President Hamid Karzai on Monday confirmed that Afghanistan was receiving cash payments from Iran but insisted the funding was "normal."
Citing two Afghan officials, " on a flight in August.
The newspaper said the cash was "part of a secret, steady stream of Iranian cash intended to ... promote Iran's interests in the presidential palace." Western and Afghan officials allege that "Iran uses its influence to help drive a wedge between the Afghans and their American and NATO benefactors," the Times said.
When asked about the allegations at a press conference in Kabul on Monday, Karzai said: "We have accepted cash payments from Iranians, large sums. This is normal."
'We are grateful'When asked whether receiving cash was unusual, Karzai added: "The U.S. gives us large bundles of cash as well.
"We are grateful for the Iranians for the help they give us and we will continue to ask them for cash help."
Karzai said Iran contributes up to 700,000 euros ($976,500) twice a year.
NBC News reported that Karzai said the Iranian cash was "used for the presidential office, paying staff and other uses at presidential discretion."
Karzai said payments were being made by "various friendly countries" to "help dispense assistance in various ways to the employees around here and to people outside."
"This is transparent," he told reporters. "This is something I have also discussed even when we were at Camp David with President (George W.) Bush. This is nothing hidden ... The U.S. is doing the same thing. They're providing cash to some of our offices."
He said the U.S. was also providing "bags of money".
"It's all the same," Karzai added. "Let's not make this an issue."
Karzai's comments came after a former governor of a border province who claims he was ousted for his criticisms of Tehran said that Afghanistan and its Western allies are dangerously underestimating Iran's destabilizing influence on the country.
Ghulam Dastgir Azaad, who ran western Nimroz for five years, said he frequently investigated and was sometimes an intended target of attacks inside Afghanistan which variously used Iranian-supplied weapons or Iranian-trained militants.
The government and its foreign allies are too focused on Afghanistan's southeastern neighbor, Pakistan, in the search for stability and have ignored the role of Iran, Azaad said.
"No one pays much attention to Iran as Pakistan but that's a mistake... Iran plays its own hidden game to increase its influence in western areas," he told Reuters on Sunday in an interview at his Kabul apartment.
"We (in Nimroz) share about 90 kilometers (56 miles) of border with Iran, which Iran easily exploits to regularly send explosive devices and weapons into Afghanistan," added Azaad, who left his job in the province two months ago.
Explosives hidden under food
A senior border policeman told Reuters on Sunday that two weeks ago 19 metric tons of explosives were found in a 40-foot container coming from Iran, hidden under food items.
He had been advised not to speak badly of Iranian influence in the area, and asked to remain anonymous.
Nimroz lies in Afghanistan's southwest with a population Azaad estimates at just 400,000, as much of its 40,000 square meters is mostly empty desert, including the harsh Plain of the Dead.
But it shares a border with Iran to the west and Pakistan to the south — countries Azaad dubs "monster neighbors" — and has long been a crossroads for smugglers.
"As long as we don't strengthen our own borders, security will get worse there," Azaad said, citing several would-be suicide attackers who he said were detained and confessed to police in Nimroz that they received training in Iran.
"I also had evidence that Iran misuses Afghan refugees by providing shelter, equipment, training then sending them to carry out attacks against the government and NATO troops," he said.
Violence in Afghanistan is at its worst since the Taliban were ousted by U.S.-backed Afghan forces in late 2001, despite the presence of nearly 150,000 foreign troops, and there is increasing support in Kabul and abroad for efforts to seek a negotiated end to the war.
Azaad said his outspoken criticism of the Iranian government made him a target of six suicide attacks during his years in charge, and eventually cost him his job.
"Iran wanted to get rid of me either physically by sending suicide squad or politically. In the end Tehran managed to remove me politically," he said.
Karzai's office in Kabul declined comment on Azaad's remarks about Iran, but said it was normal procedure to transfer or replace a governor or other senior provincial official who had spent several years in one post.