TRADE MINISTER GILDS RESIGNS AFTER ATTORNEY

UNCLAS PARAMARIBO 000038 SIPDIS SIPDIS DEPT FOR WHA/CAR - LLUFTIG DEPT FOR INL/LP NBOZZOLO, KBROWN CARACAS FOR LEGATT E.O. 12958: N/A TAGS: KCRM SNAR PGOV PREL ECON NS SUBJECT: TRADE MINISTER GILDS RESIGNS AFTER ATTORNEY GENERAL ANNOUNCES HE IS FOCUS OF CRIMINAL INVESTIGATION REF: (A) 05 PARAMARIBO 198 (B) 05 PARAMARIBO 068 ¶1. (U) Suriname's Minister of Trade and Industry Siegfried Gilds resigned on January 19 less than an hour after the Office of the Attorney General issued a press release saying that it is investigating him for money laundering and participation in a criminal organization. The investigation surrounds possible criminal misconduct by the Minister linked to his nephew Andy Groenewoud, who implicated his uncle during the course of his criminal trial in the Netherlands. The allegations say Gilds exercised power of attorney to purchase real estate in Suriname on behalf of Groenewoud, who was in the Netherlands at the time, and that the funds used were being laundered. The assertion first hit the Dutch and Surinamese press in late December. Gilds admitted to helping his nephew at first in the late 1990's, but ceased assistance once he became suspicious about the source of the funds. ¶2. (U) In a midday press conference, Gilds, who has held four different cabinet positions since 1985 including Minister of Justice and Police from August 2000 until September 2005 and Minister of Defense in the early 1990's, said he had tendered his resignation to the President effective immediately. He stated that he resigned so as not to complicate the investigation. Attorney General Subhas Punwasi said that his office has serious suspicions of Gilds involvement in criminal activities. According to early press reports, the Attorney General has asked Dutch Prosecutors to provide results of their investigation into Groenewoud to help Surinamese prosecutor's build a case against Gilds. COMMENT ¶3. (U) Badly tarnished by corruption scandals in his last administration, President Venetiaan asserted in his policy speech in October that corruption in government would bring swift retribution. There are no indications yet that Gilds was forced into resigning. Gilds, who is 66 and has had a series of health problems, may have simply decided that the honorable action was the easiest. He is given much credit for removing former military dictator Desi Bouterse from his position as head of the armed forces when Gilds was Minister of Defense. The resignation could create further problems for an already shaky New Front Plus. Because Gilds's SPA party only holds two of the coalition's 29 parliamentary seats, other parties may vie for his vacated cabinet position, sparking tense negotiations. Barnes