Kabul, Oct. 25: The Afghan President, Mr Hamid Karzai, admitted on Monday that his chief of staff had received “bags of money” from Iran but insisted the payment was transparent and a form of aid from a friendly country.

Cash payments “are done by various friendly countries to help the president’s office... this is transparent,” Mr Karzai said at a press conference.

The New York Times reported on Saturday that Mr Karzai’s chief of staff, Mr Umar Daudzai, received regular cash payments from Iran, a US foe that is reportedly trying to expand its influence in the presidential palace in Kabul.

But Mr Karzai angrily rejected the reports that the payments were secret.

“This is nothing hidden. We are grateful for Iranian help in this regard. The United States is doing the same thing. They’re providing cash to some of our offices,” he said.

Asked if the money came in bags as reported he said: “It does give bags of money yes, yes it does... it’s all the same let’s not make this an issue.” He said that Iran has assisted his government with up to $980,000 once or twice a year in the form of official aid.

“He (Daudzai) is receiving the money on my instructions,” he added. — AFP

The New York Times, citing unnamed Afghan officials, said the payments total millions of dollars and go into a secret fund that Mr Daudzai and Mr Karzai have used to pay the Afghan lawmakers, tribal elders and even Taliban commanders to secure their loyalty.

“It’s basically a presidential slush fund,” one Western official is quoted by the paper as saying. “Mr Daudzai’s mission is to advance the Iranian interests.” Thousands of Pentagon files leaked in July indicated that Iran is funding the Taliban nine years after the 2001 US-led invasion ousted the Taliban regime from power. The Iranian President, Mr Mahmoud Ahmadinejad, denied those charges.

Answering a question on what the Iranian authorities wanted in return for their payments, Mr Karzai replied angrily that they wanted good relations.

“They want good relations in return. Lots of other things in return, Afghanistan and Iran have neighbourly relations.

“We have also asked lots of things in return in this relationship, so it’s a relationship between neighbours and it will go on and we’ll continue to ask for cash help from Iran,” he said.

The New York Times had reported that both Mr Daudzai and Mr Karzai had declined to respond to written questions about their relationship with Iran.

The Iranian embassy in Kabul on Monday dismissed the report as “ridiculous and insulting.”

The Times cites unnamed officials as saying that the Iranian payments are intended to secure the allegiance of Mr Daudzai, a former ambassador to Iran who consistently advocates an anti-Western line to Mr Karzai and briefs Mr Karzai daily.

In August 2009, when Mr Karzai wrapped up a visit to Iran, Mr Feda Hussein Maliki, the Iranian ambassador in Kabul, brought to the presidential plane a plastic bag filled with euro bills and handed it to Mr Daudzai, according to the report.

“This is the Iranian money,” the paper quotes an Afghan official as saying. “Many of us noticed this.” Iran was involved for the first time last week in international talks on the future of Afghanistan held in Rome, and said it could help stabilise the country with US support.

Mr Mohammad Ali Qanezadeh, director of the Iranian foreign ministry’s Asia department, said that Tehran was spending hundreds of millions of dollars (euros) in Afghanistan for children’s education and reconstruction.

The senior US envoy for Afghanistan and Pakistan, Mr Richard Holbrooke, also said last week that Iran had “a role” to play in Afghanistan and welcomed the Islamic republic’s participation in the Rome talks.