WASHINGTON — Millions of dollars in U.S. security contracts have been funneled to the private militias of Afghan warlords with little battlefield discipline, questionable loyalty to the Afghan government and direct ties to Taliban insurgents, a new Congressional investigation has found.

In the most egregious cases, some private security companies continued to employ these militia members even after they were caught assisting insurgents fighting U.S. troops and killing other coalition security workers.

Senate Armed Services Committee Chairman Carl Levin, D-Mich., said the report serves as a wake-up call for Defense Department officials, who nine years into the war in Afghanistan still have little or no oversight on subcontracts paid for with taxpayer dollars.

“All too often our reliance on private security contractors in Afghanistan has empowered warlords operating outside Afghan government control,” he said in a news conference about the report’s release Thursday.

“There is significant evidence that some security contractors even work against our coalition forces, creating the very threat they are hired to combat.”

The investigation, conducted with the assistance of the Defense Department over the last year, focuses largely on two specific subcontracts with little military oversight, which raised numerous safety concerns for U.S. troops.

In the first, the British security contractor ArmorGroup paid two warlords to help provide security for a 2007 U.S. construction project at Shindand Air Base in Herat province. Within weeks, the rival factions began fighting each other, resulting in the death of one of the strongmen.

The report details evidence of both men cooperating with local Taliban fighters and feuding with Afghan security forces, but ArmorGroup continued to employ both men and their family members well after those problems arose.

In the second case, in the same province just a few months later, Tennessee-based EOD Technology Inc. hired a number of locals to provide security for a Afghan solider training center even though the men had been rejected by ArmorGroup for their ties to enemy insurgents.

Despite memos from U.S. military commanders and company officials that the men were “playing both sides,” the firm continued to employ them and even received additional security contracts from the Defense Department.

Investigators called those examples dramatic but not unusual examples of widespread problems with the security contracting process.

The report also reviews 125 other security subcontracts, finding “systemic failures, including security contractors failures to vet personnel or to ensure that their armed personnel received adequate funding.”

Last month, Gen. David Petraeus, head of U.S. and NATO operations in Afghanistan, issued new guidelines for awarding international contracts there, requiring fewer subcontracts and more rigorous background checks of individuals receiving the funds.

In a memo announcing the changes, Petraeus noted that “with insufficient oversight, it is likely that some of those funds will unintentionally fuel corruption, finance insurgent organizations, strengthen criminal patronage networks and undermine our efforts in Afghanistan.”

Levin praised those changes, calling them a first step in fixing the problems outlined by the report.

But he said his staff would continue to work closely with Pentagon officials on other changes to “shut off the spigot of U.S. dollars flowing into the pockets of warlords and power brokers who act contrary to our interests and who contribute to the corruption that weakens the support of the Afghan people for our efforts.”

In August, Afghan President Hamid Karzai called for the end of private security contracts for foreign armies and aid organizations working in the country by the end of 2010, but that decree's exact effect on U.S. operations there is still unclear.

The U.S. employs about 26,000 security contractors in Afghanistan.

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