The US has a programme to help it understand Afghan tribal culture
The US Defence Department says it may look into an official who allegedly ran a secret spy ring in Afghanistan and Pakistan using its funds.
The New York Times reported that Michael Furlong hired contractors to gather track and kill militants.
A Pentagon spokesman said: "The story... raises numerous unanswered questions that warrant further review by the department."
The paper said it was generally illegal to hire contractors as covert spies.
It also said that the money allegedly used could have been taken from a legitimate programme aimed at gathering information.
Mr Furlong had been in charge of a $22m (£14.6m) contract in mid-2008 to use private companies to gather information about Afghanistan's political and tribal culture, the Times reported.
The newspaper said Mr Furlong hired contractors from private security companies that employed former CIA and Special Forces operatives.
The contractors gathered intelligence on suspected militants and insurgent camps to pass on to military units and intelligence officials for "possible lethal action" in Afghanistan and Pakistan, officials are quoted as saying.
The unofficial programme was shut down after military chiefs suspected he was using department money, the Associated Press reported.