Afghan minister accused of taking bribe
$30 MILLION PAYMENT ALLEGED
Massive mining project awarded to Chinese firm
Wednesday, November 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.
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.