Summary Afghan President has denied that bank mired in scandal had spent millions of dollars for him.
KABUL - Afghan President Hamid Karzai was not aware that a major bank now mired in scandal had contributed millions of dollars to his re-election campaign, his spokesman said Thursday.
A foreign-funded inquiry reported Wednesday that a staggering $900 million fraud had ruined the Kabul Bank and that top politicians had dictated who should be prosecuted over the theft.
The country s biggest scandal in years has touched a brother of Karzai and a brother of Vice President Marshal Mohammad Qasim Fahim, who were shareholders in the bank. They are not among 22 people charged over the fraud.
The inquiry hinted that Karzai himself benefited from the bank, saying the institution had "reportedly provided millions of dollars to the campaign of at least one presidential candidate" against central bank advice.
Although the inquiry did not name Karzai, it has been reported that Kabul Bank was a major donor to his 2009 re-election campaign.
"The president is not aware (of the payments to his campaign)," presidential spokesman Aimal Faizi told AFP.
"He learnt of claims that $20 million dollars was paid to his campaign. This is a lot of money. We will investigate this."
The president had specifically told the chairman and CEO of the bank in a meeting at his office that if they were asked to contribute to his campaign they should refuse, Faizi said.
Asked why the president had met the bankers, Faizi said: "The president meets with people from all walks of life and he meets with them daily."
The accusation that Karzai s election campaign had received the sum of $20 million was made publicly during a court hearing earlier this month by the bank s former chairman, Sher Khan Farnoud.
Farnoud and the bank s former CEO, Khalilullah Ferozi, are among the 22 people who have appeared before a special tribunal set up by Karzai to try those allegedly involved in the fraud.
Faizi said the allegation about the $20 million had not been brought up during investigations and had been raised during the court hearing when the accused "saw the cameras around".
Much of the money stolen in fraudulent off-book loans was sent abroad, some being used to buy properties in Dubai and the rest transferred to 12 countries including Britain, China, Switzerland and the United States, the inquiry found.
The investigation into the bank and the trial are being watched closely by Western donors for signs that Afghanistan is finally tackling rampant government corruption.
Donors have pledged billions of dollars in aid after NATO combat troops withdraw from insurgency-racked Afghanistan in 2014, but have conditioned payment on corruption being brought under control.
The 87-page findings of the inquiry expose a sophisticated network of corruption that saw money smuggled abroad in airline food trays, as well as political interference in criminal proceedings.
"When a presidential candidate receives money, he needs to have it on a bank account," Mohammad Shafiq Hamdam, general director of the independent Afghan Anti-corruption Network, told AFP.
"A political candidate can t receive money from outsiders without disclosing the donations."
Critics including the international corruption watchdog Global Witness point out that the report also reveals an urgent need for reform in the international banking system.
"This is a story of a nascent financial sector in a conflict zone in which crooks were able to loot a major bank over the course of multiple years because of the apparent failure of the regulators, donors, auditors and the international anti-money laundering framework," Global Witness said.
