Afghan Bank Bailout: Corruption and Dishonesty at the Heart of Karzai's Family

Strategic Insights -

Corruption and dishonesty have plagued the Karzai family in Afghanistan, with the president's brother, Mahmoud, wanting U.S. taxpayers to bail out the Kabul bank after $160 million went missing. The bank's largest shareholder, Mahmoud Karzai, wants U.S. aid to cover the losses, despite the bank's officials looting funds to buy luxury real estate in Dubai. This scandal is part of a larger picture of the Karzai family's corrupt practices, including involvement in drug dealing and election rigging.

Key Takeaways:

  • The Kabul bank, the largest in Afghanistan, has lost $160 million due to looting by its top officials, including members of the Karzai family.
  • Mahmoud Karzai, the president's brother, owns 7% of the bank and wants U.S. taxpayers to bail out the bank with $160 million.
  • The Karzai family has a history of corrupt practices, including involvement in drug dealing, election rigging, and firing U.S. officials.
  • Former U.N. Special Representative to Afghanistan, Peter Galbraith, says that the Karzai government is "the second most corrupt" in the world and that Hamid Karzai stole his last election.
  • Galbraith advocates for changing the U.S. mission in Afghanistan to protecting non-Pashtun areas and Kabul with a much smaller force, around 10,000 troops.
  • U.S. Secretary of Defense Robert Gates says the U.S. has no intention of pulling out of Afghanistan, despite the corruption and lack of a credible partner.
  • Galbraith believes that many officials in the Obama administration are privately aware of the corruption and lack of credibility of the Karzai government, but publicly support the administration's strategy.

Statistics:

  • $160 million: missing funds from the Kabul bank
  • 7%: ownership stake held by Mahmoud Karzai in the Kabul bank
  • 100,000: number of U.S. troops in Afghanistan
  • $120 billion: annual U.S. spending on the Afghanistan mission
  • 2nd: ranking of Afghanistan as one of the most corrupt countries in the world
  • 1989: year the U.S. turned its back on Afghanistan, a lesson Secretary of Defense Robert Gates says was learned

Sources:

  • CNN "The Situation Room" Interview with Peter Galbraith, Former U.N. Special Representative to Afghanistan (September 2, 2010)
  • Federal News Service, Inc. (2010)
  • CNN Website (2010)
  • U.S. Department of Defense Website (2010)