Identifier
Created
Classification
Origin
05MAPUTO559
2005-05-05 12:00:00
CONFIDENTIAL
Embassy Maputo
Cable title:  

MOZAMBIQUE - CORRUPTION UPDATE

Tags:  PGOV KCOR KCRM EAID MZ 
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C O N F I D E N T I A L SECTION 01 OF 04 MAPUTO 000559 

SIPDIS
AF/S FOR HTREGER
E.O. 12958: DECL: 04/07/2010
TAGS: PGOV KCOR KCRM EAID MZ
SUBJECT: MOZAMBIQUE - CORRUPTION UPDATE

REF: 04 MAPUTO 83
Classified By: Ambassador Helen La Lime, for reasons 1.4 (b/d)

C O N F I D E N T I A L SECTION 01 OF 04 MAPUTO 000559

SIPDIS
AF/S FOR HTREGER
E.O. 12958: DECL: 04/07/2010
TAGS: PGOV KCOR KCRM EAID MZ
SUBJECT: MOZAMBIQUE - CORRUPTION UPDATE

REF: 04 MAPUTO 83
Classified By: Ambassador Helen La Lime, for reasons 1.4 (b/d)


1. (C) Summary: Mozambique has a serious corruption problem.
The former Chissano government did little to confront the
problem despite repeated promises. In the past three months
newly-elected President Guebuza has vowed to take action.
There are signs that his government is serious about
grappling with the rot, though it is too early to conclude
that its efforts will have a fundamental, far-reaching
effect. End summary.

--------------
Mozambique is Perceived as Corrupt
--------------

2. (U) Corruption remains a serious problem in Mozambique.
In its 2004 Corruption Perceptions Index (CPI) report,
Transparency International gave Mozambique a CPI score of 2.8
(on a 0 - 10 scale, from most to least corrupt).
Transparency International placed Mozambique in the same
grouping as Russia, The Gambia, Malawi, India, Nepal and
Tanzania. Its CPI score was 2.7 the year before.


3. (C) Regionally, both Zimbabwe and Zambia were rated worse
than Mozambique by Transparency International, but South
Africa, Botswana, and Namibia (and another SADC member,
Mauritius) received much higher scores. We hear regularly
from visiting businessmen of the challenges they face working
with Mozambican officials, compared to doing deals in
Johannesburg or Gaborone.

--------------
Some Systemic Reasons for Corruption
--------------

3. (SBU) One impetus for corrupt behavior lies with
government salaries, which are not very high. A government
minister, at the top rung of the government pay scale, can
expect a salary of approximately $1,500 - $2,000 a month. He
also gets free housing (in which case he can rent out his own
home),free use of several cars, and some other perquisites.
Nonetheless, this income is insufficient to support the
lifestyle expected of those holding this office, particularly
by their friends and family who hope to profit from their
position. And so ministers regularly engage in "esquemas" or
deals to supplement their salaries. The wealth identified by
Minister of Finance, Manuel Chang, who published a list of
his assets shortly after beginning work as minister in

February, demonstrates this. Minister Chang may have
declared his assets thinking that they were relatively modest
in comparison with those of his peers -- no other minister
was as forthcoming, and indeed the law only requires that
assets be disclosed to a government body and not the public.
All told Chang's net worth totaled close to $500,000 -- far
more than one could reasonably expect a middle-aged civil
servant just reaching the ministry level to have saved on his
government income unless he had family money or made
extremely lucrative investments.


4. (SBU) Another factor in corruption is the outdated and
cumbersome legal system which Mozambicans inherited from the
Portuguese. Colonial-era laws are often inappropriate now
and so need to be rewritten, but doing so takes expertise,
which is hard to come by locally, and time. Meanwhile, to
get things done, deals are made informally -- with monetary
bribes or favors. Added to the awkward regulatory
environment, officials make liberal use of fines in
Mozambique. By law they are given considerable latitude in
what fines they levy and are rewarded, in many instances,
with a portion of the fines, too. This, of course,
encourages corrupt behavior.


5. (C) More insidiously, corruption flourishes because
powerful senior leaders are insulated from public scrutiny
and discipline due to the "politburo" system of government in
Mozambique. FRELIMO, the ruling party, dominates all
branches of government and runs the country. In turn,
FRELIMO is run by a small coterie of men and women who form
the 15 member Political Commission. These individuals are
not directly elected by the people, and so not directly
accountable to them, but instead obtain their positions
through political arrangements between the Political
Commission and the broader FRELIMO body, the 172-member
Central Committee. All important decisions, from the
selection of government ministers to decisions on major
investments, depend on support from the Political Commission.
Therefore, Mozambique has a system where its leadership is
only indirectly responsible to the broad electorate, and
these 15 individuals have enormous power. This setup,
clearly, discourages accountability and transparency.


6. (C) To illustrate how such a monopoly on power by this
group leads to corruption, consider the case of retired
general Joaquim Chipande, hero of Mozambique's liberation
struggle for allegedly firing the first shot at a Portuguese
district administrator in 1964. He is a member of the
Political Commission, and has been for many years, even
though he eschews politics. Nothing gets done, the saying
goes, in his home province of Cabo Delgado without his
approval. For example a local Cabo Delgado businessman,
according to one of our staff who knows him, gave up trying
to negotiate a fair price for the land on which to build a
five-star hotel after being confronted by Chipande. One
evening Chipande called him to his private yacht at midnight
for a 'friendly' meeting to talk over the deal, but set a
handgun on the table. In the end the businessman got a
second hand delivery truck in exchange for the land. It is
unclear what Chipande received.

--------------
Chissano Government Anti-Corruption Efforts
--------------

7. (SBU) The outgoing Chissano government took some action
against corruption in its last several months. The Director
of the National Social Welfare Institute (INAS) was suspended
in August 2004 after being accused of siphoning money out of
INAS, which is now widely believed to be close to bankruptcy.
An inquiry was ordered earlier in the year into another INAS
sub-delegate accused of corruption by an anonymous
whistle-blower. In August 2004, the National Assembly passed
a long-awaited Anti-Corruption Law. The legislation aims to
fight corruption in government offices, hospitals, schools,
and the police by making bribe-taking punishable by
imprisonment. The law also provides more protection for
whistle-blowers, modifies a key provision on requests for
permits, and imposes new obligations on state auditors by
requiring them to report in writing to the Attorney General's
Anti-Corruption Unit (ACU) any audit that reveals corrupt
practices. The ACU indicted two dozen individuals on
corruption charges in 2004, doubling the number indicted in

2003. With USG support, the ACU has expanded its coverage
outside the capital city by opening new offices in the two
main provincial capitals of Beira and Nampula. The GRM has
stated that it plans to increase budget levels for the ACU in
2005 and 2006.


8. (C) But there were setbacks as well. According to a
January 2005 press report, then-Minister of Planning and
Finance and current Prime Minister Luisa Diogo dismissed
three ministry officials, allegedly because they attempted to
undermine a scheme directing state resources to FRELIMO. In
January 2005 outgoing Minister of Health Francisco Songane
distributed 36 cars to national directors and heads of
department in his ministry. Though regulations exist that
allow senior public servants the benefit of a car through
long-term lease arrangements, the timing (he delivered the
cars in the last week of his term) and value of the vehicles
(approximately USD 36K each) provoked considerable criticism
in the media.


9. (C) Virtually no one, at the senior levels anyhow, has yet
been held accountable. All of the 24 ACU indictments from
2004 were turned down or otherwise rejected by judges. Thus
there were no convictions, nor apparently even trials. As
for the head of INAS, although he appears to have lost his
job, the inquiry into his actions is not yet over and up
until now he has not gone to prison. Investigations into the
two high-profile killings of the last several years -
investigative journalist Carlos Cardoso in 2000 and senior
Banco Austral (a large local bank) official Siba Siba in 2001
- remain incomplete. In the case of Cardoso, prosecutors
have followed the trail of responsibility only up to several
wealthy Indo-Mozambicans, even though there is strong
evidence implicating former President Chissano's son Nympine.
As for the Siba Siba killing, no one has gone to trial at
all. Attorney General Madeira in March presented his annual
review in the National Assembly, and was openly ridiculed
because his report left blank any sign of progress toward
catching the guilty in these and several other high-profile
scandals. Legislators, mainly from the opposition RENAMO
party but, unusually, also from FRELIMO, scoffed when Madeira
responded that he could not reveal details of ongoing
investigations.

--------------
What More Can Be Done?
--------------

10. (SBU) The Media and Civil Society: Within Mozambican
civil society, the media continues to be one of the main
anti-corruption forces, reporting and investigating numerous
corruption cases. With USG support, in 2004 the NGO Etica
Mozambique established eight corruption reporting centers in
Maputo and Beira. The centers provide citizens with free
legal advice, justice sector ombudsman services, and a
mechanism for confidentially reporting corruption-related
crimes to the Attorney General's office. This effort by
Etica was developed in close coordination with the ACU.
Further USG support to the media or civil society to expose
corruption would be worthwhile, and we included in our
Mission Performance Plan a request for FY07 ESF for this
purpose.


11. (SBU) The Judiciary: The judiciary continues to hamper
efforts by the Attorney General's Office to fight corruption,
as shown by its rejection of ACU indictments. Partly this is
the result of under-staffing and poor training. There are
fewer than 100 prosecutors and only 184 judges in Mozambique,
and many lack specific technical skills. Isabel Rupia, head
of the ACU, admitted to the press in late 2004 that the
number of cases entering the court system from the ACU was
far too low. She called for the creation of an independent
body of auditors and specialized investigators to follow
through on court cases. In 2004 the USG supported the
training of 20 new-entry magistrates, as well as specialized
training of 21 prosecutors, representing an important
contribution to a judicial system plagued by huge case
backlogs.


12. (SBU) Public Sector Reform: Progress on the GRM's highly
publicized public sector reform has been slow. The UK's
Department for International Development (DFID) is the lead
donor assisting the GRM in its public sector reform
activities by providing functional analysis and support for
various quick impact projects (e.g. salary reform). One
reform goal, among others, is to coordinate all donor funding
through a new donor-supported budget tracking system known as
SISTAFE. A pilot project with SISTAFE should start within
the GRM in 2005; the GRM hopes to have all of its ministries'
funding tracked via SISTAFE by the end of 2006.

--------------
Guebuza Government Efforts
--------------

13. (C) President Guebuza made fighting corruption a key
message in his campaign, and since taking office has
repeatedly emphasized combating corruption in his speeches.
Queried by Assistant Secretary Newman in March whether he
meant business with all his rhetoric, he answered that she
should look to the staff he has appointed to gauge his
commitment. Several cabinet ministers have promised real
action on corruption, and indeed three of them -- Jose
Pacheco, Minister of Interior; Felicio Zacarias, Minister of
Public Works; and Aires Aly, Minister of Education -- were
governors with strong records either for openness (Pacheco)
or being tough on corruption (Zacarias and Aly). The Guebuza
government has begun to act. Auditors have begun looking
into the misappropriation of funds in the Interior Ministry,
presumably at the invitation of Minister Pacheco. The new
governor of Maputo province, Telmina Pereira, in March toured
the Ponto do Ouro resort area, on the South African border,
and upon her return the government announced that a number of
illegally-built houses there would be torn down. The
Agriculture Ministry has declared that those who have not
developed land they have leased from the government will be
forced to surrender their holdings back to the state. Most
recently, employees at the headquarters of state ministries
have been told to leave official vehicles in the parking lot
after work, rather than driving them home, and use of cell
phones has been severely restricted. There is growing
grumbling among the Frelimo party elite over the crackdown, a
sign that the fight against corruption is having a palpable
effect.


14. (C) Complicating matters is the fact that Guebuza, widely
regarded as one of the wealthiest men in the country (he is a
part-owner of more than a score of major enterprises),has
grown rich as a powerful party insider with ties to the
commercial sector. Perhaps more than anyone, he has profited
from such activity, at least in areas that elsewhere would be
considered conflict of interest schemes, insider trading,
influence peddling and the like. Can his claims to want to
fight corruption be taken seriously? Some speculate that
with a stake in the economy, he will be sure to keep it
growing. In this view, then, he would not let corruption
stifle business deals. Others guess that he will move to
crack down on petty corruption, which saps public support for
the government, but will do little to rein in the powerful.


15. (C) Comment: Mozambique remains seriously corrupt.
President Guebuza is talking a tough line, at present, and
appears serious in combating the evil, but he has been in
office for just three months. The dilemma for donors (and it
is worth remembering that fully half of the government budget
is paid by donors) is that one lever they might wield to rein
in corruption -- reducing assistance -- would certainly
affect not only corrupt senior officials but the general
population, too. As long as the government continues to
manage the economy so that the well-being of all Mozambicans
is improving, donors will be loath to cut aid. Anyway, by
African standards Mozambique's is certainly not the worst
instance of a corrupt government -- Nigeria, Angola,
Cameroon, Niger, Zambia, Zimbabwe and Sierra Leone all place
far lower down the Transparency International CPI index.
Ultimately, hope lies in fostering a sense among all
Mozambicans to hold their government and institutions more
accountable for the country's wealth. As they demand better
behavior, the powerful will find it increasingly difficult to
steal.
LALIME