MALI'S ANTI-CORRUPTION AUDITOR HAS AUDIT PROBLEMS

C O N F I D E N T I A L SECTION 01 OF 03 BAMAKO 000943

CO R R E C T E D C O P Y (ADD TAG)

SIPDIS

E.O. 12958: DECL: 12/15/2018
TAGS: PGOV KCOR KDEM ML
SUBJECT: MALI'S ANTI-CORRUPTION AUDITOR HAS AUDIT PROBLEMS
OF HIS OWN

REF: 07 BAMAKO 00170

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Classified By: Political Officer Aaron Sampson, Embassy Bamako, for
reasons 1.4 (b) and (d).

1.(C) Summary: On November 24 the Malian newspaper l'Aube
reported that the Supreme Court's accounting section had
discovered financial irregularities within the Office of the
Auditor General (OAG) during a routine three-year audit.
Created by President Amadou Toumani Toure in 2004, the OAG is
Mali's only independent anti-corruption body and the
centerpiece of Mali's anti-corruption program. A former OAG
staff member subsequently confirmed reports of an
investigation and indicated that the most serious infractions
uncovered by the Supreme Court had yet to reach local media.
On November 28 Diarra told the Embassy that "serious problems
with his staff" would prevent him from participating in the
voluntary visitor program, scheduled for mid-December,
organized in conjunction with the U.S. General Accounting
Office. Diarra said he regarded the Supreme Court's audit as
an orchestrated attempt to undermine him and OAG. We have no
proof indicating that the Supreme Court's regularly scheduled
audit is part of a concerted effort to weaken Diarra.
However, Mali has a history of creating new anti-corruption
institutions every 4 or 5 years and the Auditor General's
troubles coincide with a government sponsored nation-wide
anti-corruption forum that produced 97 recommendations
including the creation of a new anti-corruption institution.
End Summary.

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A General Audit of the Auditor General
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2.(U) The local newspaper l'Aube reported on November 24
that Mali's Supreme Court had audited the finances of OAG,
Mali's only independent anti-corruption institution. The
l'Aube report followed a November 7 report run by another
local newspaper, le Sphinx, alleging serious financial
irregularities within the OAG. The Director of the Supreme
Court's accounting section, Ouena Baba Niara, told the l'Aube
the audit was part of the accounting section's normal duties
as mandated under Mali's public accounting laws. The Supreme
Court's audit of the OAG's budgets covered a three year
period, from 2004 to 2006. The OAG's annual budget is 3
billion CFA or approximately USD 6 million. According to
l'Aube, Auditor General Diarra first refused to participate
in the audit, then threatened to resign, then yielded to
investigators.

3.(U) Since his appointment as Mali's only independent
anti-corruption investigator in 2004, Diarra has interpreted
his mandate broadly to include both Mali's public and private
sectors. This triggered some consternation, particularly
among private sector economic operators who evidently would
have preferred to keep their accounting practices to
themselves. The OAG's first report was issued in June 2007
and covered a four year period, from 2002 to 2006. This
report documented cases of fraud and mismanagement totaling
103 billion CFA (approximately USD 206 million). Diarra's
report attributed more than 70 percent of this amount to tax
evasion perpetrated by private sector fuel importation
enterprises and fraudulent practices of the customs officers
responsible for overseeing fuel imports. Other prime
offenders included the Office du Niger; the Ministries of
Health, Education, and Mines; and several smaller government
agencies and programs. The OAG's most recent report, issued
in July 2008, identified approximately USD 40 million in lost
revenue due to fraud and mismanagement, mostly within Mali's
Customs office which reports to the Ministry of Finance. The
OAG's investigations have yet to produce any criminal
prosecutions.

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Ex-AG Official: Internal Problems Abound
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4.(C) On November 24 a former senior member of the OAG
confirmed that the audit occurred and had uncovered less than
flattering details about the OAG's internal accounting
procedures. According to Adam Thiam, the Supreme Court began
auditing the AG in December 2007 as part of a mandatory three
year review process. Thiam said the OAG learned of the
Court's findings approximately two months ago.

5.(C) Thiam said the Supreme Court identified five areas of
concern, including: (1) abuse of power by Diarra, who failed
to submit OAG financial accounts to the Supreme Court as
required by Mali's public accounting procedures; (2)
unjustified expenses including air-conditioning units,
televisions, and furniture purchased for office use but
installed in Diarra's residence; (3) Diarra's private use of

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fuel coupons intended for official purposes; (4) the
recruitment of a foreign firm, charged with hiring OAG staff,
that did not follow normal procurement procedures; (5) and
misuse of per diem and business class travel while on
government business.

6.(C) "I was uncomfortable," said Thiam, "when I saw this
report because, in fact, it is all true. I read the report
and, to tell the truth, I was not very proud." Thiam went on
to say that the irregularities were not due to any calculated
attempted at self-aggrandizement on Diarra's part. "The
Auditor General," said Thiam, "is not like a lot of thieving
Ministers. It was an error." Thiam expressed surprise that
the Supreme Court's investigation had reached the Malian
media, noting that the document was supposedly confidential.
"In theory," said Thiam, "we should not have seen this in the
press." Thiam hinted at an official leak and observed that le
Sphinx was supposedly close to Malian state security
officials while the l'Aube often serves as the Malian
government's official un-official newspaper.

7.(C) According to Thiam, the audit's most damaging details
remain undisclosed. Thiam said that the OAG's first annual
report, released in 2007, contained several serious flaws
that improperly tarnished the reputation of one apparently
innocent senior government official and severely undermined
the OAG's credibility with the Ministry of Justice.
Specifically, Thiam said the AG's audit of Mali's government
run Popular Pharmacy (PPM) contained a mathematical error
totaling 300 million CFA (USD 600,000) which was never
corrected, although the OAG realized it was an error. The
mistake resulted in the PPM's director being called before
judicial authorities. Thiam said a second error led the OAG
to accuse Malian tax authorities of failing to collect 38
billion CFA (USD 76 million) in tax receipts from private
importers of petroleum products. This allegation formed one
of the centerpieces of the OAG's 2006-2007 report. Thiam
said the law that would have enabled Mali to recoup 38
billion CFA in tax receipts was never on the books and, as a
result, the entire allegation was unfounded. Thiam also
ticked off several other serious, yet still un-corrected
errors, in the OAG's previous reports.

8.(C) Thiam attributed these failures to poor methodology
and a general lack of vision within the OAG. "The Auditor
General's Office," said Thiam, "is expensive. The annual
budget is 3 billion CFA. The Auditor General must be
unassailable, beyond reproach." But, Thiam continued, a
series of flawed reports due to methodological shortcomings,
combined with Diarra's failure to correct the record or hold
anyone accountable, tarnished the credibility of the office
and ultimately led to Thiam's departure. "Because of this,"
said Thiam, "the Justice Ministry thinks all of our reports
are bad, and this is not just because the judiciary is
completely corrupt."

9.(C) Despite his evident disagreements with Diarra, Thiam
feels positively about his former boss. He repeatedly
stressed that the irregularities revealed by the Supreme
Court's investigation were the product of Diarra's honest
mistakes, not deliberate attempts to divert public resources
for personal gain. Thiam said he has encouraged Diarra to
hold a press conference and issue a public mea culpa, but
expects that Diarra will eventually resign.

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AG: Situation is "Critical"
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10.(C) On November 28 Diarra visited the Embassy to say that
"serious problems" with his staff would prevent him from
participating in the voluntary visitor program with the
General Accounting Office scheduled for mid-December. Diarra
told the Embassy that an attempt was underway to transform
the status of 15 members of his staff from independent hires
working for the OAG into government employees, thereby
undermining the OAG's political independence. Diarra
described the situation as "very critical" and hinted that
the month of December would decide the future direction of
the OAG. Diarra asked if two junior staff members could
travel to the U.S. in his place and noted that they represent
the institutional memory of the OAG whereas he had only two
years left in his role as Mali's Auditor General.

11.(C) Diarra also addressed the audit of the Supreme
Court's accounting section. He described the audit as a
mission "commanded" by higher authorities within the Malian
government. Although Diarra is clearly familiar with the
report's findings and rebutted many of the specific
allegations relayed to us by Thiam, he said he had yet to
receive a final copy and expressed surprise that aspects of
the audit had been leaked to the local media. Diarra said he

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had requested a meeting with the director of the Court's
accounting section to register this complaint and also
request an opportunity to officially respond to the
allegations.

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Comment: Undermining the AG
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12.(C) The Supreme Court's findings pale in comparison to
the egregious cases of corruption uncovered by Diarra and his
staff since the OAG's creation in 2004. Yet as Mali's
primary anti-corruption fighter, Diarra is held to a standard
higher than those he has investigated. There is no proof
indicating that the Supreme Court's regularly scheduled audit
is part of a concerted effort, or vendetta, to undermine
Diarra and the OAG. An official with the Canadian
government, which has provided more than 4.5 million Canadian
dollars as the OAG's primary international donor, questioned
the impartiality of the Supreme Court's findings and noted
that the Court's accounting section was known for challenging
the OAG's raison d'etre.

13.(C) The OAG has clearly not lived up to expectations.
None of its audits have produced any criminal investigations
or prosecutions. This failure, however, is largely
attributable not to the OAG but to the Malian judiciary and
levels of political will needed to fully pursue corruption
allegations. The AG is the most recent in a series of
anti-corruption institutions created by the Malian
government. Mali created a Judicial Ombudsman in 1997 but
did not formally staff this office until 1999. In 2003
President Toure created the Office for Administrative
Controls (CASCA) in response to a 2001 World Bank report on
corruption in Mali. The CASCA, which reports directly to the
presidency, has the authority to investigate any government
office and refer specific cases to the judiciary for
prosecution. In 2005 Mali used the CASCA to hobble the
eventual presidential aspirations of opposition figure and
Alpha Oumar Konare's son-in-law, Tiebile Drame, by accusing
Drame of misusing government funds during his role as the
organizer of the 2005 France-Africa summit in Mali (Ref. A).
No charges against Drame were ever filed.

14.(C) It was perhaps not a coincidence that while Diarra
was confronted with allegations of mismanagement and an
attempt to transform his staff members into government
employees, Mali was holding its first nation-wide General
State of Corruption forum from November 24-28. Although one
would have expected the AG to play a major role in this
forum, AG Diarra was asked to do little more than attend the
forum's opening and closing ceremonies. The forum produced
97 recommendations. Many of these focused on revising
legislation governing the mission and role of Mali's
corruption fighting institutions, including the OAG.
Hopefully the General State of Corruption process begun this
year is a genuine attempt to further curb corruption in Mali
and not an attempt to sideline Diarra by creating new,
parallel anti-corruption institutions while undermining the
administrative independence of the OAG.
MILOVANOVIC