ELECTION COUNTDOWN: CORRUPTION EMERGES AS THE

S E C R E T SECTION 01 OF 03 KUWAIT 002446 SIPDIS NOFORN SIPDIS STATE FOR NEA/ARP, LONDON FOR TSOU, PARIS FOR ZEYA E.O. 12958: DECL: 06/20/2016 TAGS: PGOV EIND KDEM KU FREEDOM AGENDA SUBJECT: ELECTION COUNTDOWN: CORRUPTION EMERGES AS THE CENTRAL ISSUE IN THE JUNE 29 PARLIAMENTARY ELECTIONS REF: A. KUWAIT 2298 ¶B. KUWAIT 2150 ¶C. KUWAIT 556 Classified By: CDA Matt Tueller for reasons 1.4 (b) and (d) ¶1. (S/NF) Summary: Corruption has emerged as the central issue in the June 29 parliamentary elections. Allegations of vote-buying are common and often politically-motivated, but there is no doubt that some candidates attempt to influence voters with bribes. Nonetheless, the intensity of the campaigning and politicking in these elections does not suggest a system rife with corruption and Kuwaitis view their democratic process as legitimate. There is also a potentially positive side to the corruption, which many blame on members of the ruling Al-Sabah family: it has caused a pro-reform backlash that threatens to bring down those who engage in efforts to manipulate voting behavior. To an unprecedented degree, candidates from all political backgrounds have united against corruption and in support of reform. They are backed by a groundswell of popular support and the intense lobbying activities of pro-reform youth organizations. If this momentum continues, the next Parliament could be elected with a mandate to implement key political reforms. As widespread rumors of vote-buying suggest, however, there are those who are working actively to prevent this from happening. End summary. Will Vote for Cash -------------- ¶2. (S/NF) The June 29 parliamentary elections are being framed by many candidates as a battle between reform and corruption. Accusations of vote-buying by those supporting and opposing reform are common. While not new to Kuwaiti politics, Kuwaitis repeatedly tell us that vote-buying in these elections is worse than ever. While much of this is politically motivated, there is certainly some degree of truth to these allegations. Pro-reform candidates accuse "corrupt forces" in the Government -- a thinly veiled reference to the "corrupt trio" of Energy Minister Ahmed Al-Fahd Al-Sabah, Minister of State for Cabinet and National Assembly Affairs Mohammed Sharar, and Shaykh Mohammed Abdullah Al-Mubarak Al-Sabah, head of the Government Bodies Assessment Agency, the government agency charged with investigating cases of government corruption -- of being behind much of the vote-buying activities. Some pro-reform candidates have even accused the "corrupt trio" by name, an unprecedented indication of the extent of popular frustration with widespread government corruption. The issue of corruption has also received considerable media coverage (septel). ¶3. (U) One of the most outspoken proponents of reform, Ahmed Saadoun, blasted the Government during a recent campaign rally. Saadoun, a member of Parliament since 1971 and a three-time Speaker of Parliament, raged, "We don't really have a government. We have a country that is run by one or two people...The confrontation today is between the Kuwaiti people and corruption despots...In this situation there will be only one result: a victory for the people. We (pro-reform MPs) and the Kuwaiti people will not leave the country a hostage in the hands of the corruption symbols." Other candidates' criticism of the Government has been equally sharp. ¶4. (S/NF) Ahmed Deyain, an astute liberal political analyst, told Poloff June 19 that the level of corruption in these elections was unprecedented. Vote-buying activities by some candidates, like former MP Jamal Al-Omar, were "flagrant," Deyain said, and driven by some high-level Government and ruling family members. He specifically mentioned Energy Minister Shaykh Ahmed Al-Fahd Al-Sabah and his brother, the Director of Kuwait State Security, Shaykh Athbi Al-Fahd Al-Sabah, who he said "everyone knows are interfering in the elections." ¶5. (C/NF) The rapid rise in oil prices and the accompanying oil boom has fueled corruption in Kuwait. In 2003, when the last elections were held, the price of Kuwaiti crude was roughly $27 per barrel, government revenue was $24.28 billion and expenditures were $19.33 billion. Today, the price of Kuwaiti crude is $60.82 per barrel, and in 2005 government revenue was $47 billion and expenditures were $26 billion. (Note: These figures have not been adjusted for inflation. End note.) Despite measures to appease the public such as the 2005 cancellation of outstanding electric bills and a 200 KD ($700) rebate to citizens, Kuwaitis are increasingly beginning to ask where all this money is going. Many cite KUWAIT 00002446 002 OF 003 the current water shortage plaguing the country as an indication of endemic infrastructure problems and poor planning by the Government. These factors play into the widespread impression that members of the Government and the ruling family are enriching themselves at the expense of the country. Khorafi's Pocket Change -------------- ¶6. (S/NF) While concrete evidence of vote-buying is almost impossible to obtain, almost everyone is willing to share anecdotal evidence of uncertain validity. One more trustworthy story involves Jassem Al-Khorafi, the Speaker of Parliament since 1999. A high-ranking contact at the Central Bank told Poloff during a casual conversation that Al-Khorafi had withdrawn six million KD ($20.8 million) in the last couple of weeks for election expenses. The contact believed with absolute certainty that this money would be used to buy votes. He cited such evidence of widespread vote-buying as the reason he was not planning to vote. ¶7. (S/NF) Seemingly corroborating this information, an Amcit who works in Kuwait for a U.S.-based private equity firm told Poloff that one of his main clients, a nephew of Al-Khorafi, had asked him jokingly if he could accept cash for a multi-million dollar investment. Al-Khorafi's nephew explained that he had "$20 million in Kuwaiti dinars" sitting in three suitcases in his office. Although he did not explicitly say this money was from his uncle or that it would be used to buy votes, this was the implication the Amcit drew from the context of the conversation and his colleagues' comments to him later. The Khorafi family company, run by Jassem's brother Nasser, has $57.2 billion in assets. Nasser is ranked by Forbes magazine as the 29th richest person in the world with $12.4 billion. Nasser's net worth increased $3.4 billion in 2005 alone. Many have accused the Khorafis of supporting the Government in return for lucrative contracts. Corruption Elicts Pro-Reform Backlash -------------- ¶8. (C/NF) On the positive side, allegations of corruption and vote-buying have been generally met with public outrage. Pro-reform candidates and their supporters have strongly criticized the Government for failing to take action to prevent these activities and have vowed to continue waging their campaign against "corrupt elements." In addition, several other local NGOs are also planning to independently monitor the elections (ref A),and in at least one district hundreds of people have signed a petition requesting the Ministry of Interior to stop vote-buying activities. According to a recent poll conducted by Al-Qabas, a pro-reform Arabic daily, 90.5% of the 1670 respondents said they did not believe the government was serious about preventing pre-election primaries and vote-buying activities. ¶9. (SBU/NF) Perhaps due to these pressures, the Ministry of Interior announced June 20 that it had approved the request of the Transparency and Reform Alliance, a coalition of 11 local NGOs (ref C),to follow up on reported cases of vote-buying in the elections. The Ministry has also agreed to "organize a rally to boost public awareness that vote-buying is a crime against society," the local Arabic daily Al-Seyassah reported. In addition, following the example of the local Arabic daily Al-Watan, the Ministry established a hotline for people to call to report incidents of vote-buying. ¶10. (C/NF) Reports of electoral corruption are also providing further impetus and momentum to the grassroots, pro-reform youth movement that emerged in support of electoral reform (ref C). Pro-reform activists are reportedly asking all candidates to sign a "Reform Charter," pledging to reject any Cabinet that includes Shaykh Ahmed Al-Fahd and Mohammed Sharar, and to make reducing the number of electoral constituencies their first legislative priority. Some have even suggested the new Parliament could resign if and when a five constituency bill is passed, forcing new elections to be held under the new electoral system. Several candidates Poloff spoke with, however, said that while they had heard of the charter, no one had approached them asking them to sign anything. In tandem with these efforts, other youth organizations have reportedly asked candidates to sign a financial disclosure agreement promising to disclose their personal financial records if they are elected in an effort to increase transparency. According to Al-Watan, five KUWAIT 00002446 003 OF 003 candidates supported by the Islamic Constitutional Movement (ICM),the political arm of the Kuwaiti Muslim Brotherhood, have already signed the agreement. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * TUELLER