Identifier
Created
Classification
Origin
07KINGSTON1681
2007-11-19 20:07:00
CONFIDENTIAL
Embassy Kingston
Cable title:  

JAMAICA: BEGINNING TO CLEAN THE AUGEAN STABLES?

Tags:  PREL PGOV SOCI ENRG ECON EFIN ASEC KCOR 
pdf how-to read a cable
VZCZCXYZ0000
PP RUEHWEB

DE RUEHKG #1681/01 3232007
ZNY CCCCC ZZH
P 192007Z NOV 07 ZFF4
FM AMEMBASSY KINGSTON
TO RUEHC/SECSTATE WASHDC PRIORITY 5608
INFO RUCNCOM/EC CARICOM COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 0024
RUEHSW/AMEMBASSY BERN 0107
RUEHCV/AMEMBASSY CARACAS 0502
RUEHLO/AMEMBASSY LONDON 0408
RUEHTC/AMEMBASSY THE HAGUE 0744
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEHUB/USINT HAVANA 0087
RHMFISS/HQ USSOUTHCOM J7 MIAMI FL
RUEATRS/DEPT OF TREASURY WASHDC
C O N F I D E N T I A L KINGSTON 001681 

SIPDIS

SIPDIS

DEPT PASS CENTRAL AMERICAN CARRIBBEAN BASIN COLLECTIVE

DEPT FOR WHA/CAR
(JOE TILGHMAN) WHA/EPSC (LISA MARTILOTTA)
INR/IAA (BOB CARHART)
TREASURY FOR IA/WH (SARA GRAY)

E.O. 12958: DECL: 11/19/2017
TAGS: PREL PGOV SOCI ENRG ECON EFIN ASEC KCOR
SUBJECT: JAMAICA: BEGINNING TO CLEAN THE AUGEAN STABLES?
THE NEW GOLDING GOVERNMENT TAKES ON THE HERCULEAN CHALLENGE
OF DEALING WITH PUBLIC SCANDALS -- PAST AND PRESENT

REF: A. 06 KINGSTON 2021 (121230Z OCT 06) (NOTAL)

B. KINGSTON 1462 (251614Z SEP 07) (NOTAL)

C. KINGSTON 1592 (252038Z OCT 07) (NOTAL)

D. KINGSTON 1523 (102131Z OCT 07) (NOTAL)

E. KINGSTON 1585 (241912Z OCT 07) (NOTAL)

F. KINGSTON 1043 (051801Z JUL 07) (NOTAL)

G. KINGSTON 1629 (021501Z NOV 07) (NOTAL)

H. KINGSTON 1622 (011214Z NOV 07) (NOTAL)

Classified By: DEPUTY CHIEF OF MISSION JAMES T. HEG, REASONS 1.5 (B)
AND (D)

Summary and Analysis
---------------------
C O N F I D E N T I A L KINGSTON 001681

SIPDIS

SIPDIS

DEPT PASS CENTRAL AMERICAN CARRIBBEAN BASIN COLLECTIVE

DEPT FOR WHA/CAR
(JOE TILGHMAN) WHA/EPSC (LISA MARTILOTTA)
INR/IAA (BOB CARHART)
TREASURY FOR IA/WH (SARA GRAY)

E.O. 12958: DECL: 11/19/2017
TAGS: PREL PGOV SOCI ENRG ECON EFIN ASEC KCOR
SUBJECT: JAMAICA: BEGINNING TO CLEAN THE AUGEAN STABLES?
THE NEW GOLDING GOVERNMENT TAKES ON THE HERCULEAN CHALLENGE
OF DEALING WITH PUBLIC SCANDALS -- PAST AND PRESENT

REF: A. 06 KINGSTON 2021 (121230Z OCT 06) (NOTAL)

B. KINGSTON 1462 (251614Z SEP 07) (NOTAL)

C. KINGSTON 1592 (252038Z OCT 07) (NOTAL)

D. KINGSTON 1523 (102131Z OCT 07) (NOTAL)

E. KINGSTON 1585 (241912Z OCT 07) (NOTAL)

F. KINGSTON 1043 (051801Z JUL 07) (NOTAL)

G. KINGSTON 1629 (021501Z NOV 07) (NOTAL)

H. KINGSTON 1622 (011214Z NOV 07) (NOTAL)

Classified By: DEPUTY CHIEF OF MISSION JAMES T. HEG, REASONS 1.5 (B)
AND (D)

Summary and Analysis
--------------

1.(C) Endemic corruption and crime have plagued Jamaica for
decades. Over 18 years of rule by the People's National Party (PNP),
major scandals rocked the country in everything from resort development
to cement production and telecommunications licensing, but seldom was
anyone held to account. The new government of Prime Minister Bruce
Golding's Jamaica Labour Party (JLP) appears ready to change this. The
task will be Herculean, particularly as some elements of his own party
may resist, and the JLP has only a narrow majority in Parliament.
Nevertheless, the new government deserves the full support of the U.S.
and international financial institutions.

End Summary and Analysis.

Distribution of Cuban Light Bulbs
--------------

2.(SBU) Following months of rumors and allegations, on
October 23 the new Minister of Mining, Energy, and Telecommunications,
Clive Mullings, announced that the Government of Jamaica (GoJ)'s
Contractor General, Auditor General, and Attorney General were opening
an investigation into the circumstances under which the previous

People's National Party (PNP) Government of Prime
Minister Portia Simpson Miller (PSM) had accrued a bill of
more than USD 3.95 million for the distribution of some four million
energy saving florescent light bulbs donated by the Government of Cuba
to the people of Jamaica. On November 6, Mullings announced that the
matter had been turned over the Director of Public Prosecutions and the
Fraud Squad, and that no further distribution payments would be made
until their investigations had been completed and a decision taken by
the Cabinet. Allegedly, Mullings' predecessor as Minister,
Phillip Paulwell, and then-Minister of State within the Energy Ministry
Kern Spencer awarded lucrative contracts for nationwide distribution of
the bulbs to two companies which only recently had been incorporated
by personal friends and/or relatives.

Careful Reaction from Opposition PNP to Light Bulb Allegations
-------------- --------------

3.(SBU) Still smarting from the widespread perception that
her previous Government had dealt ineptly and precipitously with a
series of scandals (including the Trafigura Affair, reftel A and below)
thus contributing to the PNP's defeat in the September 3 national
election, on October 28 Opposition Leader PSM gave Paulwell and Spencer
two full weeks to present a report on the light bulb project. She then
had a six-member review committee of PNP officials examine their report
On November 11, PNP General Secretary Donald Buchanan announced that
the committee had found no evidence of fraud, but admitted there had
been breaches of contracting procedures in connection with the
distribution of the light bulbs.

4.(SBU) For their parts, Paulwell and Spencer continue to
deny any wrongdoing, claiming they ultimately will be exonerated.
Nevertheless, on November 13 they resigned their respective positions
as opposition Spokesperson and Deputy Spokesperson on Industry and
Commerce. Whether they eventually may face criminal prosecution
remains an open question. (Note: Over recent years, Paulwell has been
connected with a series of major scandals, but has never been
prosecuted. To date, no allegations have been made against any of the
100 Cuban volunteers who have been involved in distributing and


installing the light bulbs around the country. End Note.)

Background: the Trafigura Affair
--------------

5.(SBU) As delineated reftel (A),the GoJ has had concessionary oil
deals with Nigeria since the 1970s. The quotas have varied as the
agreements have been renegotiated, but have always been in the range of
20-30,000 barrels-per-day. However, maintaining that the Petrojam
refinery in Kingston is unable to process the Nigerian crude, over the
years the GoJ has contracted with various oil traders to lift, market,
and trade the oil. In October, 2000 the GoJ signed such an agreement
with the Dutch oil trading company Trafigura Beheer BV (headquartered i
Switzerland). 6.(SBU) In October, 2006, then-Opposition Leader Golding
announced that he had uncovered "shady dealings" between then-PM PSM s
ruling PNP and Trafigura, and alleged that the firm had made USD 475,00
in improper payments to the private accounts of senior PNP officials.
The Government maintained the funds had been a donation, while
Trafigura claimed the payments had been part of a "commercial
arrangement." Then-PNP General Secretary Colin Campbell, a close ally
of PSM, was forced to resign his position, and the PNP subsequently
claimed to have returned the funds to Trafigura. To date, no one has
been charged in the scandal.

New Government to Cooperate Fully with Dutch Investigation of Trafigura
-------------- --------------

7.(SBU) Speaking in Parliament on November 13, PM Golding
revealed that:

-- Dutch authorities recently had told him they believed
Trafigura had bribed public officials in Jamaica;

-- the National Public Prosecutor's Office of the Netherlands was still
interested in pursuing its investigations;

-- his Government intended to cooperate fully with Dutch
authorities.

8.(SBU) Golding then said he had instructed the Minister
of Justice to issue an order, pursuant to Section 32(2) of the Mutual
Assistance Act, declaring that the provisions of the Act shall apply to
the UN Convention Against Transnational Organized Crime, and that the
Netherlands would be designated a foreign state to which the provisions
of the Mutual Assistance (Criminal Matters) Act would apply. This woul
enable the GoJ to consider the request by Dutch authorities to visit
Jamaica to conduct investigations into the affair. The Opposition PNP
thus far has refused to say whether it will cooperate with any Dutch
officials sent to Jamaica to conduct investigations.

Missing Funds from Ministry of Finance
--------------

9.(C) At least USD 243,000 in cash went missing from the
offices of the Financial Investigation Division (FID) of the Ministry o
Finance between August and October, according to police. The money was
being held as evidence in a secure vault after having been seized from
person under investigation. Two of the five Jamaica Constabulary Force
officers seconded to FID are prime suspects in an ongoing investigation
as they had access to the vault's interior secure lock-up, and,
unusually, went on trips to the U.S. about the time the money went
missing. (Note: DHS/ICE is assisting the GoJ in its investigation. En
Note.) The theft has highlighted the need for greater security at the
FID's offices; control of the vault's keys was inadequate, no
surveillance cameras covered the vault, and no systematic procedures
were in place to audit evidence held in the vault. The
theft was only discovered when FID was ordered to return the money to
the person from whom it had been seized. In the interim, Deputy Finance
Minister Don Wehby has directed that all FID moneys be moved to the Ban
of Jamaica.

10.(C) The current Director of the FID, Christine
Chambers, who is well regarded as a clean, apolitical, and effective
manager of the organization by her international partners, is unsure


whether she will remain in office. In addition to her own future,
she is deeply troubled about the devastation to staff morale caused by
the theft, which could hardly have come at a worse time: FID currently
is trying to fill 40 new positions for investigators, analysts, and
attorneys which were created when the GoJ adopted the new Proceeds of
Crime Act.

Encouraging Signs in Jamaica's Anti-Crime, Anti-Corruption Efforts
-------------- --------------

11.(C) Reftel (B) delineates the formidable crime and
corruption challenges facing the new Golding Government. During its
initial months, in addition to its investigation
of the above scandals, several encouraging developments
have convinced post that the new Government is quite serious about
combating crime and corruption:

(A) During his recent visit to Washington, Finance Minister Audley Shaw
asked the World Bank to conduct and finance a diagnostic study on issue
of corruption in Jamaica, which they agreed to do free of charge, and
confirmed that the GoJ will widen the framework of the Financial
Investigative Division (FID) Act to strengthen anti-money laundering
laws prior to introducing the legislation in Parliament (reftel
C).

(B) Jamaica's former Commissioner of Police, who had been
under fire over alleged interference in several corruption
investigations, has resigned (reftel D);

(C) Col. Trevor MacMillan, a respected senior
anti-corruption fighter, has been appointed
a Special Advisor to the Ministry of Finance, in the
expectation that the Golding Government will redraft and enact
legislation to create an effective National Independent
Investigative Authority (NIIA) with MacMillan in charge
(reftel E). (Note: MacMillan has asked for USG assistance in reviewing
the draft legislation and development of a model for the NIIA. End
Note.)

(D) The Head of the new Police Anti-Corruption Division,
Justin Felice, the former Senior Director of Investigations for the
Police Ombudsman of Northern Ireland, has a distinguished 30-year recor
(reftel F).

11.(C) Nevertheless, with a thin 32-28 seat working
majority in Parliament, the JLP will not find it easy to implement its
ambitious agenda in general (reftel G),and perhaps its
anti-corruption campaign in particular. As noted reftel
(H),the GoJ's full cooperation in the pending high-profile extradition
of a major narcotics trafficker will be a key test.

JOHNSON