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US withholds $4 billion in Afghanistan war aid. Can Gen. Petraeus cope?

Gen. David Petraeus's strategy in the Afghanistan war relies on money for reconstruction and development. But Congress says it will withhold $4 billion in Afghan aid unless rampant corruption is stopped.

By Staff writer / July 1, 2010

Newly appointed U.S. and NATO forces commander in Afghanistan U.S. Army General David Petraeus speaks during a media conference at NATO headquarters in Brussels on Thursday.

Virginia Mayo/AP Photo

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Kabul, Afghanistan

General David Petraeus is about to take over the war in Afghanistan at a time when a weapon that the military views as crucial to success is being taken out of his hands. The weapon? Money.

Yesterday, the House budget committee withheld $4 billion in Afghanistan aid from the next budget over allegations that Afghan officials and foreign contractors have been stealing much of the country’s aid.

General Petraeus briefed NATO allies in Brussels on Thursday before heading towards Afghanistan, and assured them that the current counterinsurgency strategy for the war – which blends offensive operations against the Taliban with quick development and governance improvements to convince Afghan citizen’s they’re better off without them – will remain on course.

But with Congress threatening to tighten the purse strings and angry responses from Afghan officials, who say that allegations the government of President Hamid Karzai is protecting its friends are false, a key portion of Petraeus's strategy could be undermined.

Over the past year, rumors of rampant corruption here have hardened into strong suspicions, with US officials both praising greater Afghan efforts to combat corruption and expressing frustration that investigations of politically-connected businessmen are being blocked by high officials.

“It’s clear that a lot of money is being stolen by people close to the government,” says a Western diplomat here who asked not to be named. “But how high it goes is difficult to prove.”

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Karzai looking into corruption

Qaseem Ludin, the deputy director of Afghanistan’s corruption oversight agency, admits problems, but says that President Karzai is not standing in the way. “President Karzai has asked us to look at all the high-level officials – including his brothers – and to take action if we find anything,” Mr. Ludin says. “Yes, judges take bribes, there are kickbacks, I admit we’re in a tough fight. But we’re starting to take action.”

US officials and local politicians allege that Mr. Karzai’s brothers have enriched themselves thanks to their connections. Mahmoud Karzai, the president’s older brother who has investments in property, a bank, and companies that contract to the NATO coalition, says the allegations are motivated by political rivalry and have no merit.

“These allegations are politically motivated and, frankly, stupid,” he says. “I have nothing to hide. This about trying to make President Karzai weak.”

US military and civilian officials say corruption, and perceptions of corruption, have been a dominant factor in communities in Afghanistan’s south where the Taliban is the strongest, and some US politicians are beginning to wonder if development aid on the scale planned here is possible at all.

This week, the Wall Street Journal quoted the head of customs at the Kabul airport as saying that $3 billion in cash has been flown out of the country (Afghanistan’s annual GDP is worth about $11 billion) and the Washington Post quoted unnamed US officials as saying that the government has protected senior officials and connected-businessmen from prosecution.

US diplomatic pressure

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