Washington (CNN) -- Portions of a taxpayer-funded $2.1 billion Pentagon contract to truck supplies to U.S. troops in Afghanistan are being indirectly paid to Afghan insurgents and corrupt public officials as protection money, a congressional investigation revealed.
The U.S military outsources much of the security for truck convoys carrying food, water, equipment, fuel and ammunition to remote and dangerous areas in Afghanistan, and those contractors hire local Afghans who pay bribes for safe passage, according to investigators.
"United States tax dollars are feeding a protection racket in Afghanistan that would make Tony Soprano proud," Rep. John Tierney, D-Massachusetts, said Tuesday, referring to an organized crime boss in the popular TV show "The Sopranos." Tierney make the remark at a hearing on the issue the National Security Subcommittee of the House Committee on Oversight and Government Reform.
"This contract appears to have fueled warlordism, extortion, corruption, and maybe even funded the enemy," said Tierney, who is chairman of the subcommittee.
The hearing comes shortly after the release of a 79-page congressional report that details findings ranging "from sobering to shocking," Tierney said in the report's introduction.
CNN reported on Monday that the military is also investigating the issue.
The results of the six-month investigation indicate that outsourcing the Afghanistan supply chain to contractors has resulted in "significant unintended consequences, fueling warlordism, extortion, and corruption, and it may be a significant source of funding for insurgents," the report's executive summary said.
"In other words, the logistics contract has an outsized strategic impact on U.S. objectives in Afghanistan," the report said.
Investigators found that Department of Defense "has been largely blind to the potential strategic consequences of its supply-chain contingency contracting," and that the U.S. military has little understanding of how the security is provided.
When contractors reported to the Defense Department that they were being extorted by warlords for protection payments for safe passage and that these payments were "funding the insurgency, they were largely met with indifference and inaction," the report said.
The Army Criminal Investigation Division (CID) spokesman, Christopher Grey, said the CID does have an investigation on "host-nation trucking" underway but he would not discuss details.
The "Afghan Host Nation Trucking" contract in question stipulates that the prime contractors are responsible for the safe passage of the cargo that they carry. Most contractors subcontract, hiring local Afghans for armed protection of the convoys transporting supplies.
The manager of the largest private security provider, Watan Risk Management, said he complained to U.S. military officials that his company had to pay bribes ranging from $1,000 to $10,000 monthly to Afghan governors, police chiefs, and local military officials whose territory the convoys traversed. Defense Department officials confirmed they were aware of the bribes, according to the report.
The private security companies that protect the convoys regularly encounter armed conflict with alleged insurgents and other criminal elements, the report says, and hundreds of security providers are killed annually.
One key convoy security commander in Afghanistan told investigators he spent $1.5 million on ammunition per month to protect his convoy trucks.
Investigators found no direct evidence of payoffs to the Taliban, but many military officials overseeing the contract believed that the Taliban did receive protection payments, based on information provided to them by contractor representatives, the report said.
Since mid-2009, contractors have completed over 40,000 missions, subcommittee statistics show.
Congressional members at Tuesday's hearing pressed witnesses for answers as to how the practice is allowed to continue.
Gary Motsek, assistant deputy Under Secretary of Defense for Program Support, and who is involved with Defense Department acquisition and logistics, acknowledged the members' frustrations that changes in the current conditions aren't happening quickly enough. But he said improvements won't happen overnight.
"I assure you we're taking it all seriously," Motsek said. "But if I was a cop on the other side, I would say, 'Damn it, I'm doing what I can with what I got."
Moshe Schwartz, a specialist in defense acquisition, said that for those who believe the U.S. military shouldn't be using outside contractors, "the solutions include increasing the size of the military, rethinking current force structure, or choosing not to engage in certain contingency operations."
Addressing those who believe that the problem is due to insufficient planning and poor management on the part of the military, Schwartz said, "the solution may be to develop an effective strategy for using PSCs (private security companies), improving operational planning, and enhancing oversight."
Schwartz acknowledged that the Defense Department has taken steps to improve its management and coordination of private contractors, and but warned more needs to be done.