VZCZCXRO4596
OO RUEHDBU RUEHIK RUEHYG
DE RUEHBUL #0953/01 0831300
ZNR UUUUU ZZH
O 241300Z MAR 07
FM AMEMBASSY KABUL
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7007
INFO RUCNAFG/AFGHANISTAN COLLECTIVE PRIORITY
RUEHZG/NATO EU COLLECTIVE PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEKJCS/OSD WASHINGTON DC PRIORITY
RUEKJCS/SECDEF WASHINGTON DC PRIORITY
RUEKJCS/JOINT STAFF WASHINGTON DC PRIORITY
RHMFIUU/HQ USCENTCOM MACDILL AFB FL PRIORITY
RHMFIUU/COMSOCCENT MACDILL AFB FL PRIORITY
RUCNDT/USMISSION USUN NEW YORK PRIORITY 3809

UNCLAS SECTION 01 OF 03 KABUL 000953 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DOD FOR USDP EDELMAN AND STATE A/S BOUCHER 
STATE FOR SCA/FO A/S BOUCHER AND SAS GASTRIGHT, SCA/A, 
S/CRS, SCA/PB, S/CT, 
EUR/RPM 
STATE PASS TO USAID FOR AID/ANE, AID/DCHA/DG 
NSC PASS TO AHARRIMAN 
OSD FOR KIMMITT 
CENTCOM FOR CFC-A, CG CJTF-76, POLAD, JICCENT 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PTER ASEC MARR AF
SUBJECT: PRT ASADABAD: CORRUPT TIMBER DEAL CANCELLED BY 
PRESIDENT AWAITS IMPLEMENTATION 
 
REF: (A) 2006 KABUL 5008 (B) 2006 KABUL 5877 
 
¶1. (SBU) SUMMARY: An unpopular and corrupt arrangement to 
sell timber to three designated contractors at below-market 
prices in Kunar has been cancelled by President Karzai in 
favor of a free market approach, but the order has yet to be 
implemented.  The privileged contractor arrangement 
represents a propaganda victory for the Taliban, so the 
urgent implementation of the President's decision would be 
the best hope to remove this impediment to security and 
government credibility in Kunar.  In the longer term, the GOA 
must devise a plan to regulate the timber trade in a 
transparent manner and manage timber resources.  END SUMMARY 
 
-------------------------------------- 
Timber, a Nexus of Corruption in Kunar 
-------------------------------------- 
 
¶2. (SBU) Just south of Asadabad, on the highway to Jalalabad, 
large convoys of trucks have assembled daily for the past 
several months, heavily loaded with timber.  As described in 
ref A, Kunar Province Governor Deedar received permission 
from Kabul in August to implement a plan to sell off large 
stocks of timber that accumulated in storage facilities when 
the previous Governor cracked down on illegal cutting and 
smuggling in early 2005.  Worth an estimated 8 billion 
Afghanis (USD 260 million) at the Kabul-determined price, the 
timber has been sold at below market-prices to three 
designated contractors who make substantial profits shipping 
it throughout Afghanistan. 
 
¶3. (SBU) Rumors of high-level involvement abound, including 
ongoing smuggling facilitated by senior police officers and 
the Governor.  The PRT sees in these rumors signs of 
rivalries between various factions and tribal leaders for a 
piece of the timber trade, with those left out of the GOA's 
deal understandably unhappy.  A sample of the plausible 
rumors and speculations about corruption in the timber trade 
follows: 
 
- ANP Kunar Chief General Jalal was reportedly placed in 
Kunar to ensure the security of the wood transport and 
represents the interests of Marshal Fahim. 
 
- The ABP Commander in Nangarhar, General Zahir (who remains 
at his post despite being officially removed from his 
position) was reportedly offered a bribe of USD 200,000 to 
let a 40-truck convoy of Kunar timber pass into Pakistan 
recently.  Zahir claimed to have rejected the bribe. 
 
- In addition to the taxes charged at the customs house for 
each truckload of timber leaving the province, the Governor 
takes Af 15,000 (USD 300) per truck as a personal fee. 
 
- Militants in the Korengal Valley benefit from timber sales, 
and their leadership has stocks of lumber in the storage yard 
in Asadabad, presumably being loaded and sold with the rest. 
 
¶4. (SBU) The existing fixed price contract for timber has 
enriched three well-connected parties, but average Kunaris 
buying small quantities of timber to build houses are often 
stopped on suspicion of smuggling by police eager to protect 
the trading privileges of the large contractors.  The PRT has 
met groups gathered outside the Governor,s office seeking 
his written authorization to move timber for small household 
and village level building projects. 
 
--------------------------------------------- ---- 
Karzai Cancels Deal, Kunaris Await Implementation 
--------------------------------------------- ---- 
 
 
KABUL 00000953  002 OF 003 
 
 
¶5. (SBU) The below-market price deal has angered average 
Kunaris.  As ref B noted, after meetings in Kunar, Attorney 
General Sabit pronounced the deal illegal.  He said he would 
urge the President to halt the buy up and allow traders to 
sell and transport timber freely.  In early January, a 
delegation composed of a Deputy Justice Minister, 
Presidential Adviser Osmani, and the Chief of the Forestry 
Department, visited Kunar to investigate corruption in the 
timber trade.  Provincial Administration Chief Fazl Akbar 
told the PRT 
that as a result of this visit the President decided on 
February 6 to cancel the fixed-price contracts for 
Kunar,s timber in favor of a free market system wherein 
anyone could buy and sell timber at any price, as long as the 
appropriate tax was paid on it when it left the province. 
 
¶6. (SBU) The Presidential order to cancel the timber 
contracts was announced in Kunar only on March 20, to take 
effect on the next day (the traditional Afghan New Year). 
Governor Deedar had earlier told the PRT that the order was 
being held up in the Presidential Administration (Comment: 
probably to benefit the three contractors).  Fazl Akbar has 
predicted that the reaction of the three contractors to the 
President's decision would be muted, because they had already 
recouped the bribes they paid for these contracts several 
times over.  He hoped that this decision would also help 
reduce corruption, as people would have less incentive to try 
to get around GOA rules on timber trade. 
 
¶7. (SBU) In the meantime, the Administrator of Pech District, 
Mohamed Rahman, appears to have crossed the interests of the 
timber contractors by slowing down shipments out of the Pech 
Valley out of concern that sale of timber from this region 
might benefit militants in Pech District's Korengal Valley. 
He has been detained by the NDS for the past three weeks on 
corruption charges which appear fabricated in order to get 
him out of the way.  Timber trucks continue moving steadily 
out of the Pech and down to Asadabad.  Rahman is a key 
partner of ISAF in securing the Pech Valley, and his 
detention has become a point of contention between ISAF and 
the GOA.  The PRT has urged Governor Deedar to intervene to 
secure Rahman's release.  Deedar, however, has done nothing 
to to secure Rahman's release and has sent a "temporary" 
District Administrator, with no legal standing, to act in 
Rahman's place, suggeting Deedar has an interest in keeping 
Rahman locked up.  Deedar told the PRT on March 13 that he 
was seeking a meeting with President Karzai to get Rahman 
released and to resolve the hold-up in issuing the 
President,s order to cancel the exclusive timber contract; 
but the President's travel abroad apparently delayed this 
meeting. 
 
--------------------------------------------- - 
Next Steps:  Managing Kunar's Timber Resources 
--------------------------------------------- - 
 
¶8. (SBU) The PRT has advised provincial leaders of the need 
for a long-term solution to the timber problem, including a 
system to regulate the timber trade to prevent smuggling and 
the deforestation of Kunar's mountains.   The PRT urged that 
such a plan include stronger reforestation and forestry 
protection elements, in addition to the development of a 
Kunar-based furniture and wood processing industry to add 
value before this resource before leaves the province. 
(Comment:  FY-06 PL-480 receipts will provide USD 1 million 
to the Ministry of Agriculture for Afghan Conservation Corps 
forestry work and USD 500,000 to the National Environmental 
Protection Agency for forestry and range management projects. 
 End Comment) 
 
COMMENT 
 
KABUL 00000953  003 OF 003 
 
 
------- 
 
¶9. (SBU) The timber trade is a cancer that eats at efforts to 
improve security in Kunar.  The timber buy-up plan has been 
widely unpopular, non-transparent, corrupt, and damaging to 
the reputation of the GOA.  In handing Kunar's main natural 
resource to a well-connected few, the GOA also handed a 
propaganda victory to its enemies, while doing little for the 
economy of Kunar.  Rivalries over timber have already 
sidelined a District Administrator who is one of the most 
effective ISAF partners in the eastern region and has 
consumed the attention of the provincial government to the 
detriment of its other duties.  The urgent implementation of 
President Karzai's decision to cancel the exclusive timber 
contracts is the best hope to improve this situation. 
NEUMANN