US fumed as Karzai backed ex-warlord

Karzai rebuffed the request, according to secret diplomatic records, and the minister — privately termed “the worst’’ by US officials — kept his perch at an agency that controls $2 billion in US and allied projects.

The State Department correspondence, written as Karzai was assembling a Cabinet shortly after his 2009 reelection, reveals just how little influence US officials have over the Afghan leader on pressing issues such as corruption.

Reining in graft is seen as vital to Afghanistan’s long-term stability. President Obama recently cited an urgent need for political and economic progress even as military successes have blunted the insurgency in some regions.

But US aid to Afghanistan has continued despite the dispute in December 2009 over the former warlord, Ismail Khan.

US Ambassador Karl Eikenberry pressured Karzai to remove Khan, a once-powerful mujahedeen commander, from the top of the energy and water ministry, according to two State Department reports written at the time by US Embassy officials in Kabul. They were disclosed this month by WikiLeaks.

A Dec. 19, 2009, memorandum distributed internally under Eikenberry’s name described Khan as “the worst of Karzai’s choices’’ for Cabinet members. “This former warlord is known for his corruption and ineffectiveness at the energy ministry,’’ the memo said.

Even with US threats to withhold aid, Karzai rejected requests to replace Khan. “Our repeated interventions directly with Karzai . . . did not overcome Karzai’s deeply personal bonds with Khan,’’ one of the reports said.

Khan, during a brief interview, did not respond directly to a question asking whether he was profiting personally from the ministry. He denied any widespread problems of corruption or mismanagement.

“No money is missing from the ministry,’’ he said. “All the income goes directly to the bank.’’

Khan said he was unaware of any complaints against him or the ministry. “If there have been complaints, nobody has come to me to tell me,’’ he said.

The United States continued pouring hundreds of millions of dollars into new energy and water projects that the ministry used to help generate tens of millions in customer fees. Many of those fees are lost each year partly due to corruption, according to US-funded reviews of the ministry’s operations.

The US diplomatic cables do not outline specific graft accusations against Khan, but detail several days of pointed exchanges and consternation over Karzai’s decision to keep him.

Karzai told US officials in a Dec. 14, 2009, meeting that Khan remained his choice for energy minister. Karzai said US Secretary of State Hillary Rodham Clinton had agreed to the choice after Karzai had said he would appoint “competent deputy ministers’’ under Khan.

Eikenberry disputed that. He said keeping Khan in the post could jeopardize future aid because US policy prohibits investing “in ministries not competently led’’ and Congress was concerned.

Karzai said he would reconsider. He eventually stuck with Khan.

Concerns about Khan and his ministry surfaced soon after he took over the agency in 2004. Consultants hired to identify problems in the ministry estimated that corruption contributed to the loss of $100 million or more each year from the country’s electricity system that should go back to the Afghan government, according to reports for the US Agency for International Development.