Multibillion-Dollar Afghan Fund at Risk of Being Stolen by Taliban, Watchdog Warns

Biden admin placed $3.5 billion in a fund that has made no disbursements and lacks safeguards

Taliban fighters in Kabul, Afghanistan, in 2021 (Getty Images)
January 12, 2024

More than a year since its creation, a U.S.-backed fund to support the Afghan people has not made a single disbursement and lacks safeguards to prevent the $3.5 billion investment from being stolen by the Taliban government, according to a government watchdog.

The Afghan Fund was created more than a year ago by a Biden administration order that allowed more than $3.5 billion in funds previously held by Afghanistan’s central bank to be moved into a charitable account tasked with aiding the war-torn country’s ailing population.

Since that time, "the Fund has made no disbursements for activities intended to benefit the Afghan people" and currently has no "specific controls in place to ensure funds are not diverted to or misused by the Taliban," according to a report published earlier this week by the Special Inspector General for Afghanistan Reconstruction (SIGAR), which monitors American aid to the country.

The uncertainty surrounding the fund highlights the challenges the Biden administration faces as it tries to stem a humanitarian crisis in Afghanistan that was sent into overdrive following its botched 2021 withdrawal from the country that brought the Taliban back into power. With the terror group in control of the country’s governing bodies, it has been able to steal Western aid and force U.S.-funded humanitarian workers into paying them fees.

The money in the Afghan Fund has yet to be spent because the fund failed to develop a set of safeguards meant to stop disbursements from enriching the Taliban, according to SIGAR.

"Notwithstanding its previous claim that the Fund already had ‘robust safeguards’ in place, [the] Treasury [Department] reported that a compliance program to prevent funds from being provided to sanctioned or criminal individuals, including members of the Taliban, was ‘under development,’" federal investigators found.

The money also cannot be returned to Afghanistan’s central bank because at least three members of its current executive board are "longstanding senior Taliban leaders," SIGAR learned. "At present, [the central bank] is not independent of the Taliban—its top three officials are senior Taliban leaders under U.S. and U.N. sanctions."

The watchdog group also discovered that one of the Afghan Fund’s U.S.-appointed trustees is a member of the central bank’s governing body, posing a potential conflict of interest.

"It is not clear whether this constitutes a conflict of interest in the form of competing fiduciary responsibilities," SIGAR reported. "It is also unclear who determines whether a conflict of interest exists or how it is defined."

Additionally, the State Department "was unaware that one of the individuals it selected to be a fiduciary of [the central bank’s] assets was fired from a previous position for misrepresenting his credentials, raising questions about the adequacy of State’s vetting process."

The State Department also would not provide SIGAR with details about how it vetted the individuals chosen to transfer central bank assets into the Afghan Fund.