Pakistani military may have misspent billions in US aid

The US' huge military aid to Pakistan has come under sharp scrutiny with allegations that as much as 70 percent of US$5.4 billion in assistance has been misspent.

The US has reimbursed the Pakistani military for the cost of operations against Taliban and al-Qaeda fighters in the tribal belt, where 110,000 soldiers are stationed, since 2002. The payments for food, fuel, ammunition and maintenance, averaging US$80 million a month, have been a cornerstone of US support for Pakistani President Pervez Musharraf. But US officials have concluded that Pakistan's expense claims have been vastly inflated, according to two Western military sources, who did not want be named.

"My back of envelope guesstimate is that 30 percent of the money they requested to be reimbursed was legitimate costs," said one official, adding that the US did not know what happened to the remaining 70 percent -- about US$3.8 billion -- but suspected that part of the money had been spent on F-16 fighter jets or new housing for army generals.

Apart from military-related expenses, the official said, at least half the money was thought to have disappeared.

"Who knows, the roads on Constitution Avenue [in Islamabad] may have been paved with part of this money," he said.

The Pakistani military denied the claims.

"As far as the military is concerned, I can assure you we have full account of these things," military spokesman Major General Athar Abbas said.

The controversy highlights not only strains in the relationship between Washington and Islamabad, but also the limits of US President George W. Bush's "war on terror."

The US government is impatient for "value for money," citing the billions poured into Pakistan since 2001 while militancy has surged and al-Qaeda has regrouped in tribal areas.

The Pakistani military retorts that it has lost more than 1,000 soldiers -- twice as many as the US has lost in Afghanistan -- in the face of deep public hostility in Pakistan.

Yesterday a suicide bomber killed Pakistan's surgeon general, Lieutenant General Mushtaq Baig, at traffic lights in Rawalpindi.

The extent of US payments to Pakistan was secret until 18 months ago, when Pakistan invoked the displeasure of Washington by signing a peace deal with militants in North Waziristan.

The accounting procedures for the multibillion-dollar US aid are lax. Every month, the Pakistani military submits spreadsheets with expense claims to the US embassy, officials said. No receipts are provided.

Meanwhile, Pakistani army chief General Pervez Kayani is appointing a new head of military intelligence, the first major reshuffle in the military since Musharraf quit the army.

Top military appointments in the country are always closely watched as intelligence agencies have long held influence over successive governments.

The News reported that Major General Muhammad Asif, who served as Pakistan's defense attache in Russia, is replacing Major General Nadeem Ijaz as director general of Military Intelligence (MI).

Ijaz, a close confidante of Musharraf, has worked as head of MI for more than three years, the normal length of service.