Afghan President Hamid Karzai says his office receives large amounts of cash in bags from Iran, but says the money is a transparent form of aid for his government. He told reporters in Kabul that his chief of staff, Umar Daudzai, has accepted nearly a million dollars in cash from Teheran.
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Mr. Karzai says Daudzai accepted the money in bags on his own instructions.
The president's comments follow an article in The New York Times newspaper saying the payments were to promote Iranian interests in Afghanistan.
The article says the money has been used to pay Afghan lawmakers, tribal leaders and Taliban commanders to secure their loyalty.
President Karzai says cash from a number of countries has been given to his government.
"The cash payments are done by various friendly countries to help the presidential office and to help dispense assistance in various ways to the employees around here, to people outside and this is transparent," said Karzai.
The New York Times article quotes unnamed sources as saying Iran uses its influence to drive a wedge between the Afghans and their American and NATO supporters. The newspaper quotes one Western official describing the money as a "presidential slush fund."
President Karzai says the money is paid because the Iranians want good relations with Afghanistan. He says the Americans also give him cash.
"The United States is doing the same thing. They are providing cash to some of our offices. If you would like to have the details, we will give you that too. And it does give bags of money, yes, yes it does."
The Times article says Daudzai, a former ambassador to Iran, is given the money because he consistently and daily advocates an anti-Western message to Mr. Karzai.
One Afghan official told the newspaper he believes Mr. Karzai's chief of staff regularly receives between $1 million and $2 million every other month.
The Iranian embassy in Afghanistan has dismissed the report as "ridiculous and insulting."