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HindustanTimes Sun,13 Jul 2014

World

Karzai 'unaware' of campaign cash from corrupt bank
AFP
Kabul, November 29, 2012
First Published: 14:35 IST(29/11/2012)
Last Updated: 14:37 IST(29/11/2012)

Afghan President Hamid Karzai was not aware that a major bank now mired in scandal had contributed millions of dollars to his re-election campaign, a spokesman said Thursday.

A foreign-funded inquiry on Wednesday reported on how a $900 million fraud ruined the Kabul Bank, how cash was smuggled abroad in airline food trays, and said top politicians dictated who should be prosecuted over the theft.

The inquiry did not name Karzai, but hinted that the president himself benefited, saying the bank had "reportedly provided millions of dollars to the campaign of at least one presidential candidate" against central bank advice.

Kabul Bank was reported to have been a major donor to Karzai's 2009 re-election campaign, which was itself tainted by fraud and voting irregularities.

"The president is not aware (of the payments to his campaign)," presidential spokesman Aimal Faizi told AFP.

"He learnt of claims that $20 million was paid to his campaign. This is a lot of money. We will investigate this."

The president had specifically told the chairman and CEO of the bank in a meeting at his office that if they were asked to contribute to his campaign they should refuse, Faizi said.

The country's biggest scandal in years has also touched a brother of Karzai and a brother of Vice President Marshal Mohammad Qasim Fahim, who were shareholders in the bank. They have not been charged.

The investigation into the fraud and the prosecution of 22 people allegedly involved is being watched closely by Western donors for signs that Afghanistan is finally tackling rampant government corruption.

Donors have pledged billions of dollars in aid after NATO combat troops withdraw from insurgency-racked Afghanistan in 2014, but have made payment conditional on corruption being brought under control.

The 87-page findings of the inquiry expose a sophisticated network of corruption that saw money smuggled abroad, as well as political interference in criminal proceedings.

Critics, including international corruption watchdog Global Witness, point out that the report also reveals an urgent need for international banking reform.

"This is a story of a nascent financial sector in a conflict zone in which crooks were able to loot a major bank over the course of multiple years because of the apparent failure of the regulators, donors, auditors and the international anti-money laundering framework," Global Witness said.


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