US stops paying its bills to Pakistan over accounting dispute

Sources say the US treasury department feels the bills show inflated amounts.

ISLAMABAD:

The US has withheld the payment of four billion dollars to the Pakistan Army on account of the decade-long war on terror, after finding serious flaws with bills the army had sent to its treasury department.

The Pakistan Army has sent bills worth $12 billion for reimbursement but so far, the US government has paid just eight billion dollars.

Officials of the defence ministry, speaking at a meeting of a parliamentary body on defence on April 7, confirmed that the US treasury department has not paid four billion dollars to the Pakistan army. However, they did not share with the parliamentarians what the possible reasons could be.

Earlier, defence secretary Lt-Gen (retd) Athar Ali also confirmed the non-payment during a closed-door briefing to members of the National Assembly Standing Committee on Defence, which was presided over by MNA Azra Fazal Pechuho.

Ali told the committee that as part of an official agreement between the two countries, the US had agreed to reimburse the costs incurred by the army within Pakistan’s borders. Like the defence ministry officials, Ali also chose not to speak about why the amount had not been paid by the Americans and what were the objections that they had raised.

In the April 7 meeting, defence ministry officials had said that according to the understanding, 60 per cent of the amount paid by the US government is given to the army’s general headquarters and 40 per cent is received by the Pakistani government.

According to an official source, payment was blocked after US treasury officials questioned the authenticity of bills submitted by Islamabad and refused to clear the dues until those objections were removed to their satisfaction.

However, the source said, no real efforts had been launched so far to remove these objections. He claimed that US treasury authorities had developed serious complaints against Pakistani authorities who were assigned to dispatch the bills. The Americans, he said, feel that the authorities are not following the criteria that had been set to have the amount reimbursed in line with American laws.

The source said that during bilateral talks, US authorities had complained time and again that in most cases, bills submitted to the US treasury were either faulty or they were being charged twice under one head.

The source said that the Pakistani delegation had raised the issue during the Pak-US strategic dialogue in Washington last year. After detailed discussions, the US had agreed that it will release a few hundred million dollars.

Published in The Express Tribune, April 23^rd, 2011.