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Arrest Warrant Issued For Top Afghan Banker

Filed by KOSU News in World News.
June 28, 2011

The former governor of the Afghan central bank who fled the country will be prosecuted for his alleged role in the failure of the nation’s largest private lender, the Afghan attorney general’s office said Tuesday.

Abdul Qadir Fitrat and other officials at the central bank face prosecution for not acting on warnings about widespread corruption at Kabul Bank, which nearly collapsed last year because of mismanagement and questionable lending practices, Deputy Attorney General Rahmatullah Nazari said.

He told reporters that an arrest warrant for Fitrat has been sent to Interpol and the U.S. Embassy in Kabul to return Fitrat to Afghanistan for questioning.

The troubled Kabul Bank, now under the control of Afghanistan’s central bank, has become a symbol of the country’s cronyism and deep-rooted corruption. The lender is now considered a bellwether on attempts to root out patronage and show accountability to world financial institutions, such as the International Monetary Fund.

The deputy attorney general said that Fitrat received several warnings from the nation’s intelligence service and anti-corruption officials about widespread irregularities at Kabul Bank.

“Instead, he wrote to the anti-corruption body that Kabul Bank was moving in the right course and that the bank was not facing any financial threats that there was no crisis to be worried about,” Nazari said. “It, in itself, indicates involvement of the central bank governor with Kabul Bank authorities in the crisis. He did not take any precautionary steps.”

Nazari also said that auditing firms including PricewaterhouseCoopers were being investigated for misleading government officials.

Fitrat announced his resignation Tuesday from the safety of northern Virginia, claiming that Kabul had become too dangerous for him since he began to criticize the delinquent shareholders of Kabul Bank, two of whom are brothers of President Hamid Karzai and Vice President Mohammed Qasim Fahim.

“The reason I was not able to resign in Kabul is because my life was completely in danger. This was particularly true after I spoke to the parliament and exposed some people who were responsible for the crisis of Kabul Bank,” he said.

He said he has permanent resident status in the United States and would not return to Afghanistan.

Nazari dismissed the allegation that Fitrat was threatened.

“I don’t believe Mr. Fitrat faced any danger to his life,” he said, adding that some people who flee Afghanistan make up threats to their lives in order to gain asylum.

Kabul Bank has been on life support since last year when it was discovered that nearly $1 billion of loans granted with no interest were not being repaid, including a large portion taken by politically connected shareholders. The International Monetary Fund has insisted the bank be put in receivership, but the government has been slow to act, triggering a hold on millions in aid dollars.

“In the Kabul Bank case there are no angels, there are no heroes, everybody is to blame here, including Fitrat,” said Candace Rondeaux, who covers Afghanistan for the International Crisis Group, an international think tank.

Rondeaux said the banking crisis threatens to bring down Afghanistan’s fragile economy, and other banks scandals may be coming soon. But, she said, the Karzai government’s inaction is tied in some ways to tensions with the United States and what Kabul sees as heavy-handed interference. Almost nothing is being done about corruption, she said.

“I think a lot of American officials in particular are just throwing up their hands, the level of frustration is so high right now, because nothing is on track, not the least of which of course is the problems with the banks,” she said.

NPR’s Quil Lawrence contributed to this report, which contains material from The Associated Press. [Copyright 2011 National Public Radio]

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