January 26, 2011
By Rachel Ehrenfeld
In his State of the Union speech on January 25th, the President stated:
“The Afghan government will need to deliver better governance. But we are strengthening the capacity of the Afghan people and building an enduring partnership with them.”
It is not a secret that President Karzai’s government is rife with corruption. It is misappropriating and siphoning off as many billions dollars from foreign aid, as it can. This lawlessness deepens the region's political and economic instability that enables the Taliban and other insurgencies to prosper.
Sources close to the investigation of the “fraud” at Afghanistan’s largest bank, Kabul Bank, confirmed that the inquires identified that among the suspects of fraud and suspicious loans to the bank's shareholders, are the President brother Mahmoud Karzai, and Haseen Fahim, the brother of the first vice president, Gen. Muhammad Qasim Fahim.
The IMF estimates the loss at $850 million. However, knowledgeable independent sources who wish to remain nameless say the loss totals more than one billion dollar.
How could this happen? The Chairman of Kabul Bank is alleged to have bought 20 condos on Dubai's Palm Jumeirah Island, averaging $7 million per condo. He bought them in his personal name with depositors’ money. He maintains that he bought them for the “benefit of ‘certain’ people who want to remain anonymous.” But it has been discovered that the condos are occupied by relatives of Cabinet members, including Mahmoud Karzi, the president’s brother.
This is but one example of Karzai's government rampant corruption.
Incredibly, most U.S. Agency for International Development (USAID) and Treasury programs and projects do not include any consideration for the criminogenic environments created by pouring huge funding into Finance, Health and Infrastructure projects in Afghanistan, with little or no oversight.
U.S. Bank supervision assistance to the Central Bank does NOT include a program to detect or prevent fraud. The reason for this, according to an AID officer: “we don’t want to offend the counterparts by including Criminal conduct prevention measures.”
It is time the Obama Administration to talk less about “good governance,” and stops the corrupting relationship with the Afghan government. It is time to stop the politically correct attitude that allows the disappearance of billions of dollars aimed at improving the condition of the Afghan’s people. And it is time to take serious action to prevent the massive fraud perpetrated by the Afghans, and often executed in partnership with members of international aid agencies and foreign contractors.
Although the President did not mention it in his address, fighting and corruption in Afghanistan will continue unless the U.S. takes steps using environmentally safe methods to eradicate Afghan opium poppy and Hashish cultivation and heroin production.
The Afghan people would benefit from a stable government that could help build a stable economy, only once the vast illegal income that generates hundreds of billions of dollars in revenues are eliminated. Until then, expect more of the same.
Dr. Rachel Ehrenfeld, Director of the NY based American Center for Democracy, and author of Funding Evil; How Terrorism is Financed – and How to Stop It.