Washington, Jan 01 (Agencies): Afghan President Hamid Karzai refused to remove a former warlord from atop the Energy and Water Ministry despite US pressure to oust the minister because Washington considered him corrupt and ineffective.

Secret diplomatic records showed the minister, privately termed "the worst" by US officials, kept his perch at an agency that controls $2 billion in US and allied projects.

US Ambassador Karl Eikenberry pressured Karzai to remove Ismail Khan, a once powerful mujahedeen commander, from the top of the Energy and Water Ministry, according to two State Department reports written at the time by US Embassy officials in Kabul. They were disclosed last month by WikiLeaks.

Even with US threats to withhold aid, Karzai rejected requests to replace Khan. "Our repeated interventions directly with Karzai ... did not overcome Karzai's deeply personal bonds with Khan," one of the reports said.

On the other hand, Khan had not responded directly to a question on corruption allegations. He denied any widespread problems of corruption or mismanagement.

"No money is missing from the Ministry," he said. "All the income goes directly to the bank."
The US diplomatic cables do not outline specific graft accusations against Khan, but detail several days of back-and-forth and consternation over Karzai's decision to keep him.

US officials have declined to comment on issues described in the WikiLeaks-released cables and criticised the group for making them public.

Karzai told US officials in a December 14, 2009, meeting that Khan had remained his choice for energy minister. Karzai said Secretary of State Hillary Rodham Clinton had agreed to the choice after Karzai had said he would appoint "competent deputy ministers" under Khan.

Eikenberry disputed that. He said, "If incompetent and corrupt ministers were appointed, it would provide a good reason for them to limit funding."

Karzai said he would reconsider. He eventually stuck with Khan.

Jalil Shams, a former deputy to Khan at the Energy Ministry who now heads the country's power utility, said he thought most ghost employees, considered a longtime problem at the Ministry, had been removed from the payroll, but that much make-work employment, where people are paid for little or no work, remained.