AN INSIDER'S CRITICAL VIEW OF PRESIDENT WADE'S

S E C R E T SECTION 01 OF 03 DAKAR 000825

SIPDIS

STATE FOR AF/RSA, AF/EPS, AF/W
TREASURY FOR RHALL, DPETERS
STATE PLEASE PASS MCC

E.O. 12958: DECL: 07/15/2028
TAGS: PGOV PREL KCOR ECON KMCA SG
SUBJECT: AN INSIDER'S CRITICAL VIEW OF PRESIDENT WADE'S
ADMINISTRATION AND KARIM WADE'S INFLUENCE

REF: A. DAKAR 778

B. DAKAR 733

C. DAKAR 713

D. DAKAR 588

E. DAKAR 432

F. 07 DAKAR 1530

DAKAR 00000825 001.4 OF 003


Classified By: CHARGE D'AFFAIRES, A.I. JAY T. SMITH, FOR REASON 1.4 (B)
AND (D).


1. (S) SUMMARY: During a June 28 lunch at a local
restaurant with Econ Counselor, one of President Wade's
Financial/Economic Advisors, Habib Mbaye, quietly offered a
starkly negative view of Wade's policies and priorities, and
also the corrupt influence of the President's son, Karim.
Mbaye (strictly protect) is a true insider: an advisor to
the President for many years and a childhood friend of Karim.
His opinions are clearly designed to influence, but they
tend to ring true. END SUMMARY.

KARIM'S PERVASIVE INFLUENCE
--------------

2. (S) Habib Mbaye's official title is Minister-Counselor
and Inspector of Grand Projects -- a reference to the
infrastructure projects initiated by President Wade and under
the control of Karim in preparation for the March Summit of
the Organization of Islamic Conferences (OIC) Dakar Summit
(Ref E). In Mbaye's opinion, ANOCI, the agency created to
manage the infrastructure and events for the OIC Summit, is
100 percent under Karim Wade's control. According to Mbaye,
the OIC construction was a disaster, financially,
technically, and in terms of the government's credibility.
Financially, the government committed huge amounts of money,
and much of the financing promised by Kuwait and other
countries have not yet been received. Because of ensuing
budget and time constraints, the construction on the new
Corniche road was poorly done, and the engineering of the
much vaunted 295 meter Soubedioune tunnel is "a big risk."
Mbaye said that since the OIC summit, Karim has mostly stayed
out of the country to avoid being associated with the
on-going questions about the construction and the
government's priorities.


3. (S) As we have heard from other sources, Mbaye confirmed
that the Finance Minister has had to use money earmarked for
health and education funding in order to fund the OIC effort
and other pet projects initiated by Karim. In an earlier
meeting, Mbaye confided that he wants to remove the term
"Inspector" from his title because it makes the job
impossible: he either does not do the job properly and
leaves himself open to charges of incompetence and graft, or
at some point he must criticize Karim and ANOCI and "be
ruined politically, financially, and perhaps have his life
threatened."


4. (S) According to Mbaye, Karim Wade is at the center of
every major deal in the country, and will impose himself in
deals if he is not involved initially. In Mbaye's narrative,
Karim is a close friend of the King of Morocco, and it is
through the King's personal introduction to dignitaries from
the Gulf States that Karim has been able to negotiate huge
investment deals and financial support for Senegal -- and
greatly profit personally. Mbaye confirmed press reports
that in April Karim brokered a deal with Dubai Ports World to
build a 5-star resort on Goree Island, a UNESCO World
Heritage site, knowing fully that such a development could
undermine the UNESCO designation. The deal also reportedly
gives control to DPW of two of Senegal's precious few nature
reserves.


5. (S) Mbaye confirmed that the government planned to sell
its 28 percent stake in the country's profitable
telecommunications company, Sonatel, largely at Karim's
urging. In a wrinkle on the motivation for this sale (Ref
D),Mbaye claimed that Karim has a significant personal stake
in Sudatel Senegal, the recently approved new phone and
internet provider (Ref A) that is part of Sudan-based
Sudatel. According to Mbaye, Karim is willing to "weaken"
Sonatel in order to improve the chances for Sudatel's

DAKAR 00000825 002.4 OF 003


success.


6. (S) He credited Karim with brokering the deals that
allowed Morocco-based Alfwadjiri bank to take over local
banks CBAO and BST. Coincidentally, in a surprising
decision, the new management of CBAO did not participate in
one recent Senegal Treasury bond issuance, which was
under-subscribed and a "failure" according to Mbaye. He's
concerned that this indicates a lack of confidence in
Senegal's public finances and could negatively impact
Senegal's sovereign credit rating.

PRESIDENT WADE'S PETTINESS
--------------

7. (S) Mabaye often travels with President Wade. He
expressed disappointment at the President's frequent and
expensive travel, noting that it is costing the government "a
lot." According to Mbaye, Wade is imposing himself as a
mediator in many international conflicts (Sudan-Chad, Darfur,
Zimbabwe, Kosovo, Israel-Palestine, and, he believes,
U.S.-Iran) because "he really wants a Nobel Prize."


8. (S) In Mbaye's assessment, the Wades have "given away too
much" to their contacts in Dubai. Mabaye claimed that even
President Wade is now concerned that Jafza International's
Special Economic Zone will hurt Senegal's tax structure and
will bring little benefit to the local population.


9. (S) Mbaye views President Wade's response to the Assises
Nationales (National Dialogue ) ref C) as an "overreaction"
and an example how the President continues to operate with an
"opposition" mindset. He heard Wade complain about U.S.
Embassy participation and give the directive to not cooperate
with ODC/DAO planned military training.


10. (S) Mbaye reinforced the current rumors that Prime
Minister Soumare will likely be out of a job soon. Mbaye
claims that Wade might not replace Soumare and instead take
further steps to "run the whole government himself" getting
rid of the position of prime minister (without even bothering
to create the position of Vice President, as some have
speculated),but with "the help of" the Minister of Interior.
In another window into Wade's approach to ruling, Mbaye
claimed that Foreign Minister Gadio was "demoted" during the
last ministerial reshuffle from number two to three (after
the Prime Minister) on the Ministerial protocol list
(surpassed by the Minister of Interior) because during the
OIC summit Gadio complained to Wade that his role was being
co-opted by Karim.

PROBLEMS LIKELY FOR SENEGAL'S MCC COMPACT PROPOSAL
-------------- --------------

11. (S) In 2006, Mbaye was the head of Senegal's agency
designated to develop an USD 800 million MCC compact on the
"Diamniadio Industrial Platform." In that role, he
demonstrated little management skill, was likely pocketing
GOS funds dedicated to the project, and was ultimately
replaced by a Ministry of Finance technocrat, Sogue Diarisso.
Mbaye did, however, accurately inform us that the Diamniadio
compact effort was soon to be undermined by Karim Wade's
efforts to strike a side deal with Dubai's Jafza
International to establish a similar project in the hopes of
controlling MCC grant money. Mbaye also accurately predicted
that the government's investment promotion agency, APIX
(which is widely viewed as under Karim's influence through
its Director, Aminata Niane),would not accept MCC's criteria
for transparency and competitive bidding as a condition of
its offer to contribute more than USD 300 million to complete
a much-needed toll road (Ref F). Mbaye stated that "it was
crazy" for the government to have turned down both the
Diamniadio Platform and the Toll Road and that the only
reason was that Karim and his cohorts were determined to
enrich themselves.


12. (S) Mbaye said he was still bitter that Karim and
company interfered with his efforts to conclude the
Diamniadio Platform, which would have been "great" for the
country. He is not convinced that the Jafza free trade zone
will ever bring a similar level of benefit to the country.

DAKAR 00000825 003.4 OF 003


While Mbaye was complimentary of the current Senegalese
team's efforts to conclude a compact, he remains pessimistic.
Mbaye stated that Senegal will never be able to finalize an
MCC compact because those closest to the President, namely
Karim, will not agree to have that much money enter the
country in a manner they cannot personally access.

SENEGAL'S POOR PUBLIC FINANCES
--------------

13. (C) Senegal's budget situation is "really bad,"
according to Mbaye. Finance Minister Diop is doing a "bad
job," but Wade can't fire him because Diop "knows too much,"
Mbaye said. In Mbaye's opinion the MinFin has handled the
rising food and energy prices very poorly in part because he
refused to buy futures contracts when the prices were lower
and the CFA was relatively strong.

MBAYE "THE AMERICAN"
--------------

14. (S) Habib Mbaye, claims to have an MBA from Columbia
University and like's to consider himself "the American"
among Wade's advisors. He admitted to Econ Couns that he was
being very "honest and open" about what's happening within
Wade's inner circle. The reason for sharing this
information, Mbaye stated, is so that the U.S. could help
"influence" Wade towards better governance and to "help
Senegal."


15. (C) Mbaye said he hopes to run for Mayor of the
Fann/Point E area, but he first needs to get the O.K. from
President Wade and Karim since they both have houses in that
constituency. He added that running for any office in
Senegal is very expensive because it is all about "paying
off" people. He also stated his hope to be Minister of
Finance or Budget "soon." When asked if he would settle for
being an Ambassador, Mbaye said that was "no good, because
once you leave the country and the inner circle you can never
get back in."


16. (S) At the same time, Mbaye appears somewhat concerned
for his security. In a previous conversation, Mbaye
suggested that Karim Wade, and perhaps even President Wade
could be "very dangerous." Previously, Mbaye asked about
what it takes to get a U.S. Passport, "because you never know
when you might need to leave quickly." This time, he
speculated that perhaps he should return to school in the
U.S. and pursue a PhD. at a top university, and asked if Econ
Couns could assist him in contacting the dean of the Harvard
Business School.

COMMENT
--------------

17. (S) Mbaye's criticism of President and Karim Wade is
unusual because he is the consummate "insider," who has
become rich and influential at a young age because of his
ties to the Wades. It also doesn't hurt that Mbaye is from a
very rich, prominent family with close ties to the Mouride
Muslim brotherhood leadership. His family has roots in the
Mouride holy city, Touba although even his parents grew up in
Dakar. Early in his career he was an account manager at
Societie Generale (in Paris and Dakar),where he handled the
accounts of the former Mouride Caliph General.


18. (S) We don't put corruption and political ambition past
Mbaye as another possible motive for discrediting the Wades
and even for his search for greater passport mobility.
However, the tales he tells ring true to what we hear from
other sources and should not be dismissed.
SMITH