March Madness

The NCAA tournament is one of my favorite times of the year. For three weeks every March/April, supply exceeds my demand for sports TV. Despite pre-season projections that my Illini wouldn’t make this year’s tournament, they earned their trip and seemed ready to demonstrate to their skeptics that their 5-seed wasn’t a fluke. Watching from Kabul through a webcam aimed at my family’s TV in Illinois (at the convenient tip-off time of 6:30am Afghan time), I quickly learned that they were in store for an early exit. Good thing White Sox opening day is right around the corner…

Unlike my Alma Mater, I’m moving on from my “first round match-up” here in Afghanistan, with a more challenging opponent awaiting me. Round 1—my first six months on the ground—tested whether I could thrive as an expat in Afghanistan. It brought the challenge of adjusting to a new life of cross-cultural communication, cold showers, and curfews. It forced me to defer to a culture foreign to anything to which I’ve ever been exposed. How do I know that I’ve won? When I returned to Kabul in January, post-China, I was no longer wondering if I could make it here. At some point during the winter I had determined that I simply would make it here.

Round 2 has moved from the home to the office. ”Can I live here” has been replaced by “Can I make a difference here?” For the first time in my career, I’m in a management role focused on strategy more than the day-to-day tasks. I’m learning to apply my Wall Street work ethic, management style, and drive…without causing panic attacks in my staff. I’m working daily with people for whom English is a second language and learning to be patient with people who don’t understand me (and to call out superficial head nodding). At the same time, HFL (Hope’s partner here) is uncovering its largest fraud scheme faced to date. The scheme is simple. Normally, loan officers look to community leaders to help form groups of clients who each take out loans to start businesses while guaranteeing each other’s repayments. In this scheme, however, the groups consist of “ghost clients” who have no intention of starting businesses, but instead collect loan disbursements and hand the money off to the group leaders (most likely with a kickback). The end result is a select few individuals with big (and risky) loans instead of a group of individuals with small loans. In our case, we’ve determined that six female “ring leaders” have each formed several ghost groups who have all replicated the scheme. Where do we currently stand? Over 100 ghost clients and a dangerous percentage of our portfolio at risk.

We need to send a message that defrauding our company will simply not be tolerated. But in a country where corruption rules over justice and impunity is assumed, how do we do this? We could attempt to have each of the women arrested and prosecuted, but in doing so we would run the risk of the ring leaders bribing the police and the police turning against our lawyer and loan officers…accusing them of being the real architects of the scheme. Not to mention that people in prison usually don’t pay off loans. We could consolidate the loans and treat them as individual loans of the ring leaders, but in doing so these women essentially go unpunished, sending a message that we have little to no power to do anything should our clients defraud us. We could simply announce to their families, friends, and neighbors exactly what these women have done and use social pressure to force repayment. In a culture where people will do virtually anything to maintain honor (often dishonorable things), this may be the best option…though it could force the women to flee, which we are powerless to prevent. None of these options are ideal – each has its holes. Bernie Madoff scammed from investors and went to jail. Our clients scam from our company and get restructured loans or a free pass. That is unfortunately life in Afghanistan at the moment.

My challenge, then, is to understand this context and to pursue solutions that are a compromise between what’s objectively right and what will actually work. I’ve grown up in a system in which there are feedback mechanisms in place to deliver justice. We have collection agencies and credit bureaus. We have the police. We have courts. We have a government that will implement and enforce laws that protect us. In Afghanistan, corruption and weak social infrastructure mean that we don’t have such safety nets. We must be creative to operate here...and at the same time come to terms with the fact that sometimes justice doesn’t win. How do we do this? How do we fight for principle, for our portfolio, and for the HFL staff against a system where power trumps rules? How do we keep in mind the practical reality that success will probably require compromise? This is Round 2.

I’m not the only one in this game—the expat community in Kabul is also experiencing first-hand its vulnerability to corruption. Back in 1959, as a gesture of goodwill, President Eisenhower and Afghanistan’s King Zahir Shaw came to an agreement in which the US would build a mosque in Washington DC in exchange for allowing the first and only recognized church in Afghanistan to be built in Kabul. The agreement brought outrage from religious leaders across the country, and after a political coup in 1973, the new government gave into the protest. The church board chair was exiled, the church was leveled, and the board was left with nothing but the plot of land. A small house on that land has been serving as the church ever since…until recently.

Now, the original land owner, Tamim, who happens to be the stepson of the Minister of Defense (and a former used car salesman in America…seriously), has returned demanding the land and the house. He claims that the church has no right to the land or the building, and has taken the case to the Afghan courts. For the past two months, Dan, as Chairman of the Board of the church, has been dragged away daily to court (forcing me to pull “Lehman hours” once again) in what I can only describe as one of the most bizarre legal battles I’ve ever seen. With virtually no evidence that the property should be handed back to him, Tamim has muscled his way through the legal system using bribes, courtroom rants, and threats on virtually everyone (which apparently you can do when your stepfather is the Defense Minister). And now, in what has taken “bizarre” to a whole new level, we’ve learned that the case has never actually been filed with the courts – that the landlord has been bribing/pressuring judge after judge to rule on a case that doesn’t even exist. How did we find all of this out? The church’s attorney decided to speak with a former Nixon aid, who spoke with Secretary of State Clinton, who spoke with President Karzai, who spoke with the Afghan Supreme Court Justice, who has been informed to “bring order” to his court. We’re now awaiting word on how things will proceed and whether this pretty remarkable feedback loop translates into justice. Given the country’s August elections (and a struggling used car market in the States), we’re assuming he will push to get this resolved as soon as possible.

As you can see from the examples above, life here is and will continue to be challenging. Corruption permeates virtually every aspect of life, oppressing individuals, communities, and institutions alike. But at the same time that corruption oppresses, microfinance empowers by giving people opportunities to better their lives in an ethical manner. Yes, some will try to take advantage of us. Some will outright screw us. That’s life, anywhere. We deal with it, learn from it and try to prevent it as we move forward. Nothing that has happened since I came back to Kabul in January has demoralized me; rather, it has strengthened my passion to get better at what we do so that none of this happens again. And as friendships continue to grow, as the winter wears down, as electricity now flows in abundance to Kabul (thank you Uzbekistan!), and as I learn to enjoy life more each day despite the challenges, I (still) wouldn’t choose to be anywhere else. Happy New Year to everyone, as March 21st marked the beginning of year 1388 of the Islamic calendar!

I was always told that winter in Kabul is stunning...see if you agree. Also included are some pics from a recent trip to Kampala, Uganda with an Afghan colleague (Aman). Enjoy!