How vulture capitalism evolves in Afghanistan

A key theme in my new book Profits of Doom… are the ways in which corporations enrich themselves in times of war.

Here’s the latest example, via the New York Times:

Dollar for dollar, Mahmood Karzai may well hold the title for getting the least value out of his pricey American lawyers. Mr. Karzai, a brother of President Hamid Karzai, paid one of them $100,000, and all he got was a single meeting and one follow up e-mail — and then the lawyer died.

Now he is looking for someone new to sue the estate of the dead one. “I need to find a good lawyer,” he said in an interview.

While it may not be surprising that a Karzai has access to high-powered legal help, thanks to an economic boom underwritten by the United States, there are more Afghans than one would imagine who have the money to pay legal talent from places like New York and Washington — and who have the reasons to need it.

It was probably inevitable that lawyers would follow American dollars to Afghanistan, and the arrival of some of the most prestigious law firms on the scene in recent years says a lot about just how good a business opportunity this war has been for many people.

First came the military contracts: deals with Afghans to do all kinds of things, including shipping supplies for American troops and hauling out human waste from military outposts.

Then came the crackdowns, and lawsuits, when jobs did not get done right, or the money simply went missing.

And now many Afghans who grew wealthy off American contracting are learning that the price of keeping their good names, their revenue streams and, potentially, their freedom starts with a six-figure retainer.

“We paid them when they started our work, and we paid them when they finished,” said Ahmad Rateb Popal, chairman of the Watan Group, an Afghan security and logistics firm. There was, he noted, “no bargaining.”

The lawyers in question were from Venable of Washington. The Watan Group hired the firm after being banned in 2010 from doing work for the United States government over… allegations that it had paid off the Taliban… to keep supply convoys safe.

It cost almost $1 million in legal fees to get the ban reversed in 2011, and Watan still had to agree not to guard convoys for three years, Mr. Popal said. At the time, much of the $25 million to $30 million a year Watan was making on work for the United States was for convoy security.

Venable did not respond to a request for comment.

Before its run-in with the Pentagon, Watan was spending nothing on legal fees, Mr. Popal said. Now, as it has branched out into other business, like oil exploration, it has added to its stable of legal talent, seeking advice on structuring deals and reviewing contracts from other firms. Mr. Popal said they include Fulbright & Jaworski, one of the largest in the United States, based in Houston.

It is hard to say just how many Afghans have sought outside legal counsel to smooth their dealings with the United States — neither the entrepreneurs nor their clients are eager to advertise their relationships. But in general, the owners of big Afghan businesses seem to fall into two categories: those who already have legal problems with the United States government, or those who anticipate they will have them soon enough. To that end, the firms they favor tend to have big Washington practices.

To be clear, most of the billions of dollars spent by the United States in Afghanistan have gone to American companies, which then subcontracted work to Afghans firms — and, when needed, provided their Afghan partners with referrals for legal counsel in the United States. Many of the American companies have also… run into legal troubles… of their own, but most are used to paying top dollar for legal help as the price of doing business.

It can feel a bit more surreal when the Afghan owner of a used car and spare parts garage in the United Arab Emirates, Yousef Zaland, stops an interview and mentions that perhaps it would be best to call his lawyer in the United States.

“He is in Washington. He is at Patton Boggs,” Mr. Zaland, a businessman who has been accused of aiding the Taliban, said during the interview in July.

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