$10 million is smuggled out of Afghanistan daily, official says

An estimated $10 million a day is smuggled out of Afghanistan, most of it through Kabul’s international airport, rather than through secret routes over the mountains or across the desert, the country’s finance minister said Sunday.

The amount of corruption, both by public officials and officials of private companies, makes him embarrassed to acknowledge while traveling that he is an Afghan, Finance Minister Omar Zakhilwal said.

“Corruption is a stronger threat than terrorism for Afghanistan,” said Zakhilwal, who was appointed in February and is the top financial advisor to President Hamid Karzai. “It is a cancer, a disease. It has destroyed the reputation of Afghanistan.”

The $10-million figure comes from a 19-day undercover study conducted by the U.S. that estimated $190 million left the airport undetected during that period, Zakhilwal and U.S. officials said. No similar study was done for the international airport in Kandahar.

Much of the hot cash ends up funding the Taliban insurgency, U.S. and Afghan officials said.

Zakhilwal’s comments came at the beginning of a four-day conference sponsored by the American Embassy in Kabul, the capital, in which U.S. Department of Homeland Security officials are tutoring Afghan customs officials and others on detection methods. The remarks were some of the most candid to date about the size and blatant nature of corruption under Karzai’s government.

Much of the cash allegedly comes from drug cartels eager to get the money to Dubai, United Arab Emirates, a leading financial hub and the main destination for flights from Kabul.The rest may be from corrupt officials, or otherwise law-abiding businesses that wish to dodge taxes, Zakhilwal said.

The daily loss deprives the cash-poor government of tax money that could be used for badly needed improvements in transportation, medical care and education,officials said.

If the Afghan government has done little to stop the cash smuggling, the U.S. has also not been particularly vigilant.

“For years,” said a U.S. federal investigator who was not authorized to speak publicly about the issue, “the U.S. government has failed to pay proper attention to the flow of drug money into and out of Afghanistan and the pockets of the leaders of the insurgency and the Afghan government itself.”

U.S. agencies have stepped up their efforts in recent months to interdict the flow of cash “but the effort needs to be broader than just Afghanistan and it needs to encompass tougher measures in places like Dubai and the other city-states of the United Arab Emirates as well as key countries in Europe,” the investigator said.

Under Afghan and international law, anyone taking more than $10,000 across an international border must report that amount to both countries. But as a practical matter, the law is barely, if at all, enforced in Afghanistan.

E. Anthony Wayne, an American ambassador serving as coordinating director for development and economic affairs in Afghanistan, said that cracking down on cash smuggling is a step toward establishing a government that protects “the wider interest of all the people, not the narrow interest of the few and powerful.”

In opening comments, Anthony and other U.S. officials were careful not to point out embarrassing recent events, including the arrest of high-level Afghan officials accused of sneaking money out of the country and the investigation of two Cabinet ministers.

The issue of corruption has been a continuing source of tension between the U.S. and the Karzai government. Goaded by the White House, Karzai in his inaugural address last month vowed a campaign to end the “culture of impunity” that has allowed corruption.

In an interview broadcast Sunday with CNN correspondent Christiane Amanpour, Karzai said that “the issue of corruption has been politically overplayed by some of our partners in the international community” and that he has not received credit in the news media for his anti-corruption efforts.

“There are governors who have gone to prison,” he said. “There are governors who are dismissed and are under investigation. A minister was dismissed from, from the middle of the Cabinet. Others are dismissed.”

Karzai is expected to announce his selections for a new Cabinet this week, with U.S. officials and his political opponents expected to scrutinize the selections for possible ties to corruption.

Wayne said cash smugglers use “low-tech methods” such as innocent-looking airline passengers on their way to Dubai for vacations or business. In many cases, payoffs are made to avoid detection at the airport, where the government has customs inspectors.

“Only a few are corrupted, but the reputation of all is hurt,” Zakhilwal said.

tony.perry@latimes.com