931 U.S. Troops, So Far, Died For This:

So A Pack Of Corrupt Slime Can Hide Their Wealth Safely Outside Afghanistan:

“Washington Has Invested More Than $40 Billion And The Lives Of More Than 900 U.S. Service Members In A Crony Capitalism That Enriches Politically Connected Insiders”

“The Vast Majority Of This Money Flows Into The Hands Of A Tiny Minority Through Kickbacks And Insider Deals That Bind The Country’s Political, Security And Business Elites”

“‘If There Is No Kabul Bank, There Will Be No Karzai, No Government,’ Fruzi Said”

The home of Mahmoud Karzai. (Andrew Higgins/The Washington Post)

February 22, 2010 By Andrew Higgins, Washington Post [Excerpts]

KABUL -- Afghanistan’s biggest private bank -- founded by the Islamic nation’s only world-class poker player -- celebrated its fifth year in business last summer with a lottery for depositors at Paris Palace, a Kabul wedding hall.

Prizes awarded by Kabul Bank included nine apartments in the Afghan capital and cash gifts totaling more than $1 million.  The bank trumpeted the event as the biggest prize drawing of its kind in Central Asia.

Less publicly, Kabul Bank’s boss has been handing out far bigger prizes to his country’s U.S.-backed ruling elite: multimillion-dollar loans for the purchase of luxury villas in Dubai by members of President Hamid Karzai’s family, his government and his supporters.

The close ties between Kabul Bank and Karzai’s circle reflect a defining feature of the shaky post-Taliban order in which Washington has invested more than $40 billion and the lives of more than 900 U.S. service members: a crony capitalism that enriches politically connected insiders and dismays the Afghan populace.

“What I’m doing is not proper, not exactly what I should do.  But this is Afghanistan,” Kabul Bank’s founder and chairman, Sherkhan Farnood, said in an interview when asked about the Dubai purchases and why, according to data from the Persian Gulf emirate’s Land Department, many of the villas have been registered in his name.

“These people don’t want to reveal their names.”

Afghan laws prohibit hidden overseas lending and require strict accounting of all transactions.  But those involved in the Dubai loans, including Kabul Bank’s owners, said the cozy flow of cash is not unusual or illegal in a deeply traditional system underpinned more by relationships than laws.

The curious role played by the bank and its unorthodox owners has not previously been reported and was documented by land registration data; public records; and interviews in Kabul, Dubai, Abu Dhabi and Moscow.

Many of those involved appear to have gone to considerable lengths to conceal the benefits they have received from Kabul Bank or its owners.

Karzai’s older brother and his former vice president, for example, both have Dubai villas registered under Farnood’s name.

Kabul Bank’s executives said their books record no loans for these or other Dubai deals financed at least in part by Farnood, including home purchases by Karzai’s cousin and the brother of Mohammed Qasim Fahim, his current first vice president and a much-feared warlord who worked closely with U.S. forces to topple the Taliban in 2001.

At a time when Washington is ramping up military pressure on the Taliban, the off-balance-sheet activities of Afghan bankers raise the risk of financial instability that could offset progress on the battlefield.

Fewer than 5 percent of Afghans have bank accounts, but among those who do are many soldiers and policemen whose salaries are paid through Kabul Bank.

A U.S. official who monitors Afghan finances, who spoke on the condition of anonymity because he was not authorized to comment publicly, said banks appear to have plenty of money but noted that in a crisis, Afghan depositors “won’t wait in line holding cups of latte” but would be “waving AK-47s.”

Kabul Bank executives, in separate interviews, gave different accounts of what the bank is up to with Dubai home buyers.

“They are borrowers.  They have an account at Kabul Bank,” said the bank’s chairman, Farnood, a boisterous 46-year-old with a gift for math and money -- and the winner of $120,000 at the 2008 World Series of Poker Europe, held in a London casino.

The bank’s chief audit officer, Raja Gopalakrishnan, however, insisted that the loan money didn’t come directly from Kabul Bank. He said it was from affiliated but separate entities, notably a money-transfer agency called Shaheen Exchange, which is owned by Farnood, is run by one of Kabul Bank’s 16 shareholders and operates in Kabul out of the bank’s headquarters.

The audit officer said Farnood “thinks it is one big pot,” but the entities are “legally definitely separate.”

Kabul Bank prospers because Afghanistan, though extremely poor, is in places awash with cash, a result of huge infusions of foreign aid, opium revenue and a legal economy that, against the odds, is growing at about 15 percent a year.

The vast majority of this money flows into the hands of a tiny minority -- some of it through legitimate profits, some of it through kickbacks and insider deals that bind the country’s political, security and business elites.

The result is that, while anchoring a free-market order as Washington had hoped, financial institutions here sometimes serve as piggy banks for their owners and their political friends.

Kabul Bank’s executives helped finance President Hamid Karzai’s fraud-blighted reelection campaign last year, and the bank is partly owned by Mahmoud Karzai, the Afghan president’s older brother, and by Haseen Fahim, the brother of Karzai’s vice presidential running mate.

A review of Dubai property data and interviews with current and former executives of Kabul Bank indicate that Farnood and his bank partners have at least $150 million invested in Dubai real estate.  Most of their property is on Palm Jumeirah, a man-made island in the shape of a palm tree where the cheapest house costs more than $2 million.

Responsibility for bank supervision in Afghanistan lies with the Afghan central bank, whose duties include preventing foreign property speculation. The United States has spent millions of dollars trying to shore up the central bank. But Afghan and U.S. officials say the bank, though increasingly professional, lacks political clout.

The central bank’s governor, Abdul Qadir Fitrat, said his staff had “vigorously investigated” what he called “rumors” of Dubai property deals, but “unfortunately, up until now they have not found anything.”

Fitrat, who used to live in Washington, last month sent a team of inspectors to Kabul Bank as part of a regular review of the bank’s accounts. He acknowledged that Afghan loans are “very difficult to verify” because “we don’t know who owns what.”

Kabul Bank’s dealings with Mahmoud Karzai, the president’s brother, help explain why this is so.

In interviews, Karzai, who has an Afghan restaurant in Baltimore, initially said he rented a $5.5 million Palm Jumeirah mansion, where he now lives with his family. But later he said he had an informal home-loan agreement with Kabul Bank and pays $7,000 a month in interest.

“It is a very peculiar situation. It is hard to comprehend because this is not the usual way of doing business,” said Karzai, whose home is in Farnood’s name.

Karzai also said he bought a 7.4 percent stake in the bank with $5 million he borrowed from the bank. 

But Gopalakrishnan, the chief audit officer, said Kabul Bank’s books include no loans to the president’s brother.

Also in a Palm Jumeirah villa registered in Farnood’s name is the family of Ahmad Zia Massoud, Afghanistan’s first vice president from 2004 until last November.

The house, bought in December 2007 for $2.3 million, was first put in the name of Massoud’s wife but was later re-registered to give Farnood formal ownership, property records indicate.

Massoud, brother of the legendary anti-Soviet guerrilla leader Ahmad Shah Massoud, said that Farnood had always been the owner but let his family use it rent-free for the past two years because he is “my close friend.” Massoud added: “We have played football together. We have played chess together.”

Farnood, however, said that though the “villa is in my name,” it belongs to Massoud “in reality.”

Haseen Fahim, the brother of Afghanistan’s current first vice president, has been another beneficiary of Kabul Bank’s largesse.

He got money from Farnood to help buy a $6 million villa in Dubai, which, unusually, is under his own name.

He borrowed millions more from the bank, which he partly owns, to fund companies he owns in Afghanistan.

In an interview at Kabul Bank’s headquarters, Khalilullah Fruzi, who as chief executive heads the bank’s day-to-day operations, said he didn’t know how much bank money has ended up in Dubai.

If Karzai’s relatives and others buy homes “in Dubai, or Germany or America . . . that is their own affair,” Fruzi said, adding that the bank “doesn’t give loans directly for Dubai.”

Fruzi, a former gem trader, said Kabul Bank is in robust health, makes a profit and has about $400 million in liquid assets deposited with the Afghan central bank and other institutions. Kabul Bank is so flush, he added, that it is building a $30 million headquarters, a cluster of shimmering towers of bulletproof glass.

The bank is also spending millions to hire gunmen from a company called Khurasan Security Services, which, according to registration documents, used to be controlled by Fruzi and is now run by his brother.

***********************************************

The roots of Kabul Bank stretch back to the Soviet Union. Both Fruzi and Farnood got their education and their start in business there after Moscow invaded Afghanistan in 1979.

While in Moscow, Farnood set up a successful hawala money-transfer outfit to move funds between Russia and Kabul.  Russian court documents show that 10 of Farnood’s employees were arrested in 1998 and later convicted of illegal banking activity.  Fearful of arrest in Russia and also in Taliban-ruled Afghanistan, Farnood shifted his focus to Dubai.

In 2004, three years after the fall of the Taliban regime, he got a license to open Kabul Bank.  His Dubai-registered hawala, Shaheen Exchange, moved in upstairs and started moving cash for bank clients.

It last year shifted $250 million to $300 million to Dubai, said the chief audit officer.

The bank began to take in new, politically connected shareholders, among them the president’s brother, Mahmoud, and Fahim, brother of the vice president, who registered his stake in the name of his teenage son.

Fahim said two of his companies have borrowed $70 million from Kabul Bank. Insider borrowing, he said, is unavoidable and even desirable in Afghanistan because, in the absence of a solid legal system, business revolves around trust, not formal contracts. “Afghanistan is not America or Europe. Afghanistan is starting from zero,” he said.

Fahim’s business has boomed, thanks largely to subcontracting work on foreign-funded projects, including a new U.S. Embassy annex and various buildings at CIA sites across the country, among them a remote base in Khost where seven Americans were killed in a December suicide attack by a Jordanian jihadiist.

“I have good opportunities to get profit,” Fahim said.

Kabul Bank also plunged into the airline business, providing loans to Pamir Airways, an Afghan carrier now owned by Farnood, Fruzi and Fahim.  Pamir spent $46 million on four used Boeing 737-400s and hired Hashim Karzai, the president’s cousin, formerly of Silver Spring, as a “senior adviser.”

Farnood said he also provided a “little bit” of money to help Hashim Karzai buy a house on Palm Jumeirah in Dubai.

Karzai, in brief telephone interviews, said that the property was an investment and that he had borrowed some money from Farnood.  He said he couldn’t recall details and would “have to check with my accountant.”

Noor Delawari, governor of the central bank during Kabul Bank’s rise, said Farnood and his lieutenants “were like wild horses” and “never paid attention to the rules and regulations.”

Delawari said he didn’t know about any property deals by Kabul Bank in Dubai.

He said that he, too, bought a home in the emirate, for about $200,000.

Fitrat, the current central bank governor, has tried to take a tougher line against Kabul Bank and its rivals, with little luck. Before last year’s presidential election, the central bank sent a stern letter to bankers, complaining that they squander too much money on “security guards and bulletproof vehicles” and “expend large-scale monetary assistance to politicians.”

The letter ordered them to remain “politically neutral.”

Kabul Bank did the opposite: Fruzi, its chief executive, joined Karzai’s campaign in Kabul while Farnood, its poker-playing chairman, organized fundraising events for Karzai in Dubai.

One of these was held at the Palm Jumeirah house of Karzai’s brother.

The government has returned the favor.

The ministries of defense, interior and education now pay many soldiers, police and teachers through Kabul Bank. This means that tens of millions of dollars’ worth of public money sloshes through the bank, an unusual arrangement, as governments generally don’t pump so much through a single private bank.

Soon after his November inauguration for a second term, President Karzai spoke at an anti-corruption conference in Kabul, criticizing officials who “after one or two years work for the government get rich and buy houses in Dubai.”

Last month, he flew to London for a conference on Afghanistan, attended by Secretary of State Hillary Rodham Clinton and other leaders, and again promised an end to the murky deals that have so tarnished his rule.

Also in London for the conference were Farnood, who now has an Afghan diplomatic passport, and Fruzi, who served as a financial adviser to Karzai’s reelection campaign and also owns a house in Dubai.

“If there is no Kabul Bank, there will be no Karzai, no government,” Fruzi said.

**************************************************

Chart Of Dubai Real Estate Deals For Afghans

Connected To Karzai:

Companies Owned By The Founder Of Kabul Bank Have Financed Several Properties In Dubai For People Connected To Afghan President Hamid Karzai

MORE:

In Marjah, U.S. Command Begs A Rich Opium-Growing Landlord To Help The Occupation Take Control:

“We Need To Bring Him Over To Our Side”

“Most Of His Tenants Are Impoverished Nomads Who Settled In The Area To Plow His Fields For A Share Of The Crop”

While U.S. Officers Enjoy Dinner With The Drug Lord, A Marine Is Killed In His Poppy Fields

Feb. 23, 2010 The Associated Press

MARJAH, Afghanistan - Bouwudin courteously greeted the Afghan and American officers who came to meet him, offering tea and eventually a meal as the meeting lingered on.

No amount of invitations could get him to walk a few hundred yards to the Marines base.

“I’m sorry, but I can’t do that, it’s too early,” said Bouwudin, a tribal chief.  “I’ll go when security has come back.”

Despite an 11-day-old U.S.-led attack to capture the Taliban stronghold of Marjah, most Afghan tribal leaders in this town are like Bouwudin — still sitting on the fence.

The mission may be proceeding militarily but it has not yet won over the people who matter most.

“If you leave again, I’ll have too many problems with the Taliban,” Bouwudin said with a polite smile as servants poured more cups of tea to guests sitting on rugs next to the mud-brick wall circling his fortress-like compound.

Safety wasn’t the issue in Bouwudin’s refusal to visit the American base.

He simply didn’t want to be seen with NATO troops.

The Marines made no fuss about it.  They knew Bouwudin had worked with NATO before, only to be beaten and jailed by the Taliban when they moved in when British forces left in 2007.

His family had to pay a ransom for his release. When British and Afghan troops reclaimed the town again in March last year, Bouwudin stayed away. It was a wise move because the British pulled out again.

Winning over people like Bouwudin is key to NATO’s efforts in the embattled Afghan south.

The critical step is to prove that American troops and Afghan units are going to stay — and provide better governance than the strict Islamist Taliban, who, residents say, at least ruled the town without corruption and allowed the lucrative opium poppy business to thrive.

“He’s exactly the kind of person we call ‘on the fence,’“ says Lt. Col. Brian Christmas, the commander of 3rd Battalion, 6th Marines.

“We need to bring him over to our side, because if he does, the population will follow.”

As he met with Bouwudin, Christmas promised over a dozen schools, a health clinic, roads and — most importantly — professional police forces permanently stationed in the area.

Bouwudin, who like many Afghans goes by only one name, winced at the idea.  “When police were here, they stole all the time,” he said. “People were relieved to have the Taliban back.”

Capt. Abdelhai Hujum, the Afghan army commander for the area, promised it would be different this time.

But all attempts to establish a modern administration won’t succeed in Helmand province without the support of Bouwudin’s own power base.

Bouwudin, about 45, holds over 3,000 acres of land granted to his late father by the king of Afghanistan in the 1960s, after Americans dug a large irrigation canal system through Marjah.

While he belongs to an aristocratic clan of the Pashtun ethnic group — like the Taliban leadership, the former king, and President Hamid Karzai himself — most of his tenants are impoverished nomads from the Kochi tribe who settled in the area to plow his fields for a share of the crop — now almost exclusively opium poppies.

Many villages across Afghanistan have a ‘malek,’ or local chief, acting somewhat like a mayor.

But Bouwudin is much more than that.

To explain the difference, he pulls a tin box of chewing tobacco from his pocket. “A malek is like this tobacco,” Bouwudin says, tucking a pinch under his lower lip. “You take it, and then you spit it out,” he says with a smile.

“But a khan is like the box,” a permanent fixture.

“We live under his shadow,” said Zaher, one of the frightened civilians who greeted U.S. Marines when they entered the town Feb. 13. Bouwudin says the tenants who steered the troops away from some of the numerous minefields laid by insurgents were sent on his orders. He says he’d be relieved to see the Taliban gone for good.

But intelligence officers know he’s had a working relationship with the Taliban too, if only because he grows several thousand acres of poppies used to refine heroin.

Bouwudin won’t discuss the subject, but intelligence officers say 10 percent of the crop’s worth certainly went as a tax to the insurgency. Tenants swear they know nothing about the deal.

“People came only by night to buy the poppies,” Zaher says. “They went straight inside Bouwudin’s house.”

He says the khan then handed some money back to the farmers: their fields’ equivalent for a crop of wheat — much, much less than the roughly $2,000 an acre that opium poppies have been going for.

Learning from errors of the past, NATO does not plan to antagonize farmers by destroying their poppy crops, fearing that could build support for the Taliban.

“This is not a counter-narcotics operation,” insists John Weston, a senior member of the Provincial Reconstruction Team, or PRT, as NATO’s civilian arm is known in Helmand province.

Drug Enforcement Administration teams moving in the wake of the Marines are tasked with finding traffickers and heroin factories — but not destroying crops.

The khan, who won’t have his picture taken for security reasons, says he’d be happy to try out alternative crops.

“If you stay, we can do a lot of work together,” he told Marine officers.

But alternative crops were not on the mind of the Marines during the meeting. They’ve been tasked with securing the town, and know the khan can help them.

They repeatedly asked how insurgent gunmen keep crossing through his area to fire at the troops.

Even as the meeting went on, the sound of gunshots and rockets grew more intense as Marines battled an insurgent unit just a few blocks away.

“I don’t know these fighters, I don’t talk to them,” Bouwudin said, escorting his guests indoors to avoid stray bullets.

The Pashtun code of honor — the Pashtunwali — requires he provide protection to guests in his home. If the Taliban had showed up at the door and demanded he hand over the Americans, it would be a huge breach of honor to have done so.

Others weren’t so lucky.

The khan’s guests had barely finished eating their omelet when the word “angel” rang out on the Marines’ handheld radio sets.  That’s the code word for someone killed in action.

A Marine had just fallen to Taliban bullets in Bouwudin’s nearby fields.

IRAQ WAR REPORTS

Mortar Attack On U.S. Base In Baghdad

Feb 22 REUTERS

Two mortar rounds landed in or near a complex that used to house Saddam Hussein’s central security directorate in eastern Baghdad, an Interior Ministry source said.

The complex was now used as a U.S. base.

No casualties were reported.

3 Mortar Rounds Hit Green Zone:

Nationality Of Wounded Not Announced

Feb 22, 2010 By Rebecca Santana - The Associated Press & Reuters

BAGHDAD — Three mortar rounds hit central Baghdad’s heavily fortified Green Zone on Monday, injuring at least six people and damaging homes and cars, in the latest attack on government targets ahead of March 7 elections.

A police officer in the nearby Kharkh police department said he did not know whether Iraqi or American military personnel were among the injured.

One loud blast woke many residents in the Iraqi capital at dawn.

Police said the mortar bombs damaged several cars in the Green Zone, which used to be under the control of the U.S. military but was handed over to Iraqi security forces last year.

The U.S. military said it had a report of an indirect fire incident in the Green Zone, referring to a rocket or mortar attack, but had no further information.

Resistance Action

Feb 21 (Reuters) & Feb 22 REUTERS & Feb 23 (Reuters) & Feb 24 (KUNA)

A judge specialized in cases of terrorism was assassinated in his house in northern Baghdad today, Iraqi police said Wednesday.  A bomb detonated in Justice Mohammad Abdulghafour’s house in Al-Doura neighborhood, police said.

A roadside bomb targeting a police patrol wounded two policemen in northern Mosul, 390 km (240 miles) north of Baghdad, police said.

A car bomber targeting a police headquarters killed a policeman, and wounded seven policemen in western Ramadi, 100 km (60 miles) west of Baghdad, police and hospital sources said.

An insurgent killed a policeman in central Baghdad, police said.

Insurgents shot dead a police officer in a drive-by shooting in southeastern Kirkuk, police said.

Insurgents in a car fired on an Iraqi army checkpoint, killing two soldiers, in eastern Mosul, police said.

Insurgents shot dead two policemen at a checkpoint in central Mosul, police said.

Two military personnel working in the Iraqi Defence Ministry were shot dead by Insurgents in a speeding car in northern Baghdad, police said.

A police officer assigned to the Interior Ministry and a civilian employee of the ministry were wounded by unknown insurgents as they sat in a car in Baghdad, police said.

Unknown insurgents in a car shot dead Thamer Kamel, a staff member of the Ministry of Higher Education, while he sat in his vehicle in northern Baghdad, police said.

Five police officers were killed and one wounded when a roadside bomb targeted a patrol assigned to protect power installations near Khanaqin, 140 km (86 miles) northeast of Baghdad, police said.

Attackers in a speeding car shot and killed an off-duty policeman in central Mosul, 390 km (290 miles) north of Baghdad, police said.

A car bomber targeting a police headquarters killed a policeman and wounded three in western Ramadi, police said.

Insurgents killed two policemen at a checkpoint in eastern Mosul, 390 km (240 miles) north of Baghdad, police said.  Also, a sticky bomb attached to a car killed an off-duty policeman

A roadside bomb targeting a police patrol wounded a policeman in southern Kirkuk, 250 km (155 miles) north of Baghdad, police said.

Clashes between Iraqi soldiers and guerrilla fighters killed a soldier and an assailant at a checkpoint on Monday in Mosul, police said.

Two policemen were wounded when a bomb they were trying to diffuse detonated on Monday in Tikrit, police said.

A bomb blew up in front of a police officer’s house, wounding one person on Monday northwest of Kirkuk, police said.

Al-Sadr Movement Promises To Fight Only U.S. Forces

February 25, 2010 Kuwait Times

BAGHDAD: A powerful political group contesting Iraq’s parliamentary vote next month says it may challenge the validity of multi-billion-dollar oil deals the country has signed with foreign firms.

Hazim Al-Araji, a senior member of Shiite cleric Moqtada Al-Sadr’s political movement, also intends to oppose the return in the next government of incumbent prime minister and poll candidate Nuri Al-Maliki, under whom the deals were signed.

“The Mehdi Army is there, but only to fight the occupiers. There will be no activities against anyone but the occupiers, who are the US forces, not civilians or foreign companies.”

AFGHANISTAN WAR REPORTS

931 U.S. Fatalities In And Around Afghanistan, So Far:

[Falsifications Discredit Our Cause And Our Movement]

[Despite the screeching earlier this week claiming 1000 U.S. troops dead in the war on Afghanistan, that report was a fraud.

[Falsifications make people involved in efforts to stop Imperial wars look stupid, look like liars, or look like stupid liars. 

[Falsifications of the number of U.S. troops killed is inexcusable when the falsified number is used as a supposed reason to demonstrate against that war in memory of U.S. troops killed.

[Organizations which whip up activity based on fraud, but who refuse to do face-to-face outreach to troops organizing to resist Imperial war, do political service for the benefit of the U.S. Empire.  It is unnecessary to wait for 69 more U.S. troops to be killed to take constructive action to stop the slaughter of both of U.S. troops and Afghans.  T]

Total Fatalities: 931:

Includes Fatalities that occurred in Afghanistan, Pakistan, and Uzbekistan.

This total also includes service members who died from wounds received in Afghanistan, Pakistan, and Uzbekistan.

Hawaiian Soldier Killed At Senjaray

February 23, 2010 U.S. Department of Defense News Release No. 145-10

Pfc. JR Salvacion, 27, of Ewa Beach, Hawaii, died Feb. 21 at Senjaray, Afghanistan, of wounds suffered when insurgents attacked his unit with an improvised explosive device. He was assigned to the 1st Battalion, 12th Infantry Regiment, 4th Brigade Combat Team, 4th Infantry Division, Fort Carson, Colo.

Romanian Soldier Killed In Zabul;

Another Wounded

23 Feb 2010 Press TV & Balkan Investigative Reporting Network

A soldier was killed and another one wounded in Afghanistan when their vehicle drove over an explosive device, Romania’s Defence Ministry said on Tuesday.

The ministry added the soldiers were on patrol on the highway between Kabul and Kandahar, in Zabul province.

The dead soldier was identified as 31-year-old Sgt. Maj. Florin Badiceanu.