Afghanistan: Karzai in panic as graft probe closes in

[Editor's note: Afghanistan's central bank moved to shore up confidence in the country's biggest financial institution Wednesday, taking over the Kabul Bank after its top executives resigned amid allegations of mismanagement and corruption. Kabul Bank belongs in part to the brother of President Hamid Karzai, Mahmoud Karzai, while the vice-president's brother also owns a stake. Central bank governor, Abdul Qadir Fitrat, assured reporters Wednesday that Kabul Bank has "enough liquid assets to meet its liquidity demands" and that the executives had resigned as part of reforms being implemented by the central bank to improve professionalism at some of Afghanistan's 10 private banks. But insiders suggested the bank's troubles were due to unsecured loans, real estate speculation and bribe-paying to government officials and candidates in the Sept. 18 election.]

KABUL, Afghanistan – President Hamid Karzai has again challenged the patience of his international backers as he desperately tries to keep an FBI-sponsored corruption investigation from breaching the walls of the presidential palace.

At the center of the controversy is a body set up in February by the FBI and supported by the Afghan Interior Ministry, called the Major Crimes Task Force, or MCTF. Staffed with elite Afghan law enforcement personnel trained and mentored by the FBI, it was going to break new ground in targeting officials who stepped over the line.

The problem, say insiders, was that the MCTF did its job all too well. Lulled by the president’s assurances of total independence, it successfully went after some of the top members of government, including a close aide to the president himself.

“The MCTF was a shadowy presence within the government,” said one Afghan official, speaking on condition of anonymity. “The president did not know exactly what they were doing; he had no control over their activities.”

In late July, the MCTF forced the arrest of Mohammad Zia Salehi, an insider at the presidential palace, which is known as the Arg.

Salehi’s alleged crime was to ask for a car worth approximately $10,000 as a “gift” for short-circuiting a probe into money laundering. This seems like small potatoes compared to some of the recent corruption allegations, such as the one involving the former Minister of Mines, who, according to The Washington Post, accepted $30 million as a kickback for awarding the lucrative Aynak Copper Mine concession to the Chinese. The minister, Mohammad Ibrahim Adel, denied the charges; he lost his job, but remains at liberty.

However, Salehi’s significance lay not in the scale of his offense, but in his position within the government.

Salehi, said Haroon Mir, head of the Afghanistan Center for Research and Policy Studies, is merely "a personal aide" to Karzai. "Whatever he does is on the direct instructions of President Karzai. There is no intermediary. Karzai fears that the next step will be himself."

Mir said the arrest sent alarm bells throughout the Arg.

“A few months ago everybody was talking about corruption in the Cabinet; a few officials were targeted,” Mir continued. “But the arrest of Salehi is a signal that the United States has raised the level. Whatever they extracted from Salehi would implicate Karzai. It would make it clear that the president himself is involved in bribery.”

A government insider, speaking on condition of anonymity, confirmed Mir’s assessment.

“Once Salehi was arrested, everybody panicked,” the official said. “They all thought ‘if they can take Salehi, they can take anyone.’”

But the fright was short-lived. Karzai lost no time in taking action, ordering the attorney general to release Salehi, who was home by the end of the day.

The president then began a loud and acrimonious war of words against the MCTF, launched with great fanfare by FBI Director Robert Mueller, who had said at its inauguration that, “Partnerships like these not only make the most of our resources and our personnel; they make all of us smarter and stronger.”

Karzai in early August launched a probe into the MCTF's activities and accused it, among other things, of interfering with Afghan national sovereignty. Observers feared the president would soon shut down the body. Only the intervention of Sen. John Kerry (D-Mass.), who flew to Kabul in mid-August, elicited a promise from Karzai that the MCTF could continue its actions unhindered.

But however committed and professional the MCTF might be, it has limited power in a country that has not yet established any real rule of law.

“Do we have separation of powers in this country?” asked one Afghan anti-corruption expert, who has been directly involved with government efforts to root out unlawful activity within its ranks.  He spoke on condition of anonymity. “Are there checks and balances? I don’t think so. No one can expect the MCTF to be totally independent. But organizations are dependent out of fear.”

The MCTF, he insisted, had performed well, mostly because of the high-level support it had received from the international community.

“The MCTF was established after long negotiations between high-ranking officials,” he said. “Even Karzai cannot abolish it.”

Karzai can, however, limit its scope. The MCTF can investigate, but it has no power to enforce, as seen in the Salehi case.

“The MCTF did its job,” said the expert. “The government did not.”

The crisis deepened in late August, when Deputy Attorney General Fazel Faqiryar gave an interview to The New York Times in which he claimed that he had been fired for trying to pursue high-level corruption investigations. Government officials countered that Faqiryar, who is over 70, had simply been forced into mandatory retirement, in accordance with the law.

Faqiryar himself has proven economical with facts at times, as when he told The Washington Post in mid-August that there had been no pressure from the executive branch in the Salehi case. This was just days before the president made a public admission that he had ordered Salehi’s release.

“Faqiryar himself is not all that clean,” said Mir. “He may be looking for asylum someplace, in the United States or Canada.”

But suspicion remains that the government has a lot to hide.

Within Afghanistan, the public is more bemused than shocked by the latest developments.

“What can anyone do?” shrugged Mohammad Sheik, head of an import-export business. “The government can do anything it wants.”

He may be right.

As the Afghan government slowly unravels, the only remaining question in the minds of many Afghans is how much longer the United States and its partners are going to continue to indulge the isolated and embattled president.

Ever since the international community closed its eyes to the blatant fraud during last year’s Presidential elections, Karzai has been confident that his backers see no alternative to his reign.

“He is like a spoiled child,” said Mir. “He knows his parents can’t get rid of him. They give him everything he wants, and the minute they say ‘no’ he starts to cry.”

When you are the president of a poor but strategically significant country bogged down in a protracted war, you can do quite a bit of harm when you throw a tantrum. Karzai recently banned all private security firms from the country, endangering much of the assistance that keeps him in office. He even once, famously, threatened to join the Taliban.

This has made many of his fellow Afghans, and not a few of his international partners, wonder how much longer they can deal with him.

The U.S. Ambassador to Kabul, Karl Eikenberry, warned the Obama administration in a leaked cable last year that Karzai was “not an adequate strategic partner.”

Afghans agree.

“Honestly, everybody in Afghanistan is expecting a bold change, at the very top,” Mir said. “Without drastic change, there is no hope for improvement.”

Mahmoud Saikal, former deputy foreign minister, believes that unless action is taken to curtail the activities of the power elite, Afghanistan cannot progress.

“We must say clearly: Does democracy really matter in this country or not?” he said. “If it does, then we must punish those who break the law, especially when it involves the very people who are supposed to be the guardians of that law … But most key figures in the government are mainly focused on keeping themselves in power. Our leaders cannot think beyond the walls of the Arg.”