CENTRAL ELECTIONS COMMISSION FACING BUDGET

C O N F I D E N T I A L JERUSALEM 002215 SIPDIS NEA FOR FRONT OFFICE; NSC FOR ABRAMS/RAMCHAND/PASCUAL E.O. 12958: DECL: 12/09/2018 TAGS: PGOV ECON EFIN KWBG KPAL KDEM IS SUBJECT: CENTRAL ELECTIONS COMMISSION FACING BUDGET PROBLEMS, CONTINUED HAMAS SCRUTINY OF GAZA OFFICE REF: JERUSALEM 1613 Classified By: Consul General Jake Walles for reasons 1.4 (b) and (d). ¶1. (C) Summary. The Central Elections Commission (CEC) faces serious financial difficulties, according to Chief Electoral Officer Hisham Kuhail, and will be unable to pay December salaries without an additional infusion of funding. The PA Ministry of Finance (MoF) told post it will transfer NIS 4 million to the CEC after the Eid holiday, but faulted the CEC for poor management of its budget. End Summary. CEC: Cannot Pay December Salaries -------------- ¶2. (C) The CEC has repeatedly requested donor assistance with its "dire" financial situation. Kuhail told Poloff that the MoF refuses to transfer the remaining NIS 7.4 million of the commission's 2008 NIS 10 million (USD 2.7 million) operating budget. The CEC is covering the deficit by drawing down its employee pension fund and spending leftover project funds that should be returned to donors. Kuhail said that these two sources are drying up, and that he fears the consequences of laying off experienced technical staff. He said the CEC could "barely" pay November payroll for its 50 employees and will not be able to pay December salaries without an infusion of cash. ¶3. (C) Ministry of Finance Director General Mazen Jadallah told Econ Specialist December 4 that NIS 4 million will be transferred to the CEC after the Eid al-Adha holiday. According to Jadallah, this payment is the last that will be made in 2008. "The CEC can make do with a NIS 6.5 million budget," he said. Jadallah noted that the Ministry of Finance considers CEC operating expenses too high (and faults CEC for assembling a budget in USD based on a high exchange rate). ¶4. (C) Ulrich Steinle, European Commission governance advisor, told Poloff December 4 that the CEC is unique, because it receives its salary funding from the MoF as a lump sum transfer, not through regular payroll mechanisms, which are given priority. He noted that the "CEC doesn't help itself any" by budgeting in U.S. dollars rather than Israeli shekels as other ministries and agencies do and by refusing to sign an MOU with the MoF on payroll issues. "There are independence concerns, but those can be worked out through the MOU. Other countries manage this and still have independent elections commissions," he concluded. Gaza Warehouse Keys Returned, Vehicle Briefly Seized -------------- -------------- ¶5. (C) Separately, Kuhail reported that HAMAS had returned the keys to the CEC's Gaza warehouse, which HAMAS seized in late August (reftel). He added that Hamas, in an apparently unrelated incident, had briefly seized a CEC vehicle while its registration was being renewed, returning it when the CEC proved that it, not the PA, owned the vehicle. He added that CEC Gazan staff have been closely watched by HAMAS since the CEC sent a number of Gaza-based commissioners and staff to a USG funded training program in May. WALLES