Identifier
Created
Classification
Origin
07PORTAUPRINCE1511
2007-09-14 19:11:00
CONFIDENTIAL
Embassy Port Au Prince
Cable title:  

SOME IN PRIVATE SECTOR GETTING RELIGION ON

Tags:  ECON HA 
pdf how-to read a cable
VZCZCXRO8217
PP RUEHQU
DE RUEHPU #1511/01 2571911
ZNY CCCCC ZZH
P 141911Z SEP 07
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 6843
INFO RUEHZH/HAITI COLLECTIVE PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 PORT AU PRINCE 001511 

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/07/2017
TAGS: ECON HA
SUBJECT: SOME IN PRIVATE SECTOR GETTING RELIGION ON
ANTI-CORRUPTION

REF: A) PORT AU PRINCE 1476 B) PORT AU PRINCE 1442 C)

PORT AU PRINCE 1345 D) PORT AU PRINCE 0950

Classified By: Ambassador Janet Sanderson. Reason: E.O. 12958 1.4 (b),
(d)

Summary
-------

C O N F I D E N T I A L SECTION 01 OF 02 PORT AU PRINCE 001511

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/07/2017
TAGS: ECON HA
SUBJECT: SOME IN PRIVATE SECTOR GETTING RELIGION ON
ANTI-CORRUPTION

REF: A) PORT AU PRINCE 1476 B) PORT AU PRINCE 1442 C)

PORT AU PRINCE 1345 D) PORT AU PRINCE 0950

Classified By: Ambassador Janet Sanderson. Reason: E.O. 12958 1.4 (b),
(d)

Summary
--------------


1. (SBU) American Chamber of Commerce (AmCham) leaders are
seeking to influence President Preval's anti-corruption
campaign by creating a private sector commission to work with
the GoH. Some members believe that the GoH, particularly
Port-au-Prince's Chief Prosecutor, is unfairly targeting the
private sector, sparing state civil servants, and employing
questionable methods. The members admitted Haiti has a
pervasive culture of corruption, with lack of tax compliance
and venality of customs officials among the worst practices.
They also agreed that the GoH needs to enforce tax laws in
the informal sector, which constitutes a large part of the
economy. Unless President Preval works seriously with the
private sector commission, and has his prosecutors
investigate public officials as well as businessmen, his
anti-corruption campaign will appear politically motivated
and fall far short of its goal of cleaning up Haiti's
business and political life. End Summary.

AmCham Sees Handwriting on Wall
--------------


2. (SBU) The Ambassador hosted seven board members from the
AmCham for a breakfast meeting on September 6. The meeting
was held at the request of its president Bernard Fils-Aime.
Other participants included (protect all) Gladys Coupet of
Citibank-Haiti, Mireille Merove-Pierre of KPMG, Ricky Hicks
of Compagnie de Tabac Comme Il Faut, Philippe Armand of
Dynamic Enterprise, Michel Guerrier of Dinasa/National, and
Rene-Max August of Valerio Canez SA. The previous day the
Ambassador met with Reginald Boulos of Le Nouveau du Matin SA
and other enterprises, the businessman most recently called
in for questioning by Port-au-Prince Chief Prosecutor Claudy
Gassant.


3. (C) Bernard Fils-Aime told the Ambassador that it is clear
President Preval will not be deterred from his
anti-corruption campaign, and that prosecuting corruption is
necessary for the good of business and for Haiti's
development. He and other AmCham leaders agreed that the
private sector should work with the GoH in its

anti-corruption campaign. Fils-Aime said that Preval had
welcomed their suggestion to form a private sector commission
to help the GoH curb corruption. The membership of the
private sector commission would be finalized in a matter of
days. The President had also said he would continue
investigations of private sector offenders. Fils-Aime said
the commission would probably advise the GoH on improving
income tax compliance, simplifying income tax law, and
cleaning up the Department of Customs. They would also
suggest that the government ''amnesty'' past private sector
offenses in exchange for guaranteeing future observance of
the law.

Perception of Unfairness
--------------


4. (SBU) AmCham leaders expressed anxiety, however, that the
GoH appeared to be targeting the private sector while letting
public officials off the hook. They cited the continuing
detention without charge of Franck Cine (major shareholder in
Socabank and president of the Haitian telecommunications
company Haitel REF D) and two members of the Brandt family
(influential businessman Fritz Brandt and son David Brandt
REF C) as examples. The Ambassador pointed out that the GoH
had also arrested two customs officials linked to the Brandt
case, but conceded that government-sponsored publicity
surrounding these cases was negligible compared to the Cine
and the Brandt cases.

The Claudy Gassant Factor
--------------


5. (C) Fils-Aime said Haiti's anti-corruption effort needs a
prosecutor with a ''bulldog'' personality such as Claudy
Gassant. However, he criticized Gassant's methods and
personality, accusing him of investigating suspects
selectively for maximum public effect. Fils-Aime also
criticized Gassant's self-aggrandizing and publicity-seeking
personality, but did not agree with suggestions from other
members that Gassant's methods overstepped legal bounds.


6. (C) Reginald Boulos made the same point more graphically
to the Ambassador in a separate meeting the previous day,

PORT AU PR 00001511 002 OF 002


recounting how during the prosecutor's August 23 questioning
of Boulos, Gassant had accused Boulos of plotting to kill
him. Gassant had also brazenly demanded a ''cut'' of the
bribes he accused Boulos of paying senators for their
summoning of Minister of Justice MaGloire and Gassant the day
before, a tactic Boulos saw as an attempt by Gassant to
either provoke or entrap him. (Note: Gassant refused to obey
this summons, occasioning a Senate resolution to interpellate
the entire Alexis government REF B. Gassant appeared with
Magloire and testified respectfully on August 30, but the
Senate resolution is still pending REF A. End note). To
intimidate Boulos and fan speculation that Boulos was about
to be arrested, Gassant had arranged for prison vehicles to
arrive at and depart from the prosecutor's office several
times during the questioning of Boulos. Boulos related that
he and his lawyers had easily refuted the only charge in
Gassant's file, the alleged use of the signature of a
deceased customs official on a customs import form. Boulos
said that in a meeting with President Preval the next day,
Preval appeared surprised at the flimsiness of Gassant's case
against him.

Everybody Must Pay Their Taxes
--------------


7. (SBU) AmCham leaders agreed with Rene-Max Auguste that
corruption is an historically-rooted way of life in Haiti.
Tax evasion and venality of customs officials are the biggest
challenges. The AmCham leadership said that it is time for
all private sector entities to respect the law; setting an
example by paying one's taxes must begin with top business
leaders. Gladys Coupet of Citibank stressed that the GoH
must extend tax law enforcement into the informal sector,
which she claimed makes up 75 percent of Haiti's economy.
Mireille Merove-Pierre claimed that many informal sector
entrepreneurs make as much money as businesses in the formal
sector, without paying taxes.

Threats to Whistleblowers
--------------


8. (C) Amcham leaders said that President Preval, at his
August 24 meeting with Haiti's Chamber of Commerce, had asked
for their help in identifying corrupt public officials.
AmCham leaders expressed trepidation to the Ambassador that
previous private sector cooperation on corruption cases
against state officials had led to death threats against
informants and their families. Rene-Max August countered
that examples of private sector cooperation with authorities
could create a ''critical mass'' effect that would produce a
more generalized willingness to provide evidence.

Business Sector Role in Dealing with Social Unrest
-------------- --------------


9. (SBU) Philippe Armand highlighted an additional threat in
Haiti: social unrest. He advised his colleagues to organize
social outreach projects in poor neighborhoods. His company
had organized a meeting with community representatives in the
Port-au-Prince slum district of Saint Martin, and was
astonished to hear how local residents regarded businessmen
as ''the enemy.'' Armand stated that the meeting produced a
partial change of attitude toward private business among the
Saint Martin locals, but he conceded that much work remained
to be done. He suggested that the USG sponsor a visit to
Haiti of Irish politicians who played a role in resolving
sectarian conflict in Northern Ireland, believing that such
actors could help bridge the gap in Haiti between poor urban
dwellers and the private sector.

Comment
--------------


10. (SBU) Port-au-Prince Chief Prosecutor Gassant's
investigations of businessmen have left the private sector
shaken but determined to work with President Preval against
corruption. Hence, the private sector's agreement to form a
commission to work with the government on shaping the
anti-corruption campaign. We note that the AmCham appears
more forward looking and enlightened than much of Haiti's
business community. Post will monitor how seriously
President Preval treats the commission and its
recommendations, and the degree to which investigations also
target state officials. Targeting big business wins the
President more political points and has fewer political costs
than prosecuting state officials. Progress in fighting
corruption, however, demands that Preval ''grab the bull by
both horns,''--not just one.
SANDERSON