Karzai's Ghost Money from the CIA

May 1st, 2013

flickr / US Embassy Kabul Afghanistan

The U.S. government is not unfamiliar with short-sighted policies, indeed short-sightedness in political systems often seems often more familiar than not. Yet of all the short-sighted policies the United States has engaged in, and especially of those overseas, the recent reports on ghost money in Afghanistan take the cake.

I wish I could say I was surprised.

According to a report by the New York Times, the Central Intelligence Agency has literally been dropping off “bags of cash” at Afghanistan President Hamid Karzai’s office for decades. Karzai called the amounts “small,” but evidence indicates the amounts are anything but—perhaps totaling tens of millions of dollars.

The presidential palace in Kabul said the money has been used “for different purposes, such as in operations, assisting wounded Afghan soldiers and paying rent.” But the truth is that if the means were so honest CIA wouldn’t have bothered delivering it so secretly— often in suitcases. In reality, the agency was using it to buy the loyalty of Afghans and encourage their support in the war against the Taliban. Karzai, in turn, has used it to buy power, fuelling corruption and empowering warlords.

As it would turn out, according to one American official, “the biggest source of corruption in Afghanistan, was the United States.”

As the understandably puzzled House Representative Jason Chaffetz (R-UT) and a critic of the war effort in Afghanistan put it: “I thought we were trying to clean up waste, fraud and abuse in Afghanistan.”

So did we.

In fact this policy is exactly at odds with America’s stated goals for the nation. In an interview last year former Secretary of State Hilary Clinton said: “President Karzai has made a strong public commitment to stamping out corruption, implementing key reforms and building Afghanistan’s institutions. We will support him and the government in that endeavor to enable Afghanistan to move forward toward self-reliance.”

Put bluntly, this statement is a joke. Corruption is a major—if not the major—cause of Afghan societal and governmental instability. In 2009, then U.S. commander in Afghanistan General Stanley McChrystal said this about the nation: “There are no clear lines separating insurgent groups, criminal networks (including narcotics networks) and corrupt [government] officials. Malign actors within the [government] support insurgent groups directly, support criminal groups that are linked to insurgents and support corruption that helps feed the insurgency.”

Karzai, from his dealings with the nearly-imploding Bank of Kabul to his almost laughable openness on the CIA ghost money—has proved nothing but a strong public commitment not to stamp out corruption.

That the CIA would encourage bad behavior by engaging in it itself is, of course, laughable in hindsight. Such a stark example of irony and short-sightedness is easy to ridicule and, indeed, nearly everyone has done so. Black money, ghost money, secret money—or illicit inflows if you will—are bad for nations and their economies. They encourage corruption. They foster underground economies and worsen crime. Yet society does not laugh when illicit financial inflows should be netted out from outflows—suggesting they somehow offset the damage. Yet this notion is equally absurd. It is as short-sighted and laughable as the CIA’s bags of ghost money. Yet many do not laugh.

AttributionNo Derivative Works Some rights reserved by U.S Embassy Kabul Afghanistan

Written by Ann Hollingshead

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