Mr. Ghazi, who was appointed after the Central Bank forced a change in the bank’s management last fall, did not respond to phone calls or e-mails seeking comment, nor did anyone at Afghanistan’s Central Bank.
Kabul Bank has extensive links to senior people in the Afghan government. In addition to Mahmoud Karzai, other shareholders included Haseen Fahim, the brother of the first vice president, and several associates of the family from the north of Afghanistan. Afghan officials said the bank poured millions into President Karzai’s election campaign.
It is the loans and personal grants made by the bank to powerful people, including government ministers, that could prove the most explosive, Western and Afghan officials said. “If people who are thought to be clean and who were held up as ‘good’ by Western countries suddenly are caught with their fingers in the till, it will cause questions from donors,” said a Western official in Kabul. “They will say, ‘Why are we here?’ ”
Mahmoud Karzai said that he believed the bank’s former chairman, Sherkhan Farnood, was responsible for the problems at the bank, saying that he often moved large amounts of money out of the bank on his own, with no oversight. Mr. Farnood could not be reached for comment on Sunday, and has declined to comment in the past. Mr. Karzai and Mr. Farnood were previously business partners, but had a falling-out over the operation of Kabul Bank.
While he was in charge, Mr. Farnood had total control over what loans were made and what money was moved out of Kabul Bank, Mr. Karzai said. He said he was told by the bank’s managers that Mr. Farnood took about $98 million out of Kabul Bank to finance the purchase and subsequent operations of Pamir Airways, a small passenger airline in Afghanistan.
In a cable from Sept. 26, 2009, posted by WikiLeaks, American diplomats said that competitor airlines complained that “Kabul Bank is using its deposit base to subsidize Pamir Air without its depositors’ knowledge in an attempt to drive competitors out of business.”
Mr. Karzai said that Mr. Farnood had been given space at Kabul Bank, where he was supposed to be helping the new management find the bank’s missing money.
“I think the bank is working with him to figure out what happened to the money, because he knows whom he lent it to and he knows where it is,” Mr. Karzai said. A spokeswoman for the United States Treasury Department in Washington declined to comment on the American inquiry.
“The situation of Kabul Bank is extremely serious,” said a Western diplomat in Kabul. “What you can observe is that the loans were either to fictive operators who did not exist or they were for investments outside the country.”
“Some were loans or personal grants to people linked to one shareholder or another shareholder,” the diplomat said.
According to businessmen in Kabul, loans were made to people who were fronts for the real beneficiaries. “Sometimes they would bring a loan document to someone who was a gardener or a cleaner and just ask them to sign it, and they would pay him 500 Afghanis and the person could not read or write more than his name,” said a prominent businessman here with ties to the banking community.
“Then, when the new bank managers go to look for the money, they go to the gardener’s house and they look around and they see there is nothing worth $100, and they have no idea where the money went.”
Caitlin Hayden, a spokeswoman for the American Embassy in Kabul, said that officials were working closely with the Afghan government, the I.M.F. and the World Bank. “Corrective action in response to any instance of abuse, poor banking practices or fraud is essential for public and international confidence in Afghan financial institutions and the development of Afghanistan’s financial sector,” she said.
In Lashkar Gah, the capital of Helmand Province , a Kabul bank branch has been shut down for a week because employees transferred $1.3 million to Mr. Farnood, who was removed last fall for mismanagement.
In Kabul, the Ministry of Finance is putting out bids for a new bank to pay the salaries of the security forces, which previously had been paid exclusively through Kabul Bank, according to Col. John Ferrari, the head of training programs for NATO’s training mission here. Military officials say that none of the $1.5 billion in payroll for the Afghan Army and the police has been reported missing. But concerns over the possibility that the bank could fail was one factor prompting the ministry to seek other banks to process payroll, Western officials said.
A WikiLeaks cable from last February suggested that payments were often delayed so the bank could make money on the overnight interest rates. In a Feb. 13, 2010, cable, Kabul Bank is described as “the least liquid bank operating in Afghanistan” and its difficulty in raising cash was so great that it took “more than two days to process withdrawals and has delayed paying government employee salaries by two weeks in order to place those funds in overnight accounts to collect interest.”
— Rod Nordland and Ray Rivera contributed reporting from Kabul, and an Afghan employee of The New York Times from Helmand Province.