Identifier
Created
Classification
Origin
07PRISTINA180
2007-03-08 08:11:00
CONFIDENTIAL
Embassy Pristina
Cable title:  

KOSOVO: ASSEMBLY INVESTIGATES FORMER SPEAKER DACI,

Tags:  PGOV PREL PHUM KDEM UNMIK YI 
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VZCZCXRO9334
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P 080811Z MAR 07
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TO RUEHC/SECSTATE WASHDC PRIORITY 7119
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 1079
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHFMISS/AFSOUTH NAPLES IT
RHMFISS/CDR TF FALCON
RHEFDIA/DIA WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUEPGEA/CDR650THMIGP SHAPE BE
RHEHNSC/NSC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUFOANA/USNIC PRISTINA SR
C O N F I D E N T I A L SECTION 01 OF 03 PRISTINA 000180 

SIPDIS

SIPDIS

DEPT FOR DRL, INL, AND EUR/SCE, NSC FOR BRAUN, USUN FOR
DREW SCHUFLETOWSKI, USOSCE FOR STEVE STEGER

E.O. 12958: DECL: 03/08/2017
TAGS: PGOV PREL PHUM KDEM UNMIK YI
SUBJECT: KOSOVO: ASSEMBLY INVESTIGATES FORMER SPEAKER DACI,
RESULTS BOTH PROMISING AND DISAPPOINTING

REF: 06 PRISTINA 933

Classified By: COM TINA KAIDANOW FOR REASONS 1.4 (B) AND (D).

C O N F I D E N T I A L SECTION 01 OF 03 PRISTINA 000180

SIPDIS

SIPDIS

DEPT FOR DRL, INL, AND EUR/SCE, NSC FOR BRAUN, USUN FOR
DREW SCHUFLETOWSKI, USOSCE FOR STEVE STEGER

E.O. 12958: DECL: 03/08/2017
TAGS: PGOV PREL PHUM KDEM UNMIK YI
SUBJECT: KOSOVO: ASSEMBLY INVESTIGATES FORMER SPEAKER DACI,
RESULTS BOTH PROMISING AND DISAPPOINTING

REF: 06 PRISTINA 933

Classified By: COM TINA KAIDANOW FOR REASONS 1.4 (B) AND (D).


1. (C) SUMMARY: The Kosovo Assembly's ad-hoc Investigative
Committee presented its report on financial wrongdoing to the
full Assembly, which dutifully adopted it on February 22.
The report was essentially a watered-down version of the
Auditor General's earlier findings, and was even less firm in
placing blame on the murky procurement practices of former
Assembly President Nexhat Daci. Daci's newly formed,
six-member "Democratic League of Dardania" caucus voted
against adopting the report, and the ruling LDK party did
little to put the blame on Daci. Daci loyalist Besa Gaxherri
was on the committee, and other committee members cited her
presence as the excuse for wanting to come up with a
"consensus based" report. The committee recommended some
constructive but inadequate changes in Assembly financial
controls and noted changes in Assembly personnel that have
resulted in better oversight practices. Several opposition
MPs criticized the committee's timidity. At the same time,
an international prosecutor's investigation into criminal
allegations in the Auditor General's report continues and
criminal charges against Daci resulting from this
investigation are possible. Nevertheless, the fact that the
Assembly investigated one of its own is a promising
development. END SUMMARY.

Opposition Criticize Whitewash of Daci


2. (SBU) On November 3, 2006, the Kosovo Assembly
established an ad-hoc Investigative Committee (IC) to look
into the Auditor General's (AG) factual findings on financial
impropriety in the Kosovo Assembly during 2005. (NOTE:
Nexhat Daci, former ruling LDK member and now head of an LDK
breakaway faction, served as Assembly President from December
2001 until March 2006. His tenure was marked by murky
procurement practices. END NOTE.) On February 22, 2007 the

IC presented its report to the Assembly. MPs discussed the
report and voted to adopt it with only five votes against and
one abstention. The main thrust of the report was to verify
that the majority of the AG's findings were accurate. The
report criticized the Assembly for its lack of transparency;
abuse of public funds; illegal procurement practices;
violation of official hierarchy; manipulation and concealing
of official documents; individual and collective
irresponsibility; and lack of a legal infrastructure and
internal control. The IC also criticized the illegal actions
of the Public Procurement Regulatory Committee (PPRC) and the
Ministry of Economy and Finance.


3. (SBU) The IC report also made several recommendations,
including stregthening oversight by the Budget and Finance
Committee and increasing its monitoring and reporting
capacities. It also recommended a new legal infrastructure
for the Assembly, including revamping the Presidency's Rules
of Procedure; creation of an internal audit body; improvement
of internal procedures; a new law on investigative
committees; the review of the PPRC responsibilities; and a
new law on general auditing. It placed responsibility for
implementing its recommentations with the Assembly
Presidency.


4. (C) Several MPs from the opposition Reform Party ORA and
the Democratic Party of Kosovo (PDK) criticized the report
for stopping short of a real indictment of Daci. PDK MP
Xhavit Haliti hit the report for its mild nature and oblique
conclusions when "political responsibility lies with Nexhat
Daci, the Assembly Presidency, the Ministry of Economy and
Finance, and the administrative authorities of (former
Assembly Secretary) Isuf Demaj and the PPRC." No Democratic
League of Kosovo (LDK) MPs took to the floor to criticize
Daci; those who spoke just supported the committee's work,
with little reference to Daci. MPs of Daci's Democratic
League of Dardania (LDD) group defended Daci, accusing others
of similar malfeasance. (Comment: ORA MP and member of the
IC and the current Assembly Presidency Gazmend Muhaxherri

PRISTINA 00000180 002 OF 003


admitted to us the language of the condemnation was not as
strident against Daci as many had expected, but only because
the committee had agreed to reach a cross-party consensus,
and Daci loyalists were on the committee. End Comment.)

UNMIK's Role


5. (C) Aside from this Assembly role, responsibility for
holding wrongdoers legally accountable for their crimes lies
with the international judges, prosecutors, and investigators
of UNMIK's Department of Justice (DoJ) and the Financial
Investigations Unit (FIU). The FIU began its work shortly
after the July 2006 completion of the AG's report, which
alerted it to possible crimes and defined the scope of its
Assembly investigation. Alleged Assembly financial
impropriety falls into three specific categories: an armored
car ordered for Daci (but never delivered),the construction
of the Villa Germia conference center without proper
authorization, and misuse of petty cash.


6. (C) The FIU has thus far only completed investigation of
the armored car - that file now moves to new Canadian
prosecutor Andrew Mayes, who will decide if and when to issue
indictments and move the case forward. Former Assembly
budget director Jusuf Nikqi, Daci advisor Ahmet Alishani, and
businesswoman Shefka Shasivari (who apparently failed to
import the vehice in question) were arrested in connection
with this part of the case, but all were released pending
investigation. According to FIU sources, former Assembly
secretary Isuf Demaj may face charges as well, but Daci, who

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scrupulously kept his fingerprints off the armored car deal,
will likely not. (NOTE: Shasivari, who pled poverty to ward
off a high bail determination, was eventually released after
paying the 100,000 euro bail in cash. As a result, she is
now also under investigation for money laundering. END
NOTE.)

FIU Says Daci Could Eventually Face Criminal Charges


7. (C) However, Daci may face criminal charges eventually.
FIU sources told us that since they already seized from
Assembly premises the evidence related to the Villa Germia
construction, that part of the case will keep well.
Therefore, they are focusing next on the petty cash portion,
where alleged illegal expenditures included watches from the
Zurich airport, various perfume and cologne purchases, new
porcelain teeth for Daci, and clothing and ski lessons for
his staff. FIU claims to have a sufficient paper trail and
other evidence (for example, the porcelain teeth remain on
Daci's person) to support criminal charges against the former
Assembly speaker. Though the amount of money in question is
dwarfed by the Villa Germia expenses, Daci's role as
ringleader could conceivably put him on the high end of any
possible sentence. In the FIU's assessment, budget director
Jusuf Nikci, former secretary Isuf Demaj, former logistics
officer Burim Latifi, and Daci aide Alishani are also
vulnerable to being charged in this section of the case.


8. (C) Only four Assembly staffers have lost their jobs in
the wake of the AG's report; many more were likely involved
in Daci's schemes or at least illegally received his
largesse. These people may be eligible for administrative
disciplinary procedures which have not yet been undertaken.


9. (C) COMMENT: The "glass half-full" interpretation of
these events is that the Kosovar Assembly initiated and
conducted an inquiry into allegations of malfeasance, one
that featured prominently in local press reporting and became
an oft-cited parable of official corruption. The
"half-empty" analysis is that the Assembly reacted fecklessly
to the investigation and continues to rely on internationals.
Our judgment is that it is a positive development and a
useful precedent that the conduct of a former senior official
was subjected to this scrutiny. While many ordinary Kosovars
undoubtedly want to see senior officials doing the
"perp-walk", this is at least a start. END COMMENT.


PRISTINA 00000180 003 OF 003



10. (SBU) U.S. Office Pristina clears this cable in its
entirety for release to U.N. Special Envoy Martti Ahtisaari.
KAIDANOW