TIMBER! TOP BRANCHES OF FORESTRY MINISTRY FELLED

UNCLAS KATHMANDU 000520

SIPDIS

SENSITIVE

STATE FOR SA/INS
LONDON FOR RIEGEL

E.O. 12958: N/A
TAGS: PGOV SENV NP
SUBJECT: TIMBER! TOP BRANCHES OF FORESTRY MINISTRY FELLED
IN CORRUPTION SCANDAL

REF: A. REF A) KATHMANDU 0485


B. REF B) 01 KATHMANDU 2092


1. (SBU) Summary: On March 11 Minister for Forest and Soil
Conservation Gopal Man Shrestha and Minister of State for
Forest and Soil Conservation Surendra Hamal resigned from
their posts after trading charges of corruption and abuse of
power. The resignations come less than ten days after Prime
Minister Sher Bahadur Deuba announced the formation of a
special judicial commission to probe corruption (Ref A).
Most observers tote up the resignations to mutual personal
and political enmity, rather than to any new initiatives to
rid the Government of corruption. End summary.


2. (U) On March 11 Minister for Forest and Soil
Conservation Gopal Man Shrestha and Minister of State for
Forest and Soil Conservation Surendra Hamal resigned from
their posts after trading mutual charges of corruption and
abuse of power. In tendering their resignations within hours
of one another, each publicly maintained his own innocence,
while asserting the guilt of the other.


3. (U) The short-lived but highly visible scandal erupted
March 8 after State Minister Hamal petitioned the Supreme
Court to halt an investigation, initiated by the Commission
for the Investigation of the Abuse of Authority (CIAA),of
personnel transfers he had authorized. Hamal's petition
accused CIAA Commissioner Krishna Kafle and Forestry
Secretary Chandi Prasad Shrestha of conspiring against him.

SIPDIS
In a press conference later that day, Hamal accused Forestry
Minister Gopal Man Shrestha--whose complaint had prompted the
CIAA probe of Hamal's personnel appointments--of accepting
bribes from a turpentine company in return for increasing its
resin collection permit. Minister Shrestha publicly refuted
his state minister's charges and counter-accused him of
trying to arrange illegal transfers for selected employees
within the Ministry.


4. (SBU) Several sources within the ruling Nepali Congress
Party attributed the scandal to the substantial personal and
political enmity between the two men, who hail from rival
factions of the party. (Note: In an attempt to build
broader support within his fractured party, PM Deuba expanded
his Cabinet on October 18 to offer deputy ministerial posts
to MPs aligned with his rival, former PM G.P. Koirala. End
note.) According to one source, Minister Shrestha and his
deputy locked horns over the dispensation of patronage--such
as the allocation of plum assignments--within the Ministry.
More than one party source noted that such tussles are
commonplace within ministries, but are usually kept quiet as
"internal" matters. When Shrestha and Hamal both went public
in their accusations, however, these sources emphasize, they
violated party discipline, forcing the PM to ask for their
resignations.


5. (SBU) Comment: We find it instructive that Nepali
Congress sources close to the PM identify violation of party
discipline--and the public embarrassment it caused the
Government--rather than the acts of alleged corruption
themselves as the real reason Deuba asked for the
resignations. These resignations came less than 10 days
after Prime Minister Deuba, in an apparent effort to appease
Opposition criticism of his administration's failure to
prosecute corruption, annnounced the formation of yet another
special commission to investigate corruption (Ref A). That
two members of his own Cabinet should almost immediately
thereafter engage in highly public and acrimonious
recriminations must have been acutely embarrassing for Deuba
and left him little choice but to ask for their resignations.
Whether these resignations indicate a tougher stance toward
corruption--and perhaps a more thorough Cabinet-cleaning
exercise--from the PM in the future remains in doubt.



MALINOWSKI