Vast sums of aid continue to be stolen in Afghanistan

Despite years of supposed effort to stop money laundering out of Kabul airport, billions continue to flow from the country unchecked.

By , Staff writer

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    Afghan soldiers stand guard outside an airport gate in Kabul, after a shooting incident in Kabul, Afghanistan, in this April 2011 file photo.
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In the summer of 2010, the US decided to do something about the enormous sucking sound being generated by the bulk cash shipments funneling through Afghanistan's Kabul airport and on to Dubai, Zurich, and London – every point of the compass, really.

With Afghanistan's two principal cash crops being opium and slicing chunks off the top of international aid, there were no prizes for guessing where the tens of billions of dollars transferred from Afghanistan since the US-led war began in 2002 came from, or how the luxury villas of so many Afghan officials in the United Arab Emirates had been paid for.

So, the US embassy in Kabul created a "bulk cash flow action plan" and the Karzai government said it was on board. The results since? Well, around $4.5 billion flowed out of Afghanistan in 2011, according to the Congressional Research Service, the vast majority of it unmonitored and unregistered. That's about 22 percent of gross domestic product, an astonishing amount of capital flight.

Recommended: How well do you know Afghanistan? Take our quiz.

How is the plan doing this year? About the same as last year, according to a report from the Special Inspector General for Afghanistan Reconstruction (SIGAR), a US government auditor, released today.

The failure so far is a reminder that nice-seeming US plans in Afghanistan rarely achieve their desired results, and that the Afghan government's will to rein in corruption has consistently ended with empty promises made across conference tables for a decade now.

What happened?

The US government bought high-tech currency counting machines, that could process 900 bills a minute and record both their value and their serial numbers. The machines were supposed to be electronically connected to the Afghan central bank, so that officials there could monitor who was taking money out of the country, how often, and investigate accordingly.

There was only one problem: Afghan officials decided not to fully install the machines. In 2011, US government auditors found that Afghans running the machines at Kabul airport were not recording serial numbers or transmitting information to the central bank. Without those steps, the machines were essentially useless. What's more, any person granted "VIP" status by the Afghan government of President Hamid Karzai could carry as much cash as they liked through the airport without having it counted.

That was more than a year ago, so between September and November, SIGAR auditors revisited Kabul airport to see how Afghanistan had done in delivering on promises to address the problem. As with the first set of promises, nothing was actually done.

"We found that, more than 1 year since our last visit to [Kabul airport], the cash counters are still not being used for their intended purpose, and VIPs continue to bypass key controls," SIGAR writes in the report, Anti-Corruption Measures: Persistent Problems Exist in Monitoring Bulk Cash Flows at Kabul International Airport. "A new Very Very Important Persons (VVIP) lounge was built to provide easier boarding access for high-ranking officials, again allowing transit without main customs screenings or use of a bulk currency counter."

Why aren't efforts being made to deal with money laundering? According to a US Department of Homeland Security official interviewed by SIGAR, Afghan customs officials at Kabul airport are "afraid that they would experience negative repercussions from [the Afghan government] if progress in instituting controls at the airport was made. As of October 2012, according to DHS officials, efforts to connect the bulk currency counters to the internet or a computer server were 'at a standstill.'"

That was the environment in which President Barack Obama conducted his expensive surge at the urging of Gen. David Petraeus, the since-disgraced former commander of the Afghan war and former CIA boss. This is not a case where a huge amount of resources, or technical skills that don't exist in the Afghan population, are required. It's entirely a matter of whether Afghanistan's political class and business elites are willing to have their activities subjected to scrutiny and accountability.

"Although proper controls to monitor cash flows are important for any country to institute, they are particularly critical for a country fraught with corruption, narcotics trafficking, and insurgent activity," SIGAR writes. "In 2010, Ambassador Eikenberry presciently noted that 'many of these measures [in the bulk cash flow action plan] require few, if any, additional resources; their success depends largely on the degree of [Afghan government] political will.'”

The answer so far has been "you can't make us," and that's something US policymakers, and voters, should keep in mind, particularly when considering how much more money to bequeath to the Afghan military. Another US government report out today on Afghanistan says that after 10 years of training and equipping the Afghan National Army, at a cost of well over $20 billion, only one of 23 combat brigades is capable of operating without US financial and professional assistance.

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