Identifier
Created
Classification
Origin
08DARESSALAAM493
2008-08-08 09:13:00
CONFIDENTIAL
Embassy Dar Es Salaam
Cable title:
TANZANIA: GRAND CORRUPTION CASES' SLOW, NOT SO
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C O N F I D E N T I A L SECTION 01 OF 03 DAR ES SALAAM 000493
SIPDIS
DEPT FOR AF/E JLIDDLE, AF/EPS FOR ABREITER
ALSO FOR INL
DEPT PASS TO USAID, EAST AFRICA OFFICE
TREASURY OTA FOR D VAN KOCH
E.O. 12958: DECL: 08/06/2018
TAGS: PREL PGOV KDEM PHUM EFIN ECON TZ
SUBJECT: TANZANIA: GRAND CORRUPTION CASES' SLOW, NOT SO
STEADY PROGRESS
REF: A. 07 DAR ES SALAAM 0989
B. 07 DAR ES SALAAM 1009
DAR ES SAL 00000493 001.2 OF 003
Classified By: Deputy Chief of Mission, Larry E. Andre
for reasons, 1.5 (b,d)
SUMMARY
--------
C O N F I D E N T I A L SECTION 01 OF 03 DAR ES SALAAM 000493
SIPDIS
DEPT FOR AF/E JLIDDLE, AF/EPS FOR ABREITER
ALSO FOR INL
DEPT PASS TO USAID, EAST AFRICA OFFICE
TREASURY OTA FOR D VAN KOCH
E.O. 12958: DECL: 08/06/2018
TAGS: PREL PGOV KDEM PHUM EFIN ECON TZ
SUBJECT: TANZANIA: GRAND CORRUPTION CASES' SLOW, NOT SO
STEADY PROGRESS
REF: A. 07 DAR ES SALAAM 0989
B. 07 DAR ES SALAAM 1009
DAR ES SAL 00000493 001.2 OF 003
Classified By: Deputy Chief of Mission, Larry E. Andre
for reasons, 1.5 (b,d)
SUMMARY
--------------
1. (C) The Director of Tanzania's Prevention and Combating of
Corruption Bureau (PCCB),Edward Hoseah, told our Millennium
Challenge Threshold Account coordinator that the PCCB has
been give the go-ahead to indict several GOT officials in the
Alex Stewart Assayers case, one of six grand corruption cases
the PCCB has investigated since October 2007. Four of these
six cases have been forwarded to the Department of Public
Prosecution,s (DPP) office which has to give consent before
a prosecution can proceed. Hoseah also revealed that, while
not required by law, the draft Alex Stewart case including
the list of officials to be indicted was forwarded to
President Jakaya Kikwete for his advice and informal consent.
(Note: For the list of grand corruption cases investigated
to date by the PCCB, see Para. 11). End summary.
Promise to Donors Prosecute Grand Corruption Cases
-------------- ---
2. (SBU) The Millennium Challenge Account Threshold Program
coordinator met with Edward Hoseah, the PCCB Director, for an
update on the Government of Tanzania's (GOT) ongoing
corruption case investigations. In October 2007, Hoseah had
pledged to all of Tanzania's General Budget Support (GBS)
donors that by October 2008, the investigations of at least
five "grand corruption" cases would be completed and
forwarded to the Department of Public Prosecution (DPP) for
consent to prosecute. Director Hoseah defined a "grand
corruption" case as one involving a large sum of money and/or
well-known persons.
3. (SBU) According to the Prevention and Combating of
Corruption Act of 2007, certain corruption offenses may be
prosecuted by the PCCB, which has its own staff of
prosecutors. Others have to be forwarded to the Department
of Public Prosecution. However, when PCCB wishes to
prosecute a particular corruption case, the law requires PCCB
to submit the case file to the DPP for consent to prosecute.
Under the Act, the DPP has 60 days in which to give or
withhold consent. Should consent be denied, the DPP may
elect to carry out the prosecution itself, under its own
constitutional prosecutorial authority.
Four of six cases forwarded to public prosecutor
-------------- ---
4. (SBU) In October 2007, the PCCB Director General
identified six grand corruption cases that the Bureau
intended to investigate: Alex Stewart Assayers; Mwananchi
Gold; Kiwira Coal Mine; Buzwagi Gold Mine; British Aerospace
"radar deal"; and the Bank of Tanzania "Twin Towers" case.
According to Hoseah, as of May 29, 2008, the PCCB had
completed the investigations of four of these cases)-Alex
Stewart Assayers; Mwananchi Gold; Kiwira Coal Mine; and
Buzwagi Gold Mine)-and submitted the case files to the DPP
for consent.
5. (SBU) Two months later, as of July 28, the PCCB had not
completed any more cases to be forwarded to the Public
Prosecutor. The DPP returned one case to Hoseah's office
(Kiwira Coal Mine),and requested a more thorough
investigation. In addition, the DPP gave consent for PCCB to
prosecute the case of Alex Stewart Assayers. The remaining
two cases were still awaiting a consent determination from
the Department of Public Prosecution. In both these cases,
DPP has already exceeded its 60-day window to give a
response.
6. (SBU) During his meeting with Director Hoseah, our MCA
Threshold Program coordinator learned that the PCCB has
already prepared a draft indictment in the Alex Stewart
Assayers case. Hoseah revealed that the indictment had been
shared with President Kikwete; among those charged were
several high-ranking and former high-ranking GOT officials.
DAR ES SAL 00000493 002.2 OF 003
In a separate discussion between the UK's Department for
International Development's (DFID) Senior Governance Advisor
and the Millennium Challenge Corporation (MCC) Resident
Country Director, DFID confirmed that the draft indictment is
not required under the applicable legislation and that the
PCCB was waiting the President's informal consent or advice.
7. (C) Hoseah appeared agitated when discussing the pending
Alex Stewart indictment. He also expressed concern that the
DPP had failed to provide a timely consent decision in two of
the four cases. He suggested that this failure of the DPP to
respond in a timely manner could indicate a lack of political
will on the part of the Ministry of Justice and
Constitutional Affairs to move against high-ranking
individuals. (Note: The DPP reports to the Ministry of
Justice, while the Prevention and Combating of Corruption
Bureau is within the President's Office.) Hoseah referred to
the PCCB as a "guinea pig" that is "alone and exposed" in its
interest and determination to prosecute grand corruption
cases.
Alex Stewart Indictment List on Close Hold
--------------
8. (C) Director Hoseah showed the Millennium Challenge
Account Threshold Program coordinator in confidence a copy of
the indictment in the Alex Stewart Assayers case. Three
persons were charged. Of those, one is currently serving as
Permanent Secretary of the Ministry of Finance, Grey S.
Mgonja. Also, Daniel Yona, a former Minister of Energy and
Minerals under President Benjamin Mkapa, was on the
indictment list. (Note: Due to his position as Permanent
Secretary at the Ministry of Finance, Grey Mgonja also chairs
the eleven-member Governing Board of the Millennium Challenge
Account Tanzania (MCA-T). MCA-T has the legal responsibility
on behalf of the GOT to implement Tanzania's USD 698 million
MCC Compact. End note.)
Comment
--------------
9. (C) In addition to the questions Hoseah raised about the
amount of political will that exists to vigorously combat
corruption, we are also concerned about the potential lack of
capacity on the part of the PCCB and/or the DPP to
successfully prosecute such cases through to conviction.
Such concerns also are shared by DFID and some other donors.
10. (C) As noted by DFID, the potential high-level defendants
in these cases are quite likely to have "access to
significant off-budget disposable income" that could assist
them in successfully defending themselves against a PCCB or
DPP legal team that has virtually no experience in pursuing
such sometimes complex, often difficult-to-prove cases. It
is therefore possible that part of the PCCB or DPP's
hesitation to move forward may represent a simple lack of
confidence in success rather than an absence of political
will and support.
Case Notes
--------------
11. (SBU) The six cases of grand corruption that PCCB has
investigated as of July 2008 include:
Alex Stewart:
Alex Stewart is a gold mining auditing company that
receives a large portion of gold royalties paid to the GOT.
The company was hired by the Bank of Tanzania (BOT) and is
suspected of receiving dubious payments from the BOT.
BOT "Twin Towers" Buildings:
A suspect major price escalation of this Bank of Tanzania
project indicated losses estimated at USD 265 million.
Mwananchi Gold:
The 2005/2006 report by Tanzania's Controller and Auditor
General cites dubious payments by the Bank of Tanzania to
this company including loans made to the company amounting to
USD 5.5 million.
Kiwira Coal Mine:
DAR ES SAL 00000493 003.2 OF 003
The controlling interest in the Kiwira mine was held by
Tanpower Resources, a company formed by Benjamin Mkapa and
Daniel Yona (Minister for Energy and Minerals in Mkapa,s
government). Tanpower Resources acquired the mine on
extremely favorable terms and has entered into agreements
with TANESCO. The mine was constructed with public funds.
Buzwagi Gold Mine:
Barrick Gold received a GOT contract to develop this mine
but the contract was signed in London under suspicious
circumstances by former Energy and Minerals Minister Nazir
Karamagi (who resigned in February due to his possible
implications in the "Richmond deal" scandal).
BAE "radar deal":
The British defense firm, BAE Systems, allegedly paid a
middleman a commission of USD 12 million to win a contract to
install an air traffic control system in Tanzania. The deal
was brokered by Sailesh Pragii Vithlani, who was born in
Mwanza, Tanzania, but is now a British citizen; he is
currently being tried in absentia in a Dar es Salaam court
for making false statements to a PCCB officer.
GREEN
SIPDIS
DEPT FOR AF/E JLIDDLE, AF/EPS FOR ABREITER
ALSO FOR INL
DEPT PASS TO USAID, EAST AFRICA OFFICE
TREASURY OTA FOR D VAN KOCH
E.O. 12958: DECL: 08/06/2018
TAGS: PREL PGOV KDEM PHUM EFIN ECON TZ
SUBJECT: TANZANIA: GRAND CORRUPTION CASES' SLOW, NOT SO
STEADY PROGRESS
REF: A. 07 DAR ES SALAAM 0989
B. 07 DAR ES SALAAM 1009
DAR ES SAL 00000493 001.2 OF 003
Classified By: Deputy Chief of Mission, Larry E. Andre
for reasons, 1.5 (b,d)
SUMMARY
--------------
1. (C) The Director of Tanzania's Prevention and Combating of
Corruption Bureau (PCCB),Edward Hoseah, told our Millennium
Challenge Threshold Account coordinator that the PCCB has
been give the go-ahead to indict several GOT officials in the
Alex Stewart Assayers case, one of six grand corruption cases
the PCCB has investigated since October 2007. Four of these
six cases have been forwarded to the Department of Public
Prosecution,s (DPP) office which has to give consent before
a prosecution can proceed. Hoseah also revealed that, while
not required by law, the draft Alex Stewart case including
the list of officials to be indicted was forwarded to
President Jakaya Kikwete for his advice and informal consent.
(Note: For the list of grand corruption cases investigated
to date by the PCCB, see Para. 11). End summary.
Promise to Donors Prosecute Grand Corruption Cases
-------------- ---
2. (SBU) The Millennium Challenge Account Threshold Program
coordinator met with Edward Hoseah, the PCCB Director, for an
update on the Government of Tanzania's (GOT) ongoing
corruption case investigations. In October 2007, Hoseah had
pledged to all of Tanzania's General Budget Support (GBS)
donors that by October 2008, the investigations of at least
five "grand corruption" cases would be completed and
forwarded to the Department of Public Prosecution (DPP) for
consent to prosecute. Director Hoseah defined a "grand
corruption" case as one involving a large sum of money and/or
well-known persons.
3. (SBU) According to the Prevention and Combating of
Corruption Act of 2007, certain corruption offenses may be
prosecuted by the PCCB, which has its own staff of
prosecutors. Others have to be forwarded to the Department
of Public Prosecution. However, when PCCB wishes to
prosecute a particular corruption case, the law requires PCCB
to submit the case file to the DPP for consent to prosecute.
Under the Act, the DPP has 60 days in which to give or
withhold consent. Should consent be denied, the DPP may
elect to carry out the prosecution itself, under its own
constitutional prosecutorial authority.
Four of six cases forwarded to public prosecutor
-------------- ---
4. (SBU) In October 2007, the PCCB Director General
identified six grand corruption cases that the Bureau
intended to investigate: Alex Stewart Assayers; Mwananchi
Gold; Kiwira Coal Mine; Buzwagi Gold Mine; British Aerospace
"radar deal"; and the Bank of Tanzania "Twin Towers" case.
According to Hoseah, as of May 29, 2008, the PCCB had
completed the investigations of four of these cases)-Alex
Stewart Assayers; Mwananchi Gold; Kiwira Coal Mine; and
Buzwagi Gold Mine)-and submitted the case files to the DPP
for consent.
5. (SBU) Two months later, as of July 28, the PCCB had not
completed any more cases to be forwarded to the Public
Prosecutor. The DPP returned one case to Hoseah's office
(Kiwira Coal Mine),and requested a more thorough
investigation. In addition, the DPP gave consent for PCCB to
prosecute the case of Alex Stewart Assayers. The remaining
two cases were still awaiting a consent determination from
the Department of Public Prosecution. In both these cases,
DPP has already exceeded its 60-day window to give a
response.
6. (SBU) During his meeting with Director Hoseah, our MCA
Threshold Program coordinator learned that the PCCB has
already prepared a draft indictment in the Alex Stewart
Assayers case. Hoseah revealed that the indictment had been
shared with President Kikwete; among those charged were
several high-ranking and former high-ranking GOT officials.
DAR ES SAL 00000493 002.2 OF 003
In a separate discussion between the UK's Department for
International Development's (DFID) Senior Governance Advisor
and the Millennium Challenge Corporation (MCC) Resident
Country Director, DFID confirmed that the draft indictment is
not required under the applicable legislation and that the
PCCB was waiting the President's informal consent or advice.
7. (C) Hoseah appeared agitated when discussing the pending
Alex Stewart indictment. He also expressed concern that the
DPP had failed to provide a timely consent decision in two of
the four cases. He suggested that this failure of the DPP to
respond in a timely manner could indicate a lack of political
will on the part of the Ministry of Justice and
Constitutional Affairs to move against high-ranking
individuals. (Note: The DPP reports to the Ministry of
Justice, while the Prevention and Combating of Corruption
Bureau is within the President's Office.) Hoseah referred to
the PCCB as a "guinea pig" that is "alone and exposed" in its
interest and determination to prosecute grand corruption
cases.
Alex Stewart Indictment List on Close Hold
--------------
8. (C) Director Hoseah showed the Millennium Challenge
Account Threshold Program coordinator in confidence a copy of
the indictment in the Alex Stewart Assayers case. Three
persons were charged. Of those, one is currently serving as
Permanent Secretary of the Ministry of Finance, Grey S.
Mgonja. Also, Daniel Yona, a former Minister of Energy and
Minerals under President Benjamin Mkapa, was on the
indictment list. (Note: Due to his position as Permanent
Secretary at the Ministry of Finance, Grey Mgonja also chairs
the eleven-member Governing Board of the Millennium Challenge
Account Tanzania (MCA-T). MCA-T has the legal responsibility
on behalf of the GOT to implement Tanzania's USD 698 million
MCC Compact. End note.)
Comment
--------------
9. (C) In addition to the questions Hoseah raised about the
amount of political will that exists to vigorously combat
corruption, we are also concerned about the potential lack of
capacity on the part of the PCCB and/or the DPP to
successfully prosecute such cases through to conviction.
Such concerns also are shared by DFID and some other donors.
10. (C) As noted by DFID, the potential high-level defendants
in these cases are quite likely to have "access to
significant off-budget disposable income" that could assist
them in successfully defending themselves against a PCCB or
DPP legal team that has virtually no experience in pursuing
such sometimes complex, often difficult-to-prove cases. It
is therefore possible that part of the PCCB or DPP's
hesitation to move forward may represent a simple lack of
confidence in success rather than an absence of political
will and support.
Case Notes
--------------
11. (SBU) The six cases of grand corruption that PCCB has
investigated as of July 2008 include:
Alex Stewart:
Alex Stewart is a gold mining auditing company that
receives a large portion of gold royalties paid to the GOT.
The company was hired by the Bank of Tanzania (BOT) and is
suspected of receiving dubious payments from the BOT.
BOT "Twin Towers" Buildings:
A suspect major price escalation of this Bank of Tanzania
project indicated losses estimated at USD 265 million.
Mwananchi Gold:
The 2005/2006 report by Tanzania's Controller and Auditor
General cites dubious payments by the Bank of Tanzania to
this company including loans made to the company amounting to
USD 5.5 million.
Kiwira Coal Mine:
DAR ES SAL 00000493 003.2 OF 003
The controlling interest in the Kiwira mine was held by
Tanpower Resources, a company formed by Benjamin Mkapa and
Daniel Yona (Minister for Energy and Minerals in Mkapa,s
government). Tanpower Resources acquired the mine on
extremely favorable terms and has entered into agreements
with TANESCO. The mine was constructed with public funds.
Buzwagi Gold Mine:
Barrick Gold received a GOT contract to develop this mine
but the contract was signed in London under suspicious
circumstances by former Energy and Minerals Minister Nazir
Karamagi (who resigned in February due to his possible
implications in the "Richmond deal" scandal).
BAE "radar deal":
The British defense firm, BAE Systems, allegedly paid a
middleman a commission of USD 12 million to win a contract to
install an air traffic control system in Tanzania. The deal
was brokered by Sailesh Pragii Vithlani, who was born in
Mwanza, Tanzania, but is now a British citizen; he is
currently being tried in absentia in a Dar es Salaam court
for making false statements to a PCCB officer.
GREEN