How Billions in U.S. Aid Destroyed the Legitimacy of the Afghan Republic

Kokcha News Agency: The fraudulent re-election of Hamid Karzai in 2009 exacerbated the flood of corruption that had already engulfed Afghanistan. Black money flowed across the country, with money launderers carrying suitcases containing a million dollars or more on flights out of Kabul, allowing corrupt businessmen and politicians to stash their ill-gotten wealth abroad.

Much of this money ended up in Dubai, where Afghans could pay cash for luxurious villas in the Gulf region without accountability. In Afghanistan, mansions known as “Poppy Palaces” emerged from the rubble of Kabul, becoming the homes of opium kings and warlords. These lavish buildings were adorned with precious stones, and architects hid bars in basements to avoid detection by radical clerics. Some Poppy Palaces were rented for $12,000 a month—an unimaginable sum for impoverished Afghans struggling to make ends meet.

In August 2010, Afghanistan’s largest private bank became the epicenter of corruption and fraud. Nearly $1 billion in fraudulent loans, equivalent to one-twelfth of the country’s economic output that year, disappeared into the pockets of politically connected investors who ran the bank as a Ponzi scheme. Panic ensued, and ordinary Afghans rushed to bank branches to withdraw their savings.

Washington had long been concerned about controlling corruption in Afghanistan, but as it spiraled out of control, officials in the Obama administration feared it would undermine their war strategy at the worst possible time, as U.S. troop levels surged in the country. U.S. officials publicly promised to address the crisis and hold Afghan leaders accountable. In March 2009, President Obama declared, “I want to be clear: we cannot turn a blind eye to the corruption that causes Afghans to lose faith in their leaders. We will seek a new compact with the Afghan government to crack down on corrupt behavior.”

Days later, Secretary of State Hillary Clinton stated, “Corruption is a cancer as dangerous to long-term success as the Taliban or al-Qaeda.” In August 2009, General Stanley McChrystal warned, “The harmful actions and mismanagement of power brokers, widespread corruption, and abuse of power have left Afghans with little reason to support their government.” However, these words proved hollow.

U.S. officials retreated and turned a blind eye to the truth, even as theft became more entrenched than ever. They tolerated the worst offenders—politicians, warlords, drug traffickers, and defense contractors—because they were U.S. allies. Ultimately, they concluded that the entire Afghan power structure was so corrupt that cleaning it up was an impossible mission.

Like the Bush White House before it, the Obama administration failed to confront the uncomfortable reality of failure. Since the 2001 invasion, the U.S. had fueled corruption by pouring vast sums of money into Afghanistan for reconstruction without considering the consequences. Endless opportunities for bribery and fraud arose, as U.S. spending on aid and defense contracts far exceeded what the impoverished country could absorb. Barnett Rubin, a State Department advisor, said in an interview, “The initial assumption was that corruption was Afghanistan’s problem and we were the solution, but there was one essential ingredient for corruption—money—and we were the ones with the money.”

Ryan Crocker, who served as the top U.S. diplomat in Kabul under both Bush and Obama, said the accumulation of contracts to support U.S. and NATO forces in Afghanistan ensured that bribery and extortion became deeply rooted in the country. He said corruption became so widespread that it posed a greater threat to the U.S. mission than the Taliban.

Crocker said in an interview, “Unfortunately, inadvertently, our biggest problem was the development of corruption.” He called it “the point of ultimate failure of our efforts.”

Americans were quick to blame Afghans for taking bribes, but U.S. officials also had dirty hands. From the start of the war in 2001, they embraced bribery as a tactic when it suited their goals.

To buy loyalty and information, the CIA handed cash to warlords, governors, lawmakers, and even religious leaders. The U.S. military and other agencies also supported corruption by making payments or awarding contracts to unworthy Afghan power brokers in a misguided attempt to create stability.

According to an anonymous German official who served in Kabul in 2002 and 2003, when Afghan leaders convened a Loya Jirga to draft a new constitution, the U.S. government handed out “goody bags” of dollar bills to delegates who supported Washington’s preferred positions on human rights and women’s rights. The German official said in an interview, “The perception that began at that time was that if you were going to vote in a direction that Washington was interested in, you were a fool not to get a bag for doing it.”

By the time Afghanistan held elections in 2005 to choose 352 members of parliament, this perception had hardened. The German official said lawmakers realized their votes could be worth thousands of dollars to the Americans, even for legislation they supported. The official added, “People would tell each other, so-and-so just went to the U.S. embassy and got this money. Well, now I have to go. So, from the very beginning, their experience with democracy was one in which money was deeply embedded.”

According to General Christopher Kolenda, who advised several U.S. commanders during the war, by 2006, the Afghan government had become a self-organized kleptocracy in which those in power could plunder the economy without restraint. Kolenda said in an interview, “The kleptocracy grew stronger over time, to the point where the Afghan government’s priority was not good governance but maintaining this kleptocracy. And we helped this system.”

In the end, by allowing corruption to flourish, the U.S. helped destroy the legitimacy of the fragile Afghan government it was fighting to support. With judges, police chiefs, and government officials taking bribes, many disenchanted Afghans turned to the Taliban for order.