Whistleblower or fraudster? Afghan bank chief flees to America

Kabul issues arrest warrant as corruption scandal deepens

Officials in Kabul yesterday issued an arrest warrant for Afghanistan's former central bank governor who has taken refuge in the United States, amid a deepening corruption scandal that is jeopardising international aid for the Asian country and putting a new strain on already-frayed relations with its key ally.

The warrant was issued hours after Abdul Qadir Fitrat announced his resignation to Afghan radio stations and Western news agencies from a hotel in the Virginia suburbs of Washington – he claimed his life was in danger.

In a letter to reporters, Mr Fitrat accused the government of President Hamid Karzai of hindering and intimidating central bank staff in an investigation of the Kabul Bank, Afghanistan's largest private bank which came close to collapse in September 2010. As details have emerged about the scale of the fraud, the Kabul Bank – founded in 2004 by an international poker player, Sherkhan Farnood, but through which most government salaries are paid – has become an emblem of the corruption and cronyism at the heart of the regime. Some senior figures, including the brothers of Mr Karzai and his Vice-President, allegedly treated it like a personal piggy bank, claims which they deny.

When a run on the bank forced the authorities to step in, up to $900m (£565m) of dubious loans were discovered, some of them without collateral, interest or repayment schedules – in other words, outright gifts. Efforts to clean the bank up have became a litmus test of the sincerity of Mr Karzai's promises to fight corruption.

And the scandal could jeopardise foreign aid for the country. The International Monetary Fund withdrew its assistance programme last year, through which countries donate money to Afghanistan.

But the latest events have made a murky picture even murkier. Mr Fitrat said in interviews on Monday that he first asked the Karzai government last autumn to prosecute those involved in the fraud. Instead, "high-level political authorities" interfered, weakening the central bank's regulatory and supervisory functions. Two months ago, Mr Fitrat's position became even more precarious when the ex-governor went before parliament to name names.

At that point, the Kabul government launched a "counter-offensive", refusing to support the investigation and "using law-enforcement agencies against the staff of the central bank", Mr Fitrat said.

Mr Fitrat arrived recently in the US and said he left Afghanistan after "credible sources" warned him that his life would be in danger if he stayed. The arrest warrant appears to be a further escalation of the counter-offensive.

Azizullah Ludin, who was appointed by Mr Karzai to lead the government's anti-corruption taskforce, told The New York Times on Monday that Mr Fitrat was himself involved in the fraud and that charges had been brought against Mr Fitrat. "Mr Fitrat is the root of the problem and he knew everything," Mr Ludin said.

One thing at least seems sure: the former governor will not be returning to Afghanistan soon. The US State Department says it has received no request for asylum. But that would not even be necessary, because Mr Fitrat already has permanent-resident status in the US.

Everything else appears to be less certain about the matter. According to a State Department spokeswoman, Washington intends to keep up pressure on the Afghan government to mend its ways if there is a change at the helm of the central bank. But the circumstances of Mr Fitrat's departure make it unlikely that Mr Karzai will clean his house or that the suspect "loans" will be repaid.

In the meantime, the IMF and World Bank aid programmes will remain on hold, at least until a new central bank governor is appointed. The episode will also not do anything to ease tensions between Washington and Kabul; if anything, it will be used to bolster the case for a faster withdrawal from Afghanistan than the one Barack Obama announced earlier this month. His plan calls for 33,000 US troops to come home by September 2012, ahead of a full handover to Afghan security forces at some point in 2014.

Even so, come January 2013, there will still be some 68,000 American soldiers in Afghanistan.

Many in Congress – mostly Democrats but some Republicans as well – already argue that with Osama bin Laden dead and al-Qa'ida weakened, a larger and speedier pullout is in order.

The debacle of Mr Fitrat's departure will only add opposition to "nation-building" in Afghanistan, where American blood and treasure, to all appearances, are being used to prop up a corrupt and rapacious regime.

Corruption and aid

* The watchdog Transparency International ranks Afghanistan as one of the world's most corrupt nations, with only Somalia and Burma faring worse.

Billions of dollars for aid and reconstruction have been pumped into the country in the past 10 years, much of it disappearing. Last year, The Wall Street Journal alleged that more than $3bn (£2bn), much of it foreign aid, had been flown out of Afghanistan, possibly to safe havens overseas. A US diplomatic cable unearthed by WikiLeaks highlighted the staggering extent of the corruption, with an official writing that in a proposed new cabinet line-up the Agriculture Minister alone "appears to be the only minister ... about whom no allegations of bribery exist".

Despite Western pressure, President Hamid Karzai has struggled to crack down on corruption and few government officials have faced the courts.

More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
people'I’d rather have Fred and Rose West quote my characters on childcare'
Life and Style
The new Windows 10 Start Menu
Arts and Entertainment
There has been a boom in ticket sales for female comics, according to an industry survey
comedyFirst national survey reveals Britain’s comedic tastes
Have you tried new the Independent Digital Edition apps?
ebooksAn unforgettable anthology of contemporary reportage
Bruce Chatwin's novel 'On the Black Hill' was set at The Vision Farm
travelOne of the finest one-day walks you could hope for - in Britain
footballManchester City 1 Roma 1: Result leaves Premier League champions in danger of not progressing
Arts and Entertainment
Gay and OK: a scene from 'Pride'
filmsUS film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
Life and Style
Magic roundabouts: the gyratory system that has excited enthusiasts in Swindon
motoringJust who are the Roundabout Appreciation Society?
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
booksWell it was good enough for Ancient Egyptians and Picasso...
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Early Years Teacher

£90 - £120 per day: Randstad Education Hull: Early Years supply teachers neede...

Commercial Litigation NQ+

Very Competitive Salary: Austen Lloyd: NORTH HAMPSHIRE NQ to MID LEVEL - An e...


Highly Attractive Pakage: Austen Lloyd: MANCHESTER - A highly attractive oppor...

Senior Marketing Manager - Central London - £50,000

£40000 - £50000 per annum: Ashdown Group: Marketing Manager (Campaigns, Offlin...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?