MONITORING (SW) – An Organized Crime and Corruption Reporting (OCCRP) investigation found that the Afghan president’s brother, Hashmat Ghani, owns a significant stake in Southern Development, which operates a mineral processing plant on the outskirts of Kabul.
Afghanistan’s crags and valleys hold at least a trillion dollars’ worth of minerals, first mapped by Soviet geologists in the 1970s. Local warlords and foreign powers have plundered these deposits ever since.
The Taliban and other armed groups have battled both the central government and each other for control of the mines, using them to fund their insurgencies. Even former U.S. President Donald Trump coveted Afghanistan’s gold, lithium, uranium, and other mineral riches. In 2017, Trump was persuaded to keep troops in the country by its president, Ashraf Ghani, who dangled the prospect of mining contracts for American companies.
American troops are still in Afghanistan — at least until September — and Ghani has delivered. In late 2019, SOS International (SOSi), a Virginia-based company with links to the U.S. military and intelligence apparati, obtained exclusive access to various mines across Afghanistan. As part of the deal, Ghani’s family got a little something on the side.
Ghani granted a SOSi subsidiary, Southern Development, also known as SODEVCO, rights to buy artisan ally mined ore. An OCCRP investigation found that the president’s brother, Hashmat Ghani, owns a significant stake in Southern Development, which operates a mineral processing plant on the outskirts of Kabul.
The concession presents both a conflict for both the Afghan leader and the U.S. government.
“Entering into this relationship in Afghanistan, a country with a widespread reputation for corruption, and obtaining unique benefits from it, is suspect,” said Jessica Tillipman, assistant dean of the Government Procurement Law Program at George Washington University. “If there was a color redder than red, that’s what color this red flag would be.”
In 2011, American Special Forces operators introduced an eastern Kunar paramilitary commander, Noor Mohammed, and his deputy, known as Farhad, to a small Pentagon business development office called the Task Force for Stability and Business Operations. The Task Force, which operated in Iraq and Afghanistan, aimed to create jobs for locals in key industries like mining as part of a broader counterinsurgency strategy. In theory, good jobs would stop Afghans from joining the militants.
“Their mission, to create small-scale, sustainable mining operations for the Afghans, was a solid fit to our FID [Foreign Internal Defense] mission,” said Heinz Dinter, a former Special Forces officer.
The commandos asked the Task Force to help the two local warlords, who were illegally dealing in chromite, a valuable anti-corrosion additive used in stainless steel and aircraft paint. Afghan chromite is prized for its exceptional purity. With a crusher provided by the Pentagon, Mohammed and Farhad began to process their ore at Combat Outpost Penich, a small NATO base in eastern Kunar.
The whole project was illegal in Afghanistan, where public officials and leaders of government-aligned militias such as Mohammed and Farhad are forbidden by law to hold mineral rights. Afghan law also prohibits buying ore from unlicensed mines, where it is extracted by villagers — often children — with no concern for safety or environmental damage.
Moreover, the mines are largely controlled by the very militants the U.S. and Afghanistan have been fighting for decades.
“There’s no conceivable way extraction or export could be done without the collusion of insurgent groups,” said Jim Wasserstrom, an anti-corruption expert who has worked for several U.S. agencies in Afghanistan.
After a couple of years of operation, the Kunar scheme was exposed by an anti-corruption NGO, Integrity Watch Afghanistan, and the crushing operation was shut down by then-President Hamid Karzai’s administration in 2013.
But for the Task Force’s natural resources group, getting the project off the ground by giving Mohammed and Farhad $3.8 million in mineral-crushing equipment was a big deal, and indicated such schemes had huge potential. The Pentagon office had published several geological surveys and provided assistance to the Afghan Ministry of Mines, but no other independent mining projects had come so close to full fruition.
A Special Forces major, Ryan Hartwig, touted the benefits of the Kunar project in a 2013 Naval Postgraduate School thesis, calling it a “major success” and a model for future Special Forces-facilitated business development.
Task Force officials interviewed by Hartwig said Special Forces intervention in the mining sector was key to saving the country, and downplayed complex health, safety, and political issues surrounding small-scale mining. They also criticized Afghanistan’s prohibition of unlicensed mining, saying such clampdowns were simply getting in their way.
Hartwig’s thesis cited Tarek Ghani, whose father was soon to become the Afghan president. Then a graduate student at the University of California at Berkeley, the younger Ghani had been given a pre-publication review copy. He endorsed the critique of Afghan mineral law and suggested that involving private companies in artisanal mining would force the government to accept the practice.
Task Force officials remained bullish on strategic mining long after the project was closed down; some even saw it as a possible form of Taliban rehabilitation.
“The only way to realistically economically reintegrate the Taliban back into Afghanistan’s economy is with mining,” Emily Scott King, the former director of the Task Force’s natural resource group, said in 2019 at a special operations policy forum in Washington, D.C. “It can work within the hierarchy that the Taliban is used to, with commanders running small processing facilities or becoming the brokers for small miners.”
Scott King and her colleagues never gave up on Afghan chromite. Although the Task Force’s Kunar project had been shuttered, it would later reopen under new, private management: Southern Development — the subsidiary of Virginia’s SOSi in which President Ghani’s brother had invested.
Wasserstrom, the anti-corruption expert, said: “Intelligence and Special Forces do what it takes to achieve their mission. Their military mission may have ended, but these guys may have thought they could make a ton of money and advance our national security at the same time.”
Cowboy Consultants
As a U.S. government insider, Scott King was a key player in privatizing the Pentagon’s defunct chromite project.
A geology major, she joined the Task Force as a mobile banking project consultant in Iraq not long after finishing her undergraduate degree at Bowdoin College in Maine. When the Task Force mission expanded into Afghanistan in 2010, Scott King was put in charge of setting up and running its natural resources group.
One former Task Force official described the natural resources group as unusually secretive.
“They were putting the majority of their work into cooperative ventures they had with the Special Forces world,” said the official, who asked not to be identified for safety reasons.
In 2011, much of the Task Force’s senior leadership quit after Congress transferred the authority for its operations in Iraq to the civilian United States Agency for International Development. Scott King didn’t get along with the office’s new leadership, repeatedly clashing with them over safety and the organization’s mission.
After numerous internal blow-ups, she left the government in 2013. By then, she had made exploitation of conflict minerals her niche. A self-proclaimed “mining futurist,” she co-founded a Florida-based private company, Global Venture Consulting, with her husband, Army Special Forces reservist Mark King. The couple had first met in Afghanistan, where he was a security contractor for Task Force geologists. Neither Emily Scott King nor Mark King responded to detailed questions sent by email.
Global Venture offers mining and mineral exploration services geared to “emerging and frontier markets” that require a Special Forces-style edge. Advertising its experience in executing special operations missions, Global Venture’s website is replete with photos of its founders working in harsh environments. One page shows the smiling couple in the desert, fronting a herd of camels. Scott King wears a brown jacket and white headscarf; King cradles an assault rifle.
In the private sector, cowboy outfits like Global Venture found themselves in demand. Before long, Global Venture was working for Southern Development. Scott King brought the Kunar project playbook with her and in 2018 hired Bob Wilson, a former Special Forces commander who had helped start the initial Kunar chromite crushing operation that had been shut down a few years earlier. Wilson did not respond to a request for comment.
“Those [Task Force] chromite projects grew into a $4 million investment from an American company to build a chromite processing facility outside of Kabul,” Scott King boasted at the 2019 Special Forces conference. “None of that would be the case if it weren’t for the support and the vision of the SoF [Special Forces] community.”
Friends in High Places
SOSi, the parent company of Southern Development, was the perfect firm to revive the Task Force project.
Founded in New York by Sosi Setian, a single mother who emigrated from Bulgaria as a teenager and trained as a linguist, SOSi was initially a translation and interpreting service.
In 2004, it moved its headquarters to Reston, Virginia, close to its clients at the Drug Enforcement Administration, the Central Intelligence Agency (CIA) and the Pentagon. Around the same time, Setian passed control of the company to her son, Julian, who prioritized connections with the military and intelligence agencies. Over the next decade and a half, the company added new lines of military support services as its relationship with the government grew along with the War on Terror.
In Afghanistan, the company offers a variety of services, including provision of cultural advisers, intelligence analysis, and producing communications for Resolute Support, the U.S.-led NATO mission.
SOSi’s transition to a military contracting powerhouse came through its connections to the office of retired Army General David Petraeus, the former CIA director and a major backer of the Task Force for Stability and Business Operations while serving as the top U.S. commander in Afghanistan and Iraq.
Petraeus’s translator and close confidante, Sadi Othman, was a SOSi employee, while his top deputy in Iraq, Lieutenant General Frank Helmick, was later hired to run SOSi’s logistics portfolio.
Petraeus wasn’t the only senior government official with SOSi ties. Bush administration Deputy Secretary of Defense Paul Wolfowitz, an architect of the Iraq invasion, and other U.S. defense officials also joined the SOSi board.
“It’s an open secret that SOSi is essentially a front for the DoD,” said a high-ranking Afghan official who has recently dealt with the company, using an acronym for the U.S. Department of Defense. The official asked for his name to be withheld for fear of retribution.
He said that when it came to disseminating its message in Afghanistan, SOSi offered ideal cover for the U.S.
“The U.S. government cannot directly do business with Afghan companies, so it goes through SOSi, a private entity, to secure deals with all the major Afghan media networks to broadcast Resolute Support and NATO communication material,” he said.
Its dealings in Afghanistan have thus far flown under the radar, but SOSi operations in Iraq are now under investigation by the U.S. Justice Department. The company allegedly paid an Iraqi firm connected to that country’s former prime minister, Nouri al-Maliki, in return for exclusive military base support service contracts worth hundreds of millions of dollars.
Southern Development’s Ghost Boss
Beyond its powerful American connections, SOSi was well positioned for growth because it wasn’t afraid to get dirty. In his thesis, Hartwig recommended offering the Afghan government “some type of benefit” to win support from “key leaders” for future mineral projects. Through its subsidiary, that is exactly what SOSi did, apparently cutting the president’s brother in on the deal.
Southern Development is a complex mishmash of entities that stretch from Afghanistan to the United Arab Emirates, but at its core, the company is a joint venture between SOSi and Hashmat Ghani.
A 2005 Kabul business directory and other archival documents reveal that Hashmat Ghani was the original owner of Southern Development. A Southern Development document on file in the Ras al-Khaimah Offshore Free Zone, the secretive United Arab Emirates jurisdiction where its full ownership records are held, confirms that on June 17, 2014 — three days after Ashraf Ghani was elected president — SOSi owned 80 percent of the company, with Hashmat Ghani owning the remainder.
A phone number listed in Southern Development’s most recent Afghan corporate filings also matches the number registered to Hashmat Ghani’s primary business entity, the Millennium Integrity Logistics Company.
His name was removed from Afghan corporate documents to avoid embarrassing Ashraf Ghani during his presidential campaign, according to a former SOSi employee who asked to remain anonymous because they continue to work in the field. Neither Hashmat Ghani nor President Ghani responded to questions sent by OCCRP.
It’s unclear exactly how SOSi first connected with the president’s family, but Hashmat Ghani’s son, Sultan Ghani, listed a short SOSi internship in 2013 on his resume.
Sultan Ghani now runs The Ghani Group, the family’s privately owned conglomerate with interests that include mining and military contracting. He apparently keeps in touch with old friends at SOSi. A photo uploaded to LinkedIn during the summer of 2019 shows him meeting with SOSi Vice President Helmick, and the account features praise for his interpersonal skills posted by another SOSi executive. SOSi did not respond to requests for comment.
All the President’s Mines
Buying chromite from unlicensed local mines remains illegal in Afghanistan, but Ashraf Ghani’s election opened a rich new vein of opportunity. While the American Task Force and his own son once urged legalization of artisanal mining, the president has instead redistributed bureaucratic power, enabling extralegal activities.
Until 2019, Afghanistan’s Minister of Mines reviewed mining proposals and licenses. Now, all such documents are approved directly by the president, his cabinet or the High Economic Council, which he also heads.
“The ministry just has a figurative role,” said a longtime civil servant with extensive experience of the process, who did not wish to be named for safety reasons. “Nothing goes through without the president’s green light.”
A document leaked to OCCRP reveals that on December 26, 2019, the High Economic Council, in a process overseen by the president, authorized Southern Development to take on a project far larger than the original task force project in Kunar. The company received a mineral processing permit and permission to purchase artisanal chromite in six Afghan provinces: Khost, Paktia, Paktika, Kunar, Ghazni and Maidan Wardak.
This chromite, which according to the document “was mined by local villagers over many years using rudimentary tools,” must be processed in Kabul’s District 12 neighborhood, where the Southern Development plant is located. The Ministry of Mines was instructed to oversee the entire process, and Afghan security forces and highway police were ordered to “cooperate” in securing “the transfer of the chromite ore.”
Southern Development was also given permission to obtain 20,730 tons of locally mined chromite already under the control of the Afghan government, according to leaked correspondence between the company and the Ministry of Mines.
Southern Development, it turns out, had long been preparing for a greatly expanded workload.
In the spring of 2018, more than a year before Afghanistan’s High Economic Council signed over the rights to the chromite, Southern Development’s Kabul office had imported new crushing equipment from South Africa for its Afghan operation.
In fact, Global Venture and its consultants, according to Scott King, had since 2013 been “advising private sector investors” with mining interests in Afghanistan about how to “quietly” restart initiatives like the Kunar chromite project. At the same 2019 Special Operations forum, she highlighted a mysterious $10 million investment into what she claimed were “legal” Afghan chromite mines.
Despite making gains in areas across the country, Southern Development was also trying to claim concessions it had not been granted. Until late 2019, the company falsely claimed to have won chromite exploration rights in Kabul province from Afghanistan’s Ministry of Mines and Petroleum. The claim disappeared from the website after reporters asked about it.
Bigger Fish Circling
Jodi Vittori, a non-resident fellow at the Carnegie Endowment and former anti-corruption adviser for NATO in Afghanistan, said President Ghani uses control of lucrative mineral contracts to stay in power by “managing the political settlement that helps balance the various forces there.”
Multiple sources — including employees of the Ministry of Mines, current and former civil servants, and anti-corruption officials — speak of a ring of corruption controlled by a select cast of elites at the Presidential Palace and the High Economic Council.
“If you pay the right amount to the right person, they’ll accept anything,” said the longtime civil servant. “Many people choose to pay, because success is guaranteed thanks to a tacit system by which if one member wants something to happen, the whole chain will agree.”
Javed Noorani, an expert on Afghan mining, said corruption and cronyism are rampant in the state sector.
“There are networks in Arg [Afghanistan’s Presidential Palace] that not only keep information from the president but also mislead him,” he said. “These networks are involved in wholesale corruption both in appointing their cronies to key positions in state institutions, as well as giving contracts to their clients in return for money.”
Mining takes time to generate profits and it’s unclear if SOSi has started to see a return on its investments yet, but the price of chromite ore hovers around $200 per ton and with a worldwide market for stainless steel, Southern Development could become highly profitable. Meanwhile, its success is already spawning copycats.
Another American military contractor, DGCI, which is under federal investigation for its work in Iraq and Afghanistan, hired another former Task Force staffer in 2019, in an ultimately unsuccessful attempt to mine lithium in Afghanistan’s Ghazni province. Since then, DGCI has also tried to cultivate a relationship with the Ghani family, holding public charity events with Sultan Ghani.
“DGCI seeks to give back to the communities where we work and allocates a portion of its profits to charity every year,” the company said in a statement about its relationship with Ghani. “We are proud to currently work with numerous organizations in Afghanistan and its diaspora through our charitable foundation.”
Meanwhile, Scott King in 2018 established a new company, De Zwan Ghar, which in the Pashto language means “the young mountain.” In 2019 she presented the Ministry of Mines with a plan to buy and process oxide copper. That project, which again contravened mining regulations, was declined, “but the moment she manages to persuade someone close to the cabinet, the project might see the light,” the longtime civil servant told OCCRP
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