MPs question MI6 cash for Karzai

Hamid Karzai declared handouts from the CIA and MI6 are an "easy source of petty cash". Photo / AP

British intelligence is handing "bundles" of cash to Hamid Karzai, the President of Afghanistan, for special peace projects despite warnings that handouts are promoting corruption in his regime.

MI6 officials have acknowledged that the organisation has made direct cash payments to their Afghan counterparts periodically over the 12 years that Britain has been at war in Afghanistan.

Karzai declared handouts from the CIA and MI6 are an "easy source of petty cash" for his Government as it attempts to seal alliances with regional warlords and secure defections from the Taleban.

The CIA support is believed to have amounted to tens of millions of dollars since 2001, while Britain has channelled a smaller fraction into "special projects" undertaken by Karzai's officials.

MPs expressed concern that by simply handing over so-called "ghost money" to Karzai and his lieutenants, British spies could not be sure that the money would not be lost to corruption.

Adam Holloway, a Tory MP and member of the defence select committee, warned that Karzai's regime could not be trusted even if the payments could be justified on the grounds that Taleban and other insurgents must be rewarded if they give up the fight against Nato troops.

"Every effort towards a political fix in Afghanistan must be made and those efforts welcomed, but whether or not the money is well spent is a matter that must also be considered," he said. "There is plenty of evidence that Karzai and his clique do not have an interest in a peace settlement, but instead have an interest in continuing the conflict."

As Britain reduces troop numbers before withdrawing at the end of next year, there are fears that the pressure to seek a deal with insurgents will result in increasing amounts of secret cash being spent in Afghanistan.

"We also need to know more about how and where any cash from the UK is being used - how it is being monitored, and what benefits it is actually bringing to the people of Afghanistan," said Angus Robertson, the Scottish National Party MP and party defence spokesman.

"It is enormously important to ensure that Afghanistan is as peaceful as it can be in the build-up to withdrawal."

The revelation that Karzai's office is awash with cash from his allies has caused a furore in the Afghan Parliament where the Government has faced a barrage of corruption allegations.

"Accepting such money is a big insult to Afghanistan. All those who accepted the cash payments have betrayed the nation," said Hidayatullah Rihaee, an MP from Bamyan Province.

But Karzai said the cash flow was vital to his grip on power and said he had begged the CIA station chief to continue.

He admitted that the money had been passed on to potential allies, but added: "We have not spent it to strengthen a particular political movement. It has been given to individuals."