SECRECY NEWS
from the FAS Project on Government Secrecy
Volume 2011, Issue No. 44
May 10, 2011

Secrecy News Blog: http://www.fas.org/blog/secrecy/

REPORT ON KABUL BANK CORRUPTION IS CLASSIFIED, TAKEN OFFLINE

An eye-opening report on corruption in the Afghan Central Bank that was issued last March by the Inspector General of the U.S. Agency for International Development was recently removed from the USAID web site after the Agency decided to classify some of its published contents.

The now-classified IG report focused on the failure to discover a widespread pattern of fraudulent loans at the Kabul Bank which led to the diversion of $850 million, the near collapse in 2009 of the bank, and an ensuing national crisis.

Employees of the Deloitte accounting firm, who were serving as advisers to the bank under contract to USAID, could and should have alerted the U.S. government to early signs of fraud, the Inspector General found, but they did not. (Instead, the U.S. government learned of the bank corruption thanks to a February 22, 2010 story in the Washington Post.)

But in the past week or so, the March 16, 2011 USAID Inspector General report was abruptly withdrawn from the Agency's website.

Why? Because USAID retroactively classified certain information in the report.

"At the time our report was issued, it was written utilizing information from non-classified sources," said James C. Charlifue, the chief of staff of the USAID Office of Inspector General. "After our report had been issued, USAID subsequently classified two documents that were cited in our report. This action resulted in the report becoming classified and we removed it from the web site," he told Secrecy News.

Depending on the precise circumstances, the classification of information that has already been officially released into the public domain is either discouraged or prohibited, not to mention futile. According to executive order 13526 (section 1.7c), declassified information that has already been released can only be reclassified with the written approval of the agency head. Unclassified information that has been formally released and is no longer under U.S. government control is supposed to be beyond the reach of the classification system altogether.

A spokesman for USAID did not respond to requests for comment on the decision to classify the information.

In the present case, the suppressed IG report remains independently available in its original form. A copy was obtained by Secrecy News. See "Review of USAID/Afghanistan's Bank Supervision Assistance Activities and the Kabul Bank Crisis," US AID Office of Inspector General report, March 16, 2011:

Much of the substance of the report was previously reported in "U.S. Advisers Saw Early Signs of Trouble at Afghan Bank" by Ernesto Londono and Rajiv Chandrasekaran, Washington Post, March 15, 2011; and "U.S. Agency Ends Accounting Firm's Afghan Contract" by Alissa J. Rubin and James Risen, New York Times, March 17, 2011.

Now that the original report has been formally classified and withdrawn, "We plan on publishing a non-classified version of the report," said Mr. Charlifue of the USAID Office of Inspector General, "which we will place on our web site."


ODNI DESCRIBES EMERGING TOOLS FOR DATA FUSION, ANALYSIS

Several intelligence community initiatives to develop improved tools for data search, analysis and fusion were described in the latest report to Congress from the Office of the Director of National Intelligence on data mining.

A new program called DataSphere is intended "to aid in the discovery of unknown terrorism relationships and the identification of previously undetected terrorist and terrorism information" through analysis of communication networks and travel patterns.

A continuing program called Catalyst seems to be a glorified search engine that "will enable data fusion/analytic programs to share disparate repositories with each other, to disambiguate and cross-correlate the different agencies' holdings, and to discover and visualize relationship/network links, geospatial patterns, temporal patterns and related correlations."

Although these and other initiatives do not yet constitute or engage in "data mining," they were described in the new report "in the interest of transparency." See "2010 Data Mining Report," Office of the Director of National Intelligence, April 2011:

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Secrecy News is written by Steven Aftergood and published by the Federation of American Scientists.

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