(KABUL, Afghanistan) -- Afghan politicians and bankers helped smuggle hundreds of millions of dollars from Kabul Bank out of the country, according to a new report released Wednesday.
Almost $900 million were funneled into the hands of a small circle of political elites, some of whom allegedly paid airline workers to smuggle the money out in airplane food trays. The report says those same politicians were the ones who stymied a subsequent investigation, with long delays before indictments were handed down.
The bank, which was taken over by Afghanistan’s central bank after a bank run in 2010, was supposed to be a symbol of corruption-free capitalism in the historically bribery-ridden country. Now, officials worry it will be seen as one more reason not to invest in Afghanistan.
“$935 million have been lost through the loan book scheme,” said Drago Kos, one of the authors of the report, at a news conference. “In addition, $66.2 million were lost through so-called non-loan disbursement.”
Kos added that more money was spent assuring regular Afghans. “The Afghan government had to spend $825 million to save the bank when it was guaranteeing the deposits,” he said.
One of the most prominent names in the report was that of Afghan President Hamid Karzai. According to The New York Times, Karzai’s aides specifically told investigators who to indict and who to leave alone. And while President Karzai was not named as a beneficiary of the fraud, his brother, Mahmoud Karzai, is alleged to have benefited from illegal loans.
Mahmoud Karzai denies any wrongdoing.
The collapse and bailout of Kabul Bank represents five percent of Afghanistan’s gross domestic product, which could be passed on to wealthy Western nations supporting the fledgling government.
As for how the fraud was carried out, the report detailed fake stamps for fictitious companies, loans that were never repaid, and fabricated records.
“Since 2006, this bank was running a pure Ponzi scheme,” Kos said.
Copyright 2012 ABC News Radio