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"It's a perfect war. Everybody makes money."

How US military funds are ending up in the hands of the Taliban.

“They tried to blow us up,” says security team leader Sgt. Brendan Wilczynski.

The incident illustrates some of the questions facing the U.S.-led counterinsurgency in Afghanistan. When fighting a popularly based insurgency in an opaque tribal society, how do you distinguish friend from foe? How can you do adequate development oversight in an environment where the simplest quality control is life-threatening? And how do you prevent your own development dollars from funding the enemy?

The question of Taliban funding is currently roiling the highest levels of the U.S. government. As GlobalPost reported last year, the U.S. Agency for International Development’s Office of the Inspector General has launched a probe into what is believed to be a kind of protection racket by the Taliban. GlobalPost reported that huge USAID contracts often involve Afghan subcontractors who end up paying the Taliban a form of extortion.

GlobalPost has learned there are also several investigations by the U.S. military into this practice, including work by the Department of Defense Inspector General and the Special Investigator General for Afghan Reconstruction, known by its acronym, SIGAR. The General Accounting Office is also involved with investigations into development money, as is the Afghan Threat Finance Cell, a multi-agency team headed up by the DEA.

As military and civilian officials try to come to grips with an endemic development-fueled corruption that is helping finance the insurgency, there is a particular focus here in eastern Afghanistan, where there is little poppy production. Rather than relying on the illicit opium trade, the Pashtun insurgents are skimming the flood of American dollars to help fight their war, U.S. military officers and civilian officials confirm.

Even at the highest levels in Washington there is a growing frustration.

Last March, Secretary of State Hillary Clinton told reporters at The Hague that wasted U.S. aid expenditures were “heartbreaking,” going on to say, “There are problems of design, there are problems of staffing, there are problems of implementation, there are problems of accountability.”

Since 2001, the U.S. has provided about $38 billion in development funds to Afghanistan, and the total is projected to balloon to $50 billion in fiscal year 2010, the Special Investigator General for Afghan Reconstruction office reported.

At The Hague, Clinton promised increased oversight. “We are looking at every single dollar as to how it's spent and where it's going and trying to track the outcomes.”

Up to recently, the investigative focus has been on large-scale development contracts, such as the purported protection racket that involves pay-offs from USAID-administered road construction projects and shakedowns that well-connected Afghan trucking contractors pay the Taliban for safe passage.

Amid mounting allegations and a growing body of evidence of just how widespread the corruption is, Congress has started to get involved.