CAMEROON: CORRUPTION TRIAL EMBROILS FIRST LADY,

C O N F I D E N T I A L SECTION 01 OF 03 YAOUNDE 001883

SIPDIS

SIPDIS

DEPT FOR AF/C
LONDON AND PARIS FOR AFRICA ACTION OFFICERS
EUCOM FOR J5-A AFRICA DIVISION AND POLAD YATES

E.O. 12958: DECL: 12/20/2016
TAGS: KCOR ECON PGOV EFIN KMCA CM PINR
SUBJECT: CAMEROON: CORRUPTION TRIAL EMBROILS FIRST LADY,
OFFERS CORRUPTION PRIMER

REF: A. 2005 YAOUNDE 2147

B. YAOUNDE 285

C. YAOUNDE 183

Classified By: Political Officer Tad Brown for reasons 1.4 (b) and (d).


1. (C) Summary. Defense attorneys in the FEICOM corruption
trial created tumult in the courtroom and a splash in the
headlines when they demanded, on December 19, that the court
hear testimony from First Lady Chantal Biya and other
Cameroonian notables who feature prominently in the list of
illegal cash disbursements. The Special Council Support Fund
(French acronym FEICOM) was created to finance municipal
investment projects, but according to prosecutors, former
Managing Director Emmanuel Gerard Ondo Ndong and a dozen
former employees fleeced the agency of more than $102 million
in illegal cash disbursements from 2001 to 2005. At this
point in the trial, defense attorneys are determined to prove
that their clients were carrying out orders from the
Presidency, offering a rare look into the mechanics of
corruption that pervades Cameroon. There is little reason to
doubt the Presidency was at some level aware of FEICOM's
evolution into an ATM for the politically connected, not
least since the beneficiaries included Biya's hometown,
political party and wife. End summary.

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Putting the Fox in the Henhouse
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2. (SBU) The Special Council Support Fund (official name:
Fonds Special d'Equipement et d'Intervention Intercommunal or
FEICOM) was created in 1977 to finance municipal projects
around Cameroon. By many accounts, FEICOM was relatively
functional until President Biya appointed Emmanuel Gerard
Ondo Ndong in 1999. With no significant financial, business,
or management experience, Ondo Ngong was perceived as a
political lackey appointed for his personal loyalty to
President Biya and his seniority as a traditional leader
among Biya's Beti ethnic group (Ref B).

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Sacrificial Lamb on the
Altar of Debt Forgiveness
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3. (SBU) Although removed from his position on November 12,
2005 (Ref A),Ondo Ndong remained free until he was arrested,
along with dozens of others, on February 21, 2006 (Ref B),
three days before the arrival of an IMF Mission. The
Cameroonian press has attributed these arrests to the
Government of Cameroon's campaign for debt relief under the
HIPC process and the pressure generated by Ambassador
Marquardt's public demands for progress in the war against
corruption (Ref C),a link that is confirmed in discussions
with our Cameroonian contacts. Cameroon regularly ranks as
one of the most corrupt countries in the world. From among a
bevy of corrupt government officials, Ondo Ndong was likely
singled out for prosecution because FEICOM had already
undergone a sweeping audit at the demand of the French
development agency (reftels). The French also had an
important if less public role in outing Ondo Ndong, after an
audit they financed revealed the extent of his misdeeds.

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Anatomy of Corruption: How To Loot Millions
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4. (SBU) Post has obtained copies of the audit and other
documents presented in court against Ondo Ndong and the other
defendants. These hefty tomes reveal that Ondo Ndong and his
colleagues enjoyed a veritable buffet of embezzlement,
enriching themselves by, inter alia:

-- issuing themselves periodic bonuses (for Ondo Ndong,
upwards of $320,000);
-- forging documents to appropriate FEICOM vehicles
(including Lexuses, Peugeots, and Land Cruisers);
-- pocketing millions of dollars in travel expenses for
"visits to the field" that never took place;
-- paying personal expenses from FEICOM funds; and
-- skimming personal cuts from FEICOM contracts and expenses
paid in cash.


YAOUNDE 00001883 002 OF 003


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Even Corruption Needs Paperwork
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5. (U) Whether for extralegal bonuses or fictitious field
trips, FEICOM officials dutifully completed paperwork,
replete with official-sounding purposes, to ensure proper
bookkeeping. We know from the documents that FEICOM boasted
a fleet of vehicles (everything from transport trucks to
Lexuses),and yet Ondo Ndong signed fictitious travel
vouchers that consistently included charges for rental
vehicles (sometimes as much as $400 per day for a 4x4) and
gasoline ($200 per day per car). Rather than pay FEICOM
contractors by check, Ondo Ndong would write a check for a
subordinate to cash, thereby obscuring any discrepancies
between the sums withdrawn and the amounts received by the
contractor. In one example, FEICOM paid $408,000 for the
construction of a stadium in Mvomek'a (Biya's hometown),
disbursed in a check of $200,000 and a cash withdrawal of
$208,000. The investigation revealed that the company
received the payment by check, but that the cash payment of
$208,000 never reached the company.

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Corruption: More than Swiss Bank Accounts
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6. (SBU) One marvels at the various motivations and methods
involved in looting FEICOM, illustrating that official
corruption is a multifaceted phenomenon. Some of the
purported line items are downright bizarre: $50,000 for
Christmas tree ornaments; $12,000 towards the funeral for the
wife of famed soccer player Roger Milla; $1,000 to produce a
cassette of religious music. At times it was personal
enrichment, as when Ondo Ndong forged documents to steal
FEICOM vehicles. At other times, FEICOM's accounts were
treated like a benevolent fund, disbursing $22,000 in
extralegal payments for the medical evacuation of an
employee, $2,000 for a food drive, or $20,000 to the American
School in tuition for a FEICOM employee. Often, Ondo Ndong
was called upon to fund nationalistic activities: in April
2003, Ondo Ndong signed over $240,000 for the organization of
the 30th anniversary of the May 20th National Day. The
Presbyterian Church in Yaounde received $20,000 to fund the
commemoration of the 77th anniversary of the national hymn.
In November 2001, FEICOM provided $8,000 to Miss Gisele
Biwoni to represent Cameroon in Miss Malaika 2001, a beauty
pageant in South Africa.

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Follow the Money All the Way to the Top
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7. (C) Significantly, the FEICOM records enumerate payments
to support the election campaign of President Biya and other
partisan purposes. Shortly before the 2004 Presidential
elections, a $10,000 payment was made in the name of "FEICOM
contribution to the Presidential Campaign." The most
sensitive portions of the report are those payments that are
directly linked to First Lady Chantal Biya through her
Foundation. In just four payments in 2001, FEICOM disbursed
more than $300,000 to the First Lady's HIV/AIDS Foundation.
In hearings on December 19, attorneys for Ondo Ndong and the
other defendants have lambasted the prosecutor for
side-stepping these and other politically sensitive cases and
demanded that Chantal Biya be called as a witness.

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Comment: Even a Show Trial Can Be Revealing
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8. (C) Many Cameroonians remain skeptical that the FEICOM
case will amount to anything more than a show trial to
appease the international community. They are confident that
Ondo Ndong will be found guilty and sentenced to a lenient
jail term (perhaps one year) in return for not telling all he
knows about the destination of the pilfered funds. They may
be correct. Despite the muck-raking efforts of some
journalists and defense attorneys, Biya and his coterie have
too much to lose in a full disclosure of the facts and the
judiciary's limited independence will be no match for this
challenge. While speaking of corruption is no longer the
taboo it once was here, this case illustrates the limits of
free expression about it.

YAOUNDE 00001883 003 OF 003




9. (C) Cameroonian officials are afraid to take any
significant action without approval from the Presidency and
it is unlikely that such large sums of money would have
sloshed around the country without implicit approval from
Unity Palace. Nevertheless, Biya's personal complicity is
difficult to gauge because we do not know how much his
coterie insulates him from Cameroon's day-to-day realities.
It is disheartening to be faced with such stark evidence that
corruption has been the norm, not the hidden exception,
governing Cameroon. We will continue to keep the pressure on
the Government and encourage civil society in hopes that
real, lasting gains might be made. And, if nothing else, we
will take advantage of this postmortem to better understand
how corruption works and, thereby, how best to tailor efforts
to fight it. End Comment.
MARQUARDT