Obama Rules Out Open-Ended Commitment to Afghanistan

WASHINGTON - As US President Barack Obama announced the end of his country's combat mission in Iraq, he promised the US would begin a transition to Afghan responsibility next August. Addressing the nation from his Oval Office, the president said on Tuesday he had ordered the deployment of additional troops who, under the command of NATO's top commander, Gen. David Petraeus, were fighting to break the Taliban's momentum. "As with the surge in Iraq, these forces will be in place for a limited time to provide space for the Afghans to build their capacity and secure their own future. But, as was the case in Iraq, we can't do for Afghans what they must ultimately do for themselves," Obama added. With that in mind, the US was training Afghan security forces and supporting a political resolution of Afghanistan's problems, he said. "Next August, we will begin a transition to Afghan responsibility." The pace of US troop reductions would be determined by conditions on the ground, and support for Afghanistan would endure, he assured. "But make no mistake: This transition will begin because open-ended war serves neither our interests nor the Afghan people's." He said the country's combat in Afghanistan was about to complete 10 years, but the mission was yet to be achieved. "We must never lose sight of what's at stake. As we speak, Al Qaeda continues to plot against us, and its leadership remains anchored in the border region of Afghanistan and Pakistan." Obama reiterated his vow to disrupt, dismantle and defeat Al Qaeda, while preventing Afghanistan from again serving as a base for terrorists. And because of the drawdown in Iraq, the US was able to apply the resources necessary to go on the offensive, he continued. Over the past 19 months, nearly a dozen Al Qaeda leaders and hundreds of its extremist allies had been killed or captured around the world, he concluded. (Pajhwok)

KABUL - Three parliamentary elections candidates and 13 of their campaigners have been killed or wounded so far, IEC officials say Officials in the Independent Elections Commission (IEC) citing security threats posing the parliamentary elections candidates, say they have registered 16 security threat cases so far. In a latest of such incidents, a candidate in the north of Afghanistan came under attack on Tuesday in which his bodyguard was wounded. "Militants have increased influence in Faryab province recently, and security forces have also shown weakness in controlling the situation," Mohammad Hashim, a candidate from the northern Faryab province, told Tolo news. Members of the Parliamentary Elections Candidates' Independent Group severely criticized the removal of some candidates' names from the parliamentary elections list. "The purpose for the establishment of this group is to obtain the rights of all members of this group and unfortunately it was announced last night that Mr. Amarkhil was removed from the list of the candidates," Abdul Hameed Islampur, a candidate for the parliamentary elections told Tolo news reporter. "We feel sad that the mafia has so deeply influenced the Independent Elections Commission that delists an honest man in the country from the candidates list," he added. The Parliamentary Elections Candidates' Independent Group in a statement, blamed the Independent Elections Commission and the Electoral Complaints Commission for violating the Afghan constitution and the elections laws, and has urged authorities to listen to their voice. Meanwhile Fazal Ahmad Manawi, head of the IEC, in his visit to the southern Helmand province cited security a major threat confronting parliamentary elections in the province, but he emphasized over the expansion of polling centers in the province. (Tolo News)

WASHINTON - The United States has strongly refuted news reports about peace talks between representatives of the Taliban and Hizb-i-Islami and emissaries of Richard Holbrooke in Islamabad and Peshawar. "SRAP (Special Representative for Afghanistan and Pakistan, Richard Holbrooke, did not meet with Taliban leaders. The two individuals mentioned in recent news articles do not represent SRAP in any way," a State Department official said. Michael Simbal Holand and George Daxoin, representing Holbrooke, held meetings with the activists of Jamaat-ud-Dawa for Quran and Sunnah, or Salafi Taliban, in Islamabad and Peshawar on August 17 and 21. The meeting is reported to have been organized by the former Pakistani ambassador to Afghanistan, Rustam Shah Mohmand. The then military attach Brigadier Saad Muhammad was also present, the report said. The US has said any reconciliation process has to be an Afghan-led process. For the Taliban and other extremist elements, it has said they need to abandon violence, relinquish ties to Al Qaeda and have faith in the Afghan constitution. (Pajhwok)

Lt. Gen. Baz Muhammad Ahmadi Appointed as deputy minister of counternarcotics
Lt. Gen. Ghulam Ali Appointed as deputy minister of administration
KABUL - President Hamid Karzai has ordered a major reshuffle in the Ministry of Interior, one of the key state organs responsible for maintaining security in the war-torn country. Through a decree issued on Wednesday, the president asked for reshuffling 21 high-profile officers at the ministry, a statement from the presidential office said. Lt. Gen. Baz Muhammad Ahmadi has been made deputy minister of counternarcotics and Lt. Gen. Ghulam Ali deputy minister of administration. Former deputy minister of counternarcotics, Maj. Gen. Daud Daud, has been posted as commander of the 303rd Pamir Regional Police Zone and Maj. Gen. Muhammad Wasim Azimi as general director for planning and operation. Similarly, Maj. Gen. Muhammad Wakil Akbari has been appointed as director of the Human Resource Department and Maj. Gen. Abdul Masood Ragheb as general director of the Inspection Department. With Brig. Gen. Abdul Ghaffar Syedzada posted as general director of the Counterterrorism Department, Brig. Gen. Behram has been named as new head of the Parliamentary Affairs Department. Brig. Gen. Muhammad Najib will serve as Behram’s deputy, while Brig. Gen. Ikramuddin Yawar will head the ministry’s Organizational Structure. Brig. Gen. Abdul Fatah Farogh is the new general director of the Firefighting Department and Brig. Gen. Khan Muhammad director of the Local Police Force. Additionally, Lt. Gen. Fazluddin Ayar has been made commander of the 202nd Shamshad Zone, Maj. Gen. Gul Nabi Ahmadzai commander of the 505th Spinghar Zone, Maj. Gen. Abdul Majeed Rozi commander of the 606th Ansar Regional Zone and Maj. Gen. Syed Ahmad Sami commander of the Eastern Regional Zone. By the same token, Maj. Gen. Muhammad Juma Adeel has been notified as commander of the Border Police at the Kabul International Airport, Brig. Gen. Syed Ahmad Qadoosi as advisor to the minister on administrative affairs and Maj. Gen. Abdul Manan Farahi as another advisor to the minister. (Pajhwok)

KABUL - The Afghan government intervened to shore up a deeply troubled bank on Tuesday, sending shock waves through the capital and prompting fears that Afghanistan’s pervasive corruption had now put the country’s entire financial system at risk. Sherkhan Farnood and Khalilullah Frozi, the top executives of Kabul Bank, abruptly left their jobs this week at the demand of officials at the Central Bank of Afghanistan, after the discovery that Kabul Bank’s losses might exceed $300 million. That number far exceeds the bank’s assets. The Central Bank installed its own chief financial officer, Masood Khan Musa Ghazi, as the chief executive of the bank. Afghan and American officials expressed alarm not only at Kabul Bank’s financial condition but also at the prospect of a collapse of confidence in Afghanistan’s fragile financial system, which was built from scratch after the ouster of the Taliban in 2001. The immediate concern was that news of the bank’s financial irregularities, already spreading through the capital, would prompt a run on the bank itself and that the panic would spread to other financial institutions. Bank deposits in Afghanistan are not guaranteed by the central government, officials here said. “This could be catastrophic for the country,” a senior Afghan banking official said. “The next few days are critical. I am worried.” Kabul Bank and its chairman, Mr. Farnood, lie at the heart of the political and economic nexus that sustains — and is sustained by — the government of President Hamid Karzai. Mr. Frozi was an adviser to Mr. Karzai’s presidential re-election campaign last year, and Kabul Bank provided millions to Mr. Karzai’s campaign. American investigators say that Mr. Farnood’s unorthodox financial dealings, which included lending tens of millions of dollars to himself and other politically connected Afghans, have long been shielded from scrutiny by his close ties to Mr. Karzai. American officials said the intervention by the Central Bank was personally approved by President Karzai himself, after he was briefed about the details of Kabul Bank’s financial condition and its irregularities. Investigators and bank regulators say Kabul Bank is also tied to the inquiry into New Ansari, the money-transfer firm, or hawala, that is suspected of moving billions of dollars out of the country for Afghan politicians, drug traffickers and insurgents. Kabul Bank used the firm, whose dealings are nearly impossible to track, to transfer at least $60 million out of the country, a bank shareholder said. For a bank to use a hawala to move money is inherently suspect, investigators say, because a financial institution like Kabul Bank already has the means to transfer the money electronically. Electronic transfers are easier for regulators to follow. Neither Mr. Farnood nor Mr. Frozi could be reached for comment on Tuesday. Bank regulators emphasized that the Afghan government had not taken over Kabul Bank. The regulators said they were worried that the bank would not be able to cover a run of withdrawals from nervous creditors. Afghan officials and businessmen said other financial institutions here might be affected by similar troubles; the shareholders of other banks also indulge in the practice of lending large sums of money to themselves. In interviews, Afghan officials and businessmen described Kabul Bank as Mr. Farnood’s personal fief, which he used to reward himself, shareholders and political allies who could advance his financial interests. First among the beneficiaries was Mr. Farnood himself, the officials said. He invested about $140 million of the bank’s money in the real estate market in Dubai in the United Arab Emirates, said Mahmoud Karzai, the president’s brother and a Kabul Bank shareholder. Among those properties were more than a dozen multimillion-dollar villas in Mr. Farnood’s name, some of them on Palm Jumeria, an island off Dubai’s coast, Mr. Karzai said. The Dubai real estate market collapsed in 2008, wiping out much of Mr. Farnood’s investment and leaving Kabul Bank with the losses. A senior Afghan banking official said that the bank’s estimated losses were believed to be about $300 million, with assets of about $120 million. It is not clear what Mr. Farnood did with all the properties he purchased, but he made at least some of them available to his friends and allies. One of them was Mahmoud Karzai, who owns about 7 percent of the bank. Speaking in an interview from Dubai, Mr. Karzai said he had rented one of Mr. Farnood’s villas for the past year and a half. Mr. Karzai said the bank’s troubles — and Mr. Farnood’s opaque dealings — had made him decide to vacate soon. “I want to move to a different house,” Mr. Karzai said. “I want to cut this out.” Kabul Bank also lent some $100 million to Haseen Fahim, a shareholder. Mr. Fahim is the brother of Muhammad Fahim, Afghanistan’s first vice president and a close political ally of President Karzai. Haseen Fahim is the owner of Gas Group, a large distributor of natural gas, and the developer of several large construction projects. “I am not completely aware of what he has done,” Mr. Karzai said of Mr. Farnood. Mr. Farnood was a banker before Afghanistan had a modern financial system, opening a hawala in the 1970s. A hawala allows a person in Afghanistan, say, to hand someone a bundle of cash and have it instantly credited to an account in another country — say, in the United Arab Emirates. Hawalas typically operate outside any government regulation. Mr. Farnood closed his hawala and started Kabul Bank in 2004. From the beginning, the Afghan banking official said, Mr. Farnood ran Kabul Bank outside the law, daring regulators to rein him in. Kabul Bank often exceeded the limit of what it was allowed to lend on any particular project, and it sometimes skirted collateral and deposit requirements. “Sherkhan Farnood is a very clever individual,” the Afghan banking official said. “Keeping the bank in line with the law was a constant challenge for us.” New Ansari is known to be intimately connected to another financial institution, Afghan United Bank, officials say. Asked why Mr. Farnood would use a hawala to transfer money abroad, Mahmoud Karzai, a shareholder, said he did not know. “This a very legitimate question,” Mr. Karzai said. “You should ask Sherkhan.” The New Ansari case has drawn close attention, and not only because American investigators say the money trails lead to Afghan political elites, insurgents and suspected criminals. One of the men arrested in connection with the inquiry is a senior aide to President Karzai. The aide, Mohammed Zia Salehi, was released in early August after investigators were pressured by President Karzai himself. Afghan officials say they hope they can avoid a meltdown of Kabul Bank — and of the country’s financial system. Mr. Farnood has promised to transfer the title of all of his properties to the bank, Mr. Karzai said, which would provide the bank with at least some assets to cover the loses. But it is not clear, after the collapse of the Dubai property market, how much Mr. Farnood’s properties are worth. Mr. Farnood and Mr. Frozi together owned more than half of the bank, meaning that the other shareholders had little leverage with them, officials said. It was only recently, as the bank’s losses mounted, that the two men began to disagree. Mr. Karzai and other Afghan officials said the departure of Mr. Farnood and Mr. Frozi would allow the bank to finally be run properly. Without federal depositors’ insurance, the senior Afghan banking official said, that might be the only chance depositors had of getting their money back. “The only government guarantee is the effective supervision of this bank,” he said.