$1bn fraud at Kabul Bank puts UK's Afghan pull-out in peril

[avaistheone1]

Source: The Independent

Coalition plans to pull out of Afghanistan are being hampered by theft and fraud totalling nearly $1bn, The Independent on Sunday can reveal. Hopes of a timely withdrawal of British troops from the region have been dealt a critical blow by revelations about massive bank frauds which have forced donors to suspend vital international aid.

The Department for International Development (DfID) confirmed last night that it had followed the lead of the International Monetary Fund (IMF) in withholding contributions to bankroll hundreds of "nation-building" projects in Afghanistan.

The move, to "protect taxpayers' money", came as the full extent of the scandal at Kabul Bank – described as the biggest fraud in modern times – became clear. A secret US government report into the debacle "indicates that insiders at Kabul Bank used fraudulent loans to misappropriate $850m (£525m), representing 94 per cent of outstanding loans".

The document points the finger at the former chairman and the former chief executive of Kabul Bank, and criticises the top accountancy firm Deloitte for not doing enough in response to allegations of corruption at the bank. It also highlights how auditors from PricewaterhouseCoopers (PwC) failed to spot any signs of fraud.

Read more: http://www.independent.co.uk/news/world/asia/1bn-fraud-at-kabul-bank-puts-uks-afghan-pullout-in-peril-2287602.html

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Stunning. Absolutely stunning.


Also-

Report on Kabul Bank Corruption Is Classified, Taken Offline

An eye-opening report on corruption in the Afghan Central Bank that was issued last March by the Inspector General of the U.S. Agency for International Development was recently removed from the USAID web site after the Agency decided to classify some of its published contents.

The now-classified IG report focused on the failure to discover a widespread pattern of fraudulent loans at the Kabul Bank which led to the diversion of $850 million, the near collapse in 2009 of the bank, and an ensuing national crisis. Employees of the Deloitte accounting firm, who were serving as advisers to the bank under contract to USAID, could and should have alerted the U.S. government to early signs of fraud, the Inspector General found, but they did not. (Instead, the U.S. government learned of the bank corruption thanks to a February 22, 2010 story in the Washington Post.)

But in the past week or so, the March 16, 2011 USAID Inspector General report (pdf) was abruptly withdrawn from the Agency’s website.
Why? Because USAID retroactively classified certain information in the report.

“At the time our report was issued, it was written utilizing information from non-classified sources,” said James C. Charlifue, the chief of staff of the USAID Office of Inspector General. “After our report had been issued, USAID subsequently classified two documents that were cited in our report. This action resulted in the report becoming classified and we removed it from the web site,” he told Secrecy News.

http://www.fas.org/blog/secrecy/2011/05/kabul_bank.html

[DeSwiss]

1. There is no honor among thieves. - K&R n/t

[plumbob]

2. Pfft. Only ONE billion. Need to check the '08 bailout in the US for

massive fraud. Now THOSE guys know their thievery!

[DeSwiss]

3. Ah, of course.

- But then, "THOSE" guys are the House. It's their cards and sea-water rules....

[Arctic Dave]

4. We must stay longer because the scumbags and thugs we installed are, well,

acting like scumbags and thugs.


It says a lot about you by the company you keep.

[JDPriestly]

5. Retroactive classification of a document.

This looks like a document that was classified to prevent embarrassment to the governments and AID agencies involved.

I could be wrong, but that is how this looks to an uninformed observer.

I hope we will eventually hear the whole story on this.

The classification process should not be used to cover up crimes or embarrassing facts.

[earcandle]

6. yep... I 've pointed out some embarrassing facts..

[iwishiwas]

7. Who is our government had the authority to classify them and who

knew about this?

[No Elephants]

10. Dunno. I couldn't find a listing for "U.S. Office of Classifying Stuff That's Already Been Online."

[liam_laddie]

8. Stunning but not surprising.

The executive branch and its enablers in other branches, whether elected, appointed or career, all bear responsibility for the CYA disease metastasizing in DC. Please read Jane Mayer's excellent story in the current "New Yorker" about the NSA and DOJ's prosecution of NSA whistleblower Thomas Drake.
There is no doubt in my mind that this is due to massive embarrassment in the so-called security apparatus - CIA, NSA, etc. ad infinitum - and not at all an attempt to "protect" this country. Among other reasons, they are out to please the corpo/plutocracy, which might offer cushy retirements to the main players.
I believe tha vast majority of government employees are honest, dedicated public servants (my ex-father-in-law was one) but there are toadies and miscreants in all organizations.
WHY don't we read about these scandals in the MSM here in the USA? Self-evident answer, IMO. We need an expanded definition of treason, or crimes against the citizens.

[No Elephants]

9. So many ironies, so little time.

[Larry L. Burks]

13. That’s right.

If X marks the spot.

Y. fold the laundry

Get the gun.

Not that gun. Stupid.

Get the elephant gun.

[Name removed]

11. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Hotler]

12. The corruption runs wide and deep

and the silence about it is deafening.

[Downwinder]

14. No Problem. We'll just take it out of SS or Medicare.