Kabul Bank siezed: How US Taxpayer money gets circulated into Dubai real estate.
- If order to get anything done you have to know someone in politics.
- People are making money hand over fist there.
|Our Taxpayer money hard at work|
Exhibit 1 for corruption. Hamid Karzai is president of Afghanistan and directs US government money to Kabul Bank, where his brother is 7% shareholder. Kabul Bank takes US taxpayer money and pays the soldiers in Afghanistan where most of the soldiers keep their money. Then the bank uses that money to speculate in Dubai real estate and make dubious loans to well connected friends. Of course, Kabul Bank runs into trouble because their loans aren't getting paid back. The bank is bailed out and assets are seized.
Obviously, in a sign of sophistication, the Afghan government has nationalized the bank as deposits were being withdrawn. How quickly they've learned. Via Washington Post:
Afghanistan's Central Bank has taken control of the country's biggest and most politically potent private bank and ordered its chairman to hand over $160 million worth of luxury villas and other real estate purchased in Dubai for well-connected insiders, according to Afghan bankers and officials.
The intervention aims to shore up a key pillar of the Afghan economy and also of the battle against the Taliban - both of which have been marred by rampant corruption.
Kabul Bank handles salary payments for Afghan soldiers, police and teachers, and has taken $1.3 billion in deposits from ordinary Afghans. It has said it has $500 million in liquid cash.
Kabul Bank's wayward lending practices, real estate speculation in Dubai and weeks of venomous feuding between major shareholders have threatened to wreak economic and political havoc.Via CBS:
U.S. officials have long worried that Kabul Bank, because of its size and unorthodox practices, could trigger financial mayhem, a prospect that would leave Afghan security forces without pay, threaten unrest by angry - and often armed - depositors and undermine President Obama's Afghan strategy.
President Hamid Karzai's brother, Mahmood Karzai, is the bank's third largest shareholder with 7 percent.
The New York Times and The Wall Street Journal reported Wednesday that Kabul Bank's losses could exceed $300 million - and that the figure is more than the bank's assets. The Washington Post reported that the central bank had ordered the newly resigned chairman to hand over $160 million in real estate holdings in Dubai purchased for relatives and friends of the political elite.