JIM LEHRER: News that Afghanistan's government is taking money from Iran caused new ripples today. The Iranians confirmed it, a day after Afghan President Karzai defended that practice.
It was the best face forward when President Obama met with Karzai last May in Washington, but, after the latest dust-up, the State Department had to insist again today the U.S. has an effective relationship with the Afghan leader.
P.J. CROWLEY, U.S. Assistant Secretary of State for Public Affairs: He is a partner. We are working closely with he and his government, you know, to improve the security of the country. General Petraeus and Ambassador Eikenberry meet with him on a regular basis. So, I would describe our relationship as very solid and working to fulfill our mutual interests.
JIM LEHRER: New questions about that relationship arose Monday when Karzai acknowledged accepting millions of dollars from Iran. He said his chief of staff, Umar Daudzai, takes bags of cash, on his orders.
HAMID KARZAI, president of Afghanistan: This is transparent, and this is something that I have -- I have also discussed with -- even when we were in -- at Camp David with President Bush. This is nothing hidden. We are grateful for the Iranian help in this regard. The United States is doing the same thing. They are providing cash to some of our offices. It does give bags of money, yes. Yes, it does.
JIM LEHRER: At the White House today, spokesman Robert Gibbs was asked repeatedly about that claim.
WHITE HOUSE PRESS SECRETARY ROBERT GIBBS: We're not in the "big bags of cash" business.
QUESTION: Well, are you sure that no government agency is in the "big bags of cash" business?
ROBERT GIBBS: I have not been read into that. So, I can tell you what I know.
QUESTION: Yes, I mean, bags, briefcases, whatever.
ROBERT GIBBS: Again, I'm relying on the knowledge that I have on the subject, and I don't know about it.
JIM LEHRER: Iran said today it's helping with reconstruction and not trying to buy influence with Karzai.
But the questions do not end there. Karzai also charged the U.S. has financed the killing of Afghans by paying private security guards for construction projects and convoys.
HAMID KARZAI (through translator): It is a problem for the Afghan people, and their presence here is against Afghan law. Local security in Afghanistan, the police and army, are paid poorly, while private security get paid very well and pay local Afghan security people more than the government pays its police and army.
JIM LEHRER: The Afghan president has ordered an end to using private guards by December, despite pleas from the Western organizations that rely on them.
All of this follows reports that an August meeting with U.S. envoy Richard Holbrooke over election fraud turned explosive. And U.S. officials have even voiced doubts about Karzai's mental state. The recent Bob Woodward book, "Obama's War," cited intelligence that Karzai has been diagnosed as manic depressive. It quotes U.S. Ambassador Karl Eikenberry as saying: "He's on his meds; he's off his meds."
The concerns over Karzai's reliability have come as U.S. forces try to gain the upper hand over the Taliban before beginning to draw down next summer. More than 1,350 Americans have died in the Afghan war since 2001.