The account of the generals, who asked to remain anonymous because military rules forbid them from speaking publicly, was backed up by other retired and active generals, former bureaucrats and government ministers.

At the time of the siphoning, Pervez Musharraf, a Washington ally, served as both chief of staff and president, making it easier to divert money intended for the military to bolster his sagging image at home through economic subsidies.

“The army itself got very little,” said retired Gen. Mahmud Durrani, who was Pakistan’s ambassador to the U.S. under Musharraf. “It went to things like subsidies, which is why everything looked hunky-dory. The military was financing the war on terror out of its own budget.”…

“We don’t have a mechanism for tracking the money after we have given it to them,” Pentagon spokesman Lt. Col. Mark Wright said in a telephone interview.