WASHINGTON (Reuters) -- The Obama administration sought to reassure U.S. lawmakers this week it would demand "maximum accountability" from Pakistan for $7.5 billion in aid and that it had safeguards to ensure funds did not reach extremists.
In a report sent by the State Department to congressional committees late on December 14, the administration outlined its priorities for the aid, including water, agriculture and electricity projects, and laid out a strategy to prevent corruption and misuse of the money.
"The Secretary [of State] will suspend any government to government assistance to any implementing agency if there is credible evidence of misuse of funds by such agency," said the report, obtained by Reuters.
President Barack Obama has called Pakistan the "epicenter" of violence, a region seen as critical to U.S. efforts to fight the Taliban in neighboring Afghanistan. The aid is one of the tools being used by Obama to fight extremism that threatens to destabilize the region.
The report was mandated by Congress after the $7.5 billion, five-year aid plan passed into law in October. So far, appropriations committees have agreed on nearly $1.5 billion for the first year.
In a shift from previous practice, much of the aid will be channeled via national and provincial governments in Pakistan as well as domestic groups, instead of the usual U.S.-based humanitarian organizations and contractors.
"Throughout this period there will be a decrease in reliance on U.S.-based partners for education, health and other field programs that can be managed responsibly by Pakistani institutions," said the report.
"To provide maximum accountability and oversight, a bilateral agreement between the U.S. and Pakistan must be in place detailing the conditions for disbursement of funds and detailed monitoring and reporting requirements, before any government to government assistance is provided," it said.
The report conceded "real and significant" challenges in implementing the plan, including public sector corruption, poor security and "extremist" elements as well as deep suspicion of U.S. intentions and long-term commitment to Pakistan.
Nearly half of the funds -- $3.5 billion -- would focus on infrastructure programs that would demonstrate Washington's long-term commitment to Pakistan and help build mutual trust between the two nations, said the report.
There needs to be urgent investment in canals and irrigation services, and another focus will be on improving cold storage facilities, it added.
Another large chunk -- about $2 billion -- would be allocated to humanitarian and social programs such as education and health, "extending the writ of government in areas vulnerable to extremism."
The final $2 billion is for building up Pakistani government institutions at the national, provincial and local level, it added.
One fear of lawmakers and others is that the increased U.S. aid will reach the hands of militants, but the report promised strict guidelines would be in place to ensure that aid was not awarded to "terrorist organizations."
Potential recipients would be checked against lists of suspected extremists kept by the U.S. Treasury, and the State Department's Bureau of International Narcotics and Law Enforcement would apply "thorough vetting" procedures.
"On the ground verification procedures are being implemented to ensure that U.S. government humanitarian and other forms of assistance do not benefit extremist groups."
Several lawmakers have expressed strong doubts over the capacity of the U.S. government to implement the additional funding but the report said there were plans to increase the number of U.S. staff in Pakistan. It did not give figures.