More Afghan Projects for USAID Contractor Accused of Fraud

Two months after The Louis Berger Group, an engineering contractor for the U.S. Agency for International Development, has become the subject of an investigation for alleged irregularities, it was reportedly tapped by the agency to oversee USD1.4 billion worth of projects in Afghanistan. 

>> USAID Contractor Faces Fraud Investigation

On July 31, 2006, an employee of The Louis Berger Group led federal investigators to incriminating evidence that the company, USAID’s contractor for rebuilding projects in the war-torn Asian country, has been overcharging the U.S. government.

“The decision to brush aside the allegations and the evidence and keep doing business with Louis Berger, underscores a persistent dilemma for the Obama administration in Afghanistan and elsewhere,” write Marisa Taylor and Warren P. Strobel of the McClatchy Newspapers in an article published in KansasCity.com. 

The article adds that despite Louis Berger’s alleged overcharging, which resulted in the loss of tens of millions of taxpayer dollars, court documents reveal that the U.S. Justice Department is cutting a deal that would “aid in preserving the company’s continuing eligibility to participate” in federal contracting activities in Afghanistan or anywhere else.

Holly Fisher, a Louis Berger spokeswoman, said the investigation should not affect the company’s ability to win U.S. government contracts, according to the article.

“While its work in Afghanistan was covered by that methodology, it is the methodology that is in question, not the work in Afghanistan,” she was quoted as saying. 

USAID, the article said, did not respond to requests for interviews regarding its continued association with Louis Berger. However, it issued a statement referring to its internal report on the partnership.

“USAID continues to take necessary actions to protect U.S. taxpayer funds in this matter,” the statement said. “We are engaged in ongoing dialogue with the Louis Berger Group, Inc. to ensure that the corporation is in full compliance with our contracts.”

In reaction, Ashley Jackson, head of policy in Afghanistan for international non-governmental organization Oxfam, said little has changed in the Obama administration’s attempts to revamp the agency. 

“A system has emerged where USAID is basically like a pass-through for these contractors,” she said, as quoted by the McClatchy Newspapers.

About the author

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    Louie-An Pilapil

    Louie-An is a former senior development analyst at Devex Manila. She has held consulting and editorial positions at the Asian Development Bank in Manila and a business-to-business media company in Hong Kong and mainland China.