SCANDAL IN THE FAMILY? PRIME MINISTER DENIES

C O N F I D E N T I A L SECTION 01 OF 02 NASSAU 001542

SIPDIS

E.O. 12958: DECL: 08/13/2014
TAGS: PGOV PINR EFIN BF
SUBJECT: SCANDAL IN THE FAMILY? PRIME MINISTER DENIES
IRANIAN BUSINESSMAN'S CAMPAIGN CONTRIBUTION CLAIMS


Classified By: CDA Robert M. Witajewski, Reasons 1.4 b and d

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SUMMARY
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1. (C) Iranian businessman Mohammed Harajchi presented
documentation of some of his financial contributions to the
ruling Progressive Liberal Party during a press event held at
his multi-million dollar Paradise Island home on 11 August

2004. Harajchi denied that his contributions were designed
to gain reinstatement of his bank's operating license, which
had been revoked in 2001 amidst allegations of money
laundering. The PLP issued a statement highlighting
Harajchi's confirmation that he received no political favors
in exchange for his contributions. Prime Minister Christie,
who raised Harajchi's pending announcement three times with
the Charge at an unrelated event, appearing uneasy and
preoccupied, released a press statement on August 12 angrily
denying that he or his ministers had accepted improper
contributions. The PM specifically denied that he had
received $500,000 from Harajchi to renovate his Cable Beach
home. Christie promised that the PLP would soon give a full
and accurate accounting of Harajchi's donations.
END SUMMARY.


Millions in Campaign Contributions without a Quid Pro Quo?
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2. (U) Iranian businessman and long-time Bahamas resident
Mohammed Harajchi held a press conference on 11 August 2004
at which he provided reporters with "evidence" to back up his
claim that he gave $10 million to the Progressive Liberal
Party (PLP) and its candidates during the May 2002 general
elections. Harajchi claimed that he had been approached,
either directly or via intermediaries, by "90 percent of the
(Christie) cabinet" for campaign contributions, had helped to
refurbish PLP headquarters, and underwritten several PLP
political rallies, among other things.


3. (U) Harajchi denied that his generosity was designed to
win back the operating license of his bank, Suisse Security
Bank and Trust, which was revoked by the Central Bank in
March 2001 during the previous government amidst accusations
of money laundering. Harajchi lost several court appeals to
have his license reinstated.


4. (U) Harajchi insisted to reporters that current Prime
Minister Perry Christie reached out to him prior to the 2002
campaign to express his belief that Harajchi's bank license
case had been handled badly. Harajchi said he told Christie
that he was no longer fighting to get his license restored,
but rather to get "justice" and clear his name. When asked
in the press conference if Christie made him any promises
regarding his bank license, Harajchi declined to answer,
calling the Prime Minister "an honourable man" and advising
reporters to take the matter up with him directly.


5. (U) Harajchi provided receipts for a $100,000
contribution to the "PLP Leadership Act," bills from two
fireworks displays totaling $75,000, and a $1,000 check paid
to the "Singing Bishop Prophet" Lawrence Rolle, who performed
at two PLP rallies. Harajchi also presented the results of a
lie detector test which he said verified that he was telling
the truth.


PLP Says, We Agree.
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6. (U) The PLP issued a statement shortly after the press
conference confirming that Harajchi had made donations to the
party, but in amounts far short of $10 million. The PLP
emphasized in its press release that it is neither illegal or
improper for political parties in The Bahamas to accept
donations from individuals, and highlighted attention on
Harajchi's confirmation that he had received no favor or
promise in exchange for his financial donation.


7. (U) Prime Minister Christie issued his own press release
the following day responding to Harajchi's allegations, In a
two-page press release sent to the local newspapers August
12, Christie declared that he "rejected any insinuation"
Harajchi may have made "in his "relentless campaign of
vengeance" against the PLP government. Christie stood behind
his ministers and defended them against what he characterized
as Harajchi's attempt to "smear the good name and reputation"
of his Cabinet. Christie attributed Harajchi's comments to
resentment at not being granted a new operating license for
his bank.


8. (U) Addressing rumors that campaign contributions had
financed his newly-renovated home in the Cable Beach area of
Nassau, PM Christie said "Mr. Harajchi did not contribute so
much as a single cent toward the renovation of my house." He
pointedly refused to call Harajchi an "honourable man,"
instead saying that Harajchi had expected Christie's
government to "pervert the course of justice and give him
back his bank license." Christie called Harajchi's claim
that he had donated $10 million "an absolute lie." Christie
insisted that the PLP was investigating its own accounting
records and would present the details of its findings
regarding Harajchi's donations as soon as possible.


COMMENT
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9. (C) Prime Minister Christie spent the hours before
Harajchi's press event at the opening of a disaster
preparedness conference sponsored by the Bahamian National
Emergency Management Agency. During the course of the
morning, the PM quietly raised Harajchi's pending press
conference three times with the Charge as the two sat next to
each other and talked. Christie uncharacteristically stayed
for the entire event and seemed reluctant to go back to his
office where, he knew, reporters would be awaiting his
response to Harajchi's allegations. After previously leaving
the public comments to his ministers - one of whom called
Harajchi a "terrorist" before backing off - the Prime
Minister has now personally turned his guns on Harajchi in an
effort to decisively disassociate himself and his party from
a shady businessman whose story is not going away.


10. (C) Both of The Bahamas' two major political parties
live in glass houses when it comes to campaign contributions.
Many Bahamian campaign contributors are not as reticent as
Harajchi claims to have been about putting down explicit quid
pro quo markers in return for their contributions. As much
as the FNM opposition might like to exploit Harajchi's
corruption charges leveled against the Christie Government
and cast some rocks at the PLP's home, it knows that it too
cannot afford close scrutiny of the source -- and quid pro
quo's of -- its own party's campaign contributions.
WITAJEWSKI
WITAJEWSKI