Iran, Afghanistan, and a plastic bag full of cash

By Willis Sparks

The New York Times reported on Saturday that Feda Hussein Maliki, Iran’s ambassador to Afghanistan, recently passed a large bag full of cash to Umar Daudzai, chief of staff to Afghan President Hamid Karzai. According to the Times, unnamed Afghan and Western officials say the payment was part of a "secret, steady stream of Iranian cash intended to… promote Iran’s interests in [Afghanistan’s] presidential palace" and "to buy the allegiance of Afghan elected officials, tribal leaders and insurgent commanders."

Iran has dismissed the report as "devilish gossip," and even some members of Karzai’s staff initially denied the report. But Karzai himself now admits that it’s true — though he claims the payments are no secret. "The cash payments are done by various friendly countries to help the president’s office and to help dispense assistance in various ways to the employees around here, to people outside, and this is transparent and this is something that I have discussed," Karzai said. The United States’ sometimes pay in cash too, he added.

On the question of transparency, Karzai has a point. After all, the money was reportedly packaged in plastic bags.

Maybe the anonymous sources who leaked this story are working to drive a wedge between Karzai and his chief of staff, who some Western officials say is Tehran’s man in Kabul. Maybe someone is trying to punish Daudzai for complaining about the use of private security companies in Afghanistan to protect aid organizations, a practice Karzai now blames for the deaths of significant numbers of Afghan civilians.   

Maybe the story is designed simply to shine another light on Iran’s backroom bid to build patronage networks inside Afghanistan — and thus to make it a little more difficult for Tehran to extend its influence. Maybe the leak was designed to build a case for U.S. troops to remain in Afghanistan longer than some within the Obama administration would like. Perhaps all these factors played a role.

But the larger story here is that U.S. troops will one day leave Afghanistan — and that the neighbors, including Iran, want as large a say as possible in what happens next. Reaction to this story sounds a bit like the surprise and outrage expressed by members of Congress when someone inside the United States is caught spying for Russia. As if no one could have known that Moscow still spies on Washington, or that Washington still spies on Moscow. It would be a lot more shocking if Iran weren’t trying to buy influence in Afghanistan.

Given the Taliban’s history and its views of Shia Islam, it’s fair to say that Washington and Tehran share a common enemy in Afghanistan. The Sunni-dominated Taliban has massacred Shia, targeted Iranian officials, and fueled the transport of opium from Afghanistan into Iran. Neither government wants a return to full Taliban control.

But as in Iraq, Iran also has a clear interest in seeing both the withdrawal of U.S. troops from a neighboring country and expansion of Iranian influence there.

President Obama has pledged to begin the withdrawal of U.S. troops next July, though the pace of drawdown will depend on security conditions in Afghanistan — and political conditions at home. But however long U.S. troops remain in Afghanistan, just as in Iraq, they can’t stay forever.

The other moral of the story is that, despite hundred of billions in outside help, Afghanistan is still a country where cash is king.  

Willis Sparks in an analyst in Eurasia Group’s Global Macro practice.