Visit Afghanistan's 'Little America,' and See the Folly of For-Profit War

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First with an ill-fated Cold War-era project and now with the war today, Helmand province has been the source of enormously lucrative private contracting that has done little to improve peoples' lives.

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U.S. officials inspect a field in Afghanistan's Helmand. (AP).

Eight years ago, a 72-year-old American aid worker named Charles Grader told me a seemingly fantastical story. In a bleak stretch of Afghan desert that resembled the surface of Mars, several dozen families from states like Montana, Wisconsin and California had lived in suburban tract homes with backyard barbecues. For 30 years during the Cold War, the settlement served as the headquarters of a massive American project designed to wean Afghans from Soviet influence.

American engineers oversaw the largest development program in Afghanistan's history, constructing two huge earthen dams, 300 miles of irrigation canals and 1,200 miles of gravel roads. All told, the project made 250,000 acres of desert bloom. The town, officially known as "Lashkar Gah," was the new capital of Helmand province and an ultra-modern world of workshops and offices. Afghans called it "Little America."

Intrigued, I hitched a ride to the town with Grader a few weeks later. A weathered New England blue blood, Grader was the last American to head the Kabul office of the U.S. Agency for International Development before the 1979 Soviet invasion. In 2004, he was back in Afghanistan working as a contractor, refusing to retire just yet and trying, it seemed, to do good.

From the moment we arrived in Lashkar Gah, I was transfixed by Little America, its history and its meaning. At enormous cost, a sweeping American Cold War effort had temporarily eased the destitution of one corner of Afghanistan but failed to achieve its lofty goals. Surveying the town, I desperately hoped America could do better.

Over the next eight years, an epic tragedy unfolded in Helmand. All told, 858 American and British troops have died in the province since 2001 - nearly twice as many as in any other Afghan province - and the U.S. and British governments have spent billions of dollars in a province twice the size of Maryland with a population of 1 million. Hundreds of foreign contractors arrived to train Afghan police, farmers and government officials as well.

A clear pattern emerged. When massive international efforts were made, real progress emerged. The provincial capital and other large towns in central Helmand grew more secure and thrived economically, and narcotics cultivation dropped by one-third. But in isolated rural areas poverty, corruption and Islamic conservatism defied a scattershot American effort. As American and British forces prepare to withdraw next year, Afghans fear that the gains will crumble.

Over the course of four years, from 2004 to 2008, I visited Helmand roughly every six months. I embedded with American military units but found myself drawn to the American civilian effort again and again. Creating a crude but functioning Afghan economy, government and schools, it seemed, was the key to long-term stability.

In the end, Helmand proved tragic. I met dozens of well-intentioned American and Afghan civilians who found themselves trapped in a system marred by inconsistency, short-term goals and a focus on American - not Afghan - priorities. Speed, visibility and American political needs ruled. Patience, complexity and deference to Afghans were shunned.

Instead of triumphing, many of the Americans I met there ended up dejected, confused and cynical. What happened in Little America - and what it says about America's place, role and future in the world - haunts me as well.

*  *  *

In June 2004, accompanied by eight Afghan security guards, I drove into Lashkar Gah with Grader and found a bustling town of 100,000 people filled with shops and open-air markets. But the prosperity was illusory. The boom was largely fueled by Helmand's opium trade, which by then had been spreading across the province for two and a half years since the fall of the Taliban.

In the center of town, the remains of Little America still stood. The one-story suburban tract homes built by Americans during the Cold War were inhabited by Afghan families that had erected walls around them, a sign of differing Afghan and American notions of privacy. Rows of pine trees still lined some streets. And the headquarters of the Helmand Valley Authority - an impressive two-story office building - was in remarkably good shape. In some ways, Lashkar Gah recalled a small town in Texas, which bustled in the morning and grew still in stifling afternoon heat.

The province's governor, Sher Muhammad Akhundzada, was allegedly enmeshed in the opium trade, residents later told me, and enriching his own tribe at the expense of others. When I asked him, Akhundzada repeatedly denied engaging in trafficking or targeting other tribes. Over time, though, the drug trade and the corruption it spawned would act as a cancer in Helmand, creating dubious fortunes, deep inequality and simmering anger at the government.

In a series of meetings with local officials, Grader promised to create public-works projects that would repair the province's American-built irrigation system, employ large numbers of farmers and give them an alternative to poppy growing. As we crisscrossed the town that day, he defended the Cold War effort in Helmand. Yes, it had enormous cost overruns and failed to irrigate the acres promised, he said, but it trained thousands of Afghans.

"I feel so good about the education here," he said after meeting a second Afghan engineer taught by Americans in the 1970s. "USAID trained a lot of people."

Lanky, with a thick shock of gray hair and a faded all-American look, Grader was a marker of how the American approach to development had changed since the Cold War. No longer a government worker, he was a private contractor paid $130,000 a year by Chemonics International, a for-profit consulting firm based in Washington. From Kabul, he managed a $130 million USAID contract to revitalize agriculture and slow the exploding cultivation of opium poppy, the raw form of heroin, across southern Afghanistan.

Instead of USAID implementing projects itself, the agency doled out government aid money to private contractors like Chemonics, who then hired a cascading series of subcontractors to actually carry out the work. Chemonics was one of dozens of Washington-based contracting firms known as "Beltway bandits" established in response to the privatization of government services by the Reagan, Bush and Clinton administrations. The owner of Chemonics at the time, Scott Spangler, worked for USAID during the first Bush administration. During the 1990s, he and his wife contributed $98,000 to political candidates, all Republicans. By 2004, 95 percent of the firm's $185 million in annual revenue came from USAID.

Afghans loathed foreign contractors, and cited studies showing that 40 percent of foreign aid eventually returned to donor countries in the form of contractor profits. An Afghan engineer who worked for Grader said both Americans and Afghans were corrupt. Americans made their money through high overhead and expense rates, he said. Afghans made their money through old-fashioned kickbacks and bribes.

"For you, it's white-collar crime," he told me. "For us, it's blue-collar crime."

Perennially clad in brown bucks, khaki pants, and blue Brooks Brothers button-down shirts, Grader was an eclectic Cold War throwback with a renaissance flair. He was the son of a postmaster and a housewife, and his family affectionately dubbed him "The Indiana Jones of Marblehead," a reference to the community north of Boston the Graders had inhabited since the 1700s.

After graduating from high school, he went to sea as a sailor on a Liberian tanker. Later, he attended the Coast Guard Academy, earned a bachelor's degree from Boston University, studied at the London School of Economics, received a doctorate in economics from the Fletcher School of Diplomacy and earned an MBA from the Massachusetts Institute of Technology .

In a USAID career that spanned the 1960s and 1970s, Grader made his name as an advocate for reducing American staff at USAID missions and increasing local national staff. After retiring from USAID , Grader served as CEO of the world's largest bauxite mine in Guinea for five years, ran the senior executives program at MIT for a decade and then returned to Afghanistan in 1996 as managing director of Afghan Aid, a British NGO.

A divorced father of two and lifelong vegetarian, Grader lived in a rented house in Kabul and spent his nights cooking cheese soufflés, listening to Italian opera and reading Thucydides. He worried that America was in danger of following the path of ancient Athens, overextending itself and succumbing to Sparta.

Sometimes, Grader overextended in his own life. In 1997, he was nearly captured and killed by the Taliban while working with his Afghan Aid team in northern Afghanistan. In 2003, airport customs officials arrested him in New Delhi after they found British colonial-era rifles from Afghanistan in his suitcase. Falsely accused of smuggling antiquities, he spent five weeks in a fetid Indian jail. When American diplomats came to visit Grader, they found him teaching microeconomics to other inmates.

After spending the night in Lashkar Gah, we made the long journey back to Kabul. During the drive, Grader grew pensive. American society had changed since the Cold War, he told me. Companies were less loyal to workers. Government agencies were more politicized. Expediency was the norm.

"I'm frightened by what we're seeing," he told me. "I really feel the integrity is less."

Later, I learned that Grader was right about USAID. The agency was a shell of its Cold War self. Exaggerated accounts of American aid being poured down "foreign ratholes" prompted Congress to slash its budget. USAID's worldwide staff had shrunk from a high of 17,000 during the Vietnam War to 3,000 in 2004. Following the 9/11 attacks, the agency's budget doubled, but it received virtually no additional staff to manage a torrent of spending.

Grader said that when he ran USAID Afghanistan in 1977, 100 Americans managed a $25 million annual budget, monitoring roughly $250,000 each. In 2004, 60 Americans managed roughly $500 million, or $80 million each. Staffers struggled to design, put out to competitive bid, and monitor hurried and sprawling reconstruction projects.

For Grader and other USAID veterans, the post-2001 effort in Helmand was an anemic epilogue to an intrepid American Cold War effort. "Our policy is screwed up, and it's costing us dearly in time, treasure and goodwill," he told me, warning that Afghans would quickly tire of foreigners. "It really bugs me how inept our government is operating."

At the time, I assumed Grader was exaggerating. Like generations before him, he saw youth as feckless and society in decline. Four months later, though, Chemonics fired Grader after only 10 months on the job. Company officials said they could not comment on personnel decisions. Grader said he was forced out after he dared clash with USAID officials about the agency's programs.

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David Rohde is an investigative reporter for Reuters and a contributing editor for The Atlantic. A two-time winner of the Pulitzer Prize, he is a former foreign correspondent for The New York Times and The Christian Science Monitor. His latest book, Beyond War: Reimagining American Influence in a New Middle East, was published in 2013. More

He is also the author of Endgame and, with Kristen Mulvihill, A Rope and a Prayer. He lives in New York City.

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