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Karzai Bans US Advisers From Afghan Central Bank

Afghan soldiers chat in front of the main office of Kabul Bank in Kabul, Afghanistan, Sept. 1, 2010.

Afghan soldiers chat in front of the main office of Kabul Bank in Kabul, Afghanistan, Sept. 1, 2010.

A new report says Afghan President Hamid Karzai has banned U.S. Treasury advisers from the country's central bank, where they had been working to prevent the flow of money from getting into the wrong hands.

The audit by the U.S. special inspector general for Afghan reconstruction, which was released Wednesday, says the ban has been in place since May. The report adds the U.S. Treasury has no plans to re-engage at Afghanistan's central bank because working conditions for the U.S. advisers have become "hostile."

Corruption allegations

Acting Special Inspector General for Afghanistan Reconstruction Herbert Richardson said Wednesday the United States has poured billions of aid dollars into a country "plagued by corruption, insurgency, and the narcotics trade."

He added that "it is essential that we use all available tools to ensure that U.S. dollars are protected from fraud and diversion to the insurgency."

The audit says President Karzai's ban on U.S. advisers is just one of several examples of the Afghan government's lack of cooperation on international efforts to improve Afghanistan's financial sector. The report cites unwillingness of the country's attorney general to prosecute those suspected of financial crimes.

Former bank official fears for his life

The country's central bank has been at the center of controversy since its former head resigned last month and fled to the United States. Abdul Qadir Fitrat told VOA his life was in danger from those he tried to prosecute for "stealing millions" from Kabul Bank.

Afghanistan's largest private lender lost more than $900 million in funds and nearly collapsed last year due to alleged mismanagement, cronyism and questionable lending.

The Afghan government said Fitrat was partially responsible for the scandal, which prompted the International Monetary Fund and some international donors to suspend aid to the country.

Tracking the money

The U.S. Congress has appropriated over $70 billion since 2002 to improve security and development in Afghanistan. The audit by the special inspector general for Afghan reconstruction says efforts to track U.S. dollars and other international aid have been hampered by the Afghan government.

U.S. officials say millions of dollars in cash payments flow through the international airport in Kabul. The audit notes that Afghan officials delayed for months the installation of cash counting machines at the airport, and that the serial numbers on cash disbursed to Afghan contractors and to recipients of U.S. aid payments are still not being recorded.

The report also says that Afghan officials continue to allow VIPs to bypass the main security and customs screenings without verifying their declared cash with currency counting machines.

Some information for this report was provided by AP and Reuters.