PRESIDENT KIKWETE NAMES HON. MIZENGO PETER PINDA

C O N F I D E N T I A L SECTION 01 OF 04 DAR ES SALAAM 000098

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E.O. 12958: DECL: 02/08/2018
TAGS: EAID ECON KDEM PHUM PREL TZ
SUBJECT: PRESIDENT KIKWETE NAMES HON. MIZENGO PETER PINDA
AS NEW PRIME MINISTER FOLLOWING RESIGNATION OF PM LOWASSA

REF: A. 07 DAR ES SALAAM 085

B. 07 DAR ES SALAAM 01037

C. 06 DAR ES SALAAM 01776

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Classified By: Ambassador Mark Green for reasons 1.4 (b,d)

SUMMARY
--------------

1. (SBU) On February 8 President Jakaya Kikwete named Hon.
Mizengo Peter Pinda, a Minister of State in the Prime
Minister's Office and member of Kikwete's former cabinet, as
the new Prime Minister of Tanzania. Pinda's nomination was
approved by the Parliament a few hours later, with the full
support of both the ruling and opposition parties. Amid
controversy surrounding a Parliamentary Committee report
about an energy contract given to the U.S.-based Richmond
Company, the former Prime Minister Edward Lowassa sent his
resignation letter to President Kikwete on February 7. Later
the same day, the incumbent Minister of Energy and Minerals,
Nazir Karamagi, and Ibrahim Msahaba, who was Minister of
Energy when the Richmond contract was signed, also resigned.
In the late evening of February 7, President Kikwete accepted
Lowassa's resignation and dissolved the Cabinet. By custom,
once the President names a prime minister (PM) he consults
with the PM concerning the other cabinet positions. On
Monday, February 11, Kikwete has promised to announce a new
cabinet that we expect will be more streamlined than his
former 23 ministries.


2. (SBU) Hon. Pinda has served as Kikwete's Minister of State
for Regional Administration and Local Government in the Prime
Minster's office since January 2006. Previously he was a
Deputy Minister in the same ministry. He has a reputation
for being an honest, somewhat reserved, yet straight-forward
official. Hon. Pinda was the representative of the
Government of Tanzania (GOT) and guest speaker at the Peace
Corps Tanzania's 45th Anniversary celebration in 2006. (See
Para 14, bio information). End summary

PM Lowassa out: Public, press and Parliament wanted truth
about Richmond
--------------

3. (U) In November 2007, the Parliament's Speaker Samuel
Sitta ordered a special multi-party Committee to be formed to
investigate the "Richmond scandal," as it is popularly known
in Tanzania. The Committee's report was read to Parliament
on February 6 and broadcast live on national television; the
report implicated PM Lowassa by name as putting pressure on
the Tanzanian Electric Supply Company (TANESCO) to circumvent
the required public procurement process and sign a contract
with the Houston-based Richmond Company for temporary energy
relief during Tanzania's 2006 energy crisis. Richmond had
promised to deliver 100 megawatts of power within two months;
not one watt of energy was ever produced. The contract was
transferred to a second company, Dowans Company of Dubai, six
months later.


4. (U) Throughout the Richmond ordeal from June to November
2006, the public was outraged because severe power shortages
continued unabated in Dar es Salaam while Richmond fumbled
all attempts to put its diesel-run generator system on line.
Rumors swirled that Lowassa's son, Frederick, was a co-owner
of Richmond Company. Investigative reporters latched onto
the "Richmond story" and did not want to let go. Since
Richmond is a U.S.-based company, the Embassy received many
inquiries, but could only say that Richmond was registered in
Houston Texas as a "printing shop and business services
center."

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PCCB closed its Richmond Company probe
--------------

5. (C) In January 2007, Edward Hosea, head of the Prevention
and Combating of Corruption Bureau (PCCB),told the DCM that
the Richmond Company procurement process was under PCCB
investigation. However, in May 2007 the PCCB abruptly closed
the case stating the "no wrong-doing had been found." Hosea
told the Mission's program coordinator of the Millennium
Challenge Account (MCA) Threshold program that since PCCB had
been unable to prove any money had changed hands in the
Richmond deal, the Bureau decided to drop the investigation.
Tanzania's new and tougher Anti-Corruption Act 2007 went into
effect on July 1, 2007, which allowed for investigations into
public procurement irregularities, but the case was not
reopened.

Millennium Challenge Account-funded PPRA more courageous
-------------- --------------

6. (SBU) The Public Procurement Regulatory Authority (PPRA)
(www.ppra.go.tz) conducted a procurement audit of the TANESCO
power company in 2007 that was fully funded by the MCA
Threshold program, through an implementing partner,
Kilimanjaro International. The PPRA audit concluded that the
tendering process for the emergency energy relief the
Government of Tanzania sought during Tanzania's severe
2005-06 energy crisis, had been "influenced by higher
authorities." The PPRA report provided well-documented
details showing serious departures from the Public
Procurement Act in the selection of Richmond Company as the
contractor.


7. (SBU) Post's MCA Threshold team urged PPRA to make the
full report public; while reluctant at first, the head of
PPRA, Dr. Ramadan Mlinga, finally agreed to release the full
report to Tanzania's Development Partners Group of which
USAID is a member. The report eventually caught the
attention of Members of Parliament (MPs) from both the ruling
CCM and the opposition parties; when the decision was made to
form a special Committee to investigate the "Richmond
scandal," the Committee used the PPRA report as the starting
point for its investigation. Several of the Kilimanjaro
International auditors were called to testify before the
Parliamentary Committee and provide key evidence. As a
result of PPRA's decision to share the full TANESCO audit
report and other such courageous actions, it has earned the
moniker of "procurement watchdog" in the Tanzanian press.


8. (U) The special Committee took three months to complete
its investigation and then announced it would present the
conclusions to a full session of Parliament the week of
February 11-15. However, on February 2, when the Minister of
Energy and Minerals, Nazir Karamagi, organized a seminar at
the Parliament complex in Dodoma to discuss the Electricity
and Petroleum Bill 2008 that was before the Parliament, angry
ruling party Chama Cha Mapinduzi (CCM) MPs came to the
seminar room, but boisterously and unanimously refused to
listen Karamagi. They told the Minister they wanted only to
discuss the Richmond report. On February 5, Speaker of
Parliament Sitta abruptly canceled his plans to attend the
National Prayer Breakfast in Washington DC and announced that
the report would be presented the next day.

Richmond Parliamentary Probe Committee: Key findings
-------------- --------------

9. (U) The Richmond Parliamentary Probe Committee was chaired
by the relatively young MP, Hon. Harrison Mwakyembe, from
Kykela district, who has the reputation for being serious

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about fighting corruption. Other committee members included
Hon. Stella Manyanya (CCM); Hon. Lucas Selelii (CCM); Hon.
Herbert Mntangi (CCM); and Hon. Mohamed Mnyaa (Civic United
Front). The key findings of the Committee were:

-- Prime Minister Lowassa acted inappropriately to secure
the Richmond Company contract and should be held
accountable;
-- all senior GOT officials implicated in the Richmond
Company deal should resign;
-- the Attorney General should be held accountable for
failing to advise the Government during the Richmond
contract process;
-- the Government should review the Public Procurement
Act of 2004;
-- the Government should remove top PCCB officials for
appearing to "whitewash" its own Richmond probe;
-- the Government should review all existing energy
contracts.

PM's Resignation not a surprise to Kikwete
--------------

10. (C) A personal assistant to President Kikwete told
Ambassador Green on February 8 that Kikwete, who had been
briefed in advance on the committee's findings in the
Richmond report, anticipated that Lowassa might resign once
the report was public. However, Kikwete was unprepared, yet
surprised, by the emotional outpouring from many prominent
ruling party CCM MPs who condemned, in no uncertain terms,
Lowassa and the two ministers also implicated in the report.
During the February 7 evening session of the Parliament that
was on national television (Note: In Tanzania, every session
of parliament is broadcast live to the public. End note.)
Speaker Sitta gave the floor to MP after MP from the ruling
party who spoke forcefully that they were tired of being
"muzzled"--a reference to the iron hand that PM Lowassa had
used to keep the CCM MPs within the party line; tired of
being a "rubber stamp" legislature; and tired of the
corruption "that is tainting our party and our country."
When Minister of Energy Karamagi, was given the floor, he was
booed back to his seat.

Comment
--------------

11. (C) While the immediate reason for PM Lowassa tendering
his resignation was his implication in the illegal
procurement of the energy contract with Richmond, Lowassa's
corrupt activities have been an open secret throughout
Tanzania for many years. In addition, rumors of a cabinet
shake-up had been rampant since the conclusion of the CCM's
Party Congress on November 5, 2007. As a result of CCM
elections for the party's National Executive Committee,
several of President Kikwete's close circle took on new roles
in the party. Other CCM stalwarts were moved to "lower"
positions, indicating that Kikwete was maneuvering to
distance himself from ministers and others with reputations
for lining their pockets.


12. (C) In January 2007, testing the waters of high-level
political will to fight corruption, the DCM had asked Edward
Hosea, head of the PCCB, if Kikwete was sincere about
battling graft (Ref A). Hosea replied he believed the
President Kikwete to be honest, but "the test will be whether
he is ready to go after the big fish." Ironically, the
Parliamentary Committee report has also condemned Hosea for
allowing PCCB to whitewash its own Richmond investigation.
It remains to be seen if in Kikwete's upcoming Cabinet
announcements, Hosea, whose PCCB is directly under the

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President's Office, retains his position or not. In any
case, President Kikwete is facing a critical crossroads in
selecting his cabinet. He appears to have chosen a
well-respected Parliamentarian as his new Prime Minister.
Through his selection of his other ministers and deputies,
Kikwete will craft the message he wants to send on
corruption, not only to his government and the 82 percent of
the electorate who put him into office in December 2005, but
to all of Africa.


13. (C) Kikwete's January 31 election as Chair of the African
Union (AU) has thrust him into a central role with
expectations that he will assist in resolving crises from
Kenya to Chad to Zimbabwe. In anticipation that he may spend
a lot of time "on the road" this next year trouble shooting
for the AU, we presume Kikwete's goal would be put in place
not only a reliable and honest PM, but to surround himself
with capable ministers who could keep the Government on
course when he is away.

Biographic Information: Mizengo Peter Pinda
--------------

14. (U) Honorable Mizengo Pinda served for two years in
President Kikwete's cabinet as the Minister of State in the
Prime Minister's Office for Regional Administration and Local
Government. Previously he was a Deputy Minister in the same
office under former President Mkapa. Hon. Pinda began his
government career as a state attorney in the Ministry of
Justice in 1974. He served as a security officer in the
State House and from 1982 to 1992 he was the assistant
private secretary of President Julius Nyerere. In 2000,
Mizengo Pinda was elected to Parliament as the CCM party's
candidate in the Mpanda East constituency. President Mkapa
subsequently appointed him to serve as his Deputy Minister
for Regional Administration and Local Government. Prime
Minster Pinda was born in the town of Sumbawanga, Rukwa
region in Western Tanzania on August 12, 1948. He holds a
Bachelor of Law degree from the University of Dar es Salaam.
GREEN