Annals of Afghan Corruption: Government Officials Smuggle Suitcases of Cash to Dubai While Drug Trade Thrives

As President Obama prepares to send 30,000 additional troops to Afghanistan, U.S. officials on the ground are despairing over what some describe as the flagrant corruption of President Hamid Karzai's government. Among the most alarming developments: mounting evidence that Afghan government officials are spiriting millions of dollars in illicitly gained assets out of the country to the Persian Gulf. A special U.S. money-laundering task force, dubbed the Afghan Threat Finance Cell, is monitoring the movements. "It's very blatant—they are literally smuggling suitcases of bulk cash and moving them to Dubai," said one U.S. official familiar with the money movements as well as other recent investigations into Afghan corruption.

In one recent high-profile case, two officials of the Hajj and Islamic Affairs Ministry were arrested at Kabul International Airport trying to carry $360,000—some of it hidden in biscuit boxes—out of the country. The funds had allegedly been extorted from landlords around Mecca in return for directing Afghan pilgrims to their apartments—a scheme that U.S. and Afghan officials suspect was overseen by the Islamic-affairs minister. ("I am 100 percent innocent," the minister, Sadiq Chakari, declared in a recent press conference.)

But that seizure is almost certainly the tip of a vast money-laundering iceberg, U.S. law-enforcement officials say. Law-enforcement officials in the United Arab Emirates have intercepted couriers from Afghanistan arriving at Dubai's airport with "millions of dollars in suitcases," according to a little-noticed passage in a recent Senate Foreign Relations Committee report. What happens to the funds after that is anybody's guess. "We don't know, once the money comes into Dubai, where it goes," said one U.S. Embassy official in Dubai, quoted in the Senate report.

The vast majority of the illicit funds are derived from a booming narcotics trade that U.S. officials say is still being protected by Karzai's government. Last June, U.S. officials—including Ambassador Karl Eikenberry—were outraged when they learned that Karzai had pardoned five convicted drug traffickers, including the nephew of his campaign manager. The pardons were an especially sore point because the traffickers had been prosecuted by a special drug court that the U.S. government has spent tens of millions to develop. Since the protests, U.S. officials say that Karzai has indeed stopped pardoning traffickers. Instead, they say, he or officials close to him have "switched tactics" and have begun intervening in drug cases to protect politically influential figures. 

One recent case involves an alleged drug trafficker who is the son of a powerful businessman in Nangarhar province, on the border with Pakistan. The trafficker was arrested by the Afghan Counter Narcotics Police last June after four kilograms of heroin were found at a store he owns. But once his father appealed to the president's office, Karzai sent a special team of prosecutors and police officers to reinvestigate the case. The Karzai team concluded the alleged trafficker had been framed and ordered him released. "The whole thing stinks," said the U.S. official. "We think the guy is absolutely guilty and somebody tampered with the evidence. There are some very brave Afghan prosecutors and judges who go out on a limb to make these cases, and when you see something like this happening, it's really disheartening."

Another recent case involves the commander of the highway patrol in Badakshan province, near China. The commander, his deputy, and a major trafficker in the region were all arrested and convicted as part of a U.S.-assisted investigation into the seizure of 23 kilograms of heroin in the province. But this summer, U.S. officials began getting reports that Karzai's office had taken an interest in the case, presumably because the commander's uncle was a member of the Afghan Parliament. They were worried that Karzai would either pardon the highway commander or pressure the Supreme Court to overturn his conviction. Karzai never issued a pardon. But the U.S. concerns were confirmed last month when the Supreme Court vacated the judgment against him and ordered a new judicial review of the case.

Karzai, for his part, has denied that he is protecting drug traffickers and pledged to U.S. officials to crack down on corruption in his government. (Said Tayeb Jawad, Afghan's ambassador to the United States, was unavailable to comment, his office said on Friday.) "Those who spread corruption should be tried and prosecuted," Karzai declared in his inaugural speech for his second term last month. "Corruption is a very dangerous enemy of the state." But many U.S. officials remain skeptical, as are a growing number of members of Congress—one reason the response to Obama's new Afghanistan strategy has been less than overwhelming. During a recent trip to Afghanistan, "I was appalled and horrified by the depth of corruption in Karzai's government," said Democratic Rep. Jane Harman. As Declassified noted earlier this week, Harman is a longtime hawk on national-security issues who backed President Bush's invasion of Iraq. But hours before Obama's speech she announced she was opposed to pouring more troops into Afghanistan, a country she said now conveys "eerie echoes" of Vietnam.