Karzai says West had role in bank crisis, wants US ties reviewed

KABUL – Afghan President Hamid Karzai blamed the international community on Monday for playing a part in a huge corruption scandal at the country’s biggest lender, and called for a traditional “jirga” summit to review strategic ties with the United States.
The gathering of hundreds of community leaders should be held in around two or three months, he said, adding that Afghanistan would not be dominated by the bigger power.
“The first condition of this strategic partnership is that they should bring us peace,” he said. “We have put forward many conditions and we have tied their hands and feet.”
Addressing a banking scandal that has jeopardised the country’s flow of aid, because of disputes with the IMF about how to handle it, Karzai warned that those responsible for bad loans would have to repay within a month or face prosecution. Politically well-connected Kabulbank lost hundreds of millions of dollars through fraud, bad loans and mismanagement until the scandal emerged late last year.
Among three senior shareholders and former executives of the failed bank now under investigation is Mohammad Haseen, the brother of Afghanistan’s First Vice President Mohammad Qasim Fahim. The president’s brother Mahmoud Karzai is a shareholder, but he is not under investigation in Afghanistan.
“Those who have committed these violations must be prosecuted,” Karzai told a news conference in the Afghan capital. But he gave few concrete details about plans for Kabulbank — even though Afghanistan has agreed to break-up the lender — and repeatedly said international governments and institutions bore some responsibility for the bank’s failure.
His comments are likely to rile diplomats in Kabul, who have been at loggerheads with the Afghan government for months over the fate of the bank, and have long denied any role in the collapse of a private institution.
Karzai denounced a spectrum of wrongdoing by the bank’s managers but also warned of possible foreign corruption.
“Internal and external factors played a role. (On the internal side) negligence, recklessness, lack of experience, lack of knowledge in dealing with banking,” he said, without mentioning corruption.