Karzai's brother said to be on CIA payroll - report

(For full coverage of Afghanistan, click on [nAFPAK])

WASHINGTON, Oct 27 (Reuters) - The brother of Afghan President Hamid Karzai has been getting regular payments from the Central Intelligence Agency, The New York Times reported on Tuesday, citing current and former U.S. officials.

Ahmed Wali Karzai is a suspected player in Afghanistan's opium trade and has been paid by the CIA over the past eight years for services that included helping to recruit an Afghan paramilitary force that operates at the CIA's direction in and around the southern city of Kandahar, the newspaper reported.

Ahmed Wali Karzai said in an interview that he cooperates with U.S. civilian and military officials but does not engage in the drug trade and does not receive payments from the CIA, the Times said.

The CIA neither confirmed nor denied the reported payments.

"No intelligence organization worth the name would ever entertain these kinds of allegations," a CIA spokesman told Reuters.

According to the Times, the agency's financial ties to Ahmed Wali Karzai and its working relations with him have created deep divisions within the Obama administration.

Critics see the relationship as complicating Washington's increasingly tense relationship with President Karzai, it said.

The CIA's practices also suggest the United States is not doing everything in its power to stamp out the lucrative Afghan drug trade, a major source of revenue for the Taliban, the Times said.

In addition, some U.S. officials argue that the reliance on Ahmed Wali Karzai undermines the push to develop an effective central government that would eventually allow the United States to withdraw, the paper reported. (Reporting by JoAnne Allen and Adam Entous; Editing by John O'Callaghan)