KABUL (Reuters) - Cash from the U.S. military and international donors destined for construction and welfare projects in restive parts of Afghanistan is ending up in the hands of insurgents, a contractor and village elders said.
The alliance of largely Western nations who back President Hamid Karzai and have nearly 150,000 troops on Afghan soil have spent hundreds of millions of dollars on aid and infrastructure since they ousted the Taliban from power in late 2001.
However with violence spreading and the insurgency bloodier than ever, some construction firms and workers on development projects say they are having to hand over some of their earnings to insurgents to protect their personnel, projects or equipment.
Mohammad Ehsan said he was forced to pay insurgents a substantial part of a $1.2 million (755,000 pound) contract he won from the U.S. military two months ago to repair a road in Logar province south of Kabul, after they kidnapped his brother and demanded the cash.
"You know we need this American money to help us fund our Jihad," Ehsan quoted them saying when he eventually spent over $200,000 of the project money to secure his brother's freedom.
Ehsan said the insurgents also demanded the cash be changed out of dollars into Afghan or Pakistani currency, saying greenbacks are "Haram" or forbidden for Muslims.
Paying off militants is common across Afghanistan, where it is hard to work in villages or remote areas without greasing the palms of local insurgent commanders, said Ehsan.
"We are aware of those kind of reports...contracting methods are definitely considered part of the counterinsurgency effort," said Major Joel Harper, spokesman for the NATO-led International Security Assistance Force, when asked about Ehsan's payment.
"Such incidents would be investigated, and we have measures in place to try and prevent these things happening."
A U.S. Senate inquiry into private security firms contracting in Afghanistan found last week that funds had sometimes been funnelled to warlords linked to insurgents, but did not look at other possible channels taking foreign money to insurgent groups.
The Taliban regularly attack supply convoys and development projects as well as military targets, but spokesman Zabiullah Mujahid denied the group extorts money from contractors, saying other elements may use the Taliban name to defame them.
"It is totally baseless, we don't need any money from any organisations that are linked to the invading force," he told Reuters by telephone from undisclosed location.
"The people support us willingly and we will continue our Jihad against all occupying troops and their contractors."
But even elders from Provincial Development Shuras -- traditional local councils adapted to foster development -- that receive cash for small-scale projects in their villages, say they are not immune to the extortion.
"The Provincial Reconstruction Team gave me 500,000 Afghanis ($10,000) to clean sewers in my village but I was forced to pay 200,000 of it to the Taliban," said Aslam Jan from Logar's Baraki Barak district.
The U.S. government's aid arm USAID said it was aware of the risks from working in dangerous areas and worked to counter them.
"We take very seriously allegations that our funds are finding their way into the Taliban funds. We investigate each such allegation," USAID said in a statement.
Afghans who run transport businesses through volatile areas also prefer to pay off the Taliban rather than hire private guards who are often magnets for insurgent attacks.
Abdul Ghafoor Noori, owner of a transport firm in Kabul, says paying the insurgents makes business sense.
"I pay the Taliban not to attack my goods, and I don't care what they do with the money," he said laughing. "If you don't, the next day your property is attacked and destroyed."
Editing by Emma Graham-Harrison and Alex Richardson