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Who Made Kabul Corrupt?

Pious bromides about tackling corruption in Afghanistan cannot hide the fact that the buck stops in Washington

Afghan intelligence officers beat back Afghan police officers who mobbed the only branch of Kabul Bank open in the capital on Wednesday, in a desperate attempt to draw money before it closed for Eid al-Fitr, the most important festival of the year in Islamic countries. Eid marks the end of a month of Ramadan fasting and most Afghans spend a small fortune on food and presents for the holiday.

Most of the 250,000 government employees in Afghanistan receive their salaries via electronic transfer to Kabul Bank, the country's largest private bank, which is reported to be on the verge of collapse. Blame has been cast on the biggest borrower – a man named Abdul Hasin, who was given $100m for a variety of projects which he has not repaid. Hasin happens to be the half-brother of the vice president of the country, Mohammed Qasim Fahim.

A little less than a year ago, I visited the heavily guarded headquarters of Abdul Hasin's business conglomerate – Zahid Walid – in the wealthy Kabul neighbourhood of Wazir Akbar Khan, not far from the even more heavily fortified US embassy. Neither Hasin nor Fahim were wealthy when the US invaded Afghanistan in 2001, but as the de facto leader of the Northern Alliance, Fahim was perfectly placed to profit from the new opportunities created by the collapse of the Taliban.

Ramin Seddiqui, the managing director of the Zahid Walid's diesel import business, filled me in on how the business grew: first, a series of lucrative contracts to pour concrete for a Nato base, as well as portions of the US embassy being rebuilt in Kabul and the city's airport, which was in a state of disrepair.

On a plot of land in downtown Kabul acquired for a pittance by Fahim, Abdul Hasin also financed the construction of a high-rise building dubbed "Goldpoint", which now houses dozens of jewelry shops. Soon, the company was importing Russian gas, and not long after that, Abdul Hasin set up the Gas Group, which markets bottled gas to households and small businesses.

Beginning in the winter of 2006, Zahid Walid won over $90m in contracts from the Afghan ministry of energy and water to supply fuel to the diesel power plants in Kabul. (I was involved in making a video for Channel 4 investigating the overspending on the Tarakhil diesel plant.)

The business deals of Abdul Hasin were legal, but given their apparent failure, major questions can – and should – be raised about nepotism and backroom deals cut by the Bush and the Obama administrations in their drive to combat corruption in Afghanistan. Hasin's epic default hardly makes him the only businessman whose dealings deserve closer scrutiny – his business partner is Mahmoud Karzai, brother of the president, who flipped a house Dubai's Palm Jumeirah with the Kabul Bank's former chairman, Sher Khan Farnood. Karzai was quoted this week saying: "Making a profit on a house is beautiful."

Mohammed Zia Salehi, the chief of administration for the national security council who was recently arrested – then released, at President Karzai's behest – in a corruption investigation, appears to have been on the CIA payroll for many years, according to the New York Times, as is Ahmed Wali Karzai, another brother of the president.

What is to be done about these gentlemen? In a report released this week, Anthony Cordesman, a former Pentagon official who now works at the Center for Strategic and International Studies in Washington. Titled "Time to Look in the Mirror", the report correctly notes that low-level corruption is not the problem:

"Unfortunately, the worst aspects of this corruption are largely the product of our mistakes. The fact is that we are at least as much to blame for what has happened as the Afghans, and we have been grindingly slow either to admit our faults or to correct them."

There is absolutely no doubt in the mind of anyone in Kabul that corruption is endemic among Afghanistan's ruling elite. But who granted the contracts, put them on the payroll and gave them the money?

So, when are we going to see those CIA and Pentagon officials in Washington DC facing charges?

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