Since the Biden administration promised to release half of the $7 billion in Afghan central bank assets back to the country late last week, it has offered very little information on how it plans to do so — or when. Instead, the White House has blamed the delay on the court proceedings concerning the other half of the funds, which President Joe Biden set aside to settle a lawsuit against the Taliban by a small subset of 9/11 victims’ families. The result is a game of finger-pointing in which the lives and livelihoods of millions of Afghans are suspended, falsely contingent on the slow-moving court and a rapacious circle of lawyers.
The proceedings are currently under an injunction while more 9/11 families argue they should also have access to the funds, but legal experts say Biden’s broad emergency powers allow him to release the seized funds any time. In fact, Biden was initially forced by a court order in the Taliban lawsuit to make a decision about the assets — which were frozen when the U.S. withdrew from Kabul, despite belonging to the Afghan people and not the Taliban — by February 11.
When news of the split funds first broke last week, it was reported that the half not reserved for ongoing litigation would be channeled through humanitarian groups. That appears not to be settled: The corresponding executive order doesn’t specify, and officials seem undecided on what exactly they want to do with the billions of dollars held in the New York Federal Reserve Bank. For now, the funds are said to be in the process of being diverted to a trust fund “for the benefit of the Afghan people.”
In an interview at the United States Institute for Peace on Tuesday, Thomas West, the State Department’s special representative and deputy assistant secretary for Afghanistan, tacitly confirmed that the administration is still weighing whether to use these funds to provide the Afghan economy with liquidity. He conceded that the consensus opinion he hears from Afghans and experts on the best use of these funds is to channel them toward the “potential recapitalization of a future central bank,” but told moderator Stephen Hadley that officials are “early in [their] discussions” about how to release the funds. A source with knowledge of internal discussions, who was granted anonymity in order to speak freely, confirmed that the administration is considering releasing some of the funds to the Afghan central bank.
But how committed Biden is to using the funds for macroeconomic stability — the lack of which is the driver of the economic collapse — remains an open question. In a separate exchange on Tuesday, the administration again pointed to the court case, this time to justify their slow decision-making. In response to a question about how the administration justifies seizing money from Afghanistan’s federal reserve in the first place, press secretary Jen Psaki claimed the administration was taking a “proactive step” in splitting the assets of the Afghan central bank, which were frozen six months ago.
When prodded by The Intercept to explain how this step was proactive given the remaining uncertainty over when and how these assets will be released, Psaki pointed to the ongoing litigation, telling reporters that “no funds can be transferred until the courts make a ruling” on whether the money should go to the families of some of the victims of 9/11 and other terrorist attacks. She then reiterated that the move was “proactive” because it signals the administration’s intent to eventually get some of the money to the Afghan people “for humanitarian purposes.” (None of the participants in the 9/11 attacks were from Afghanistan; only a small number of victims’ families are participating in the lawsuit.)
This line of reasoning was picked up by the lawyers representing the most prominent group of 9/11 plaintiffs, who used it to press the judge to lift the stay on their purported share of the Afghans’ money. In a filing on Wednesday, a team of lawyers including Lee Wolosky, a recent member of the White House team on Afghanistan, accused the administration of dragging its feet, telling the court that “the sooner [the] proceedings move forward, the sooner [the Afghan central bank] funds may be applied in service of urgent humanitarian needs.”
Afghans are in the throes of a harsh winter, and the administration’s indecision ensures that the liquidity the economy needs to restart is still months away. In a call explaining the decision to split the assets on February 11, a senior administration official explained that it would be “months and months” before any of the assets would be doled out.
The economic crisis has been the topic of increasingly alarming warnings from international human rights organizations. Multiple reports from these organizations have described devastating conditions: individuals selling their organs, families burning their furniture for warmth, and children dying of malnourishment or being sold by parents desperate for basic commodities like food and fuel.
Several international human rights and economics experts within these organizations told The Intercept this week that the administration’s messaging has been inconsistent and their movement toward releasing the assets of the central bank has been slow. According to Graeme Smith, a consultant for the International Crisis Group who testified about the plight of the Afghan people in a Senate hearing last week, the devastation Afghans are experiencing as a result of the delay is difficult to quantify, but the reality, he told The Intercept, is that “people are starving to death — dying quiet, miserable deaths behind mud walls.”
The Congressional Progressive Caucus has continued to push the Biden administration to release Afghanistan’s reserves. In a statement released on Tuesday, they lambasted Biden’s decision to split the Afghan central bank’s assets, saying that “by removing and breaking up Afghanistan’s already frozen funds, the United States is continuing to contribute to a crumbling economy and devastating impacts on the Afghan people.” They dismissed the idea of waiting until litigation over the funds concluded.
Multiple legal experts have also dismissed the idea that the Biden administration needs to wait until the conclusion of litigation to release another country’s foreign reserves. Even Biden’s relatively few defenders in the international human rights community concede that the politics of ongoing litigation are a factor in the administration’s refusal to engage in prompt action to recapitalize Afghanistan’s central bank. In a recent post for the think tank Atlantic Council, Brian O’Toole defended what he described as the administration’s “kabuki theater” on the grounds that a swift release of the bank’s assets, which experts say is well within the administration’s broad authority, would leave the administration “bogged down in years of legal action.”
The longer the United States delays the release of the central bank’s funds, the longer starving Afghans will have to wait for relief. John Sifton, the Asia advocacy director at Human Rights Watch, told The Intercept that the next few months will see critical spikes in acute malnutrition. By the end of March, over half of Afghans are expected to face crisis or emergency levels of food insecurity. Both Smith and Sifton pointed to an injection of liquidity into the Afghan economy as the critical move needed to prevent widespread humanitarian disaster. While recapitalizing the existing central bank is not the only option for providing liquidity, experts say it is the quickest route to get money flowing through the economy.
“It’s good that U.S. policymakers are talking about reviving the [Afghan] central bank,” Smith told The Intercept, “but they can’t do it quickly enough.”