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$4B Taken Out Of Afghanistan Every Year

From the Wall Street Journal:

Corruption Suspected in Airlift of Billions in Cash From Kabul

By MATTHEW ROSENBERG

JUNE 25, 2010

KABUL—More than $3 billion in cash has been openly flown out of Kabul International Airport in the past three years, a sum so large that U.S. investigators believe top Afghan officials and their associates are sending billions of diverted U.S. aid and logistics dollars and drug money to financial safe havens abroad.

The cash—packed into suitcases, piled onto pallets and loaded into airplanes—is declared and legal to move. But U.S. and Afghan officials say they are targeting the flows in major anticorruption and drug trafficking investigations because of their size relative to Afghanistan’s small economy and the murkiness of their origins.

Officials believe some of the cash, if not most, is siphoned from Western aid projects and U.S., European and NATO contracts to provide security, supplies and reconstruction work for coalition forces in Afghanistan. The North Atlantic Treaty Organization spent about $14 billion here last year alone. Profits reaped from the opium trade are also a part of the money flow, as is cash earned by the Taliban from drugs and extortion, officials say.

The amount declared as it leaves the airport is vast in a nation where the gross domestic product last year totaled $13.5 billion. More declared cash flies out of Kabul each year than the Afghan government collects in tax and customs revenue nationwide. "It’s not like they grow money on trees here," said a U.S. official investigating corruption and Taliban financing. "A lot of this looks like our tax dollars being stolen. And opium, of course."

Most of the funds passing through the airport are being moved by often-secretive outfits called "hawalas," private money transfer businesses with roots in the Muslim world stretching back centuries, officials say.

The officials believe hawala customers who have sent millions of dollars of their money abroad include high-ranking officials and their associates in President Hamid Karzai’s administration, including Vice President Mohammed Fahim, and one of the president’s brothers, Mahmood Karzai, an influential businessmen

Between the beginning of 2007 and February of this year, at least $3.18 billion left through the airport, according to Afghan customs records reviewed by The Wall Street Journal.

U.S. officials say the sum of declared money may actually be higher: One courier alone carried $2.3 billion between the second half of 2008 and the end of 2009, said a senior U.S. official, citing other documents that are in the possession of investigators…

The declared cash is believed to represent only "a small percentage" of the money moving out of the airport and all of Afghanistan, said Gen. M. Asif Jabar Khail, the chief customs officer at Kabul’s airport.

Hundreds of millions of undeclared dollars, maybe billions, are being carried across Afghanistan’s porous border with Iran and Pakistan, where a number of Afghan hawalas have branches, he said.

One figure often cited by Afghan and Western officials is $10 million a day leaving Afghanistan. That is $3.65 billion a year, more than a quarter of the current GDP

The formal banking system here is in its infancy, and hawalas form the backbone of the financial sector. The State Department says that 80% to 90% of all financial transactions in Afghanistan run through hawalas.

Hawala networks run on what is effectively an honor system and much of the business they do is legitimate.

At their simplest, a customer drops off money at one dealer and is given a numeric code or password, which is then used by the money’s recipient when the cash is picked up elsewhere.

The hawala operators then settle up among themselves…

Most of the cash loads are taken on one of the eight flights a day from Kabul to Dubai in the United Arab Emirates. Wealthy Afghans have long parked their money in Dubai

Your tax money at waste.

This also shows that the corrupt officials have heard about Mr. Obama’s withdrawal date, too.

This article was posted by Steve on Monday, June 28th, 2010. Comments are currently closed.

7 Responses to “$4B Taken Out Of Afghanistan Every Year”

  1. Mithrandir says:

    As per usual you have to factor in about 35% of all government spending to go to Fraud / Waste / Abuse.

    Until you treat government workers, officials, and anyone on the public dole, like the lowliest street thugs, increase punishments for violating the public trust 10X, you will keep getting the arrogant smug “what are you going to do about it” smirk from them every time.

  2. AcornsRNutz says:

    This just goes to show that the counter insurgency tactic of plying the enemy with money for schools and infrastructure (Mchrsytal having been a proponent of this) is a damned foolish pile of stupidity and is getting us shot up for almost no gain. What we should do instead is sew every poppy feild in the country with salt, and provide not a penny to that country until we have killed every last taliban fighter and his whole family. People will be hurt, there wil be suffering by the poor farmers, yada yada yada. I don’t care. The only other tactic that can be tried is eliminate everyone, and fortunately for the world and contrary to what these libwits would have you think, America doesn’t fight that way. It doesn’t work very well either. But pouring money into that shithole is an abject waste of effort, money and lives.

  3. proreason says:

    $4B.

    A slow month for the criminals in Washington.

  4. Right of the People says:

    The Won is very angry about this. Those funds should be going into his re-election fund.

    • Rusty Shackleford says:

      You beat me to it. At least it’s not money that’s under direct control of the regime.

      There has to be some good in that.

  5. tranquil.night says:

    It’s possible we might still be getting more value from this than the stimulus. In fact, Karzai’s bunch (in addition to many radical Islamic organizations) seem to have picked up on an uncanny number of Leftist administrative and political tricks to fool people while you’re funneling their charity and good-will into a black hole or worse.

  6. chabuka says:

    No wonder “we” couldn’t afford the public option or medi-care for all…our tax money is going to a corrupt government (U.S. puppet) in Afghanistan…this will be Obama’s Viet Nam…Bush won’t be blamed for it..even though it IS the Bush policy that Obama is continuing


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