Afghan minister accused of taking $30 million bribe

This Washington Post story, could just as easily apply to Jim Flaherty and his handling of the income trust tax:

"Anytime somebody brought up anything, the Minister would squelch it," Yeager said in an interview. "We never really had any discussion."

Sort of like the time that Flaherty demanded his blacked out documents issued under the Access to Information be returned as they revealed more of the truth than Flaherty could handle. By recalling these documents, Flaherty simply wanted to squelch the fact that tax leakage is a lie and his income trust tax is therefore a fraud.

Or then there was Flaherty's dogged refusal to hold public hearings on income trusts, only to turn the event into a kangaroo court when they were held. Or the time that Flaherty refused the offer of a $50,000 donation to a charity of his choice, if he would simply debate the income trust issue with me. Talk about squelching! What is Flaherty so desperate to hide? What is he running from?

I wonder what Flaherty’s personal financial pay off is for his income trust tax? A fancy Board seat upon leaving office? Campaign contributions? Undeserved accolades in Euromoney magazine? Just exactly what motivated Flaherty to engage in this elaborate lie about tax leakage that, in the end, has CAUSED billions in tax leakage and the loss of $35 billion of Canadian’s retirement savings?

Just like the Minister of Mines for Afghanistan, Flaherty's income trust policy has completely played into the hands of those foreign interests who want to exploit Canada's resources and get them "on the cheap", as in the case of Abu Dhabi Energy acquiring devalued Prime West Energy or the case of Korean state owned Korea National Oil Company acquiring Harvest Energy Trust. Exactly how much tax will these new owners pay on these company's earnings? Billions less than the taxable Canadian investors who previously owned them....that's how much.


Afghan minister accused of taking bribe
*By Joshua Partlow
Washington Post Foreign Service
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. The first major
contract of Adel's tenure was to privatize the Ghori cement factory, the
country's only functioning cement plant, set in the limestone hills of
Baghlan province in northern Afghanistan. The former mines minister, Mir
Mohammad Sediq, said that Mahmoud Karzai, the head of the Afghan
Investment Co. and the brother of the Afghan president, approached him,
asking to take over the factory.

President Karzai replaced Sediq and installed Adel as minister in March
2006. Adel moved quickly on the cement proposal. A competitor for the
project, the Aria Zamin company, said Adel used his influence to deny
the firm a fair chance. The company's representative in the bidding,
Nasir Khisrow Parsi, said that in the final days of the bidding process,
Adel told him his company needed to present $25 million in cash to the
ministry as a guaranty to show that the firm was serious.

"I told the minister, 'This violates the rules of the process. This is
totally wrong,' " Parsi recalled. "In a country like Afghanistan, a
person cannot carry even $100,000 from one place to another." But
Mahmoud Karzai's Afghan Investment Co. (AIC) came up with the money. The
cash for the guaranty was carried in a cardboard box, flanked by gunmen,
and placed on a desk in the ministry's headquarters in Kabul, officials
said. One former deputy minister who witnessed the spectacle feared
violence, but the deal went smoothly and AIC won the right to
rehabilitate and expand the factory.

Adel defended the process but acknowledged that he has changed his
procedures. "It was unusual. It was our first bidding," he said. To
Parsi, it was a blatant example of influence peddling in the ministry.
"They can do whatever they want," said Parsi, who now works in the
geology department of the Mines Ministry. "The whole ministry is
corrupt. No one is clean there. I don't see how this is going to end.
Only God can stop this corruption."

Mahmoud Karzai could not be reached for comment. Adel said he exerted no
influence over the ministry's decision. "If Mahmoud comes here, he has
to sit there 30 minutes or one hour waiting for me," Adel said in his
office. The contract called for a massive increase in production -- from
the 40,000 tons produced this year to 3 million tons -- by refurbishing
the functioning plant, finishing construction on a second, adjacent
factory, and building a third. But on a recent visit to the factory, the
grounds were quiet and nearly abandoned. A manager blamed technical
problems.

The work on the Aynak copper mine, in the high desert terrain of Logar
province, has also gone slowly. The Chinese company has fallen about a
year to 18 months behind schedule. The railroad project has not started.
The company has complained about security threats from neighboring
villages, despite an on-site force of more than 1,500 Afghan national
policemen. The deposit is estimated to hold enough copper to generate
more than $200 million a year in government royalties, an amount
equivalent to about a third of Afghanistan's budget last year, according
to a report on the project by James R. Yeager, an American geologist who
served as a ministry adviser.

Yeager's report criticized what he called a "murky and insufficient
tender process" led by a "strong-willed minister unrelenting in his
preference to see this award through with Asian partners." In ministry
meetings to evaluate the bids, which included proposals from American
and Canadian firms, Adel was a dominant force, several officials said.

"Anytime somebody brought up anything, he would squelch it," Yeager said
in an interview. "We never really had any discussion."