HASINA FACES NUMEROUS ALLEGATIONS OF CORRUPTION,

UNCLAS SECTION 01 OF 02 DHAKA 001161

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: PHUM PGOV KGOV KDEM BG
SUBJECT: HASINA FACES NUMEROUS ALLEGATIONS OF CORRUPTION,
EXTORTION

REF: DHAKA 1152


1. SUMMARY. (SBU) On July 16, Awami League president Sheikh
Hasina was arrested at her Dhaka residence and brought to
court on charges of extortion. The charges stem from an
alleged bribe Hasina and her cousin, Sheikh Fazlul Karim
Selim, extracted from a company seeking permission to build
an electricity generating plant in 2001. In addition to this
charge, several other charges are pending against Hasina. END
SUMMARY.

THE BACKGROUND
==============


2. (SBU) Early on July 16, Awami League president Sheikh
Hasina was arrested at her Dhaka residence and brought before
the Dhaka Chief Metropolitan Magistrate, where she was
charged in an extortion case. The magistrate denied bail and
transferred the case to the Special Anti-Trafficking Court.
Hasina was then transferred to a sub-jail created for her
detention in the empty residence of the Deputy Speaker of
Parliament, located on the Parliament grounds. A date for the
framing of charges against her in the Special Court is
pending. Lawyers for the Anti-Corruption Commission (ACC)
will prosecute the case on behalf of the government.


THE ACCUSATION
==============


3. (SBU) Hasina faces charges that she and her cousin, jailed
Awami League Presidium member Sheikh Fazlul Karim Selim,
demanded bribes from the representative of a Russian power
company named Techno Prom Export in 2001. The local
representative of Techno Prom was Eastcoast Trading Private
Limited. Its managing director, Azam Chowdhury, filed the
charges against Hasina on June 12.


4. (SBU) According to Azam Chowdhury, Techno Prom received a
work order to build and commission the first phase of a power
plant in Narayanganj in 2000, when Hasina was Prime Minister
and Sheikh Selim was Health Minister. Techno Prom hired
Eastcoast Trading to be its local representative in
Bangladesh. Sheikh Selim informed Chowdhury that Hasina
would stop the project and prevent the government's Power
Development Board from paying Techno Prom if they did not pay
a "commission." Chowdhury paid Selim 29 million taka,
($420,000) in eight checks drawn from Standard Chartered Bank
and Southeast Bank.


5. (SBU) Selim was arrested on May 29. In an open court
hearing on June 21, he confessed that he extorted the 29
million taka from Eastcoast and divided it with Hasina.
Investigators working with the Anti-Corruption Commission
have reportedly traced the checks back to accounts controlled
by Hasina and Selim, prompting Hasina's formal arrest.

THE OTHER CASES
===============


6. (SBU) According to open media and government sources, the
following cases against Hasina that are currently being
investigated by the police and the ACC:

A) Tajul Islam Farook, chairman of Westmont Power Company,
filed a case against Hasina on April 9 alleging extortion and
abuse of power. Farook says that in 1998, when Hasina was
Prime Minister, she demanded a three million taka ($43,000)
bribe from his company to secure the contract to construct
and launch a 90-megawatt barge-mounted power plant for the
government. Westmont won the bid. The case is currently
under investigation.

B) Noor Ali, director of Unique Group and managing director
of the Dhaka Westin Hotel, filed an extortion case against
Hasina. He alleged he paid Hasina and her cousin Sheikh
Helal over 50 million taka ($725,000),and transferred to
Helal's wife ownership of two apartments in 1998 to resolve a
dispute between his company and the Power Development Board
over his company's construction of a 110-megawatt
barge-mounted power plant. Ali claims he personally handed
to then-Prime Minister Hasina twelve checks amounting to over
32 million taka ($463,000),with the remainder paid directly
to Helal. This case is also currently under investigation.

DHAKA 00001161 002 OF 002



C) The Bureau of Anti-Corruption (BAC),predecessor to the
ACC, filed a case against Hasina in December 2001, alleging
corruption deals she made while Prime Minister to purchase
eight MiG-29 fighter planes from Russia and a naval frigate
from South Korea. On May 28, the interim government appealed
to the High Court to resume hearing the two graft cases
against Hasina. The High Court will hear Hasina's petition
to dismiss the proceedings on August 1.

D) In October 2002 an investigative officer submitted a
charge sheet against Hasina accusing her and other former
ministers of corruption involving the contract to construct
the Meghnaghat Power Plant. A trial was initiated in October
2002, but the High Court stayed the case later that year. On
May 16, the High Court decided to lift the stay and scheduled
a July 25 hearing of Hasina's petition to dismiss the case.

E) On April 11, police charged Hasina, Jamaat Islami
president Matiur Rahman Nizami, and 50 other politicians with
murder, incitement to violence, and other serious offenses
connected to the street demonstrations and riots on October
28, 2006. Seven people were killed in the clashes between
Awami League and Jamaat Islami supporters in downtown Dhaka.
On July 16, Bangladesh press reported incorrectly that Hasina
was also being charged in this case. Investigators are
continuing to collect evidence in this case.

THE PUBLIC DEBATE
=================


7. (SBU) In news appearances in the United States shortly
after Hasina's arrest, her son Sajeb Wazed "Joy" decried his
mother's detention, claiming she was arrested without a
warrant, and that her detention was undemocratic and
politically motivated. A government lawyer familiar with the
case said Hasina was not detained under the government's
Special Powers Act, but had been charged in a specific
bribery case. The lawyer stated that under Bangladesh's
Criminal Procedure Code, a warrant is not required in such a
case. The lawyer added that Hasina's detention came only
after an extensive investigation into the charges, including
the testimony of her cousin, Sheikh Selim.


8. (SBU) Post continues to monitor the arrest and cases
against Hasina closely.
PASI