WITH SHEIKH HASINA'S TRIAL SET TO START, KHALEDA

C O N F I D E N T I A L SECTION 01 OF 02 DHAKA 000114

SIPDIS

SIPDIS

E.O. 12958: DECL: 01/22/2018
TAGS: PGOV PHUM KCOR KDEM BG
SUBJECT: WITH SHEIKH HASINA'S TRIAL SET TO START, KHALEDA
ZIA'S LOOMS CLOSER

REF: A. 07 DHAKA 1234

B. 07 DHAKA 1986

Classified By: A/DCM Danilowicz; reasons 1.4 (b) and (d)


1. (U) SUMMARY. The extortion trial against former Prime
Minister Sheikh Hasina of the Awami League has again been
given the green light, despite delaying tactics on the part
of her lawyers. Meanwhile, Anti-Corruption Commission (ACC)
prosecutors are putting the finishing touches on charges
against another former prime minister, Khaleda Zia of the
Bangladesh Nationalist Party (BNP),in a separate corruption
probe. Both ladies also are under investigation in a third
case involving alleged kickbacks to a Canadian gas
exploration company. Continued uncertainty over the fate of
these two powerful autocratic leaders is hampering efforts by
the Caretaker Government (CTG) to bring lasting democratic
reform to Bangladesh's dysfunctional politics. With the clock
ticking toward national elections promised by the end of the
year, a timely resolution of their fate remains elusive but
increasingly necessary. END SUMMARY.

START OF HASINA'S TRIAL FINALLY IN SIGHT, DESPITE DELAYS
============================================= ===========


2. (U) On January 13, Judge Azizul Haq of the Dhaka
Metropolitan Sessions Court formally accepted the charges
in a corruption case against Sheikh Hasina, paving the way
for the oft-delayed trial to begin. Hasina and her cousin,
former Health Minister Sheikh Fazlul Karim Selim, are accused
of extortion and accepting bribes in the construction of a
power plant in the late 1990s. (REFTEL) During an emotional
outburst during the hearing, Sheikh Hasina claimed the cases
filed against her were false and that she would never have
been charged if she had acceded to military demands to leave
the country after the Caretaker Government came to power in
January 2007. Sheikh Selim tried to retract his confession,
claiming he gave it under duress. The judge dismissed both
arguments and scheduled testimony to begin January 17.


3. (SBU) However, in another bid to delay the start of the
trial, Hasina's lawyers convinced the High Court to suspend
trial proceedings and to instruct the Government to justify
its decision to try the case under the Emergency Power
Rules of 2007. Those rules expedite the trial process,
requiring the case to be tried within 45 days, with a
possible 15-day extension. (NOTE: This is a continuation of
the procedural wrangling between the prosecution and defense
that has marked the entire case. END NOTE.) The CTG appealed
the High Court's suspension, and the Appeals Court January 24
overturned the suspension, ruling the case should proceed.

MEANWHILE, ZIA'S CASE LOOMS AS WELL
===================================

4.(U) On September 3, the Anti-Corruption Commission filed a
case against BNP leader Khaleda Zia, alleging she violated
procurement laws in the selection of a company to process
containers at the Dhaka Inland Container Port and the
Chittagong Port. The company, Global Agro Trade Company Ltd.
(GATCO),which had no previous experience handling this type
of work, paid a "commission" to the then-BNP Shipping
Minister's son in exchange for his assistance in winning the
contract. The ACC alleged that the minister's son, working
on inside information from his father, agreed to pay Zia's
younger son Arafat "Coco" Rahman half of the "commission" to
persuade his mother to influence the deal. ACC prosecutors
say that the filing of charges is imminent now that a dispute
over whether to charge others in the case has been resolved.

BOTH LADIES MAY FACE CHARGES IN A THIRD CASE
============================================


5. (SBU) A third case, involving the granting of gas field
leases to a Canadian oil and gas exploration firm,
continues to percolate as well. Sheikh Hasina approved a
deal to grant a gas field concession to the company, Niko
Resources Group, during her term as prime minister. Zia's
government later granted further concessions to the company
and was in office when one of Niko's fields caught fire in

DHAKA 00000114 002 OF 002


2004, causing millions of dollars in damage. Both
governments have been accused of receiving kickbacks and
"damaging the national interest" in granting Niko the
concessions. No charges have been filed in this case and ACC
prosecutors do not expect to file charges in the near future.


HASINA NERVOUS, ZIA MORE CONFIDENT
==================================


6. (C) Shortly after the assassination of former Pakistan
Prime Minister Benazir Bhutto on December 27, the Deputy
Inspector General (DIG) of Prisons visited Hasina to assure
her the Home Ministry was taking extra security measures
for her safety. According to the DIG, Hasina became even
more agitated and concerned for her safety. People close to
Hasina also have said she is becoming less confident she will
escape conviction. She fell ill during a hearing in early
January and her lawyers asked the CTG to let her seek medical
treatment in the United States. Acting Awami League
president Zillur Rahman has said, however, that Hasina will
not agree to leave Bangladesh if the government insists on
attaching any "conditions," including an agreement not to
speak to the media, and the request to travel abroad does not
seem to have gone anywhere.


7. (C) Zia, meanwhile, is said by some to be more confident
of being exonerated. Since her trial has yet to begin, she
remains outside the public spotlight, but according to BNP
officials who have met with her she does not feel the
government has sufficient evidence to convict her in the
GATCO case. She continues to insist that the decision to
grant GATCO the contract came from the Cabinet's procurement
committee and that no prime minister ever rejects its advice.


8. (C) COMMENT: Most observers believe it unlikely the two
ladies will be acquitted because the military-backed CTG is
afraid their return to active politics would kill its
political reform efforts. A conviction is likely to be only
the beginning of government efforts to find a way to sideline
the two former PMs. With less than a year before scheduled
elections and much yet to do in instituting electoral and
political party reform, a timely resolution of the ladies'
fate is growing in urgency. While Sheikh Hasina may be
feeling less confident about her legal prospects, she can be
consoled by her party's much stronger political position than
its chief rival's.
Rollins