By Amy Davidson for the New Yorker:

Who owns Kabul Bank? And where has its money gone? Last night, after Obama had finished his speech about how we were sort of almost done in Iraq but still had a lot of lives to lose and money to spend in Afghanistan (see Anderson, Osnos, and Packer for more on that), the Washington Post put a story on its Web site about how the Afghan Central Bank was moving to replace the management of Kabul Bank. This is the bank that handles the payroll for Afghan soldiers and schoolteachers. From the Post:

Kabul Bank's wayward lending practices, real estate speculation in Dubai and weeks of venomous feuding between major shareholders have threatened to wreak economic and political havoc.

U.S. officials have long worried that Kabul Bank, because of its size and unorthodox practices, could trigger financial mayhem, a prospect that would leave Afghan security forces without pay, threaten unrest by angry-and often armed-depositors and undermine President Obama's Afghan strategy.

Our war in Afghanistan may be compromised by a bank? And, again, whose bank-who are the major shareholders involved in "venomous feuding?" The Post includes a helpful chart; they all seem to have ties to Karzai, his election campaign, and his cabinet. One is his brother, Mahmoud Karzai. He is in a better position to come out of this well than the depositors who were heading to the bank to get their money out this morning; there is a fair amount of confusion at the moment about who's in control, what the central bank's role will be, and, most of all, where all the money has gone. (Some seems to have funded an airline owned by the chairman of the bank.) Are American taxpayers going to end up bailing this bank out, because it's so entwined with the Karzai government that it's considered crucial to the war effort? Is there such a thing as a bank that's too corrupt to fail?

The Wall Street Journal, in a follow-up, described "a massive portfolio of off-the-books loans by the bank's chairman to himself and to other politically connected Afghans." The bank has also, according to the Journal, used hawala, a less-than-regulated money-exchange system, "to clandestinely transfer almost $1 billion out of Afghanistan in the past few years." It was mixed up with New Ansari, a firm that, as the Journal put it, "allegedly helped Afghan politicians, drug barons and even the Taliban move billions of dollars out of the country." (Karzai recently intervened to get one of his aides, who was accused of taking a bribe to stop an investigation of Al Ansari, out of jail.) The Times said that Kabul Bank and its chairman, Sherkhan Farnood, were "at the heart of the political and economic nexus that sustains-and is sustained by-the government of President Hamid Karzai" and "provided millions to Mr. Karzai's campaign." Then there are its business dealings:

First among the beneficiaries was Mr. Farnood himself, the officials said. He invested about $140 million of the bank's money in the real estate market in Dubai in the United Arab Emirates, said Mahmoud Karzai, the president's brother and a Kabul Bank shareholder. Among those properties were more than a dozen multimillion-dollar villas in Mr. Farnood's name, some of them on Palm Jumeria, an island off Dubai's coast, Mr. Karzai said.

A lot of that value was lost when the Dubai real-estate market fell (assuming, of course, that the transactions were real). More from the Times:

It is not clear what Mr. Farnood did with all the properties he purchased, but he made at least some of them available to his friends and allies. One of them was Mahmoud Karzai, who owns about 7 percent of the bank. Speaking in an interview from Dubai, Mr. Karzai said he had rented one of Mr. Farnood's villas for the past year and a half.

Mr. Karzai said the bank's troubles-and Mr. Farnood's opaque dealings-had made him decide to vacate soon.

"I want to move to a different house," Mr. Karzai said. "I want to cut this out."

So President Karzai's brother has been living in a villa in the Emirates that constitutes a questionable investment by the bank he partially owns; but he might move. The Wall Street Journal said that a U.S. official had tried to make the case that the removal of bank officials was "a sign" that Karzai was getting a little bit serious about corruption. But, the Journal noted,

An Afghan banker with knowledge of the situation offered a less optimistic view, saying the move may have more to do with shifting political and business alliances among the country's small, clubby elite.

Mahmood Karzai, for example, has recently forged stronger links with the owners of Afghan United Bank, a competitor of Kabul Bank. Afghan United Bank's chairman owns a 20% stake in a housing development that Mahmood Karzai is building outside the southern city of Kandahar, where U.S. forces are making a major push against the Taliban.

So what is Mahmoud Karzai's new preferred bank like?

Afghan United Bank is owned by the founders of New Ansari, the hawala that is being investigated. U.S. officials say the bank's owners still control the hawala, although the bank's owners say they have cut ties to the money-transfer business.

Moving the money from one bank to another, or the President's dubiously wealthy brother moving himself from one villa to another, doesn't really count as doing something about corruption. Or, if it does, then we have a long way to go in Afghanistan. It's a bit like moving soldiers from one war to another, and calling it victory.

So, should U.S. taxpayers bail out Kabul Bank because it is considered so vital to the war effort?

Were that all our foreign policy decisions were so easy.