Afghan President Hamid Karzai has blocked efforts by U.S. officials to safeguard money entering his country’s economy, and making it difficult for the United States to combat money laundering and terrorist financing, a new report finds.
An audit by the Office of Special Inspector General for Afghanistan Reconstruction released Wednesday morning has “found that U.S. agencies have not done all they can to safeguard U.S. funds, and the Afghan government has not provided the cooperation needed to build a strong, secure financial system,” Herbert Richardson, the special inspector general, said in a statement.
The new concerns come as Afghanistan’s banking sector has been caught up in scandal in recent months. More than $900 million in loans from Kabul Bank have gone missing, among other recent troubles.
“The United States has poured billions of aid dollars into a country plagued by corruption, insurgency and the narcotics trade,” Richardson said. “It is essential that we use all available tools to ensure that U.S. dollars are protected from fraud and diversion to the insurgency. We must also ensure that the Afghan government is a full partner in efforts to set a fledgling financial sector on sound footing.”
The audit found that Karzai has barred U.S. Treasury officials from accessing the Afghan central bank, where they described working conditions as being “hostile,” the audit said.
Responding to the audit, the U.S. Embassy in Kabul said that Karzai “banned” U.S. officials from the bank in May and has no plans to try to return there since “the working conditions there for advisors have become hostile.”
Though U.S. agencies have worked to improve their oversight of U.S. money, the Afghan government limits their access to details that would help track money and prevent its mishandling.
The agencies, though, have faltered in fully coordinating their programs aimed at developing the Afghan financial sector, the audit found. The Department of Defense and the Department of Homeland Security, for instance, have not coordinated their efforts to work with the same commercial banks.
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