Abdul Qadeer Fitrat, the former governor of the Afghan central bank, fled the country Monday amid a scandal over corruption at Kabul Bank, which was taken over by the government last year.Now the IMF’s support of Afghanistan is said to be in jeopardy.
Fitrat says he fled because his life was in danger. He says he flew to the U.S. because, “The government, and particularly the president, knew that I knew a lot of facts about how they stole public depositors money [including] the deposits of small Afghans, farmers, carpenters … that they [had] saved in Kabul Bank … they [the government] had used that money for political campaigns and they knew I had evidence for that.”
Fitrat might have found out about the allegedly fraudulent money transfers in the past few months, or he might have known about them earlier. The central bank audited Kabul Bank twice a year.
Fitrat of course argues that he found out recently, after the Afghanistan central bank took over Kabul because it nearly collapsed last year (Al Jazeera says mismanagement and questionable lending practices lead to the near-collapse).
After the central bank took it over, some people alleged that bank’s potential insolvency was caused or aggravated by the bank’s granting off-the-book loans worth a reported $900 million to prominent people like politicians, ministers, relatives of the president, a vice president, and a powerful former warlord, for example, who allegedly used the funds for various things like luxury properties in Dubai and political campaigns, for example.
Fitrat, who worked for the central bank until he resigned on Tuesday, says he lead the fraud investigation from the central bank, and that his life was threatened because of the information he possessed and had been in the process of revealing. According to Al Jazeera, Fitrat named three prominent men who were allegedly involved in the scandal at the bank in April.
According to Fitrat:
- Mahmood Karzai, the president’s brother and a former shareholder of the bank, took out $22 million
- Hassin Fahim, the vice-president’s brother, took out $78 million
- Haji Khalil Ferzoi, who had been the financial adviser during Karzai’s re-election campaign, took out $66.9 million
So that’s one side of the story, that Fitrat’s life was in danger because he had all of this alleged information about people who could afford to have him killed. Another side says that Kabul Bank was openly called a ponzi scheme by many in the country, including Western officials in Afghanistan.
But claiming that his life is threatened would be to Fitrat’s advantage even if no one wanted him dead. An arrest warrant has been sent to Interpol and the US embassy in Kabul, calling for Fitrat to be returned to Afghanistan for questioning, according to Al Jazeera. If he can convince leaders that his life is in danger, they might grant him safe exile.
That’s the other side of the story. Mahmood Karzai, the president’s brother and a former shareholder of the bank, whom Fitrat said took out $22 million, told Al Jazeera that there’s no reason for Fitrat to feel threatened.
He said, “He has merely escaped justice in Afghanistan… A new report published by the commission accuses [Fitrat] of gross negligence … he did not escape before the findings of the commission. He only left after the report was released and sent to the president and the attorney general… It is a shame that in Afghanistan, once accused of corruption, people can simply go overseas and claim that their life is under threat.”
Ramazan Bashardost, an Afghan MP and a former presidential candidate, added that allegedly, Fitrat allowed the irregularities despite the bank being audited twice every year.
He said, “Surely he knew and let it happen … I think he left Afghanistan with an understanding with others involved in the mess – that if he remained in the country, he would be forced to expose other names that he has so far resisted on.”
If he knew, it won’t help the country’s relations with the IMF.
The scandal is said to have endangered the IMF’s future support for Afghanistan. Afghanistan’s finance minister Omar Zakhilwal called talks with the IMF a “waste of my time,” last week, according to Al Jazeera.
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