JULY 27-29 COALITION SUPPORT FUNDS DISCUSSIONS

C O N F I D E N T I A L ISLAMABAD 017890

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: DECL: 08/23/2016
TAGS: PK
SUBJECT: JULY 27-29 COALITION SUPPORT FUNDS DISCUSSIONS
WITH THE GOVERNMENT OF PAKISTAN

Classified By: DCM Peter W. Bodde, Reasons 1.4 (b) and (d)


1. (SBU) Summary. From July 27-29 CENTCOM J-8 led a team of
OSD-Comptroller, OSD-Policy, CENTCOM, Joint Staff and Embassy
personnel to discuss Coalition Support Fund (CSF) issues with
the Government of Pakistan's (GOP) Joint Staff, military
services, and Ministry of Finance. The U.S. delegation
raised issues regarding formalizing the CSF process,
maintaining detailed accounting of expenditures by the GOP,
and improving the claims processing time. The GOP
counterparts were attentive to USG needs and ensured greater
effort in providing information for CSF reimbursement. End
Summary.

Meeting with Joint Staff
--------------

2. (SBU) On June 27 the U.S. delegation met with Brigadier
Afzal (Joint Staff, Director Operations and Plans) at the
Pakistan Joint Staff Headquarters to discuss CSF funds.
Brigadier Afzal's delegation included representatives from
each service as well as the incoming and outgoing Pakistani
Senior National Representative at CENTCOM. Brigadier Afzal
welcomed the U.S delegation and emphasized that he understood
that we had come to improve the procedures for reimbursing
the CSF claims. He reminded the delegation that an earlier
team had come in 2004 and as a response, Pakistan had
implemented a new spreadsheet that provides more information.
The Pakistan military had readily complied with that request
and is ready to provide whatever Qormation the USG needs.


3. (SBU) The delegation responded by emphasizing the
continual need to formalize the CSF prQs. In 2001, the
USG had to implement the program quickly, but now, five years
later, there is a need to formalize the process as well as
look at the future. The delegation emphasized that the
purpose of these discussions was not to cut funding but to
improve accountability of the program. The delegation
emphasized the need to provide additional information to
Congress, especially in the current tight budget environment.
By having more information, DoD representatives will be
better advocates for Pakistan in discussions with Congress.

Presentation
--------------

4. (SBU) OSD-C Senior Analyst stressed the importance of
Pakistan's commitment to the Global War on Terror and CSF
funding. The OSD-C Senior Analyst made a presentation to
Pakistani officials on the mechanics of the CSF program. The
following were the highlights of the presentation:
- Since October 2001, the USG has provided over $4.5 billion
in CSF to Pakistan. Pakistan receives approximately 87% of
all CSF money.
- CSF is not in the regular budget but is part of the
Emergency Supplemental budget. The authority for CSF was
passed after 2001. It is very unusual for DoD to receive
such an authority, so there is a need to protect it and
continually defend it.
- All CSF claims must be "valid and reasonable."
- Claims must be for incremental costs above normal
operations. The delegation emphasized that to understand
what is incremental, the delegation needed help understanding
what the normal costs are for the Pakistani military.
- There must be quantifiable data that is comparable to U.S.
costs.
- The delegation emphasized that it expected to get CSF in
the future but needed to increase its justification of the
program in order to ensure funding.
- The U.S. delegation passed on a new spreadsheet to the
Pakistan delegation that asked for additional information on
costs, rates, and operations conducted. Additionally, the
delegation asked the Pakistan military to provide a briefing
every 90 days to the Embassy so both sides can talk about the
issues and claims.
- The delegation emphasized that the requirements it was
asking Pakistan for are the same ones that it asks from its
own Services.

Discussion of Claims
--------------

5. (U) The U.S. and Pakistan delegations discussed the April,
May, and June claims in order to better understand each line
item.


6. (C/REL PAK) The Pakistani military noted that the manpower
in the tribal area had increased from 82,000 personnel to
92,000 personnel from April to June. This is largely due to
support provided to MOUNTAIN THRUST.


7. (SBU) There were questions on the Frontier Corp's presence
in the tribal area. These were not fully addressed because
there was no Ministry of Interior representative present.
The delegation asked if the GOP could break down the number
of 11th Corp and 12th Corp Civil Armed Forces in future
claims.


8. (SBU) The U.S. delegation emphasized the importance of
understanding Pakistan's military operations that claim CSF.
Greater clarity and transparency of operations is required to
process CSF clams. The delegation asked for information from
the Pakistan military on:
- The number of helo hours broken down by helo type;
- More information about "road building," which is being
claimed by both the Pakistani Army and Navy;
- Information about fuel rates and quantities;
- Types of ammunition being used;
- Breakout of flying costs from the Pakistan Air Force;
- More information about the Air Defense Radar; and
- Generally greater transparency and accountability in
Pakistani operations that claim CSF.


9. (SBU) The U.S. delegation emphasized to Brigadier Afzal
that it would be helpful for the Pakistanis to assist us with
predicting future CSF expenses. Since CSF is a limited pot
of money, we need to be able to forecast what is going to
happen in the future to ensure funding.

Meeting at the Ministry of Finance
--------------

10. (SBU) On June 28 the U.S. delegation met with a
delegation from the Ministry of Finance to discuss the CSF
payment process. OSD Comptroller presented a briefing on the
CSF program and process (the same briefing that was presented
at the Joint Staff).


11. (SBU) Ministry of Finance personnel asked if the USG
could expedite the processing of claims, as there were many
negative consequences of not getting paid back in a timely
fashion (such as having to borrow money from the Central Bank
to pay the OEF bills).


12. (SBU) The Pakistani Ministry of Finance asked if the USG
could improve claim processing time to two/three months.
After some discussion, the delegation agreed to try to
process claims in a three/four month time frame. OSD-C also
agreed to try to process the Pakistan January/February claim
by the end of August and the March-June claim by the end of
November 2006.


13. (SBU) Both sides agreed to continue to meet in the future
and have meetings that included Ministries of Defense,
Finance, and Interior. (NOTE: The Embassy attempted to do
this prior to this trip but received push back from the
Pakistani Joint Staff.)

Office Call with MG Bilal of the Joint Staff
--------------

14. (U) On June 29 the delegation held an Office Call with
Major General Bilal, the Joint Staff's Director General of
Operations and Plans, and again explained that as money gets
tighter, the USG will need more information to justify CSF.


15. (SBU) MG Bilal stated that he had heard that the
discussions went extremely well and that his staff would
provide any additional information that we need. He knew
there was an issue with money being used for road
construction and he promised that he would get more
information to us.


16. (SBU) The delegation emphasized that in addition to
gaining more information to validate CSF, Congress would also
want to eventually see the results of these operations. The
delegation stated that the USG would need to see tangible
progress in the long-term.


17. (U) This cable was drafted in cooperation with Cara
Negrette, OSD-Policy.
CROCKER