Where Was Deloitte While Kabul Bank Was Looted?

The troubling story of Kabul Bank -- looted of some $850 million by corrupt insiders connected at the highest levels of the Afghan government -- has just gotten even more troubling. It turns out that the U.S. paid a top accounting firm, Deloitte, a small fortune to keep an eye on things at the bank, only to have Deloitte be asleep on the job when the fraud went down.

This latest twist emerged earlier this week when the U.S. Agency for International Development suspended the contract with Deloitte after its AID's Inspector General issued a damning report on Deloitte's negligence during the Kabul Bank heist. According to the report, "Deloitte advisers did not follow up aggressively on fraud indicators." Apparently Deloitte advisers were told clearly and on different occasions that there was a high risk of fraud at Kabul Bank. And even when the fraud was being investigated, the report said, "the Deloitte advisers remained detached, providing only theoretical advice instead of lending hands-on assistance to find evidence of the fraud that seemingly everyone believed exists."

One has to wonder: If a top accounting firm could miss a $900 million fraud, just what exactly was Deloitte doing for the $92 million that the U.S. paid it to provide provide technical assistance" to the Afghanistan Central Bank "in bank supervision and examination?" Long lunches at Kabul's luxury Serena Hotel, perhaps? 

This would not be first time that a major U.S. contractor failed to fulfill its obligations in Afghanistan. In fact, contractors operating in both Afghanistan and Iraq have been accused of a wide range of failures and abuses that have cost taxpayers a fortune. While some patriotic Americans have voluntarily chosen to fight and die in these battle zones, major corporations have seen an opportunity to line their own pockets while doing the least amount of work possible.

The difference here is that this profiteer is a respected accounting firm. Surprised? I'm not. Nearly every major accounting firm, including Deloitte, has been implicated in some of the worst financial scandals of our time. Greed, it would seem, is an alarmingly powerful current in an industry that is entrusted with ensuring the integrity of crucial corporate and financial institutions -- not just at home, but also abroad.

Report on Deloitte Negligence in Kabul Bank Fraud