Corruption: Afghan Style

Afghan minister accused of receiving huge bribe
‘Only God can stop this corruption’ competitor says of government practices
The Washington Post
Nov . 18, 2009

KABUL - The Afghan minister of mines accepted a roughly $30 million bribe to award the country's largest development project to a Chinese mining firm, according to a U.S. official who is familiar with military intelligence reports.

The allegation, if proved true, would mark one of the most brazen examples of corruption yet disclosed in a country where the problem has become so pervasive that it is now at the heart of Obama administration doubts over Afghan President Hamid Karzai's reliability as a partner. The question of whether Karzai can address his government's graft and cronyism looms large as he prepares for his inauguration Thursday for a new term, and as President Obama completes a months-long strategy review that will define the future of U.S. involvement in Afghanistan after eight years of war.

Karzai is coming under intense international pressure to clear his cabinet of ministers who have reaped huge profits through bribery and kickback schemes. Although he announced a new anti-corruption unit this week, the president has been reluctant to fire scandal-tainted ministers in the past, and it is unclear whether he is ready to do so now. Meanwhile, Afghans' perceptions that they are ruled by a thieving class have weakened support for the government and bolstered sympathy for the Taliban insurgency.

In the case of the minister of mines, there is a "high degree of certainty," the U.S. official said, that the alleged payment to Mohammad Ibrahim Adel was made in Dubai, United Arab Emirates, within a month of December 2007, when the state-run China Metallurgical Group Corp. received the contract for a $2.9 billion project to extract copper from the Aynak deposit in Logar province. Aynak is considered one of the largest unexploited copper deposits in the world.

Issue gains urgency
The selection of the Chinese firm, known as MCC, has angered some Afghan and American officials who worked on the bidding process with Adel. They say he was biased toward the company and did not give a fair hearing to the proposals of Western firms. But the issue has also gained urgency because the ministry is reviewing offers for another massive mining deal -- this time for an iron ore deposit west of Kabul known as Haji Gak -- for which MCC is the front-runner.

"This guy has done this already; we're in the same situation again," said the official, who spoke on the condition of anonymity.

In an interview, Adel denied repeatedly that he has received any bribes or illicit payments during his three-year-old tenure as minister and said that MCC won the contract after a fair review process. The Chinese company's investment -- including plans to build a railroad and a 400-megawatt power plant, and to make an $808 million bonus payment to the Afghan government -- far exceeded that of other firms, Adel said.

"I am responsible for the revenue and benefit of our people," Adel said. "All the time I'm following the law and the legislation for the benefit of the people."

The performance of the Mines Ministry under Adel typifies the weakness of Karzai's government. Afghanistan's wealth of mineral resources represents a potential bright spot in an otherwise feeble economy. Flush with copper, iron, marble, gold and gemstones, the mining sector could become a major source of revenue for the country.


But today, no major mines are functioning, and current and former U.S. and Afghan officials said incompetence and corruption have hindered the industry's development and frightened away potential investors.

"There is a pattern of improprieties that have gone on. We do know that the World Bank procedures, and the government of Afghanistan procedures, were badly breached repeatedly," said one former American adviser to the ministry. "There is every reason to believe there were probably gratuities exchanged."

Adel trained as a mining engineer in what was then the Soviet city of Leningrad, and his autocratic style has alienated current and former Afghan and American officials who have worked with him. It also has prompted widespread allegations that he or his deputies have received payments to award lucrative contracts to allies.


$25 million in a cardboard box
The first major contract of Adel's tenure was to privatize the Ghori cement factory, the country's only functioning cement plant, set in the limestone hills of Baghlan province in northern Afghanistan. The former mines minister, Mir Mohammad Sediq, said that Mahmoud Karzai, the head of the Afghan Investment Co. and the brother of the Afghan president, approached him, asking to take over the factory.

President Karzai replaced Sediq and installed Adel as minister in March 2006. Adel moved quickly on the cement proposal. A competitor for the project, the Aria Zamin company, said Adel used his influence to deny the firm a fair chance. The company's representative in the bidding, Nasir Khisrow Parsi, said that in the final days of the bidding process, Adel told him his company needed to present $25 million in cash to the ministry as a guaranty to show that the firm was serious.

"I told the minister, 'This violates the rules of the process. This is totally wrong,' " Parsi recalled. "In a country like Afghanistan, a person cannot carry even $100,000 from one place to another."

But Mahmoud Karzai's Afghan Investment Co. (AIC) came up with the money. The cash for the guaranty was carried in a cardboard box, flanked by gunmen, and placed on a desk in the ministry's headquarters in Kabul, officials said. One former deputy minister who witnessed the spectacle feared violence, but the deal went smoothly and AIC won the right to rehabilitate and expand the factory.

Adel defended the process but acknowledged that he has changed his procedures. "It was unusual. It was our first bidding," he said.

‘Only God can stop this corruption’
To Parsi, it was a blatant example of influence peddling in the ministry.

"They can do whatever they want," said Parsi, who now works in the geology department of the Mines Ministry. "The whole ministry is corrupt. No one is clean there. I don't see how this is going to end. Only God can stop this corruption."

Mahmoud Karzai could not be reached for comment. Adel said he exerted no influence over the ministry's decision. "If Mahmoud comes here, he has to sit there 30 minutes or one hour waiting for me," Adel said in his office.

The contract called for a massive increase in production -- from the 40,000 tons produced this year to 3 million tons -- by refurbishing the functioning plant, finishing construction on a second, adjacent factory, and building a third. But on a recent visit to the factory, the grounds were quiet and nearly abandoned. A manager blamed technical problems.

The work on the Aynak copper mine, in the high desert terrain of Logar province, has also gone slowly. The Chinese company has fallen about a year to 18 months behind schedule. The railroad project has not started. The company has complained about security threats from neighboring villages, despite an on-site force of more than 1,500 Afghan national policemen.


The deposit is estimated to hold enough copper to generate more than $200 million a year in government royalties, an amount equivalent to about a third of Afghanistan's budget last year, according to a report on the project by James R. Yeager, an American geologist who served as a ministry adviser.

Yeager's report criticized what he called a "murky and insufficient tender process" led by a "strong-willed minister unrelenting in his preference to see this award through with Asian partners." In ministry meetings to evaluate the bids, which included proposals from American and Canadian firms, Adel was a dominant force, several officials said.

"Anytime somebody brought up anything, he would squelch it," Yeager said in an interview. "We never really had any discussion."

F'ing Pak's Think They're A Serious Country

AQ Khan blows the whistle on Pakistan

CHIDANAND RAJGHATTA, TNN
The Times of India
20 September 2009

WASHINGTON: An angry, humiliated, and wounded A.Q.Khan has finally made public and official what has long been suspected: his nuclear proliferation activities that included exchanging and passing blue-prints and equipment to China, Iran, North Korea, and Libya was done at the behest of the Pakistani government and military, and he was forced to take the rap for it.

"The bastards first used us and are now playing dirty games with us" Khan writes about the Pakistani leadership in a December 2003 letter to his wife Henny that has finally been made public by an interlocutor. "Darling, if the government plays any mischief with me take a tough stand,'' he tells his wife, adding, ''They might try to get rid of me to cover up all the things they got done by me.''

But Henny was unable to play hardball because Khan had also sent copies of that letter to his daughter Dina in London, and to his niece Kausar Khan in Amsterdam through his brother, a Pakistan Airlines executive. Pakistani intelligence agencies got wind of it and threatened the well-being of the family, forcing him to recant and publicly take the blame for the proliferation activities in a humiliating television spectacle engineered by then military ruler Pervez Musharraf.

However, a copy of the four-page letter reached Khan’s long-time journalistic contact Simon Henderson in 2007. In fact, in the letter, Khan tells his wife, ''Get in touch with Simon Henderson and give him all the details.'' Henderson says when he acquired the copy of the letter, he was shocked. His acquaintance with Khan goes back to the late 1970s, but it was never intimate, and consisted of an occasional
interviews and conversations, and seasonal greetings.

Describing the four-page letter as ''extraordinary,'' Henderson says in numbered paragraphs, it outlines Pakistan’s nuclear co-operation with China, Iran and North Korea, and also mentions Libya. Some of the disclosures are stunning , and in one para that is bound to embarrass Beijing, besides implicating it, Khan writes about how Pakistan helped China in enrichment technology in return for bomb blueprints.

''We put up a centrifuge plant at Hanzhong (250km southwest of Xian),” Khan writes. “The Chinese gave us drawings of the nuclear weapon, gave us 50kg of enriched uranium, gave us 10 tons of UF6 (natural) and 5 tons of UF6 (3%).'' UF6 is uranium hexafluoride, the gaseous feedstock for an enrichment plan.

On Iran, the letter says: ''Probably with the blessings of Benazir Bhutto, General Imtiaz [Benazir’s defence adviser, now dead] asked me to give a set of drawings and some components to the Iranians. The names and addresses of suppliers were also given to the Iranians.''

On North Korea:" A now-retired general] took $3 million through me from the N. Koreans and asked me to give some drawings and machines.''

Henderson does not explain why he waited nearly two years since he got hold of the letter to make it public. But he writes sympathetically about Khan’s travails in Pakistan, where he is held largely incommunicado under house arrest. The Pakistani government and the military have repeatedly rejected and challenged court orders to free him, and an episode last month, where Khan was freed just for a day on court orders before Islamabad locked him up again under pressure from Washington, appears to have precipitated the leak of the explosive letter.

Henderson’s Sunday Times expose also implicates the U.S and other western powers, who he says, basically shoved Islamabad’s rampant proliferation (while blaming it solely on Khan) under the carpet in order to get Pakistan’s cooperation in the war on terror. The move also saved Washington from huge embarrassment since it was basically asleep on the watch when Pakistan began its nuclear proliferation and then
winked at it when it was discovered, all the while lavishing billions in military supplies on its unstable client state.

Henderson also implicitly defends Khan from charges that he profited from proliferation activities, as alleged by deposed military ruler Pervez Musharraf. Khan, he says, is adamant that he never sold nuclear secrets for personal gain. So what about the millions of dollars he reportedly made?

''Nothing was confiscated from him and no reported investigation turned up hidden accounts. Having planted rumours about Khan’s greed, Pakistani officials were curiously indifferent to following them through,'' Henderson writes.

According to Henderson, much was made of a ''hotel'', named after Khan’s wife, Henny, built by a local tour guide with the help of money from Khan and a group of friends in Timbuktu. But it is a modest structure at best, more of a guesthouse, he says. A weekend home at Bani Gala, outside Islamabad, where Khan went to relax, is hardly the palace that some reports have made it.

In fact, says Henderson, Khan was close to being broke by the summer 2007, when he was finding it difficult to make ends meet on his pension of 12,200 (Pakistani) rupees per month. After pleading with General Khalid Kidwai, the officer supervising both Pakistan’s nuclear weapons and Khan, the pension was increased to $2,500 per month and there was a one-off lump-sum payment of the equivalent of $50,000. Hendersen says he has copies of the agreement and cheques.

Henderson’s 3000-word expose also reveals a couple of intriguing tid-bits that should interest the world’s strategic community, including New Delhi. Besides details of the Pakistan-China nexus, he says Pakistan tested only two devices in its 1998 tit-for-tat nuclear tests that followed India.

While Pakistan claims it conducted six tests to be one-up on India’s five tests, Western experts and seismologists have long said they recorded only two signals for devices that measured between two and four kilotons. Khan also states clearly that China gave Pakistan designs for the nuclear bombs.

In fact, in one colorful passage in his article, Henderson describes how Khan was warned by a Chinese counterpart about the Pakistani Army. On a visit to Kahuta, Li Chew, the senior minister who ran China’s nuclear-weapons programme, tells Khan, ''As long as they need the bomb, they will lick your balls. As soon as you have delivered the bomb, they will kick your balls.''

Henderson himself seems deeply conscious of any perception that he is close to Khan or that he is a cat’s paw for any country. ''Any relationship with a source is fraught with potential difficulties. One doesn’t want to be blind to the chance of being used. Government officials and politicians in any country are seldom interested in the simple truth. They all have their particular story to tell. In this
context, I am frankly amazed that Khan has chosen me to be his interlocutor with the world,'' he writes.

But Pakistani authorities were clearly aware that he and Khan had been in touch and Khan may have managed to smuggle a copy of the letter implicating Islamabad to him. Henderson says in a court document that Khan was asked to sign when he was promised freedom, there is a line that read “That in case Mr Simon Henderson or anyone else proceeds with the publication of any information or material anywhere in the world, I
affirm that it would not be based on any input from me and I disown it.” That line was eventually deleted and replaced with a more general prohibition about unnamed ''specific media personnel."

In other words, stand by for a flurry of denials.

Pakistan: NOT our Ally

U.S. Accuses Pakistan of Altering American-Made Missiles
The accusation reporteldy stems from U.S. detection of a suspicious missile test on April 23 which was never announced by Pakistan and appeared to give it a new offensive weapon.
FOXNews.com
Sunday, August 30, 2009

The United States has accused Pakistan of illegally modifying American-made missiles to expand its ability to hit land-based targets in what could be a direct threat to India, the New York Times reported.

The accusation triggers a new round of U.S.-Pakistani tensions amid concern over the country's weapons development. It stems from U.S. detection of a suspicious missile test on April 23 which was never announced by Pakistan and appeared to give it a new offensive weapon.

Military and intelligence officials told the Times they suspect the Harpoon antiship missiles the U.S. sold Pakistan in the '80s had been modified, which would be a violation of the Arms Control Export Act.

"There's a concerted effort to get these guys to slow down," a senior administration official told the Times. "Their energies are misdirected."

A senior Pakistani official called the accusation by the U.S. "incorrect," saying that the missile tested was developed by Pakistan, just as it had modified North Korean designs to build weapons capable of striking India.

The move could also trigger an arms race with India that the U.S. has tried to end.

"The focus of our concern is that this is a potential unauthorized modification of a maritime antiship defensive capability to an offensive land-attack missile," another senior administration official told the Times. "When we have concerns, we act aggressively," the official added.