TANZANIA: ANTI-CORRUPTION DRIVE MARKS KIKWETE'S

UNCLAS SECTION 01 OF 04 DAR ES SALAAM 000696 SIPDIS SENSITIVE SIPDIS DEPT AF/E FOR B YODER, C PELT, AF/RSA FOR J NAY, M HARPOLE ALSO AF/EPS FOR M NORMAN, T HASTINGS DRL/PHD FOR K GILBRIDE, DRL/CRA FOR S CRAMPTON USAID FOR AF/W OFFICE PASS TO MCC OFFICE FOR G BREVNOV, L BLACK E.O. 12958: N/A TAGS: PGOV PREL PHUM ECON EAID TZ SUBJECT: TANZANIA: ANTI-CORRUPTION DRIVE MARKS KIKWETE'S FIRST 120 DAYS IN OFFICE REF: A. DAR ES SALAAM 0498 ¶B. DAR ES SALAAM 0298 Summary -------------- ¶1. (SBU) As Jakaya Kikwete passed the 120-day mark of his presidency, he continued to wage a sustained and very public attack on alleged corruption, urging probes into persons and institutions that for years enjoyed apparent immunity from scrutiny under previous administrations. The press carried reports that the government has frozen the foreign bank accounts of former Prime Minister Sumaye, and the Tanzanian ambassador to Rome is being recalled to face corruption charges. Kikwete has given new life to the Public Corruption Bureau, and Parliament has picked up on his message, calling for several new investigations into alleged corrupt practices, including those of Madam Mkapa, wife of the former President. Kikwete is also urging the press to step up and become a more effective institutional watchdog of Tanzanian democracy. We believe, however, that the jury remains out. While these are all highly encouraging signs, the ultimate success of Kikwete's anti-corruption drive will be measured by hard numbers -- the number of those relieved of their posts, and the number of those investigated, prosecuted, convicted, and jailed. End summary. Words into Action -------------- ¶2. (U) Over the past four months, the Kikwete administration's anti-corruption campaign has moved beyond words to action including: -- March 4, President Kikwete appointed a new Inspector General of Police (IGP) with strong credentials who immediately began restructuring the police force in an effort to halt a wave of bank robberies and other high-stake crimes that had been plaguing Dar es Salaam and Zanzibar for the past six months. -- March 8, twenty-eight persons, many of them influential businessmen, suspected of financing or encouraging the crime wave were identified by the police; several had been important Kikwete campaign supporters. Two of these businesspersons were arraigned March 7 and are currently out on bail pending completion of police investigations. -- March 31, the GOT formed a special task force composed of the Tanzanian Peoples Defense Force, the Directorate of the Tanzanian Intelligence Services and the Police Force to intensify the war on crime. -- In March, Tanzania's Ambassador to Italy, Prof. Costa Mahalu, was relieved of his duties, stripped of diplomatic immunity, and ordered to return to Dar es Salaam to cooperate with the ongoing Public Corruption Bureau's (PCB) investigation into missing funds of nearly USD 2 million that were earmarked to purchase a new Tanzanian Embassy in Rome. -- The PCB is also probing the operations and finances of SIMU 2000, an offshoot of the Tanzania Telecommunications Company Ltd (TTCL),that was formed after TTCL was privatized. Allegations abound that SIMU was incorporated illegally by certain high-placed officials. -- April 10, the Minister of State for Regional Administration and Local Government, announced the PCB would begin a review of suspect local authority contracts and examine the source of the amassed wealth of many district council directors and other local officials. Public Corruption Bureau Given "Teeth" -------------- ¶3. (U) In his monthly address to the nation on March 31, President Kikwete challenged the Public Corruption Bureau (PCB) to accelerate its anti-corruption efforts; he told the Bureau to probe deeply and "send directly to me the list of the highest-placed culprits" that PCB investigations uncovered. Allegations of corruption at all levels of the DAR ES SAL 00000696 002 OF 004 GOT have persisted for years. The Public Corruption Bureau was created during the administration of Benjamin Mkapa to be the GOT's lead anti-corruption agency with a mandate to investigate cases of corruption and refer them to the courts. ¶4. (SBU) Prior to the Kikwete's tenure, the PCB was frequently accused of being ineffective by the press and NGO watchdogs. As reported in post's 2005 Human Rights Report, the prosecution of corruption cases was excruciatingly slow, with the PCB often taking up to two years to investigate a single case. Only about five percent of the corruption cases referred to PCB regional offices made it to a court of law. From 1995 to mid-2004, the PCB received 10,319 reports of corruption and investigated 9,507 allegations; only 357 cases were prosecuted and a mere 48 led to conviction. During 2005, no high-level government leaders were tried on corruption charges. ¶5. (SBU) Since January 2006, the PCB has responded to the President's anti-corruption call and begun to flex its muscles. The PCB is proactively investigating not only possible misuse of funds by the former Tanzania ambassador to Italy, but systematically reviewing the contracting history of local and district councils. Contracts and tenders as well as construction projects and revenue collection will all be examined. The investigations will extend to whether wealth of certain local officials was obtained through corruption or other illegal means. Should this top-down PCB investigation on the order of Mizengo Pinda, the Minister of State for Local Government, uncover any misdeeds, it is unlikely the findings will languish for two or more years before court action begins. April 13 Dar es Salaam press reports indicate that the PCB also recently initiated scrutiny of three sitting ministers and one deputy minister (no names yet public); some are being asked to explain the source of large sums of money in their personal bank accounts. ¶6. (U) In a district level meeting in Kilimanjaro district on April 5, President Kikwete reiterated that the "leading public enemy" is graft. He targeted in particular civil servants who demand bribes for the services they are supposed to give people free of charge and warned: "The days for such officials are numbered." New IGP Determined to Change Police Force Image -------------- - ¶7. (SBU) As Kikwete took office, the police force was under intense scrutiny for corrupt practices, particularly in face of a wave of armed robberies over the past six months. The Tanzanian and Zanzibar police forces have been severely underpaid, with the policemen's monthly salaries often deposited late, thus increasing the temptation to take bribes, "rent out" weapons to robbers, or, in the worst cases, become guns for hire. In a high-profile January 2006 case, fifteen Mainland police officers were accused of the murder of four Dar es Salaam gemstone dealers. As of April 8, ten of these officers had been arrested and are being held in pre-trial detention. ¶8. (SBU) The new Inspector General of Police (IGP),Said Mwema, appointed by President Kikwete on March 3, moved into his position with impressive credentials. A former Regional Police Commissioner in Mbeya, he had headed up the regional Interpol office in Nairobi, Kenya since 2003. Working proactively from the moment he took the helm of the Tanzanian police force on March 4, the IGP developed a plan to reduce corruption opportunities for police officers. Mwema asked for and received from the GOT an earmark of approximately USD 3 million as an incentive fund for the police force. The monies first will settle the arrears in police officers' salaries, with the remainder to be used for allowances and incentive pay. ¶9. (U) The IGP announced April 4 the formation of a special unit to monitor the activities of police officers to "stamp out any elements who collude with gangsters." In addition, Mwema said the GOT has set up a reward fund of USD 40,000 to compensate citizens for tips that lead to solving a crime; DAR ES SAL 00000696 003 OF 004 tips can be reported by phone or through a new interactive website. In a April 7 announcement, the IGP published phone numbers of all Regional Police Commissioners and encouraged the public to use the numbers to report crimes or suspect activities. Press Rising to the Occasion -------------- ¶10. (SBU) During a March 9 visit to the Ministry of Information and Communications, Kikwete told journalists their responsibility is to maintain a high standard of excellence. He then directed his Cabinet to "give journalists the information they need to keep the public informed" about what each ministry is doing. Kikwete's attitude is in noticeable contrast to that of the Mkapa administration, where few reporters had access to ministry officials and many GOT officials would only answer written questions from the media, sending their responses weeks or months later. Since President Kikwete took office, several daily and weekly journals have taken a much more aggressive stance in reporting on corruption in parastatals organizations or by individuals, including: -- Calling for probes into the financial transactions of both the National Social Security Fund (NSSF) and the Public Servants Pension Fund (Note: Allegations abound that these pension funds have been invested in dubious deals, possibly jeopardizing citizens' retirement benefits. End note.); -- Exposing possible mismanagement by the Tanzanian Ports Authority including gross embezzlement and the purchase of obsolete machinery at extremely high prices; -- Closely scrutinizing the Tanzanian Revenue Authority for possible financial mismanagement; and -- Reporting that foreign bank accounts of the Prime Minister under former President Mkapa, Frederick Sumaye, have been frozen by the GOT pending investigation and could be worth over USD hundreds of millions of dollars. The "Real Debate" -------------- ¶11. (SBU) The reaction to this investigative reporting by the accused persons or agencies has been predictably swift. Yusuf Manji, the Corporate Director of Quality Plaza, who was implicated by the press as involved in suspect NSSF deals, has sued Reginald Mengi, an important media owner, for USD 10 million over "false allegations" made by Mengi's newspaper. PM Sumaye reacted similarly, suing the owners of the weekly "Tanzania Leo" for USD 10 million as well for its report on his finances, and demanding an apology. ¶12. (SBU) While these actions are clearly intended to intimidate the press, the editorial pages of the newspapers have not remained silent. The April 2 "Sunday Citizen" editor commented on Yusuf Manji's suit against media-owner Mengi thusly: "It would indeed be a sad venture if the media that has found new life under the new, vibrant President were to be cowed by unwarranted litigations and sent back to dark days of reporting only that which politicians say." The editor of "This Day" called April 7 for the press and the public to stay focused on the key issue: "As these two businessmen war in the civil courts, the public must not be swayed from the real debate--pension funds must explain how they invest people's retirement benefits." Parliament Speaks Up -------------- ¶13. (SBU) The newly-elected and expanded 323-seat parliament has also become more vocal on corruption during the third Parliamentary session (March 27 to April 10). Several committees initiated investigations into: -- The high construction costs of the new Bank of Tanzania building which could reach nearly six times the original estimates. While the project overseers claimed that much of the inflated cost is due to a slide in the value of the DAR ES SAL 00000696 004 OF 004 Tanzanian shilling, Members of Parliament (MPs) are asking for thorough scrutiny of apparently-excessive cost increases; -- Finance and Economic Committee began an investigation into how former First Lady Anna Mkapa's NGO--the Equal Opportunity for All Trust Fund (EOTF)--was allowed to purchase a cashew nut factory in Mtwara contrary to the law. As a tax-exempt NGO, EOTF is not permitted to own or operate businesses; and -- On April 3, the Parliament called for an investigation into the use of the Tanzanian Social Action Fund (TASAF) created in 2003 to carry out poverty-alleviation projects. While the previous Parliament had approved TASAF Phase 2 in May 2005, the new MPs are now calling for a probe into allegations that district council officials may have misused the fund to construct houses or buy cars. Both ruling party and opposition MPs are concerned over suspect auditing procedures and that a high proportion of the TASAF funds went to pay for advisors and consultants rather than create jobs or micro-finance projects. Quick response from executive side -------------- ¶14. (U) On April 4, the executive branch responded to the MP's call for a TASAF investigation: the Minister of State on Policy and Coordination, Juma Akukweti, reaffirmed the government's determination to fight poverty and to take tough measures against local officials who impede the implementation of TASAF. Akukweti announced that in Phase 2, district commissioners would no longer chair committees that administer TASAF funds: "From now on the council financial committees would manage all projects; if anything goes wrong, the entire committee would be responsible," Akukweti stated. Comment -------------- ¶15. (SBU) Kikwete's vocal calls for action against corruption have not only sparked greater independence and investigative reporting in the press, but strengthened the institutional voice of Parliament. This, we think, bodes well for Tanzania's liberal democracy. From the time of President Nyerere, Tanzania's Executive branch has dominated, while the Legislative and Judicial branches wielded little influence and the press was largely silent on issues of corruption. Thus, the checks and balances of a thriving, liberal democracy remained weak. Kikwete appears to be laying the beginnings of a foundation to strengthen democratic institutions. If his efforts extend into the judicial system, widely acknowledged as corrupt and inefficient, this would bode well not only for Tanzania's democracy, but also for its business and investment climate. ¶16. (SBU) The litmus test for corruption, however, will remain the hard numbers of arrests and convictions. On this, the jury remains out. To date, while many investigations have commenced, no high-placed officials or GOT agencies have been charged with graft, misuse of funds or other wrongdoing. RETZER