The Karzai Rule

Amy Davidson writes: If we’re talking about a Buffett Rule for taxes, we might also think about a Karzai Rule. This could be formulated as subjecting the the billions of taxpayer dollars we are sending to Afghanistan to the same rate of scrutiny we give to the income of a billionaire, or his secretary. That doesn’t seem to be the case now. The Times, this week, had a report on how the family of President Hamid Karzai is engaged in an end-of-days fight over whatever money and power is left to Kabul. The family has become rich enough on graft and other forms of corruption—funded, in many cases, by American contracts and piles of aid money—for factions to form among his relatives. One brother, Mahmoud Karzai, says another, Shah Wali Karzai, essentially stole fifty-five million dollars from a real-estate development venture called Aino Mena. Shah Wali says that he just moved the money because Mahmoud was going to steal it and move it abroad as he’s done with other funds (which Mahmoud denies). These charges are not mutually exclusive. Figuring out which brother of the President we’re keeping in power is guilty of stealing how much makes legal sense. But this may also be one of those cases where two people each tell you that the other is crazy, or corrupt, and all you can work out is that at least one of them is—and that maybe you shouldn’t be giving money to either of them.

Another question: Does anyone think that that Aino Mena, a big housing development outside of Kandahar, through which tens or hundreds of millions of dollars are apparently flowing, actually makes any economic sense? I could misapprehend the Afghan housing market, but it seems from a distance to be about as sensibly run as the Kabul Bank, where lending resembled looting and which ultimately failed, and involved some of the same characters. (See Dexter Filkins’s story for the details.) Then again, since, according to the Times, it is being built on “land that Afghan military officials have claimed was illegally seized from the Ministry of Defense,” it might make some money.

One odd aspect of the story is that a number of members of the Karzai family are actually American citizens, including Mahmoud. They lived here for many years in exile; they started a chain of Afghan restaurants, which are supposed to have pretty good food. This is also why Mahmoud is under investigation on various tax-evasion charges, and here the Karzai Rule suggests another question: If you can’t even tax the true income of the expatriate multimillionaire American associates of a corrupt foreign regime, should the taxes of a secretary in America be paying for it? [Continue reading…]

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