JORDAN TRANSPARENCY ROUNDUP - AS ACCOUNTABILITY

C O N F I D E N T I A L SECTION 01 OF 03 AMMAN 001731 SIPDIS E.O. 12958: DECL: 06/05/2018 TAGS: PGOV ECON KCOR JO SUBJECT: JORDAN TRANSPARENCY ROUNDUP - AS ACCOUNTABILITY WATCHDOGS MATURE, LAND DEALS DEBATE SIMMERS REF: A. AMMAN 1455 ¶B. AMMAN 1153 ¶C. AMMAN 604 ¶D. 07 AMMAN 5061 AMMAN 00001731 001.2 OF 003 Classified By: Ambassador David Hale for reasons 1.4 (b) and (d). ¶1. (C) Summary. Institutions designed to increase transparency and accountability in Jordan are starting to flex their bureaucratic muscles. The audit bureau released a report outlining its activities in 2007, and the Anti-Corruption Commission announced that it had referred its first cases for prosecution. On the legislative front, the government plans to amend a financial disclosure law to close some unintended loopholes. Yet, as these measures are going forward, media commentary and the Amman rumor mill are still actively engaged on the issue of land deals, with a particular focus on the issue of a canceled contract for a Dead Sea casino. After the text of the initial deal was made public, the government was compelled to explain its actions further. There are still aspects of the contract and its ultimate settlement which remain unclear, however, prompting further calls for release of information. Meanwhile, the King summoned senior officials and members of parliament in an attempt to quell rumor-mongering and character assassination directed at Royal Court Chief Bassem Awadallah, whose position remains precarious. End Summary. Anti-Corruption Commission Files Its First Cases -------------- --- ¶2. (SBU) The Anti-Corruption Commission (ACC) announced on June 3 that it had referred twenty-one cases to the courts for prosecution. The cases, which deal with fraud, misuse of public office, forgery, bribery, and embezzlement, are the first test of the commission's powers. ACC chair Abed Shakhanbeh explained that the prosecutions resulted from over 200 complaints investigated by the commission. Note: As reported in Refs B and C, the ACC is under pressure to show results. Recent media commentaries have also criticized the commission for failing to act on the land deals issue. End Note. Audit Bureau Fights Embezzlement -------------- ¶3. (U) The Audit Bureau released its annual report to the public on June 1. During 2007, the bureau prosecuted forty-eight cases of "violations of public money" totaling JD 1.1 million (USD 1.5 million). Judgments have been issued in sixteen of those cases, and the government reclaimed JD 43,600 (USD 61,000). The remaining cases are still pending further court action, or are in settlement talks. Closing Loopholes in the Financial Disclosure Law -------------- -------------- ¶4. (U) The Jordan Times reported on May 29 that the government was planning to introduce changes to the Financial Disclosure Law which would close some loopholes which became apparent during its application. The law, which came into force earlier this year, obligated thousands of elected officials and government employees to disclose their finances to the Ministry of Justice. Officials later noticed that a double jeopardy clause in the law was too broad, and would prevent prosecutions of repeat offenders. The Minister of Justice has since requested a series of amendments to the law that would allow multiple prosecutions. So far, 150 cases have been opened against officials who failed to file financial disclosure agreements. Land Deals Issue Continues to Simmer -------------- ¶5. (SBU) While Jordan's long term effort to build mature anti-corruption institutions starts to bear fruit, a debate about transparency continues in the background. As outlined Ref A, the controversy over alleged and actual sale of public land by the Jordanian government continues to grab headlines. The Dead Sea casino deal in particular continues to raise questions about transparency. ¶6. (SBU) On May 19, attorney and former Minister of Culture and Education Mohammed Hammouri wrote a lengthy article in the daily newspaper Al Arab Al Yawm detailing a confidential agreement concluded between the former government of Ma'arouf Al-Bakhit and the Oasis company (whose backers remain anonymous) for the sale of land on the shores of the Dead Sea for the construction of a casino. Note: That agreement was later annulled through a negotiated settlement with the AMMAN 00001731 002.2 OF 003 current government. The text of that settlement has not been released, although Hammouri is trying to obtain a copy through whistleblowers in the government. End Note. ¶7. (SBU) Hammouri's article prompted the Ministers of Justice and Tourism to appear one week later and defend the government's handling of the case. In a news conference, Minister of Justice Ayman Odeh asserted that the government's actions had protected the treasury from a USD 1.5 billion penalty, and was ultimately the best deal for Jordan. He also noted that PM Nader Dahabi had met with the owners of the Oasis company in order to iron out the settlement. Odeh dispelled some rumors, but confirmed others when he said that the Oasis company was given the right to purchase land in the Jordan Valley for tourism development as part of the settlement agreement. Tourism Minister Maha Khatib asserted that the land was pre-zoned for development as a resort, adding that the Oasis deal would create local jobs. ¶8. (C) During a meeting with Poloff, Hammouri displayed a copy of the contract for the casino, and spoke about his reasons for exposing it further. Hammouri asserted his "annoyance" with the seeming inability of the government to simply come clean on the issue. In writing his extended legal brief, Hammouri intended to get the facts out in the public sphere so the politicians and the people could decide for themselves about the content of the deal: "If the government's behavior is correct, we will defend them. If not, then we will condemn them." Hammouri was unimpressed by the performance of the Ministers of Justice and Tourism, saying that "they were embarrassed - this deal is unconstitutional." ¶9. (C) Despite the release of the initial contract, which was essentially forced by Hammouri's article, there are still many pieces of the casino deal which remain unclear. As long as the government refuses to release the text of the settlement agreement, it will likely face continued rumors and speculation as to its contents. The identity of the Oasis company's owners is also still a mystery. The contract is signed by Michel Hebert, CEO of Oasis. According to Hammouri, Oasis is a shell company registered in the British Virgin Islands. Media reports claim that a "Kurdish-British businessman" is behind Oasis - possibly a reference to Nazmi Ouji, the owner of Amman's Le Royale hotel. ¶10. (C) In a June 3 article in Al-Ghad daily, columnist Yasir Abu Hilalah called on the government to "follow through to the end" by releasing the remaining details to the public. The government is still playing its cards close to its chest, however. Former PM Bakhit and former Tourism Minister Osama Dabbas (who signed the original deal) have not appeared publicly to defend their actions. Note: As reported Ref A, Bakhit was summoned by the speaker of parliament for a private explanation. End Note. On June 4, the governor of Balqa rejected a request by the Jordanian Bar Association (led by Hammouri) to hold a symposium which would have focused on the constitutionality of the casino deal. The King Goes on the Record -------------- ¶11. (SBU) London-based Al Quds Al Arabi reported on May 27 that the King assembled a group of senior ministers and members of parliament to chastise them for "the spread of rumors and gossip against the King's entourage and government policies." This was an effort to defuse the widespread character assassination aimed at Royal Court Chief Bassem Awadallah, whose Palestinian origin and wealth made him the target of unfounded corruption allegations surrounding various land deals (Ref A). Parliamentarians were at the forefront of fanning the anti-Awadallah flames, most notably in a session with PM Dahabi which several MPs used to publicly besmirch his reputation and question his loyalty to the kingdom by harping on his Palestinian origin. The King also reportedly affirmed that "Jordanian land is Hashemite and will remain Hashemite" - a backhanded reference to the fear (voiced in private by many of our contacts) that government land could end up in the hands of Israeli owners. Lower House Speaker Abdulhadi Al-Majali told the Ambassador on June 8 that the King's intervention had succeeded in addressing and quelling the concerns of MPs. Comment: Is Awadallah Skating on Thin Ice? -------------- ¶12. (C) The point that is being lost in all of the hubbub surrounding land deals is that regardless of the nationalities involved, the deals will likely be good for Jordan's economy. In the long term, these developments will create employment opportunities where none or few currently AMMAN 00001731 003.2 OF 003 exist and the tax revenues will fill government coffers. The problem has less to do with the economic fundamentals of the deals, and more to do with the government's inability to convince an unsophisticated and suspicious public of those benefits. The lack of transparency in the genesis of these deals, and initial contradictory statements by officials, only fueled attacks and fed suspicions. As accountability mechanisms within Jordan's government mature, government officials are increasingly being called upon to offer a clear policy rationale for their decisions. As the land deals issue shows, there will be a process of adjustment as the government searches for a strategy that works. ¶13. (C) As far as post knows, Awadallah had little or nothing to do with the controversial land sales. However, he is a lightning rod for opposition attacks. As a leading champion of internal reform, a promoter of free market growth strategies, a Palestinian-Jordanian, and someone who alienates his foes with open displays of contempt, Awadallah is anathema among members of the East Bank establishment who dominate parliament and the security services. The King may be compelled to sacrifice Awadallah should attacks on him from this quarter mount, and should the spiraling cost-of-living cause unrest among lower income groups that form the base of the East Bank conservative constituency. while his departure might prove temporary, as was the case in the past, it would eliminate the one remaining voice in the King's inner circle - apart from his wife - advocating meaningful political reform. However, it would not likely effect economic policy. Although many of Awadallah's critics favor handouts and subsidies as the answer to inflation, the Prime Minister and the cabinet are firmly committed to promoting free trade, foreign investment, and a stronger free market as the way to bring growth and jobs. ¶14. (C) Meanwhile, the King is seen in the media almost every day meeting with common, struggling Jordanians, and providing assistance to them. He has longer term plans to meet the needs of impoverished areas of Jordan, but they are unlikely to be implemented in time to soften the blow from inflation this year. The Prime Minister has told the Ambassador that the strategy to deal with this problem is to seek more assistance for budget support, and the Saudis appear to have promised substantial assistance. The King has told the parliamentary leadership in confidence that he has gained a cash gift of USD 500 million, on top of the USD 300 million provided earlier this year. He will travel to Saudi Arabia later this week to consult prior to the visit of Jordan of Iraqi PM Maliki, and he hopes to double that amount. Visit Embassy Amman's Classified Website at http://www.state.sgov.gov/p/nea/amman Hale