Council and the Office of the Director of 
National Intelligence did not provide comments. We received technical 
comments from Defense, Justice, State, and USAID, which we incorporated 
throughout the report where appropriate. 

We are sending copies of this report to Members of Congress, cognizant 
congressional committees, the President and Vice President of the 
United States, and executive branch agencies. The report also is 
available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact Charles Michael Johnson at (202) 512-7331 or johnsoncm@gao.gov. 
In addition to the contact named above, Steve Sebastian, Director; 
Hynek Kalkus, Assistant Director; Roger Stoltz, Assistant Director; 
Edward J. George; Claude Adrien; David W. Hancock; Cara Bauer; Janice 
Friedeborn; Karen Deans; and Mark Dowling made key contributions to 
this report. Contact points for our Office of Congressional Relations 
and Public Affairs can be found on the last page of this report. 

Signed by: 

Gene L. Dodaro: 
Acting Comptroller General of the United States: 

Enclosures: 

Congressional Requesters: 

The Honorable Howard Berman: 
Chairman: 
The Honorable Ileana Ros-Lehtinen: 
Ranking Member: 
Committee on Foreign Affairs: 
House of Representatives: 

The Honorable Gary Ackerman: 
Chairman: 
The Honorable Dan Burton: 
Ranking Member: 
Subcommittee on the Middle East and South Asia: 
Committee on Foreign Affairs: 
House of Representatives: 

The Honorable John F. Tierney: 
Chairman: 
The Honorable Jeff Flake: 
Ranking Member: 
Subcommittee on National Security and Foreign Affairs: 
Committee on Oversight and Government Reform: 
House of Representatives: 

The Honorable Tom Harkin: 
The Honorable Robert Menendez: 
United States Senate: 

The Honorable Mike Pence: 
House of Representatives: 

[End of section] 

Enclosure I: Pakistan Facts and Figures: 

Located in southern Asia, bordering the Arabian Sea, between India on 
the east, Iran and Afghanistan on the west, and China on the north, 
Pakistan's area is about 300,600 square miles, which is slightly less 
than twice the size of California (see figure 1). It is divided into 
four provinces, the North West Frontier Province (NWFP), Punjab, Sindh, 
and Balochistan, as well as the FATA. The entire Pakistani/Afghan 
border, known as the Durand Line, is 1,640 miles of difficult, widely 
differentiated terrain, from the southern deserts of Balochistan to the 
northern mountain peaks of the NWFP. 

The FATA is a tribal belt administered by the Pakistani government 
consisting of seven tribal agencies (Khyber, Kurram, North and South 
Waziristan, Mohmand, Bajaur, and Orakzai). Its area is approximately 
10,500 square miles, roughly the same size as the state of Maryland. 
The FATA shares a 373-mile border with Afghanistan. 

Figure 1: Pakistan and the FATA: 

[Refer to PDF for image] 

This figure is a map of the Afghanistan-Pakistan border, depicting the 
Federally Administered Tribal Areas (FATA) along the Durand line. The 
FATA include the following: 

South Waziristan Agency; 
North Waziristan Agency; 
Kurram Agency; 
Orakzai Agency; 
Khyber Agency; 
Mohmand Agency; 
Bajaur Agency. 

The FATA borders the North West Frontier Province (NWFP) of Pakistan. 

Also included in the map is an inset showing a map of Afghanistan and 
Pakistan, with the their respective capitals indicated: 
Kabul, Afghanistan; 
Islamabad, Pakistan. 

Note: The boundaries and names used on this map do not imply official 
endorsement or acceptance by the U.S. Government. 

Source: GAO; USAID and Map Resources (maps). 

[End of figure] 

Demographics and Development Indicators: 

Pakistan's population is estimated at roughly 170 million. Pakistan's 
largest ethnic groups include Punjabi (45 percent), Pashtun (15 
percent), Sindhi (14 percent), Siraiki (8 percent), Mohajirs (8 
percent), and Balochi (4 percent). Some ethnic groups predominantly 
populate specific regions, such as the Pashtun along both sides of the 
border with Afghanistan. Several languages are spoken in Pakistan, the 
most common being Punjabi (48 percent). Urdu and English are the 
official languages spoken in Pakistan. About 38 percent of the 
population is under age 15, and Pakistanis have a life expectancy of 
about 64 years. Islam is the predominant religion--75 percent of the 
population are Sunni and 20 percent are Shi'a. 

Economy: 

Pakistan's principal natural resources are arable land, water, and 
energy reserves. Agriculture accounts for about 21 percent of 
Pakistan's gross domestic product (GDP) and employs about 42 percent of 
the labor force. The most important crops are cotton, wheat, rice, 
sugarcane, fruits, and vegetables, which together account for more than 
75 percent of the value of total crop output. Pakistan exports rice, 
fish, fruits, and vegetables and imports vegetable oil, wheat, and 
cotton. Pakistan is a net food importer and the economic prominence of 
agriculture has declined since independence, when its share of GDP was 
around 53 percent. Pakistan's manufacturing sector accounts for about 
25 percent of GDP. Cotton textile production and apparel manufacturing 
are Pakistan's largest industries, accounting for about 70 percent of 
total exports. Pakistan has extensive energy resources, including 
natural gas, oil, coal, and hydroelectric power potential. According to 
State officials, however, these energy resources are not fully 
exploited. For instance, domestic gas and petroleum production totals 
only about half the country's energy needs. 

The World Bank considers Pakistan a low-income country and it is among 
the largest recipients of World Bank financial assistance. In fiscal 
year 2007, World Bank support to Pakistan totaled $985 million, making 
it the seventh largest borrower in the world. Pakistan's economy also 
contends with structural problems and corruption.[Footnote 4] 
Pakistan's macroeconomic situation deteriorated significantly because 
of large price increases in key commodities such as oil and food. In 
November 2008, the IMF's Executive Board approved a $7.6 billion loan 
for Pakistan to support its program to stabilize and rebuild the 
economy while expanding its social safety net to protect the poor. The 
loan is intended to enable the government to address economic concerns 
such as bringing down both the inflation rate and the budget deficit, 
while increasing expenditures on the poor through such measures as 
targeted electricity subsidies. 

The FATA and the Pakistan-Afghan Border: 

The FATA, where al Qaeda and other militants have succeeded in 
establishing safe havens, has an estimated population of 3.1 million, 
and is characterized by harsh geography, poor education, and scarce 
infrastructure. The FATA is the poorest, least developed part of 
Pakistan. Literacy is only 17 percent, compared to the national average 
of 56 percent, and among women it is 3 percent. Annual per capita 
income is roughly $250--half the national average. About 60 percent of 
households live beneath the poverty line. There is little employment in 
the industrial sector. The FATA's forbidding terrain, as shown in 
figure 2, further serves to isolate tribal communities from markets, 
health and education services, and many outside influences. 

Figure 2: Village in the FATA [Aerial Photograph]: 

[Refer to PDF for image] 

Source: GAO. 

[End of figure] 

The FATA is governed by an administrative system and a judicial system 
different from the rest of Pakistan--the Frontier Crimes Regulations 
(FCR) of 1901, codified under British rule. Because Pakistan retained 
the colonial administrative and legal structures of the British, the 
FATA populations are legally separate from and unequal to other 
Pakistani citizens. Examples of differences under the FCR include the 
following: 

* FATA residents do not have access to national political parties, and 
political parties are forbidden from extending their activities into 
the FATA. 

* The FATA is under the direct executive authority of the president of 
Pakistan. Laws framed by the National Assembly of Pakistan do not apply 
in the FATA unless so ordered by the president, who is empowered to 
issue regulations for the tribal areas. 

* FATA residents do not have the right to legal representation, to 
present material evidence, or to cross-examine witnesses in Pakistan's 
judicial system. Those convicted of crimes are denied the right of 
appeal in Pakistan's courts. 

* The president's representatives to the FATA, who are called political 
agents, can punish an entire tribe for crimes committed on the tribe's 
territory by issuing fines, making arrests, implementing property 
seizures, and establishing blockades. 

Some believe that the FCR is a culturally acceptable recognition of the 
tribal structure of the FATA, where the population is ethnically 
different from the majority of Pakistan's citizens, and precludes 
forced assimilation and that removing the FCR without a replacement 
mechanism that is accepted by the indigenous population has the 
potential to create a vacuum that could result in negative 
consequences. An announcement by Pakistani Prime Minister Yousaf Raza 
Gillani proposing the repeal of the FCR drew mixed reactions from 
tribesmen and political leaders, some of whom called for amendments to 
the FCR, rather than its repeal. 

U.S. Funding to Pakistan: 

Since fiscal year 2002, the United States has provided Pakistan with 
approximately $12.3 billion in assistance and reimbursements. Table 1 
provides a breakdown of U.S. funds for Pakistan from fiscal year 2002 
to 2008, broken out by elements of national power--military, law 
enforcement, diplomacy, development assistance, economic, and 
intelligence--that the administration's national security strategies 
and Congress have recognized are needed to address the terrorist threat 
emanating from the FATA.[Footnote 5] Greater details for these elements 
of national power are provided in the following enclosures. 

Table 1: U.S. Funding to Pakistan by Element of National Power, FY 2002-
2008 (Dollars in thousands): 

Element of national power[A]: Military; 
FY 2002: $1,464,911; 
FY 2003: $1,473,183; 
FY 2004: $781,928; 
FY 2005: $1,273,037; 
FY 2006: $1,218,435; 
FY 2007: $1,095,315; 
FY 2008: $1,387,543; 
Total: $8,694,352; 
Percentage: 70.4%. 

Element of national power[A]: Law enforcement; 
FY 2002: $100,725; 
FY 2003: $31,700; 
FY 2004: $36,400; 
FY 2005: $40,200; 
FY 2006: $46,220; 
FY 2007: $31,327; 
FY 2008: $31,547; 
Total: $318,119; 
Percentage: 2.6%. 

Element of national power[A]: Development & Economic; 
FY 2002: $662,899; 
FY 2003: $258,262; 
FY 2004: $303,538; 
FY 2005: $404,733; 
FY 2006: $677,477; 
FY 2007: $542,277; 
FY 2008: $445,194; 
Total: $3,294,380; 
Percentage: 26.7%. 

Element of national power[A]: Diplomacy[B]; 
FY 2002: $3,486; 
FY 2003: $3,957; 
FY 2004: $6,811; 
FY 2005: $5,869; 
FY 2006: $9,144; 
FY 2007: $8,735; 
FY 2008: $1,497[C]; 
Total: $39,499; 
Percentage: 0.3%. 

Total: 
FY 2002: $2,232,021; 
FY 2003: $1,767,102; 
FY 2004: $1,128,677; 
FY 2005: $1,723,839; 
FY 2006: $1,951,276; 
FY 2007: $1,677,654; 
FY 2008: $1,865,781; 
Total: $12,346,350; 
Percentage: [Empty]. 

Source: GAO analysis of budget documents provided by State Director of 
Foreign Assistance. 

[A] These elements of national power are based on National Strategies 
and other national security documentation. To classify the funding we 
relied on State budget documents and consultations with State Director 
of Foreign Assistance, and made judgments based on the nature of many 
of the programs funded. We combined the Development and Economic 
elements due to the similar nature of the programs funded. These 
figures do not include normal operating costs, such as salaries of U.S. 
government officials. 

[B] To capture the diplomatic element of national power we combined 
programmatic State Public Diplomacy from the State Operations account 
with State Education and Cultural Exchange programs in Pakistan. 

[C] State did not provide GAO with FY 2008 State Education and Cultural 
Exchange funding. 

[End of table] 

[End of section] 

Enclosure II: The United States Needs to Develop a Comprehensive Plan: 

In our April 2008 report, we reported that the U.S. government had not 
met its national security goals to destroy terrorist threats and close 
the safe haven in the FATA and had not developed a comprehensive plan 
reflecting the integration of multiple U.S. government agencies' 
efforts for meeting U.S. national security goals in Pakistan's FATA, 
[Footnote 6] as called for by the National Strategy for Combating 
Terrorism (2003), the independent 9/11 commission (2004), and as 
mandated by congressional legislation (2007).[Footnote 7] We also 
reported that the U.S. embassy in Pakistan has had no Washington- 
supported, comprehensive plan to combat terrorism and close the 
terrorist safe haven in the FATA. We concluded that a comprehensive 
plan to combat terrorism was needed. We noted that this plan should 
include, among other things, the various elements of national power and 
clear goals, objectives, priorities, and milestones in order to help 
ensure the continuity of effort and allow Congress and the American 
public to assess progress and ensure accountability of U.S. efforts in 
Pakistan's FATA and Western Frontier. 

Prior Recommendations and Agency Responses: 

To address the lack of a comprehensive plan, we recommended that the 
National Security Advisor and the Director of the National 
Counterterrorism Center, in consultation with the Secretaries of 
Defense and State, and the Administrator of USAID, the intelligence 
community, and other executive departments as deemed appropriate, 
implement the congressional mandate to develop a comprehensive plan. We 
also recommended that the comprehensive plan include all elements of 
national power--diplomatic, military, intelligence, development 
assistance, economic, and law enforcement support--called for in the 
Intelligence Reform Act, the Implementing Recommendations of the 9/11 
Commission Act of 2007, and components that we have previously reported 
as being needed to improve the effectiveness of plans involving multi- 
departmental efforts to combat terrorism. Specifically, we recommended 
that the plan should: 

* place someone directly in charge of this multi-department effort to 
improve accountability; 

* articulate a clear strategy to implement the national security goal 
to destroy terrorists and close the safe haven in the FATA; 

* clarify roles and responsibilities of each department; 

* provide guidance on setting funding priorities and providing 
resources; 

* require a monitoring system; and: 

* provide periodic reports to Congress on the progress and impediments. 

In written responses to our report, Defense and USAID concurred with 
the recommendation that a comprehensive plan should be developed; State 
asserted that a comprehensive plan existed; the NSC provided no 
comments; while the Office of the Director of National Intelligence and 
the National Counterterrorism Center stated that plans to combat 
terrorism exist. During a May 20, 2008, hearing before the Senate 
Foreign Relations Committee, the Deputy Secretary of State also 
indicated plans exist for a variety of efforts underway to assist 
Pakistan in combating terrorism, but he acknowledged that more can be 
done to integrate plans to focus on the threat along the Afghanistan- 
Pakistan border. The Deputy Secretary of State also indicated that 
efforts were underway to revisit the U.S. plans to focus on the key 
components suggested in our April 2008 report. The Office of the 
Director of National Intelligence noted in an August 2008 response to 
our request for a status update on the development of a comprehensive 
plan that it continues to disagree that the United States lacks plans 
to combat terrorism in Pakistan's FATA. The Director also noted that 
the United States has a multi-faceted strategy, with short-and long- 
term elements to increase the capability of Pakistani security forces 
to confront terrorist groups. We do not assert that the United States 
lacks individual plans; rather, we did not find nor were we provided a 
comprehensive plan that integrated the combined capabilities of 
Defense, State, USAID, the intelligence community, and others, and 
included key components we called for in our report to meet U.S. 
national security goals in Pakistan. As of January 2009, neither the 
National Security Council, the National Counterterrorism Center, nor 
Defense, State, or USAID has produced for our review an integrated 
comprehensive plan as recommended in our April 2008 report. 

Efforts Underway to Improve Interagency Coordination: 

Since the release of our report in April 2008, the U.S. embassy in 
Islamabad has taken steps to coordinate the various efforts of Defense, 
USAID, and State to implement their department-specific efforts focused 
on combating terrorism in the FATA and Western Frontier. In addition, 
the embassy, in conjunction with State headquarters, was working to 
build support in Washington, D.C., for the need for a more 
comprehensive approach to combating terrorism, including greater 
integration of U.S. and Pakistani efforts in the FATA. State also 
continued to collect information on Defense, USAID, and State 
activities in the FATA, and added new objectives under the diplomatic 
element of national power, including (1) increased cross-border 
dialogue with Afghanistan, and (2) a public diplomacy objective 
intended to undermine the ideological foundation of extremism and 
bolster the image of the Pakistan government in the FATA. 

State has staffed three new coordinator positions--one at State in 
Washington, D.C., and one each for the U.S. embassies in Pakistan and 
Afghanistan---intended to improve coordination among U.S. programs on 
each side and across the Pakistan--Afghanistan frontier. Their goals 
include (1) increasing interagency communications at the working level 
and (2) integrating elements of U.S. strategy into a comprehensive 
effort along the border. In addition, an Afghan-Pakistan Border Working 
Group was convened in July 2008 and has met seven times as of December 
18, 2008. It includes representatives from the National Security 
Council; the Departments of State, Defense, Treasury, and Commerce; 
USAID, and the U.S. Trade Representative. 

Oversight Questions: 

As the United States moves forward in its efforts to address the 
terrorist threat and close the safe haven, the following oversight 
issues should be addressed: 

* What progress has been made in developing a comprehensive plan, as 
called for by the Intelligence Reform and Terrorism Prevention Act of 
2004 and the Implementing the Recommendations of the 9/11 Commission 
Act of 2007? 

* What obstacles or impediments have prevented the completion of a 
comprehensive plan? 

* Are there sufficient resources devoted by the various agencies toward 
completing the development of a comprehensive plan to address U.S. 
national security goals in the FATA? 

* How well are the various agencies coordinating their efforts in 
developing a comprehensive plan and what interagency agreements, if 
any, have been reached? 

[End of section] 

Enclosure III: Use of Military Element of National Power: 

The United States has relied primarily on the use of the military 
element of national power to address national security-related 
priorities in Pakistan, providing about $8.7 billion in military- 
related reimbursements and assistance since 2002. As figure 3 shows, 
the military element of national power has accounted for about 70 
percent of U.S. funds devoted to addressing the U.S. strategic goals in 
Pakistan. This enclosure provides information on the U.S. military- 
related funding and programs for Pakistan including status of the U.S. 
Security Development Plan for FATA and the Western Frontier. It also 
highlights several oversight issues for Congress and the new 
administration to consider. 

Figure 3: Percentage of Funding Devoted to Military Activities: 

[Refer to PDF for image] 

This figure is a pie-chart depicting the following data: 

Percentage of Funding Devoted to Military Activities: 
[Emphasis: Military: 70.4%;] 
Development - Economic: 26.7%; 
Law enforcement: 2.6%; 
Diplomacy: 0.3%. 

Source: GAO analysis of budget documents provided by State Director of 
Foreign Assistance. 

Note: Funding figures do not include normal operating costs, such as 
salaries of U.S. government officials or funding for covert activities. 

[End of figure] 

Table 2 indicates the amount and sources of U.S. military-related 
funding to Pakistan. 

Table 2: U.S. Military-Related Funding to Pakistan, FY 2002-2008 
(Dollars in thousands): 

Funding source: State: Foreign Military Financing; 
FY 2002: $75,000; 
FY 2003: $224,500; 
FY 2004: $74,560; 
FY 2005: $298,800; 
FY 2006: $297,000; 
FY 2007: $297,000; 
FY 2008: $297,570; 
Total: $1,564,430. 

Funding source: State: International Military Education and Training; 
FY 2002: $894; 
FY 2003: $990; 
FY 2004: $1,384; 
FY 2005: $1,885; 
FY 2006: $2,037; 
FY 2007: $1,992; 
FY 2008: $2,325; 
Total: $11,507. 

Funding source: State: Peacekeeping Operations; 
FY 2002: $220,000; 
FY 2003: 0; 
FY 2004: 0; 
FY 2005: 0; 
FY 2006: $850; 
FY 2007: $700; 
FY 2008: $750; 
Total: $222,300. 

Funding source: Defense: CSF Reimbursements; 
FY 2002: $1,169,017; 
FY 2003: $1,246,571; 
FY 2004: $705,278; 
FY 2005: $963,925; 
FY 2006: $861,604; 
FY 2007: $731,772; 
FY 2008: $900,600; 
Total: $6,578,767. 

Funding source: Defense: Counterterrorism Fellowship Funding; 
FY 2002: 0; 
FY 2003: $1,122; 
FY 2004: $706; 
FY 2005: $727; 
FY 2006: $744; 
FY 2007: $998; 
FY 2008: $816; 
Total: $5,113. 

Funding source: Defense: Counternarcotics Funding; 
FY 2002: 0; 
FY 2003: 0; 
FY 2004: 0; 
FY 2005: $7,700; 
FY 2006: $28,700; 
FY 2007: $49,100; 
FY 2008: $54,700; 
Total: $140,200. 

Funding source: Defense: Section 1206 Funding; 
FY 2002: 0; 
FY 2003: 0; 
FY 2004: 0; 
FY 2005: 0; 
FY 2006: $27,500; 
FY 2007: $13,753; 
FY 2008: $55,782; 
Total: $97,035. 

Funding source: Defense: Frontier Corps Train and Equip Authority; 
FY 2002: 0; 
FY 2003: 0; 
FY 2004: 0; 
FY 2005: 0; 
FY 2006: 0; 
FY 2007: 0; 
FY 2008: $75,000; 
Total: $75,000. 

Funding source: Total; 
FY 2002: $1,464,911; 
FY 2003: $1,473,183; 
FY 2004: $781,928; 
FY 2005: $1,273,037; 
FY 2006: $1,218,435; 
FY 2007: $1,095,315; 
FY 2008: $1,387,543; 
Total: $8,694,352. 

Source: GAO analysis of budget documents provided by the State Director 
of Foreign Assistance. 

Note: Funding figures in this table do not include normal operating 
costs, such as salaries of U.S. government officials. 

[End of table] 

U.S. Military-Related Programs in Pakistan: 

Coalition Support Funds Used to Reimburse Pakistan for Military 
Operations: CSF payments have been used since fiscal year 2002 to 
reimburse the Pakistani government for incremental costs (i.e., costs 
above and beyond normal operating costs) incurred in direct support of 
U.S. military operations associated with the war on terror.[Footnote 8] 
CSF has reimbursed a broad range of Pakistani military operations, 
including navy support for maritime patrols and interdiction 
operations; air force support for combat air patrols, reconnaissance 
and close air support missions, airlift support, and air traffic 
control; army military operations in the FATA; and increased management 
requirements at the Pakistan Joint Staff Headquarters. These activities 
include Operation Al Mizan, a major deployment of the Pakistani army to 
combat al Qaeda, Taliban, and other militants in the North West 
Frontier Province and the FATA that began in 2001 and has continued in 
various phases to date. The goal of this operation was to intercept 
militants attempting to escape the U.S. invasion of Afghanistan by 
fleeing into Pakistan. According to Defense, Pakistan has deployed over 
100,000 army and paramilitary troops in support of this operation, 
incurred more than 1,400 casualties, and killed hundreds of al Qaeda, 
Taliban, and other terrorists. According to Defense, CSF is critical to 
ensure Pakistan's continued support of U.S. efforts to combat 
terrorism. Defense officials stated that without CSF or a similar 
mechanism to reimburse Pakistan for its support, Pakistan could not 
afford to deploy military forces along the Pakistan-Afghanistan border. 

Foreign Military Financing Program: Foreign Military Financing is the 
second-largest source of military-related funding provided to Pakistan, 
superseded only by CSF reimbursements. Foreign Military Financing has 
been used to provide grants for the acquisition of U.S. defense 
equipment to enable key allies to improve their defense capabilities 
and to foster closer military relationships between the United States 
and recipient nations. Pakistan has used Foreign Military Financing to 
purchase military equipment, such as Cobra helicopters, Harris radios, 
and upgrades to its F-16 fighter aircraft. 

International Military Education and Training, Regional Defense 
Counterterrorism Fellowship Program, and Peacekeeping Operations: Both 
the International Military Education and Training and the Regional 
Defense Counterterrorism Fellowship Program provide training to foreign 
military and related civilian personnel. The International Military 
Education and Training program specifically allows these personnel to 
train at various U.S. military war colleges in the United States. The 
Regional Defense Counterterrorism Fellowship Program provides education 
and training to the same foreign personnel, but concentrates on 
counterterrorism activities intended to bolster the capacity of 
friendly foreign nations to detect, monitor, and interdict or disrupt 
the activities of terrorist networks. Additionally, Peacekeeping 
Operations funding is currently used by State to engage the Pakistan 
Ministries of Foreign Affairs and Defense to develop plans to increase 
Pakistan's capacity for conducting international peace support 
operations. 

Security Development Plan: Defense's Security Development Plan, which 
seeks to enhance the counterinsurgency capacity of Pakistani security 
forces in FATA and the Western Frontier, has three objectives: (1) to 
secure Pakistan's border with Afghanistan, (2) to deny terrorists a 
safe haven in the FATA, and (3) to create a security environment that 
allows economic development and political reform to begin. The plan 
encompasses Defense's initiatives in the FATA and the Western Frontier 
to achieve these goals and is funded through several sources: 
Counternarcotics, Section 1206, and Frontier Corps Train and Equip 
Authority. According to Defense officials, Defense Counternarcotics 
funding can be used to support counterterrorism efforts in Pakistan due 
to the nexus between terrorism and drug trafficking along the Pakistan- 
Afghanistan border. Section 1206 funds are used to build the capacity 
of foreign military forces to conduct counterterrorism operations or 
support U.S. military operations. The Frontier Corps Train and Equip 
Authority is an authority created in the fiscal year 2008 National 
Defense Authorization Act that allows Defense to provide assistance to 
enhance the ability of the Frontier Corps to conduct counterterrorism 
operations along the Pakistan-Afghanistan border. The plan calls for 
annual investments of around $200 million through 2012. The centerpiece 
of the plan, according to Defense officials, is the expansion, 
training, and equipping of the Pakistan Frontier Corps, a paramilitary 
force that has previously experienced deficiencies in training and 
equipment.[Footnote 9] The goal is to turn the Frontier Corps into a 
local security force capable of supporting Pakistan's counterinsurgency 
operations and providing sufficient security to allow for investments 
in local governance and economic development to yield results. 

Training and Equipping of the Frontier Corps: 

The Security Development Plan seeks to assist the Pakistani government 
in establishing 16 new Frontier Corps units of about 650 personnel each 
capable of counterinsurgency operations. However, a deteriorating 
security environment has delayed the completion of a training center in 
the NWFP that was to be used to train Frontier Corps units. Defense 
expects that the facility will not be operational until early 2009. 

As the additional Frontier Corps units proceed through training, 
Defense plans to supply each trainee with equipment needed to carry out 
their counterinsurgency efforts, such as helmets and protective vests. 
Defense is also currently supplying mobility equipment--pickup trucks, 
water trucks, ambulances, motorcycles--to existing Frontier Corps units 
already deployed to address existing mobility deficiencies. See figure 
4 for an example of the mobility challenges posed by the mountainous 
terrain in the FATA. 

Figure 4: Frontier Corps Checkpoint in the FATA [Aerial Photograph]: 

[Refer to PDF for image] 

Source: GAO. 

[End of figure] 

Enhancement of Pakistani Military's Helicopter Capability: 

The Security Development Plan is also intended to support the 
maintenance and re-servicing of Pakistani army helicopters used for 
counter-insurgency operations in the FATA and Western Frontier, 
including Bell 412s, Cobra gunships, and MI-17 troop transports. Bell 
412s are utility helicopters used primarily for command and control 
functions in the border region where there is rough terrain. These 
helicopters are also used for administrative airlift and have been 
equipped with door guns to use in the provision of security for 
Pakistani army convoy movements. Cobra gunships are used in the FATA to 
support ground forces with missiles, rockets, and guns. MI-17s are 
heavy-lift helicopters used to move commando units in and out of combat 
operations, including for medical evacuation (see figure 5). According 
to Defense officials, these MI-17s are reaching their 1,500 flight hour 
marks, at which point they must go through mandatory re-servicing. 
Defense plans to enhance the operational readiness of all three 
helicopter types by providing initial maintenance and developing long- 
term sustainment programs. According to Defense officials, the MI-17s 
are particularly important for the air mobility of the Special Services 
Group Quick Reaction Squadron, a Pakistani army commando unit that 
conducts targeted counterterrorism missions in the FATA and elsewhere. 
Under the Security Development Plan the Special Services Group Quick 
Reaction Squadron is being provided with night vision equipment as well 
as air assault training and tactics. 

Figure 5: MI-17 Troop Transport [Photograph]: 

[Refer to PDF for image] 

Source: Defense. 

[End of figure] 

Border Coordination Centers: 

Finally, the Security Development Plan includes the establishment of 
six Border Coordination Centers to integrate border security 
operations. Their mission is to coordinate friendly forces and 
coordinate the interdiction of terrorists and others. Each center is to 
be staffed with officers from Afghanistan, Pakistan, and coalition 
forces, and will possess communications and surveillance capabilities 
intended to provide tactical intelligence to military forces on both 
sides of the border. The first center in Torkham, Afghanistan, became 
operational in October 2008. A second center is under construction in 
Afghanistan. Defense plans for the third and fourth Border Coordination 
Centers to be located on the Pakistan side of the border. The locations 
for the centers, however, have not been finalized with the Pakistani 
government. 

The Security Development Plan May Face Funding Shortfall in Fiscal Year 
2009: 

Defense estimated that around $230 million would be required to fully 
support the Security Development Plan initiatives in fiscal year 2009. 
In fiscal year 2009, the plan received a total of $62.5 million ($37.5 
million in counternarcotics funding and $25 million in Frontier Corps 
Train and Equip Authority funding). As a result, Defense's Security 
Development Plan faces a shortfall of approximately $167.5 million, 
about 73 percent of its funding goal for fiscal year 2009. As of 
December 2008, no existing security assistance funds have been re- 
directed toward the Security Development Plan. Defense officials stated 
that without dedicated long-term funding, implementation of the 
Security Development Plan may be hampered, and the training and 
equipping of the Frontier Corps could slow down by March 2009. 

Oversight Questions: 

* To what extent do the U.S.-funded Pakistani military efforts align 
with the U.S. national security goals in Pakistan's FATA and Western 
Frontier? What are future U.S. plans and strategies for this area? 

* What have been the results of the U.S. investment of about $8.7 
billion toward military efforts to address the terrorist threat and 
close the safe haven in Pakistan? 

* To what extent do the U.S.-funded Pakistani military efforts assist 
in securing and stabilizing regions for development projects to be 
undertaken in the FATA and Western Frontier? How is Defense measuring 
the Pakistani military's adoption and success at implementing an 
effective counterinsurgency doctrine to accomplish military goals and 
to allow for economic development? 

* What has the Security Development Plan accomplished to date and what 
are future objectives? 

* How is the Security Development program coordinated with other U.S. 
efforts? For example, how has Defense's effort to train and equip the 
Frontier Corps built on prior State efforts under the Border Security 
Program to train and equip the Frontier Corps? 

* Given the shortfall in funding noted by Defense officials to fully 
implement the Security Development Plan in fiscal year 2009, how does 
Defense envision funding the remainder of the Security Defense Plan? 
What effect does the current funding situation have on planning and 
implementation? 

* What measures does the United States have in place to assess the 
readiness and capability of Frontier Corps units that have been trained 
and equipped under the U.S.-funded Security Development Plan? 

* What is the level of oversight and accountability controls over 
equipment provided to the Frontier Corps? 

[End of section] 

Enclosure IV: Use of Law Enforcement Element of National Power: 

The United States has used the law enforcement element of national 
power to address national security-related priorities in Pakistan, 
providing about $318 million in law enforcement-related assistance 
since 2002. As figure 6 shows, the law enforcement element of national 
power has accounted for about 3 percent of U.S. funds devoted to 
addressing the U.S. national security goals in Pakistan. This enclosure 
provides information on U.S. government agency efforts to provide law 
enforcement-related assistance to Pakistan, including the efforts of 
the Departments of State, Justice, and Treasury that relate to the 
training and equipping of law enforcement entities, improving law 
enforcement access, and combating terrorist financing. It also 
highlights several oversight issues for Congress and new administration 
to consider. 

Figure 6: Percentage of Funding Devoted to Law Enforcement Activities: 

[Refer to PDF for image] 

This figure is a pie-chart depicting the following data: 

Percentage of Funding Devoted to Law Enforcement Activities: 
Military: 70.4%; 
Development - Economic: 26.7%; 
[Emphasis: Law Enforcement: 2.6%;] 
Diplomacy: 0.3%. 

Source: GAO analysis of budget documents provided by State Director of 
Foreign Assistance. 

Note: Funding figures do not include normal operating costs, such as 
salaries of U.S. government officials or funding for covert activities. 

[End of figure] 

Table 3 indicates the amount of U.S. law enforcement-related assistance 
to Pakistan. This funding is provided through the State Department's 
International Narcotics and Law Enforcement and Nonproliferation, Anti- 
terrorism, Demining, and Related Programs accounts. According to State, 
it also provides a small amount of operational support for law 
enforcement agencies. 

Table 3: U.S. Law Enforcement-Related Funding to Pakistan, FY 2002- 
2008 (Dollars in thousands): 

Funding source: International Narcotics and Law Enforcement; 
FY 2002: $90,625; 
FY 2003: $31,000; 
FY 2004: $31,500; 
FY 2005: $32,200; 
FY 2006: $37,620; 
FY 2007: $21,350; 
FY 2008: $21,822; 
Total: $266,117. 

Funding source: Nonproliferation, Anti-terrorism, Demining, and Related 
Programs; 
FY 2002: $10,100; 
FY 2003: $700; 
FY 2004: $4,900; 
FY 2005: $8,000; 
FY 2006: $8,600; 
FY 2007: $9,977; 
FY 2008: $9,725; 
Total: $52,002. 

Funding source: Total; 
FY 2002: $100,725; 
FY 2003: $31,700; 
FY 2004: $36,400; 
FY 2005: $40,200; 
FY 2006: $46,220; 
FY 2007: $31,327; 
FY 2008: $31,547; 
Total: $318,119. 

Source: GAO analysis of budget documents provided by State Director of 
Foreign Assistance. 

Note: Funding figures in this table do not include normal operating 
costs, such as salaries of U.S. government officials. 

[End of table] 

State's Border Security Program Focused on the FATA: 

State's Bureau of International Narcotics and Law Enforcement (INL) 
assists foreign nations in developing their law enforcement capacity. 
INL has three general assistance efforts in Pakistan: (1) the Border 
Security Program, (2) the counternarcotics program, and (3) law 
enforcement reform, which includes training and capacity building 
focused on the judicial system and rule of law programs.[Footnote 10] 
INL funding from fiscal year 2002 through 2008 totaled about $266 
million. The Border Security Program and the counternarcotics program 
are intended to support and expand Pakistan's law enforcement capacity 
to secure the Afghan border and frontier regions against terrorists, 
narcotics traffickers, and other criminal elements. Figure 7 shows a 
community that spans both sides of the border. 

Figure 7: Village Spanning Both Sides of the Pakistan-Afghanistan 
Border [Photograph]: 

[Refer to PDF for image] 

Superimposed on the photograph is the border line separating 
Afghanistan and Pakistan. 

Source: Pakistan Military Operations Directorate. 

[End of figure] 

The Border Security Program is State's primary law-enforcement effort 
to build the capacity of the Pakistani government to identify and 
arrest al Qaeda and Taliban terrorists and other criminals in 
Pakistan's border region with Afghanistan. State launched the Border 
Security Program shortly after the attacks of 9/11 to help the 
government of Pakistan better secure its western border and coast 
against exploitation by terrorists, drug traffickers, and other 
criminals and support bilateral cooperation with the government of 
Afghanistan. The Border Security Program's goals also include arresting 
criminals operating in the border region through combined use of ground 
forces and the Air Wing, expanding Pakistan's road and bridge network, 
constructing forts, outposts, and pickets for border security forces, 
and integrating modern law enforcement training techniques to enhance 
border security. The Border Security Program is a key law enforcement 
element of the U.S. embassy's strategy in the FATA, with efforts that 
include: 

* improving law enforcement access within the FATA through road and 
outpost construction, 

* providing training and equipment to law enforcement agencies 
operating in the FATA, and: 

* supplying technical and material support to law enforcement agencies 
operating on the western border. 

Under the program, the United States has provided funding and 
assistance to Pakistan's Ministry of Interior; the Anti-Narcotics 
Force; the Frontier Corps in the FATA, NWFP, and Balochistan; and 
others.[Footnote 11] It has also provided funds for the maintenance, 
support, and operating expenses of the Border Security Program- 
established Ministry of Interior Air Wing based in Quetta, Balochistan. 
The Air Wing, with three fixed-wing surveillance aircraft and nine Huey 
II helicopters, was intended to permit monitoring and interception of 
terrorists, drug traffickers, and other criminals operating in remote 
areas.[Footnote 12] 

Border Security Program Accomplishments: 

According to State, the Border Security Program has made progress 
toward many of its program goals. Program accomplishments cited by 
State include Pakistan's detaining roughly 600 suspected al Qaida 
and/or Taliban personnel, in part because of Border Security Program 
assistance. In addition, State indicates that the program helped 
Pakistan extend its authority into autonomous tribal border areas for 
the first time and substantially increased drug seizures. Reported 
progress on other efforts includes: 

* construction of 137 of 176 planned outposts; 

* construction of 113 of 370 planned kilometers of fully paved border 
security roads, and 2 of 18 bridges; 

* provision of 2,496 vehicles and motorcycles, 1,012 night vision 
goggles and binoculars, 4,338 pieces of communications equipment, 1,824 
bulletproof jackets, and 2,850 bulletproof helmets; and: 

* completion of 500 kilometers of gravel roads intended to extend the 
authority of the Pakistan government into previously inaccessible areas 
in the FATA and open these areas up to the mainstream economy, as 
illustrated in figure 8. 

Figure 8: State/INL-Funded Road in the FATA Next to a Highway [Aerial 
photograph]: 

[Refer to PDF for image] 

Source: GAO. 

[End of figure] 

Border Security Program Faces Implementation and Monitoring Challenges: 

Program managers in Washington and Pakistan have raised concerns about 
the implementation and impact of this program. For example, since 2005 
the pace of road and bridge construction, as well as monitoring 
efforts, has slowed because Pakistan cannot guarantee the security of 
the work crews or U.S. end-use monitors; the security situation has 
caused the roads, bridges, and outpost construction efforts to be shut 
down for months or even years, as in the Waziristans since 2005. 
Additionally, U.S. trainers increasingly face security restrictions on 
conducting training at locations in the NWFP according to State 
officials. As a result, some training scheduled for the NWFP has been 
either postponed or moved to secondary locations near Islamabad. 

Monitoring of the Border Security Program has been hampered by the 
deteriorating security situation in FATA and the NWFP, which has 
restricted travel in the last 3 years. State officials told us that 
this limits their ability to monitor road construction progress in two 
of the seven FATA agencies, North and South Waziristan. According to 
State, in 2007, all monitoring visits to the FATA were canceled for 
security reasons. In some instances, Pakistani officials were asked to 
bring the Border Security Program-supplied equipment to safer locations 
for inspection by embassy staff. 

Other U.S. Government Law Enforcement Training Efforts in Pakistan: 

State also provides law enforcement training in Pakistan through its 
Antiterrorism Assistance (ATA) program. ATA's objectives are to provide 
partner nations with counterterrorism training and equipment, improve 
bilateral ties, and increase respect for human rights. ATA assistance 
generally consists of (1) training courses on tactical and strategic 
counterterrorism issues and (2) grants of counterterrorism equipment, 
such as small arms, bomb detection equipment, vehicles, and computers. 
ATA provides training primarily through contract employees and 
interagency agreements with other U.S. law enforcement agencies. 
According to our February 2008 report on ATA, Pakistan was the third 
largest recipient of ATA funding in the world.[Footnote 13] 

State has also funded law enforcement-related training activities 
carried out by Department of Justice agencies. In August 2002, the 
Department of Justice's International Criminal Investigative Training 
Assistance Program (ICITAP) initiated an assistance program to increase 
the capacity of the Pakistan law enforcement agencies to combat major 
internal criminal activities and terrorist threats. ICITAP training has 
primarily been targeted to address three specific needs: (1) building 
training capacity by training institutional staff and assisting in 
revision of core curricula, (2) improving investigative skills and 
capability through training in crime scene processing and basic 
criminal investigation, and (3) improving management and leadership 
ability through training in modern police management practices. The 
ICITAP program in Pakistan encompasses three major areas of 
responsibility: (1) border security, (2) law enforcement reform, and 
(3) the Automated Fingerprint Identification System. According to 
Justice, the program has developed and presented more than 150 training 
programs in both the border security and law enforcement reform areas. 

In addition, Justice has one representative in Islamabad from the 
Criminal Division's Office of Overseas Prosecutorial Development, 
Assistance and Training (OPDAT). OPDAT's mission is to develop and 
administer technical and developmental assistance designed to enhance 
the capabilities of foreign justice sector institutions and their law 
enforcement personnel to combat terrorism and other types of crime. 
According to Justice, an OPDAT assessment led to the placement of a 
Justice Resident Legal Advisor at the U.S. Embassy in 2006 to assist 
Pakistan in legal reforms. Since than, the Advisor has worked to 
improve Pakistan's anti-money laundering legislation, and monitored 
terrorism prosecutions and the government's closure of Islamic 
charities linked to terrorist organizations. According to Justice, 
funding for OPDAT activities comes from State INL funds. 

The Drug Enforcement Administration (DEA) and the Federal Bureau of 
Investigation (FBI) both have mandates to assist host nations, such as 
Pakistan, combat threats emanating from criminal activities, including 
those associated with illicit drugs and terrorist activities. DEA has 
offices in Islamabad and Peshawar intended to target drug-related 
threats to American citizens. Although it has not been given the 
specific goal to assist foreign nations to combat terrorism, in 
response to the 9/11 terrorist attacks, it has expanded its 
intelligence capabilities and information sharing, and instituted a 
formal procedure to query its in-country sources on terrorist-related 
information, which is then shared with the FBI and other agencies 
involved with efforts to fight terrorism. According to DEA officials, 
DEA cannot access the FATA; however, DEA can query its in-country 
sources on terrorist-related information when they leave the FATA. DEA 
training has been focused on improving the counter-narcotics 
capabilities of their Pakistani counterparts. 

The FBI operates a Legal Attaché office in Islamabad, Pakistan. The 
office is intended to (1) coordinate international investigations with 
their foreign nation colleagues; (2) cover international leads for 
domestic U.S. investigations; (3) link U.S. and international resources 
in critical criminal and terrorist areas to protect Americans at home 
and abroad; and (4) coordinate FBI training, including counterterrorism 
classes, for police in their geographic regions. The FBI has also 
provided terrorist financing and money laundering training to 
Pakistan's law enforcement agencies. It also reported providing other 
types of training, including post-blast crime scene instruction and 
training related to the prevention, interdiction, and investigation of 
terrorist acts. 

The U.S. embassy also coordinates efforts by State, Justice, Treasury, 
and Homeland Security to assist Pakistan identify and disrupt terrorist 
financing. For terrorist financing, the embassy, working with 
representatives from the FBI's Legal Attache office and the Department 
of Homeland Security, provided the Pakistani government technical 
assistance to develop an anti-money laundering law and helped create a 
financial intelligence unit to implement the law and reduce sources of 
terrorist financing. Treasury provided Pakistan assistance on its draft 
money laundering legislation to ensure it meets minimum international 
standards. Nonproliferation, Anti-terrorism, Demining, and Related 
Programs provides the bulk of the funding for interagency assistance 
for counterterrorism financing programs in Pakistan, with additional 
support provided by International Narcotics and Law Enforcement funds. 

Oversight Questions: 

* What performance indicators are in place to measure progress toward 
the U.S. law enforcement goals in Pakistan's FATA and Western Frontier? 
What progress has been made through the various law enforcement 
efforts? What are the desired end states, and what are the expected 
time frames for completion? 

* Given that several U.S. agencies are involved in various law 
enforcement activities in Pakistan, how well are law enforcement 
efforts in Pakistan coordinated among the various U.S. agencies? 

* How effectively is the experience and expertise of the Department of 
Justice, its components, and others being used? 

* To what extent are U.S. agencies working along the Afghanistan and 
Pakistan border sharing information on potential terrorists, drug 
traffickers, and other criminals? 

* What are the anticipated costs of fully implementing the Border 
Security Program? What accountability measures are built into the 
Border Security Program to ensure U.S. funds are used as intended? How 
has State determined whether the Government of Pakistan deployed Border 
Security Program assets as intended? 

[End of section] 

Enclosure V: Use of Development and Economic Assistance Elements of 
National Power: 

The United States has used development and economic assistance to 
address national security-related priorities in Pakistan, providing 
about $3.3 billion in related activities since 2002. As figure 9 shows, 
the development and economic assistance elements of national power have 
accounted for about 27 percent of U.S. funds devoted to addressing the 
U.S. strategic goals in Pakistan. The development and economic needs of 
Pakistan are considerable. Pakistan is one of the world's poorest 
countries and ranks near the bottom of several development indicator 
categories, such as literacy; nutrition; and infant, child, and 
maternal mortality (see enclosure I for additional information on 
Pakistan's development indicators). As such, development and economic 
assistance are two key elements of national power vital to U.S. efforts 
to address terrorism and close the safe haven in Pakistan. This 
enclosure provides information on U.S. development and economic policy 
assistance to Pakistan, including development assistance for Pakistan's 
underdeveloped areas, direct budget support to enhance Pakistan's 
macroeconomic stability, and use of economic policy to assist Pakistan 
to achieve economic prosperity. It also highlights several oversight 
issues for Congress and the new administration to consider. 

Figure 9: Percentage of Funding Devoted to Development and Economic 
Assistance Activities: 

[Refer to PDF for image] 

This figure is a pie-chart depicting the following data: 

Percentage of Funding Devoted to Development and Economic Assistance 
Activities: 
Military: 70.4%; 
[Emphasis: Development - Economic: 26.7%;] 
Law Enforcement: 2.6%; 
Diplomacy: 0.3%. 

Source: GAO analysis of budget documents provided by State Director of 
Foreign Assistance. 

Note: Funding figures do not include normal operating costs, such as 
salaries of U.S. government officials or funding for covert activities. 

[End of figure] 

Table 4 indicates the amount and sources of U.S. development and 
economic-related funding to Pakistan. 

Table 4: USAID Development and Economic Funding to Pakistan, FY 2002- 
2008 (Dollars in thousands): 

Funding source: Child Survival and Health Programs Fund; 
FY 2002: $14,000; 
FY 2003: $15,600; 
FY 2004: $25,600; 
FY 2005: $21,000; 
FY 2006: $28,100; 
FY 2007: $22,385; 
FY 2008: $29,816; 
Total: $156,501. 

Funding source: Development Assistance; 
FY 2002: $10,000; 
FY 2003: $34,500; 
FY 2004: $49,400; 
FY 2005: $29,000; 
FY 2006: $37,500; 
FY 2007: $95,327; 
FY 2008: $29,757; 
Total: $285,484. 

Funding source: Economic Support Fund (ESF)[A]; 
FY 2002: $615,000; 
FY 2003: $188,000; 
FY 2004: $200,000; 
FY 2005: $297,600; 
FY 2006: $337,100; 
FY 2007: v388,673; 
FY 2008: $347,165; 
Total: $2,373,538. 

Funding source: Other[B]; 
FY 2002: $23,899; 
FY 2003: $20,162; 
FY 2004: $28,538; 
FY 2005: $57,133; 
FY 2006: $274,777; 
FY 2007: $35,892; 
FY 2008: $38,456; 
Total: $478,857. 

Funding source: Total; 
FY 2002: $662,899; 
FY 2003: $258,262; 
FY 2004: $303,538; 
FY 2005: $404,733; 
FY 2006: $677,477; 
FY 2007: $542,277; 
FY 2008: $445,194; 
Total: $3,294,380. 

Source: GAO analysis of budget documents provided by State Director of 
Foreign Assistance. 

Note: Funding figures in this table do not include normal operating 
costs, such as salaries of U.S. government officials. 

[A] About two-thirds of ESF was provided directly to the Pakistani 
government for debt relief, balance of payments, and direct budget 
support. 

[B] Other categories of funding include International Disaster and 
Famine Assistance; Public Law 480, Title II (Emergency Food Aid); 
Migration and Refugee Assistance; Human Rights and Democracy Funding; 
Department of Agriculture's McGovern-Dole International Fund for 
Education and Child Nutrition Program; Department of Agriculture's Food 
for Progress; Overseas Humanitarian and Civic Aid; Foreign Assistance 
Act section 506(a)(2) drawdown; and Emergency Response Fund. 

[End of table] 

USAID activities in Pakistan have been funded from Child Survival and 
Health Assistance, Development Assistance, and ESF. These funds are 
intended to help improve the lives of ordinary Pakistanis; lay the 
groundwork for the country's sustained economic growth; and strengthen 
social, political, and economic institutions. A stated goal of these 
efforts in Pakistan is also to alleviate the conditions that breed 
extremism while demonstrating that the United States' interest in 
Pakistan extends beyond the war on terror to concern for the Pakistani 
people as a whole. State is also supporting legislation for 
Reconstruction Opportunity Zones intended to promote trade and economic 
development. This legislation was not passed in the 110th Congress. 

U.S. Development and Economic Assistance Programs: 

USAID's development programs have been organized into strategic 
objectives covering health, governance, education, and economic growth. 
In 2005, following the 7.6 magnitude earthquake in the northwestern 
part of Pakistan, USAID also began providing emergency relief and 
earthquake reconstruction assistance funded from the accounts detailed 
in table 4. In addition, the United States provides direct budget 
support through ESF, as well as economic policy assistance to Pakistan, 
including efforts to establish Reconstruction Opportunity Zones. 

Health--USAID's Health Program has focused on improving maternal and 
newborn health services, enhancing the accessibility and availability 
of family planning products, preventing the spread of major infectious 
diseases, and increasing access to safe drinking water (see figure 10). 
For example, USAID's Pakistan Safe Drinking Water and Hygiene Promotion 
Project supports the Pakistani government's effort to install more than 
6,000 water filtration plants, with the aim of providing clean drinking 
water. 

Figure 10: Beneficiaries of a USAID Health Project: 

[Refer to PDF for image] 

Photograph of a mother holding a child while being examined. 

Source: USAID. 

[End of figure] 

Governance: USAID's Democracy and Governance Program was intended to 
assist Pakistan's parliamentary institutions improve electoral 
processes and advance the decentralization process. For example, 
USAID's Pakistan Legislative Strengthening Project has trained hundreds 
of members of parliament on rules of procedure, the committee system, 
law drafting, and budget review. 

Education: USAID's Education Program has supported projects to reform 
and revitalize Pakistan's education system, including educational 
assistance to young children (see figure 11). Education received the 
most development funding because the United States and Pakistan deemed 
it critical to improving the quality of life for the citizenry. For 
example, according to USAID, its Strengthening Teacher Education in 
Pakistan initiative is intended to improve teacher education through 
the development of national standards for teacher certification and 
accreditation. 

Figure 11: Beneficiaries of a USAID/Pakistan Education Project: 

[Refer to PDF for image] 

Photograph of children at play in a school setting. 

Source: USAID. 

[End of figure] 

Economic growth: USAID's Economic Growth Program has sought to increase 
incomes and employment in Pakistan. The program focuses on expanding 
access to credit, improving the competitiveness of Pakistani small-and 
medium-sized enterprises through technical assistance, improving 
agricultural practices, and catalyzing development in energy. For 
example, according to USAID, its Developing Financial Services for 
Communities without Credit Program worked with the Khushhali Bank to 
disburse 356,361 micro-loans (average size approximately $200) in 
various districts, totaling more than $63 million and including 2,531 
loans in FATA worth $429,450. 

Earthquake reconstruction: On October 8, 2005, a 7.6 magnitude 
earthquake struck Pakistan, killing 74,000, injuring 70,000, and 
rendering more than 2.8 million people homeless. Focusing on immediate 
humanitarian needs, U.S. assistance provided emergency shelter, relief 
supplies, and medical help. Emergency relief efforts were followed by a 
USAID program to enable people to return home and rebuild their lives. 
In October 2006, USAID commenced a 4-year, $200 million Earthquake 
Reconstruction Program, through which it is constructing schools and 
healthcare facilities, improving education and health services, and 
enhancing economic well being by restoring livelihoods and expanding 
employment and enterprise opportunities. 

Economic Support Funds Used for Emergency Economic Assistance to 
Pakistan: Although Economic Support Funds are used for a variety of 
U.S. programs in Pakistan, nearly $1.6 billion of these funds have been 
provided for direct budget support to the government of Pakistan via 
Emergency Economic Assistance, as shown in table 5. According to USAID, 
initially these funds provided balance of payments, budget support, and 
debt relief to the government of Pakistan during a time of economic 
hardship and political strain associated with Pakistan's participation 
in the Global War on Terror. Beginning in fiscal year 2005, these funds 
were direct grants for the government's health, education, clean 
drinking water and earthquake reconstruction initiatives. Following the 
announcement of a State of Emergency in Pakistan in November 2007, the 
fiscal year 2008 ESF committed for direct budget support to Pakistan 
was transferred into USAID-managed development programs. According to 
USAID officials, the fiscal year 2009 ESF commitment that would have 
gone to Emergency Economic Assistance will also be projectized. 

Table 5: ESF-Funded Emergency Economic Assistance to Pakistan, FY 2002- 
2008: 

FY: 2002; 
ESF level: $600 million; 
Objective of Emergency Economic Assistance: Balance of payments and 
direct budget support grant. 

FY: 2003; 
ESF level: $188 million; 
Objective of Emergency Economic Assistance: Debt relief. 

FY: 2004; 
ESF level: $200 million; 
Objective of Emergency Economic Assistance: Debt relief. 

FY: 2005; 
ESF level: $200 million; 
Objective of Emergency Economic Assistance: Direct budget support grant 
to help Pakistan meet macroeconomic stability objectives and increase 
spending on human capital and private-sector development objectives. 

FY: 2006; 
ESF level: $200 million; 
Objective of Emergency Economic Assistance: Direct budget support grant 
to help Pakistan meet macroeconomic stability objectives and increase 
spending on human capital, specifically in education, health, and clean 
drinking water sectors. 

FY: 2007; 
ESF level: $200 million; 
Objective of Emergency Economic Assistance: Direct budget support grant 
to help Pakistan meet macroeconomic stability objectives and increase 
spending on human capital, specifically in education, health, clean 
drinking water, and earthquake reconstruction. 

FY: 2008; 
ESF level: $200 million; 
Objective of Emergency Economic Assistance: This funding was 
transferred into USAID development projects and was not used for 
Emergency Economic Assistance. 

Source: USAID. 

[End of table] 

Economic Policy Assistance: The embassy's objectives in economic policy 
includes encouraging the Pakistani government to promote structural 
reforms that further liberalize the economy and increase economic 
opportunities in underserved areas, such as the FATA. In addition, they 
include efforts to reduce the government's role in economic activity 
through privatization of state-owned enterprises, improve the 
efficiency of the financial sector, and increase the transparency of 
fiscal and monetary policies. In addition, the embassy planned to help 
Pakistan develop and strengthen its national export control system, 
expand trade, and eliminate trade barriers. 

U.S. Efforts to Support Pakistan's Sustainable Development Plan for the 
FATA: 

The use of development assistance in the FATA was not prominent in the 
United States' efforts in Pakistan until March 2006, when the President 
of Pakistan requested that the United States adopt a more comprehensive 
approach to combating the terrorist threat in the FATA. Following these 
discussions, Pakistan proposed a Sustainable Development Plan that 
focuses on providing economic development and extending the influence 
of the Pakistani government in the FATA. USAID provided technical 
assistance to the Pakistani government's Sustainable Development Plan 
and has based its development activities in the FATA on this plan. The 
U.S. development activities include capacity building for the FATA 
institutions needed to plan, manage, and monitor development projects; 
efforts to build community and government relations; funding for health 
and education services; and efforts to increase employment and economic 
growth. The United States has pledged $750 million between 2007 and 
2011 toward the Pakistani government's $2 billion, 9-year Sustainable 
Development Plan. 

As of December 2008, according to USAID, its efforts in support of 
Pakistan's Sustainable Development Plan have led to numerous results, 
including the following: 

* The $43 million FATA Capacity Building Program has provided 
administrative and management training for 340 staff from FATA 
development agencies, procured $1.7 million worth of computer and 
networking equipment, and started the development of a monitoring and 
evaluation system. 

* The $300 million Livelihoods Program has benefited over 10,000 youth 
through short-term cash for work programs, enrolled over 800 youth in 
vocational training and scholarship programs, and enrolled 350 youth in 
literacy and life skills programs. 

* The $15.4 million education programs have trained over 360 education 
staff in areas such as school management, financial management, 
training of trainers, and educational planning. In addition, 58 
primary, middle, and high schools have been constructed and furnished 
in the FATA. 

* The $16.7 million health programs have conducted 1,824 Child Health 
Days that provided more than 207,821 children and 19,000 mothers with 
medical care and vaccinations. In addition, the programs provided 
training for 1,321 health providers in newborn and child health care. 

U.S. Considering Establishment of Reconstruction Opportunity Zones in 
Pakistan: 

During the 110th Congress, bills were introduced in both the House and 
the Senate for Reconstruction Opportunity Zones in Afghanistan and 
Pakistan; neither bill was the subject of committee or floor action. 
[Footnote 14] The proposed legislation was intended to provide economic 
incentives to address the widespread poverty and unemployment that, 
according to State, provide fertile ground for violent extremism in 
Afghanistan and the border region of Pakistan. By granting duty-free 
treatment to a wide array of goods produced in areas designated by the 
president as Reconstruction Opportunity Zones, the act was intended to 
promote investment and employment while giving local populations a 
stake in a more stable and prosperous future. The proposal included 
duty-free treatment for certain non-textile, textile, and apparel 
products for a period of 15 years. The Reconstruction Opportunity Zones 
eligible areas would be the entire territory of Afghanistan and the 
border region of Pakistan, which would include the FATA, the earthquake 
affected areas of Azad Jammu and Kashmir, parts of Balochistan, and the 
North West Frontier Province including Peshawar. 

Oversight Questions: 

* To what extent is development and economic assistance to be included 
in future U.S. plans for addressing the terrorist threat and closing 
the terrorist safe haven in Pakistan's FATA and Western Frontier? 

* How has USAID coordinated its plans to carry out development projects 
in Pakistan's FATA and Western Frontier with the Pakistani government 
and what efforts are made to ensure that regions are secured before 
development projects are undertaken? 

* How much of the development and economic assistance funding has been 
expended? How much of the development and economic assistance has 
Pakistan used to support health and education initiatives? What are the 
development and economic assistance priorities going forward and what 
are the projected future funding requirements? 

* What are the cost and benefits to the United States of implementing 
Reconstruction Opportunity Zones? 

* What performance indicators are in place to measure progress toward 
the U.S. development and economic assistance goals in Pakistan and its 
FATA and Western Frontier? What do the indicators show to date? 

* How are USAID's activities in support of Pakistan's Sustainable 
Development Plan coordinated with State, Defense, Pakistan government, 
and other development activities to combat terrorism in the FATA? 

* What challenges, if any, do USAID and others working on behalf of the 
U.S. face in implementing development projects in FATA and Western 
Frontier, and what are the United States' contingency plans for 
mitigating these challenges? 

[End of section] 

Enclosure VI: Use of the Diplomatic Element of National Power: 

The United States has used, to a limited extent, the diplomatic element 
of national power to address national security-related priorities in 
Pakistan, providing about $39 million in related activities since 2002. 
As figure 12 shows, the diplomatic element of national power has 
accounted for less than 1 percent of U.S. funds devoted to addressing 
the U.S. strategic goals in Pakistan. This enclosure provides 
information on U.S public diplomacy efforts in Pakistan and the FATA. 
It also highlights several oversight issues for the Congress and new 
administration to consider. 

Figure 12: Percentage of Funding Devoted to Diplomatic Activities: 

[Refer to PDF for image] 

This figure is a pie-chart depicting the following data: 

Percentage of Funding Devoted to Diplomatic Activities: 
Military: 70.4%; 
Development - Economic: 26.7%; 
Law Enforcement: 2.6%; 
[Emphasis: Diplomacy: 0.3%.] 

Source: GAO analysis of budget documents provided by State Director of 
Foreign Assistance. 

Note: Funding figures do not include normal operating costs, such as 
salaries of U.S. government officials or funding for covert activities. 

[End of figure] 

Table 6 indicates the amount of U.S. public diplomacy-related funding 
to Pakistan. 

Table 6: State Public Affairs Funding to Pakistan, FY 2002 to 2008 
(Dollars in thousands): 

Funding to Pakistan; 
FY 2002: $3,486; 
FY 2003: $3,957; 
FY 2004: $6,811; 
FY 2005: $5,869; 
FY 2006: $9,144; 
FY 2007: $8,735; 
FY 2008: $1,497[A]; 
Total: $39,499. 

Source: GAO analysis of budget documents provided by State Director of 
Foreign Assistance. 

Notes: Funding figures in this table do not include normal operating 
costs, such as salaries of U.S. government officials. Data includes 
State Public Diplomacy program funding and State Education and Cultural 
Exchange programs in Pakistan, but does not include funding for the 
Fulbright exchange program, which is funded by USAID and included in 
our development and economic funding table. 

[A] State did not provide FY 2008 Education and Cultural Exchange 
funding. 

[End of table] 

In November 2008, we identified public diplomacy as one of the key 
issues demanding urgent attention and continuing oversight by the new 
Congress and administration to ensure our nation's security and well- 
being.[Footnote 15] State leads public diplomacy efforts overseas, but 
other agencies such as Defense and USAID also seek to influence foreign 
public opinion through their public diplomacy and humanitarian relief 
efforts. 

U.S. Embassy Plans for Diplomacy: 

According to the U.S. embassy in Pakistan, its public diplomacy efforts 
span a broad range of embassy objectives, including efforts to promote 
democracy and human rights, economic development, and regional security 
in Pakistan. The embassy uses its exchange and visitor programs in an 
effort to expose Pakistani opinion makers to the United States, as 
illustrated in figure 13. 

Figure 13: Pakistani Exchange Students' Pre-Departure Orientation 
[Photograph]: 

[Refer to PDF for image] 

Source: Department of State. 

[End of figure] 

In addition, the embassy seeks to enhance its engagement with the 
public through the Lincoln Corner program. The program provides 
American books, Internet access, and other material, as well as space 
to conduct programs for education, seminars, round tables, and language 
training, with or without American involvement, as seen in figure 14. 
It also utilizes a visiting speaker's program and enhanced public 
speaking engagements for mission personnel to educate the Pakistani 
public about U.S. policies and programs. State provided GAO numerous 
examples of public diplomacy efforts in Pakistan, such as student 
exchanges, press coverage, and training initiatives. 

Figure 14: Lincoln Corner Children Gathering to Gain a Better 
Understanding of American Culture [Photograph]: 

[Refer to PDF for image] 

Source: Department of State. 

[End of figure] 

Diplomacy Efforts for the FATA: 

According to State, the embassy plans to use public diplomacy to 
undermine the ideological underpinnings of extremism while bolstering 
the image of the Pakistani national government. The U.S. embassy 
included public diplomacy efforts toward its objective of preventing 
terrorist acts and denying a safehaven for terrorists. The embassy has 
used Pakistani government and local aid workers to implement and 
publicize U.S. supported projects in an effort to extend the authority 
of Pakistan's national government into the FATA, a key objective of the 
Pakistani and U.S. effort in the FATA. In addition, the embassy planned 
to deploy a variety of public diplomacy programs including speakers, 
scholarships, exchanges, and Lincoln Corner programs to reinforce other 
U.S. objectives in NWFP and Balochistan. 

The U.S. government initiated a number of programs for the FATA for 
fiscal year 2008: 

* English Scholarship Program: The State Department awarded multiple 
grants to higher education institutions in NWFP to conduct English 
language training for students from the FATA and surrounding areas for 
a period of 2 years. 

* Youth Radio Drama Program: The State Department, through the Peshawar 
Consulate, awarded a grant to a U.S. institution to develop a radio 
drama program for broadcast in NWFP and FATA, the aim of which was to 
train and support moderate local voices. Through this grant, a team of 
trainers traveled to Peshawar to work with journalism and mass 
communications students from two area universities. The trainers 
provided training in script development and radio acting and helped the 
students to produce serial dramas highlighting real-life problems 
confronting residents in the FATA. This program was broadcast in Pashto 
on local radio stations. 

* Radio and Television Training Program: The State Department provided 
a grant to a U.S. higher education institution to work with a higher 
education institution in the NWFP on television and radio broadcast 
training. 

* International Visitor Leadership Programs: Two International Visitor 
Leadership Programs specifically targeted the FATA region. One was a 
program for tribal and community leaders from Pakistan's border region. 
A second program, with an emphasis on Advancing Peace through Community 
Problem Solving, targeted community leaders from both the Afghan and 
Pakistan border areas. 

* Small Grants Program for the FATA and NWFP: Through the Peshawar 
Consulate, post provided small grants to support locally initiated 
civic education programs. 

* Sports Initiative: The State Department awarded a grant to a local 
organization to encourage initiatives where sports can assist in 
creating a platform for post-conflict, peace-building and development 
by facilitating and equipping 150 youth sport teams with sports goods 
and establishing a sports network. The initiative directly involves 150 
teams of cricket, football, and volleyball, more than 20,000 indirect 
beneficiaries (spectators), and provides recreational facilities for 
youth teams. 

* Social Awareness and Educational TV and Radio Programs: The State 
Department awarded a grant to a higher education institution for the 
development of a series of radio and TV programs in Pashto, Urdu, and 
English designed to educate residents and promote tolerance through 
moderate messaging. 

* International Women of Courage Awards: The State Department conferred 
an International Women of Courage Award on a community activist from 
the FATA for her work to empower the voice and role of women in 
traditional communities of the region. 

State officials said that U.S. public diplomacy efforts in Pakistan 
have been historically hampered by a lack of funding, staffing, and the 
security environment. State officials characterized public diplomacy 
funding to Pakistan as "woefully under-funded" to counter Pakistani 
perceptions of U.S. policies in Pakistan. They also said that Pakistani 
public diplomacy efforts were "very understaffed" given the number of 
people in Pakistan (170 million), the number of media outlets, and the 
grave national security concerns that Pakistan represented. State 
officials said that there were eight officials with public diplomacy 
responsibilities for Pakistan, and two of these have other 
responsibilities. By contrast, they said, the U.S. mission in 
Afghanistan has seven full-time Americans engaged in public diplomacy 
efforts for a population of around 30 million people and a less complex 
media environment than Pakistan. State officials said that the lack of 
funding and staffing is one reason the United States has been unable to 
counter the public perception that terrorist attacks in Pakistan are 
caused by U.S. efforts to combat terrorism in the FATA. For example, a 
June 2008 Pakistan-wide public opinion poll released by the New America 
Foundation found negative views held by Pakistanis of the United States 
and its policies in Pakistan. According to the poll, more than half (52 
percent) blamed the United States when asked who was most responsible 
for the violence that is occurring in Pakistan today, while 8 percent 
blamed al Qaeda fighters. 

State public diplomacy officials said that there has been a recent 
increase in interest in expanding public diplomacy efforts in Pakistan. 
In August 2008, State's Office of the Under Secretary for Public 
Diplomacy and Public Affairs began to develop a list of potential 
public diplomacy activities intended to reaffirm the U.S. commitment to 
Pakistan as a key ally and counter the view that the United States is a 
threat to Islam. State officials estimated the potential cost of these 
proposed initiatives, still pending approval, at about $29 million. 

Oversight Questions: 

* How do State's diplomacy priorities align with the overall U.S. 
strategy for combating terrorism emanating from Pakistan's border area? 

* To what extent have diplomacy efforts been, or will they be, 
integrated with other efforts, such as development assistance, to 
combat terrorism in Pakistan's FATA and Western Frontier? What are the 
projected scope, priorities, and future funding requirements for 
diplomacy programs? 

* What have been the results of U.S. diplomacy efforts in Pakistan? 
What performance measures are, or will be, included to assess progress? 

* How have the worsening security situation and limited funding and 
resources devoted to U.S. diplomacy efforts impacted planning and 
implementation of State's public diplomacy efforts? 

* What steps have been taken, among the U.S. government agencies, to 
coordinate public diplomacy and strategic communications activities in 
Pakistan? 

[End of section] 

Enclosure VII: Oversight and Accountability of CSF and Other Funds 
Provided to Pakistan: 

As noted earlier, the U.S. government has provided Pakistan more than 
$12.3 billion for military, law enforcement, development and economic 
assistance, and diplomacy efforts to secure, stabilize, and develop 
Pakistan, and particularly the FATA and Western Frontier. Where audits 
have been completed covering about $5.7 billion in military and 
development assistance, GAO and the Defense and USAID inspectors 
general have raised accountability and oversight concerns, such as the 
ability of the U.S. government to work with the Pakistani government to 
validate the use of U.S. funds.[Footnote 16] Going forward, the U.S. 
government's plans for training and equipping Pakistan security forces 
in FATA and the Western Frontier call for annual investments of around 
$200 million per year from fiscal year 2009 through 2012. Additionally, 
the United States has committed $750 million for development efforts in 
the FATA over 5 years (fiscal years 2007 through 2011), and legislation 
currently under consideration, if passed, could provide billions more 
in development assistance to Pakistan over a 5-year period.[Footnote 
17] Given the oversight and accountability deficiencies that we and the 
inspectors general have previously identified, as well as the number of 
U.S. programs and activities that remain unaudited, continued 
congressional oversight and agency monitoring efforts are needed to 
help ensure U.S. funding is used as intended. This enclosure highlights 
our previous findings relating to the need for increased oversight and 
accountability of Pakistan's CSF reimbursement claims, prior 
recommendations for enhancing oversight, and efforts undertaken by 
Defense to improve the oversight and accountability of the CSF 
reimbursement process. 

Previously Reported Deficiencies in Oversight and Accountability of 
CSF: 

We previously reported in June 2008 that Defense did not consistently 
apply its existing CSF oversight guidance. While Defense generally 
conducted macro-level analytical reviews called for in its guidance, 
such as determining whether the cost is less than that which would be 
incurred by the United States for the same service, for a large number 
of reimbursement claims, Defense did not obtain detailed documentation 
to verify that claimed costs were valid, actually incurred, or 
correctly calculated. For example, as of May 2008, Defense paid over $2 
billion in Pakistani reimbursement claims for military activities 
covering January 2004 through June 2007 without obtaining sufficient 
information that would enable a third party to recalculate these costs. 

We also found that Defense may have reimbursed costs that (1) were not 
incremental, (2) were not based on actual activity, or (3) were 
potentially duplicative. For example, Defense paid an average of more 
than $19,000 per vehicle per month for Pakistani navy reimbursement 
claims. These claims appeared to contain duplicative charges for a 
fleet of fewer than 20 passenger vehicles. We also found that 
additional oversight controls were needed. For example, Defense had no 
guidance to verify currency conversion rates used by Pakistan, which if 
performed would enhance Defense's ability to monitor for potential over-
billings. In addition, Defense's 2003 guidance did not specifically 
task the Office of the Defense Representative (ODRP) in the U.S. 
embassy with attempting to verify Pakistani military support and 
expenses. 

Prior Recommendations Regarding Oversight of CSF: 

To improve oversight of CSF payments to Pakistan, our June 2008 report 
made the following five recommendations to the Secretary of Defense: 

* Consistently implement existing criteria to disallow or defer 
Pakistani claims that do not include the documentation needed to verify 
the claims. 

* Define and formalize the roles and responsibilities of ODRP. 

* Clarify guidance for Comptroller analysis of cost fluctuations. 

* Develop and apply criteria to evaluate currency exchange rates to 
ensure that the U.S. government is not overpaying for Pakistan 
operations. 

* Work with the government of Pakistan to develop procedures to allow 
ODRP or other U.S. representatives to conduct greater oversight of CSF 
use in Pakistan, including the potential use of onsite inspections. 

Efforts Undertaken to Improve Oversight and Accountability of CSF: 

Defense concurred with our recommendations and has taken steps to 
address them. In June 2008, the Defense Comptroller issued formal 
guidance that, among other things, clarified the roles and 
responsibilities of Defense representatives at U.S. embassies. The 
guidance also added a requirement for the Defense Comptroller to 
analyze cost fluctuations that exceed 10 percent in each cost category 
and note changes in operational tempo, force strength, or cost elements 
that may have contributed to the change. The guidance also required 
that reimbursement requests provide costs in local currency, convert 
costs to the U.S. dollar equivalent, and indicate the effective date of 
and the exchange rate used. 

To help ensure consistent implementation of its guidance, in the case 
of Pakistan, Defense staff from the Comptroller and U.S. Central 
Command (CENTCOM) visited Islamabad to conduct discussions on the 
administration and processing of CSF reimbursement claims with ODRP and 
Pakistani military representatives. The U.S. delegation spent several 
days in August 2008 discussing changes to the CSF claims approval 
process with Pakistani military officials, including a joint 
examination of the May 2008 claim. 

As a result of these discussions, Defense agreed to: (1) provide 
Pakistan a set of revised guidelines on CSF administrative procedures; 
(2) provide Pakistan a revised format for the submission of Pakistan's 
June 2008 claim and all future CSF claims; and (3) return to Pakistan 
every 6 months beginning in February 2009 to discuss new CSF issues, 
provide training on CSF administrative processing requirements and 
revisit unresolved issues. Pakistani officials agreed to: (1) provide 
additional documentation and cost methodology information for the May 
2008 claim; (2) provide a monthly operational summary of Pakistani 
army, air force, and navy actions in support of U.S. military 
operations; (3) provide feedback on the proposed submission format 
within 30 days of receipt; and (4) beginning with the May 2008 claim, 
provide additional information or documentation for all disputed claims 
within 90 days to substantiate claims deferred or disallowed by ODRP, 
CENTCOM, or the Defense Comptroller. However, the Pakistani military 
was reluctant to provide costs in rupees due to the long processing 
time on previous CSF reimbursements. According to Defense officials, 
the Pakistani officials worried that they would be significantly under- 
compensated due to inflationary pressure on their national currency. In 
addition, Defense would not agree to pay for certain Pakistani 
requests, such as equipment depreciation or injury compensation for 
Pakistani soldiers. As of December 2008, these remaining issues had not 
been fully resolved. Figure 15 provides an illustration of the revised 
CSF oversight process. 

Figure 15: Revised CSF Oversight Process: 

[Refer to PDF for image] 

Legend: 
CENTCOM = United States Central Command. 
Defense = Department of Defense. 
DSCA = Defense Security Cooperation Agency. 
ODRP = Office of the Defense Representative to Pakistan. 
OMB = Office of Management and Budget. 
OUSD/Comptroller = Office of the Under Secretary of Defense for 
Comptroller. 

Illustration of Revised CSF Oversight Process, as follows: 

Pakistan: 
Submits claim for reimbursement to ODRP at U.S.Embassy. 

ODRP: 
Assists host country in formulating claim for reimbursement and 
endorses the country’s claim through a memo that: 
(1) Summarizes the expenses claimed by the country for support to U.S. 
military operations. 
(2) Verifies currency exchange rate used and date and source of 
exchange rate. 
(3) Describes the support provided by the country to U.S. military 
operations. 
(4) Certifies, to the best of the embassy's knowledge, information, and 
belief, the country incurred the costs and provided the support. 
(5) Verifies that expenses claimed for reimbursement are costs 
reasonably expected to be incurred by the country for the type of 
support provided. 
(6) Recommends disallowing or deferring expenses with appropriate 
explanation (e.g., not eligible for reimbursement, not reasonable 
charges for type of support provided). 
(7) Recommends use of comparative cost assessment in the absence of 
invoices or other cost documentation. 
(8) Confirms the country could not provide the support without 
reimbursement of expenses; 
(9) In the case of countries that receive recurring reimbursements, 
verifies the country’s explanation of fluctuations that exceed 10 
percent in each cost category (e.g., increase in troop strength, 
increase in operations, increase in food or fuel costs). 
(10) Verifies, to the extent possible, that claimed costs are charged 
to the appropriate category and are not double counted. 

CENTCOM: 
Prepares an operational validation that: 
(1) Validates support provided by the country was essential to the 
success of U.S. military operations. 
(2) Describes operational support provided by the country and how 
support met U.S. objectives. 
(3) Verifies financial and non-financial indicators are reasonable for 
the types of support provided. 
(4) Certifies, to the best of the Combatant Command's knowledge, 
information, and belief, that the costs are based on the U.S. 
requirement and would not otherwise have been incurred by the country 
requesting reimbursement. 
(5) Describes, where possible, the types of costs incurred and method 
for calculating the costs. 
(6) Recommends use of comparative cost assessment in the absence of 
invoices or other cost documentation. 

OUSD/Comptroller: 
(1) Compares total cost of country’s support to the total potential 
U.S. costs for similar support, including affirmation that the cost is 
less than that which would be incurred by the United States for the 
same service. If the cost comparison is not required or not 
appropriate, the evaluation shall include a statement providing the 
rationale. In cases where the country cannot provide the level of 
quantifiable data generally considered reliable under U.S. standards, 
the Department will rely on the Combatant Commander validation and the 
comparative cost assessment to evaluate the claim for reasonableness 
and credibility. 
(2) Assesses whether cost categories reported are reasonable. 
(3) Assesses whether selected subcategories are reasonable compared to 
U.S. costs. 
(4) Compares claim to previous reimbursements, including an assessment 
of cost fluctuations that exceed 10 percent and possible changes in 
operational tempo, force strength, or cost elements that may have 
resulted in the fluctuation. 

OMB: 
Reviews Comptroller package. 

Defense General Counsel: 
Reviews Comptroller package. 

State Department and Under Secretary of Defense for Policy: 
Verify that the reimbursement is consistent with U.S. government’s 
national security policy and not adversely impact balance of power in 
the region. 

Secretary of Defense: 
Provides Congress with 15-day notification of impending reimbursement. 

Congress: 
If no congressional action, transfer of funds to Pakistan is carried 
out by DSCA. 

Source: GAO analysis of Defense documentation and discussions with 
Office of the Undersecretary of Defense for Comptroller. 

[End of figure] 

While we recognize Defense is taking various steps to strengthen 
oversight of CSF claims, the extent to which Defense is consistently 
implementing this new guidance cannot be determined until the more 
recent Pakistan reimbursement claims are fully processed. Furthermore, 
Defense's ability to improve oversight over the CSF program will depend 
upon the cooperation of the Pakistani government. 

Oversight Questions: 

* Given that over $12 billion in U.S. assistance and reimbursements has 
been provided Pakistan, what oversight and accountability controls are 
now in place by the various U.S. agencies to oversee the use of U.S. 
funds? To what extent have the various agencies adequately implemented 
oversight and accountability controls? 

* What are the challenges to ensuring funds are used towards U.S. 
national security goals in Pakistan? What steps have U.S. agencies 
taken, or do they plan to take, to address these challenges and to 
ensure that funds are used as intended? 

* To what extent have the various U.S. agencies devoted sufficient 
resources for oversight of U.S. funds and efforts in Pakistan? How are 
resource requirements determined and to what extent do they include 
staff with appropriate skills (such as auditing, accounting, and 
program evaluation)? 

* Given limited ability to collect first-hand data on the use of U.S. 
funds in Pakistan and the need, in some cases, to rely on the Pakistani 
government for sufficient documentation to support reimbursement 
claims, what has been the level of cooperation between U.S. agencies 
and their counterparts in the Pakistani government to ensure oversight 
and accountability over U.S. funds? 

[End of section] 

Related GAO Products: 

Combating Terrorism: Increased Oversight and Accountability Needed over 
Pakistan Reimbursement Claims for Coalition Support Funds. [hyperlink, 
http://www.gao.gov/products/GAO-08-806]. Washington, D.C.: June 24, 
2008. 

Combating Terrorism: U.S. Efforts to Address the Terrorist Threat in 
Pakistan's Federally Administered Tribal Areas Require a Comprehensive 
Plan and Continued Oversight. [hyperlink, 
http://www.gao.gov/products/GAO-08-820T]. Washington, D.C.: May 20, 
2008. 

Preliminary Observations on the Use and Oversight of U.S. Coalition 
Support Funds Provided to Pakistan. [hyperlink, 
http://www.gao.gov/products/GAO-08-735R]. Washington, D.C.: May 6, 
2008. 

Combating Terrorism: The United States Lacks Comprehensive Plan to 
Destroy the Terrorist Threat and Close the Safe Haven in Pakistan's 
Federally Administered Tribal Areas. [hyperlink, 
http://www.gao.gov/products/GAO-08-622]. Washington, D.C.: April 17, 
2008. 

Securing, Stabilizing, and Reconstructing Afghanistan: Key Issues for 
Congressional Oversight. [hyperlink, 
http://www.gao.gov/products/GAO-07-801SP]. Washington, D.C.: May 24, 
2007. 

Securing, Stabilizing, and Rebuilding Iraq: GAO Audits and Key 
Oversight Issues. [hyperlink, http://www.gao.gov/products/GAO-08-231T]. 
Washington, D.C.: May 24, 2007. 

[End of section] 

Footnotes: 

[1] GAO plans to issue similar issue papers on Iraq (March 2009) and 
Afghanistan (April 2009). 

[2] GAO, Combating Terrorism: Increased Oversight and Accountability 
Needed over Pakistan Reimbursement Claims for Coalition Support Funds, 
[hyperlink, http://www.gao.gov/products/GAO-08-806] (Washington, D.C.: 
June 24, 2008); Combating Terrorism: U.S. Oversight of Pakistan 
Reimbursement Claims for Coalition Support Funds, [hyperlink, 
http://www.gao.gov/products/GAO-08-932T] (Washington, D.C.: June 24, 
2008); Combating Terrorism: U.S. Efforts to Address the Terrorist 
Threat in Pakistan's Federally Administered Tribal Areas Require a 
Comprehensive Plan and Continued Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-08-820T] (Washington, D.C.: May 20, 
2008); Preliminary Observations on the Use and Oversight of U.S. 
Coalition Support Funds Provided to Pakistan, [hyperlink, 
http://www.gao.gov/products/GAO-08-735R] (Washington, D.C.: May 6, 
2008); Combating Terrorism: The United States Lacks Comprehensive Plan 
to Destroy the Terrorist Threat and Close the Safe Haven in Pakistan's 
Federally Administered Tribal Areas, [hyperlink, 
http://www.gao.gov/products/GAO-08-622] (Washington, D.C.: Apr. 17, 
2008). 

[3] The National Security Council provided no comments. 

[4] The Heritage Foundation's 2008 Index of Economic Freedom ranked 
Pakistan's economy 93rd out of 157 countries. The index identified 
restrictive trade policies, a heavy fiscal burden, weak property 
ownership protections, and limited financial freedoms as issues. 
Corruption is another serious problem; in 2007, Berlin-based 
Transparency International placed Pakistan 138th out of 179 countries 
in its annual ranking of world corruption levels. 

[5] Intelligence funding is covert and was not included in this report. 

[6] GAO, Combating Terrorism: The United States Lacks Comprehensive 
Plan to Destroy the Terrorist Threat and Close the Safe Haven in 
Pakistan's Federally Administered Tribal Areas, [hyperlink, 
http://www.gao.gov/products/GAO-08-622] (Washington, D.C.: Apr. 17, 
2008). 

[7] Implementing the Recommendations of the 9/11 Commission Act of 2007 
(P.L. 110-53, sec. 2042). 

[8] CSF is used to reimburse 27 coalition allies, of which Pakistan is 
the largest recipient. 

[9] Beginning in 2007, responsibilities for training the Frontier Corps 
in the FATA shifted from State to Defense as part of Defense's Security 
Development Plan. 

[10] The counternarcotics program focuses on eliminating poppy 
cultivation, inhibiting further cultivation, interdicting smugglers, 
building Pakistan government capacity, providing infrastructure for 
alternative livelihood, and reducing domestic demand. The program 
relies on law enforcement, air support, and judicial reform, which are 
bolstered by complimentary INL programs: the Border Security Program 
and the Law Enforcement Program. INL initiated law enforcement reform 
in fiscal year 2003, working mainly through the Department of Justice 
to focus on training and leadership/management development. 

[11] The Border Security Program also provided funding to the Frontier 
Constabulary; the Federal Investigation Agency; the coast guard; and 
the Customs Department. 

[12] State indicates that the Air Wing has the best operational rate of 
any helicopter unit in Pakistan and is the country's only nighttime- 
capable air unit. According to Defense, the operational rate was 
supported by civilian contractors for some maintenance. 

[13] See GAO, Combating Terrorism: State Department's Antiterrorism 
Program Needs Improved Guidance and More Systematic Assessments of 
Outcomes, [hyperlink, http://www.gao.gov/products/GAO-08-336] 
(Washington, D.C.: Feb. 29, 2008). 

[14] Afghanistan-Pakistan Security and Prosperity Enhancement Act, H.R. 
6387, 110th Congress, and Afghanistan and Pakistan Reconstruction 
Opportunity Zones Act of 2008, S. 2776, 110th Congress. 

[15] See GAO, 2009 Congressional and Presidential Transition, 
[hyperlink, http://www.gao.gov/transition_2009/index.php]. 

[16] Department of Defense Inspector General, Financial Management: 
Coalition Support Funds, D-2004-045 (Washington, D.C.: Jan. 16, 2004). 
This is a classified report. USAID, Audit of Selected Activities under 
USAID/Pakistan's Basic Health Program, Audit Report No. 5-391-07-005-P 
(May 23, 2007) and USAID, Audit of USAID/Pakistan's Education Sector 
Reform Assistance Program, Audit Report No. 5-391-08-004-P (Mar. 28, 
2008). The office of the Chief Financial Officer for USAID has since 
issued a memorandum stating that final action is complete for all four 
of the recommendations to the 2007 Health Programs audit (5-391-07-005- 
P). 

[17] Enhanced Partnership with Pakistan Act of 2008, S. 3263, 110th 
Congress. 

[End of section] 

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