OIL MINISTER TORCHED IN GRILLING; FACES NO

C O N F I D E N T I A L SECTION 01 OF 02 KUWAIT 000989 SIPDIS SIPDIS STATE FOR NEA/ARP, EB/ESC/IEC, ENERGY FOR MWILLIAMSON E.O. 12958: DECL: 06/26/2017 TAGS: PGOV EPET KDEM KU NATIONAL ASSEMBLY SUBJECT: OIL MINISTER TORCHED IN GRILLING; FACES NO CONFIDENCE VOTE JULY 9 REF: A. KUWAIT 919 ¶B. KUWAIT 882 ¶C. KUWAIT 836 ¶D. KUWAIT 707 Classified By: Ambassador Richard LeBaron for reason 1.4 (d) ¶1. (C) Summary and comment: On June 25, ten MPs submitted a no confidence motion on the Oil Minister following a nine-hour "grilling" by three opposition MPs on corruption-related charges. The motion was supported by MPs from all four parliamentary blocs, suggesting it will get the 25 votes needed to pass when it is voted on July 9. Most expect the Minister to resign in the coming days rather than risk being forced out by Parliament. If he does, this would represent a significant victory for opposition parliamentarians and a defeat for the Government. There is also the possibility that the entire Cabinet could resign or the Amir could dissolve Parliament and call new elections. Regardless of the outcome, we see no serious consequences for U.S. interests emerging in the short term, particularly regarding key foreign, security, and energy policy issues. End summary and comment. ¶2. (SBU) On June 25, ten MPs submitted a no confidence motion on Oil Minister Shaykh Ali Al-Jarrah Al-Sabah, a distant cousin of the Amir, after he was "grilled" (i.e. questioned) by three opposition MPs for nine hours on corruption-related charges. Liberal MP Abdullah Al-Roumi, Islamist MP Adel Al-Sarawi, and Populist MP Musallam Al-Barrak accused the Minister of using his position to protect his cousin, Shaykh Ali Al-Khalifa Al-Sabah, from prosecution in a major oil-related embezzlement case (ref B). They also claimed the Minister had not only failed to combat corruption in the Oil Ministry, but was himself involved. The evidence they provided for their accusations about the oil ministry was more sensational than persuasive. At one point the MPs displayed pictures of senior Kuwaiti oil officials (though not the minister himself) with Japanese women the MPs labeled prostitutes at a party in Tokyo allegedly paid for with government funds. ¶3. (SBU) The Minister denied the allegations and noted that many of the violations cited by the MPs had occurred before he was appointed. On his relationship with Shaykh Ali Al-Khalifa, he explained that he consulted the former minister as part of a routine series of meetings with more than 50 senior oil sector officials. Shaykh Ali Al-Jarrah also suggested that several prominent individuals with vested interests in key oil projects that he had opposed were behind the grilling. Parliamentarians were apparently unconvinced: the no confidence motion was supported by MPs from all four parliamentary blocs. The motion, which only needs 25 votes to pass, is expected to be voted on July 9. ¶4. (C) Reactions to the grilling were mixed. Most local newspapers argued that the MPs outperformed Shaykh Ali Al-Jarrah and their accusations against the Minister were generally convincing. The new daily Al-Jarida, owned by prominent liberal MP Mohammed Al-Sager, whose bloc supported the grilling, reported that "the key winner in yesterday's grilling was Kuwait and its democratic march." The head staffer for liberal MP Mishari Al-Anjari told PolOff June 26 that the evidence presented was good, but "not enough" to oust the Minister. He believed the grillers had stronger, more damning evidence against the Minister, but had chosen to withhold it due to the potential political repercussions that could result if they revealed it in Parliament. He suggested they had shared this information with MPs, which was why so many had expressed support for the no confidence motion. Few Good Options for the Government -------------- ¶5. (C) The no confidence motion comes as a blow to the Government and threatens to fuel political tensions. This is the second grilling against a minister from the ruling family that opposition MPs have mounted since winning a parliamentary majority in last summer's elections; another grilling in December was avoided at the last minute by the minister's resignation. It is unclear how the Government will handle this latest challenge. It is unlikely the Government will risk a close vote on the no confidence motion, particularly since no minister has ever been ousted this way in Kuwait's 45 years of parliamentary democracy. If either the Minister or Cabinet resigns, it would represent a major victory for opposition MPs and a serious blow to the Government's prestige, and could merely encourage additional grillings. In the latter case, many believe Shaykh Nasser KUWAIT 00000989 002 OF 002 Mohammed would not be re-appointed as Prime Minister. A final option is dissolving Parliament and calling new elections. Most contacts argue that this would be very difficult in the current political environment, and would be interpreted as an attempt by the Amir to protect senior ruling family members from investigation and prosecution on corruption-related charges. Nonetheless the "summer elections" option was recently predicted by an influential member of the Al-Sabah family. No Short-term Impact; Long-term Projects Could Suffer -------------- -------------- ¶6. (C) Since the Oil Minister plays no direct role in the day-to-day operations of Kuwait's oil sector, there should be no short-term effect on Kuwait's production or exports of crude oil and refined products, which are managed by state-owned Kuwait Petroleum Corporation. However, a change in leadership at the Oil Ministry could further delay important projects designed to enhance Kuwait's production of heavy crude oil, gas, and "clean fuel." Increased scrutiny of the oil sector and public perceptions of corruption could also make decision-makers more risk averse. Plans to invite international oil companies to participate in Kuwait's oil sector through enhanced service agreements or the proposed 8.5 billion USD Kuwait Project could suffer further delays as a result. ********************************************* * For more reporting from Embassy Kuwait, visit: http://www.state.sgov.gov/p/nea/kuwait/?cable s Visit Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ********************************************* * LeBaron