From testimony given in January at a Senate subcommittee hearing to examine spending within the Task Force for Business and Stability Operations, a division of the Department of Defense that was charged with economic development in Afghanistan. The task force was shut down last year. Kelly Ayotte, a senator from New Hampshire, chaired the hearing. Brian McKeon is the principal deputy undersecretary for policy at the Department of Defense. Mike Rounds is a senator from South Dakota. Claire McCaskill is a senator from Missouri.

kelly ayotte: Welcome, everyone. The goals of the Task Force for Business and Stability Operations (T.F.B.S.O.) in Afghanistan were to reduce violence, enhance stability, and support economic normalcy. Since fiscal year 2009, $638 million was disbursed for the task force’s operations and activities. The purpose of today’s hearing is to determine whether these resources were spent wisely. What happened to the money? What did we get for the taxpayers in terms of economic development in Afghanistan?

brian mckeon: So that’s the big question, Senator, and it’s the right one. I think it’s a mixed record. The jury is still out. The task force’s most recent audit says it’s ultimately up to the government of Afghanistan to carry the ball forward.

ayotte: Did we keep metrics for this task force?

mckeon: I don’t — I have not seen in the materials I have reviewed —

ayotte: There was no feasibility study?

mckeon: We have not found, in our search of the records, what we would understand to be a feasibility study.

ayotte: One hundred and fifty million dollars were spent on villas and security for T.F.B.S.O. staff. Why couldn’t they have stayed on base?

mckeon: I think part of the reason for this housing was for staff coming from Washington. I don’t think a lot of people lived there permanently. They were also used as offices, to show international executives that they could come to Afghanistan and do business.

ayotte: Did we get any contracts from international businesses there?

mckeon: Senator, I can’t tie a specific visit of an executive in one of these houses to a later investment. I wouldn’t make that claim.

ayotte: I want to follow up on the $55 million that was spent to facilitate an oil-tender process that resulted in a Chinese company winning a contract. Do you think that was a wise use of taxpayer dollars?

mckeon: Senator, the task force assisted Afghanistan’s Ministry of Mines in accordance with general international principles. And the Chinese company competed. I can’t tell you whether it was completely transparent and followed all the rules.

ayotte: We spent $55 million to pave the way for the Chinese to get a contract to exploit an estimated trillion dollars’ worth of Afghanistan’s mineral resources. Do you think that was a wise use of our resources?

mckeon: Senator, the foundational work of advising the Ministry of Mines may pay off in the future. And it’s a lot of ifs. I’m not going to tell you that we’re happy about the Chinese government winning a tender.

mike rounds: Mr. McKeon, did T.F.B.S.O. personnel attend a designer and trade-show event in Europe in support of the Afghanistan carpet initiative?

mckeon: I don’t know the precise answer to your question about the show, Senator. I know that it’s listed in our activities reports.

rounds: Is it true that T.F.B.S.O. imported a large number of Italian goats via air shipment from Italy to Afghanistan?

mckeon: I’m pretty sure if it happened, it happened before my time.

claire mccaskill: The average person in Afghanistan, their annual income is $690. It costs $800 to convert a car to natural gas. Who made the decision that it was a good idea to put a natural-gas station in Afghanistan?

mckeon: Senator, it was a unique task force, far from the core competency of the Department of Defense.

mccaskill: Let’s talk about security. I wish our embassies had the security these villas have. Besides the queen-size beds, flatscreen TVs, DVD players, and mini-refrigerators, we’re talking about $51 million for accommodations secured twenty-four hours a day, seven days a week by armed guards, and a CCTV monitoring system that can view the entire perimeter. They paid $40 million to provide transportation and personal protection. If you’ve got to spend that much money on security, don’t you think most businesses are going to go, “We can’t afford to open a business here”?

mckeon: Senator McCaskill, I’m not a businessman. You make a lot of valid points. Investing in a war zone is dangerous and high cost. I agree with a lot of what you have said. The costs sound quite exorbitant, and we’re digging into this villas question.

ayotte: Apparently T.F.B.S.O. had a Herat ice-cream project, and a former employee said this initiative was one of the primary reasons that they had a villa established in Herat.

mckeon: A lot of countries in the world have as many natural resources as Afghanistan and they have not managed them well. It’s a pretty big challenge even in the absence of a war. I’m not sure we’re going to see a payoff anytime soon, if indeed there ever is a payoff.