Aid contractors not liable for US foreign policy, lawyers argue in terror-financing case

Lawyers for a major development contractor argue that the company should be dismissed from alleged violations of the Anti-Terrorism Act. Photo by: Marco Verch / CC BY

BURLINGTON, Vt. — A major U.S. development contractor that is being sued by family members of American troops and contractors killed in Afghanistan has argued it should be dismissed from the lawsuit since its projects and activities were conducted in support of U.S. foreign policy goals.

Lawyers representing DAI, a Maryland-based international development company that has worked in more than 150 countries, filed a memorandum Wednesday calling on the U.S. District Court for the District of Columbia to dismiss the company from a lawsuit that involves a variety of U.S. and international contractors that operated in Afghanistan after the U.S. invasion.

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The lawsuit alleges that DAI violated the Anti-Terrorism Act by funneling protection payments — through subcontractors and sub-subcontractors — to terrorist groups, which then enabled those groups to carry out deadly attacks on U.S. personnel between 2009 and 2017.

“DAI would not support attacks against U.S. service members and civilian contractors — the same people who have protected and rescued DAI personnel from those insurgents. That allegation is implausible and, indeed, deeply offensive,” the memorandum reads.

The allegations against DAI relate to six contracts the company implemented on behalf of the U.S. Agency for International Development. The plaintiffs devote the most attention to USAID’s Local Governance and Community Development project, which aimed to win support among the Afghan people by implementing small-scale infrastructure projects that would “accelerate, extend, and complement government efforts.”

“DAI ... understands the strong desire to hold the perpetrators responsible. But DAI does not belong in this lawsuit.”

— A memorandum filed by lawyers representing DAI

As part of that project, USAID explicitly tasked DAI with engaging possible Taliban recruits, former combatants, and Taliban supporters. DAI was also directed to enlist local community members in providing protection for those projects. USAID recognized that cash infused into local communities in unstable areas could end up getting diverted to terrorist groups, DAI’s representatives say, but determined the potential benefits of the project served U.S. interests.

According to DAI’s lawyers, the plaintiffs based their complaint on a 2010 report from USAID’s Office of Inspector General, or OIG, which reviewed whether security subcontractors “misused USAID funds to pay the Taliban or others in exchange for protection.” DAI’s representatives argue that the plaintiffs mischaracterized this report, which in fact found no indication that the organization hired by DAI made such payments and instead detailed incidents in which DAI elevated potential risks to USAID.

“The Report does not find, or even suggest, that DAI made protection payments or was complicit in payments made by subcontractors. Instead, the Report shows that DAI responded to insurgent threats by cancelling projects, raising concerns to both USAID and the OIG, and conducting due diligence that USAID found ‘appropriate to the complex environment and in accordance with contractual obligations,’” the memorandum reads.

Because DAI’s actions — both in implementing the project and in responding to risks associated with it — were taken in accordance with the U.S. government’s directions and to further its policy goals, the lawyers argue that the lawsuit, “boils down to a challenge to DAI’s implementation of U.S. foreign policy.”

That challenge, they say, should be dismissed since companies cannot be held liable for actions related to policy choices made by the U.S. Congress or the executive branch of government, according to a legal statute called the “political question doctrine.”

According to DAI’s lawyers, the plaintiffs claims would “require the Court to re-evaluate USAID’s determinations, at both the macro and micro level, that the need to press forward with these stabilization initiatives outweighed their inherent risks.”

“DAI recognizes the sacrifices of those service members and civilians who served the United States in Operation Enduring Freedom, condemns those who attacked U.S. forces and civilian personnel in Afghanistan, and understands the strong desire to hold the perpetrators responsible. But DAI does not belong in this lawsuit,” the memorandum reads.

About the author

  • Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.

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