Corruption and cronyism riddled Afghanistan's August elections and are now the biggest challenges facing the Karzai administration.
"Corruption is the biggest enemy in Afghanistan. It's much, much bigger than the Taliban, it's much, much bigger than al Qaeda," a senior official told CBS News.
But getting rid of the warlords who thrive on kick backs might be the biggest challenge. President Karzai's vice president, Marshal Qasem Fahim, has been accused by the United States of drug trafficking. Fahim denies the accusation.
Karzai also convinced another warlord, General Abdul Rashid Dostum, to support him in the election.
Dostum is accused of war crimes, including the deaths of 2,000 prisoners. President Obama wants the crimes reinvestigated.
But Karzai's brother poses the greatest threat to the Afghan president's resolve in tackling corruption. Ahmed Wali Karzai is accused of drug trafficking and appropriating land for private use.
"There has to be pressure from the international community on President Karzai to clean up the cabinet as best he can so that he doesn't have to give powerful governerships and cabinet posts to people who are guilty of some very serious human rights violations," said John Dempsey of the U.S. Institute of Peace.
Fixing corruption will also help boost Karzai's legitimacy in the eyes of many Afghans. Karzai is ready to make the change and says to expect a high-profile person to be prosecuted for corruption soon, a U.S. official told CBS News.