CYPRUS: INDEPENDENT INQUIRY COMMITTEE FOLLOW-UP

C O N F I D E N T I A L NICOSIA 000449

SIPDIS

SIPDIS

DEPT FOR IO/PSC (LIZ PARKER)

E.O. 12958: DECL: 03/23/2016
TAGS: PREL PGOV EFIN CY
SUBJECT: CYPRUS: INDEPENDENT INQUIRY COMMITTEE FOLLOW-UP

REF: A. SECSTATE 40595


B. 05 NICOSIA 1697

Classified By: DCM JANE ZIMMERMAN; REASONS 1.4 b and d.


1. (C) Summary: Per reftel request, we raised on March 20 the
issue of GoC action in support of the Independent Inquiry
Committee (ICC) investigating the UN's Oil-for Food Program
(OFF) with Eva Papakyriacou, Head of the Unit for Combating
Money Laundering (MOKAS),and key aide to Attorney General
Petros Clerides. According to Papakyriacou, on January 16
the GoC formally asked the UN for documentation in support of
the ICC's allegations against Cypriot national and former UN
employee BENON Sevan, who is currently living in Nicosia. In
response, the ICC invited the GoC to view the documents in
person in New York. The GoC was not able to arrange a visit,
however, before the ICC office closed. The GoC also received
a formal reply from the UN placing several conditions on the
release of any documents. This week the GoC plans to send a
letter accepting those conditions and reiterating its request
that the UN share whatever pertinent information it can to
enable the AG's office to determine whether a criminal
investigation against Sevan is warranted. As a result, as
far as the GoC is concerned, the ball is back in the UN
court. Papakyriacou also reported that her office was
cooperating with U.S. authorities in their investigation of
"four or five" companies active in Cyprus, which are
suspected of violating the OFF program. End Summary.


2. (C) On March 20, Eva Papakyriacou head of the Unit for
Combating Money Laundering (MOKAS) told us that in response
to our repeated inquiries she had on January 16 signed a
letter on behalf of the Attorney General to the UN asking it
to provide documentation on the ICC allegations against
Cypriot national and former UN employee BENON Sevan. (Note:
Sevan is currently living in his aunt's apartment in central
Nicosia where he was discovered in October by visiting
Staffdel Rickman. At our request, Papakyriacou then placed
Sevan on a watch list, requiring the Cypriot immigration
authorities to report to Mokas should Sevan leave the
country. Attorney General Clerides, however, refused at the
time to ask the ICC for the information it had acquired
incriminating Sevan -- see Ref B. End note.)


3. (C) According to Papakyriacou, her January 16 letter
stated that the information would be used by the Attorney
General's office to decide whether opening a criminal
investigation against Sevan was warranted. Subsequently,
Papakyriacou received an e-mail from a "Mrs. Ringler" from
the ICC invited her to send someone to view the relevant
documents in New York in person. Papakyriacou proposed the
first or last week of April only to learn that the visit
would have to be in March as the ICC office was closing.
Other priorities, however, did not permit a visit before
April and AG Clerides advised her that the Sevan case should
not take precedence over her offices' pre-existing
commitments. Thus no trip to New York was made.


4. (C) Papakyriacou reported that following the e-mail, the
Cypriot Ambassador to the UN received a letter formally
responding to her January 16 request. The letter stated that
the documents could only be shared under certain conditions
and that this in no way would prejudice the immunities
granted to UN employees. The letter also reportedly noted
that the names of all sources would be withheld and asked the
GoC to go through the UN should the GoC need to interview any
UN employees in the course of its investigations.
Papakyriacou reported that she planned to send a formal reply
this week on behalf of the AG in which she would reiterate
her request for ICC documents on Sevan, noting that the GoC
accepted the UN's conditions.


5. (C) Papakyriacou also noted that in response to a rogatory
letter from the U.S. Department of Justice, MOKAS and the
AG's office were cooperating with U.S. law enforcement
officials in their investigations of "four of five companies"
active in Cyprus that are suspected of violating the OFF
program. She did not know, however, whether information
leading to this investigation was discovered by the ICC or
from other sources.


6. (C) Papakyriacou also reported that the Cypriot Ambassador
to the U.S. had received an "angry" letter from the HIRC
charging that AG Clerides had refused to take any action
against Sevan. In his reply the Cypriot Ambassador
reportedly denied the allegation citing as evidence the
January 16 letter.

7. (C) Comment: The AG's office has not initiated a case
against Sevan and AG Clerides does not appear to regard this
as a priority. In all likelihood, the GoC will continue to
drag its feet on this issue. We suspect that if it were not
for Papakyriacou's desire to remain in the good graces of the
U.S. and the international community, no actions would have
been taken to date. As far as the GoC is concerned, the ball
is now in the UN's court and the AG's office appears to
believe it has done enough for now to cover itself. It is
unlikely that the GoC will make much progress on bringing
Sevan to justice unless the UN provides incontrovertible
proof of his guilt. Cyprus, however, has a strong record of
cooperating with the U.S. on legal investigations and would
be likely to cooperate with a U.S. investigation of Sevan.
Although the Cypriot Constitution (which prohibits the
extradition of Cypriot nationals) would preclude his
extradition to the U.S., the opening of a formal case against
Sevan in the U.S., and a UN decision to strip Sevan of his
immunity, could help force Cyprus to finally take action.
End comment.
SCHLICHER