BUSINESSMEN AND POLITICIANS REACTION TO SECOND

C O N F I D E N T I A L SECTION 01 OF 02 DHAKA 000457

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/19/2017
TAGS: KCRM KDEM PREL PGOV BD
SUBJECT: BUSINESSMEN AND POLITICIANS REACTION TO SECOND
LIST OF 50

REF: A. DHAKA 0436

B. DHAKA 0329

Classified By: Deputy Chief of Mission Geeta Pasi; Reason 1.4(d)


1. (C) Summary. Businessmen are starting to express concern
about the lack of transparency with the government's
anti-corruption lists, particularly as they pertain to
several well-regarded businessmen. Meanwhile, an Awami League
politician says his inclusion on the lists is being used by
senior army officers to pressure him to join a pro-military
political party. End Summary.


2. (SBU) On February 18, the government published a list of
50 persons required to present personal net worth statements
to the Anti-Corruption Commission; most of the 50 were
subsequently arrested and most were widely reputed to be
exceptionally corrupt. On March 8, the Daily Star newspaper,
citing a "reliable source," published a second list of 50
corruption suspects who the government never officially
acknowledged or dismissed. Although politicians from both
the Awami League and even more from the Bangladesh
Nationalist Party dominated both lists, some businessmen,
journalists, and labor leaders appeared on the second list.
Most prominent were the chairman of Bashundhara Group and
Beximco, two of the country's largest business conglomerates,
and the president of the Bangladesh Chamber of Industries,
A.K. Azad, whose garment factories are principal suppliers to
JC Penny and Target. No specific charges have been
associated with or filed against most of the suspects.


3. (C) Reports that a third list is being compiled have
fueled anxiety among potential targets. Recently, several
business leaders told econoff that they were surprised by the
inclusion of Azad on the list as none could explain what he
might have done wrong. Azad's inclusion raised concerns
among major U.S. buyers about the potential impact of the
anti-corruption campaign on Bangladesh's reputation as a
reliable supplier of ready-made garments. Both JC Penny (ref
A) and Target contacted the Embassy to seek register concern.



4. (C) On March 18, business leaders told econoff that the
anti-corruption campaign and earlier government actions to
target "hoarders" and adulterated commodities have had a
chilling effect on business, evidenced by a drop in the
volume of import letters of credit opened over the past
month. Buyers, they say, are reluctant to order normal
quantities because of uncertain rules over what constitutes
"hoarding." Importers of commodities also fear that normal
spoilage (5%-10% wastage is not uncommon) will be attacked as
"adulteration."


5. (C) On March 18, Awami League International Affairs
Secretary Syed Abul Hossain, who is on the second list of 50,

SIPDIS
told poloff that he does not sleep at home now for fear of
arrest and insisted that corruption allegations that led to
his resignation as State Minister during the last Awami
League government had all been resolved. In order to clear
his name, Hossain said, he sought out business and army
leaders. When he asked Directorate General for Forces
Intelligence,s Brigadier General Bari to purge his name from
the list, Bari reportedly replied that the army was forming a
political party and wanted to know how many Members of
Parliament Hossain could bring with him to this new party.
Bari allegedly added that the army has approached other
members of both major parties about joining them,
underscoring to Hossain that his name on the list was simply
a ploy to get him to join the new party.


6. (C) Jatiya Party Secretary General Ruhul Howlader recently
told poloff that during the Ershad regime, BNP member (and
future BNP law minister) Moudud Ahmed was arrested on
corruption charges, given a choice about his future,
released, and then welcomed into the fold of Ershad's Jatiya
Party. Howlader speculated that the army today is using the
same strategy to build its own political party.


7. (C) Comment: The public has strongly supported government
action against individuals widely believed to be corrupt, but
as the net widens to capture people who are those less
obviously culpable, it risks alienating constituencies, like

DHAKA 00000457 002 OF 002


business, that originally hailed the government's agenda and
scaring off key overseas buyers who seek stable supply
chains. As reports accumulate from leaders of both main
parties that military officers have urged them to support a
pro-military party, the allegation that the military is using
the corruption campaign as political leverage looks more and
more credible.
BUTENIS