Much of the donor money to Afghanistan is lost to fraud and abuse, in part by Western companies.
Countries that donate billions of dollars in aid to Afghanistan often complain about widespread corruption that impedes development. But some Afghans have been pushing back lately, pointing a finger at a particular NATO official in Kabul whose former company has drawn fire for alleged mismanagement and graft.
The firm, Aktis Strategy, was founded and run by two former British diplomats, and it oversaw development projects in Iraq, Turkey, Tunisia, Somalia, and elsewhere. But when it suddenly ran out of cash in early 2019, it left contractors and staffers stiffed and stranded, with angry creditors demanding payment that never arrived, according to former Aktis subcontractors and an investigation conducted last year by Britain’s Daily Mail.
Now, one of the company’s directors, Andrew Rathmell, is back in the development business, working as the head of the Office of the NATO Senior Civilian Representative in Kabul, according to two sources who spoke to Foreign Policy on condition of anonymity. And that has angered many Afghans who accuse the international community of hypocrisy for slashing aid funding to Afghanistan over corruption even as it tolerates graft in its own ranks.
When NATO’s official account in Afghanistan tweeted a demand last month that corruption “be stamped out,” it drew a blistering response from an official in Afghan Vice President Amrullah Saleh’s office.
“And what about corrupt people working with the @NATO in Kabul???” tweeted Ejaz Malikzada. “Who is Rathmell connected to that is so powerful that nobody talks against?”
The anger appeared to be echoed on the streets of Kabul, where one businessman struggling to keep his company afloat told Foreign Policy: “It’s the height of hypocrisy. The internationals are telling us to clean up our act, and reducing the aid we need to survive, and yet they are guilty of the very corruption they accuse us of. How dare they.”
Rathmell and another former British diplomat, Alex Martin, set up Aktis in 2013 and quickly began winning security and development contracts in the developing world as well as in Europe. The company grew fast: By 2018, it had 150 staff and turnover of about 24 million pounds a year, equivalent to around $32 million at that time, according to Devex, a development sector recruiting and media platform, with most of that coming from the British government.
Rathmell’s company used its status as a “prime”—a company approved as a recipient of funds from government departments and agencies like the United Nations—to win development contracts. It then employed other firms and contractors to do the work, paying salaries and expenses out of the pot, but not before paying itself a substantial management fee.
By March 2019, Aktis was out of money, despite having landed millions of dollars in government contracts. “Dozens of staff, and a number of Aktis’ subcontractors, are understood to be owed several months of back pay, expenses, and pension contributions,” Devex reported. It cited an email from Rathmell in which he “blamed Aktis’ demise on poor financial management which left the company unable to manage its rapid scale-up and growing portfolio of low-margin projects in fragile and conflict-affected countries.”
But former contractors said the management problems came from the top.
“The directors paid themselves very well. Rathmell was the director; it was his financial mismanagement” that led to the company’s demise, said one British contractor, who is owed money by Aktis. He and other sources for this story spoke to Foreign Policy on condition they remain unnamed, to avoid drawing attention to their past association with the company. He’s part of a WhatsApp group of former contractors and staffers with financial grievances.
The contractor said he managed oversight for Aktis on a counterterrorism project funded by the European Commission from 2016 to 2020. He said he was owed 15,000 pounds ($20,000) when Aktis stopped paying salaries and expenses in 2018, leaving contractors scrambling to cover their own costs.
“The problem was that the Commission had paid the British government, which had paid Aktis, so no one could understand why there was no money for contractors’ costs,” the contractor said. “It was very damaging to Britain’s reputation.” The British government is considering establishing an in-house consultancy to manage aid projects, cutting out consultancies like Aktis to reduce waste and corruption, according to British media reports.
When the company went bust, some contractors working on projects in far-flung places were forced to fund their own trip home, the former contractors told Foreign Policy. In Iraq, Aktis stopped paying for onsite security, endangering the lives of people on the project, one source who is part of the WhatsApp group said. In Somaliland, workers on a project to develop the judiciary received death threats from Aktis creditors, according to the manager of a company subcontracted by Aktis on the project.
He said his company paid the money to cover Aktis’s debts and get contractors home. “Somebody had to, it was the right thing to do,” he told Foreign Policy.
Rathmell did not respond to multiple requests for comment or an interview. According to a description of his job, posted by NATO, Rathmell earns more than $10,000 a month and runs a staff of seven.
A NATO official, asked for a comment, said: “We don’t comment on personnel issues.”
The Daily Mail story about Rathmell’s misdoings, which was written last year, has circulated widely on Afghan social media in recent weeks.
The way big development projects are funded—with the “prime” taking a cut, then doling out bits and pieces to contractors of its own—often means that a significant proportion never makes it to projects.
A 10 percent cut is not unusual, but some companies go much higher. The Special Investigator General for Afghanistan Reconstruction said in an October report that a review of $63 billion in U.S. aid to the country had “concluded that a total of approximately $19 billion or 30 percent of the amount reviewed was lost to waste, fraud, and abuse.”
Officials in Afghanistan and other countries say the development system fuels corruption and poverty, and Kabul has long complained that billions of dollars in international development donations are administered by donor governments and agencies, with little or no accountability to Afghan authorities. Due in large part to international concern with corruption and graft, international donors cut their four-year funding from $15 billion to $12 billion at a conference in Geneva last week.
For years, Kabul has asked that international funding be placed on the government’s budget so that spending can be better coordinated and tracked, according to a senior government advisor.
“Accountability has to be mutual,” he said, speaking on condition of anonymity.