SPLM/NCP JOINTLY CONFRONT CORRUPTION THROUGH POLITICAL

UNCLAS SECTION 01 OF 03 KHARTOUM 001603 DEPT FOR AF A/S FRAZER, SE WILLIAMSON, AF/SPG NSC FOR PITTMAN, HUDSON, PMARCHAM, AND MMAGAN DEPT PLS PASS USAID FOR AFR/SUDAN, DCHA SUDAN NAIROBI FOR USAID/DCHA/OFDA, USAID/REDSO, AND SFO GENEVA FOR NKYLOH USUN FOR DMERCADO BRUSSELS FOR JADDLETON USMISSION UN ROME FOR RNEWBERG, HSPANOS ADDIS ABABA ALSO FOR USAU AIDAC SIPDIS E.O. 12958: N/A TAGS: PREL PGOV PREF EAID ASEC KPKO UNSC SU SUBJECT: SPLM/NCP JOINTLY CONFRONT CORRUPTION THROUGH POLITICAL INSTITUTIONS IN SOUTHERN KORDOFAN REFS: A) KHARTOUM 1460 B) KHARTOUM 1455 C) KHARTOUM 1435 D) KHARTOUM 1427 E) KHARTOUM 1309 KHARTOUM 00001603 001.2 OF 003 - - - - SUMMARY - - - - ¶1. (U) Recent events in Southern Kordofan state serve as a reminder of the divided, partisan nature of the state administration and the continued potential for widespread conflict to erupt. Tensions between the Sudan People's Liberation Movement (SPLM) Minister of Finance, who is pursuing financial reform, and the National Congress Party (NCP) state Governor, who opposes these measures, came to a head on September 27 when the Governor dismissed the Minister without consulting the SPLM Deputy Governor. Public reaction was immediate, with protests and road blocks reported, as well as rumors that the Deputy Governor had placed Sudan People's Liberation Army (SPLA) units at Lake Abiad on standby. However, the situation reportedly is now contained. State SPLM leaders are conferring with party leaders in Juba, trying to confirm whether First Vice President Salva Kiir approved the Governor's action. End sumary. - - - - - - - - - - - - - - - - - - - - - - - STATE MINISTER EMBARKS ON FINANCIAL REFORM WITH PARLIAMENT'S SUPPORT - - - - - - - - - - - - - - - - - - - - - - - ¶2. (U) Dr. Ahmed, Southern Kordofan's SPLM State Minister of Finance, said he embarked on a reform program within the ministry after assuming office in early 2008. The state's financial practices had already come under scrutiny by the NCP in mid-2007, when Second Vice President Ali Osman Taha noted "financial irregularities" during a visit and called for an official investigation into the state's financial practices. However, in Dr. Ahmed's view, the inquiry was poorly conducted, and its findings were inconclusive. Following the signing of the Comprehensive Peace Agreement (CPA),the Department of Economics and Planning was separated from the State Ministry of Finance to form its own ministry. The SPLM took the ministerial position for Economics and Planning, while the NCP continued to hold the ministerial post for Finance in 2005. Upon the CPA-mandated government rotation in late 2007, the SPLM took over the position of Minister of Finance; the NCP the Minister of Economics and Planning. At this point, the NCP Governor issued a decree channeling all development funds through the Economics Ministry, leaving the Finance Ministry in charge of the state's operational expenses and salaries. A new bank account, to which the Governor has access, was established to receive state development funds. ¶3. (U) Dr. Ahmed claims that after he took office, the state legislative assembly gave him bipartisan support to introduce more formal and transparent processes to manage the state's finances. According to Dr. Ahmed, his review of the ministry's systems revealed financial irregularities, as well as the state Governor's direct intervention in operations. For example, he noted that the ministry was paying salaries directly to state employees instead of receiving budgets from the ministries. The latter system would ensure budgets are approved by the state assembly with funds then transferred to individual ministries to pay their staff. Dr. Ahmed believes the system being used bypasses ministerial planning and legislative approval processes, allowing for ad hoc payment decisions, and making it difficult to catch "ghost employees" remaining on the payrolls. By decentralizing budgetary decision-making and allowing for legislative oversight, Dr. Ahmed hoped to make the process more transparent and less open to interference. - - - - - - - - - - - - - - - - - - - - - - - - REFORM MEASURES - CLEANING HOUSE OR PERSONAL ATTACK - - - - - - - - - - - - - - - - - - - - - - - - ¶4. (U) Dr. Ahmed indicated that the ministerial review uncovered a number of financial irregularities. Many were related to the NCP Director General's (DG) issuance of payments at the direction of the Governor - without adhering to procedures or to legislatively approved state budgets. Dr. Ahmed first relieved the DG of certain KHARTOUM 00001603 002.2 OF 003 responsibilities, then, as he began introducing more formal processes for allocating funds, dismissed him from his post. According to Dr. Ahmed, the Governor saw these moves as an investigation of the Governor himself, although Dr. Ahmed assured him that he was concerned only with reforming the ministry to spend state funds more responsibly and effectively, not with the Governor's actions. ¶5. (U) The Governor reappointed the DG without consulting Dr. Ahmed. In turn, Dr. Ahmed refused to allow the former DG to resume his duties, reiterating to the Governor his commitment to correcting financial irregularities within his Ministry. Ahmed also informed the Governor that any such decision must be taken in consultation with the Minister. The Governor requested that the DG be allowed to resume his duties for a period of a few months, which Dr. Ahmed rejected. ¶6. (U) State Secretary General Abdalla Toum gives a contradictory version of events. (Note: While Toum claims to be politically independent, his positions on issues line up with those of the NCP and the NCP Governor who appointed him to his position. End note.) Toum told USAIDoff on October 6 that Dr. Ahmed was dismissed for having replaced the ministry's DG with a corrupt official, Kamis Ahmed Suliman. The Governor opposed Suliman's appointment because he had been previously fired by the state Internal Auditor for corruption. According to Toum, the Minister then created chaos in the ministry by reshuffling his staff, putting junior members in positions supervising more senior staff. The Governor consequently wrote to Salva Kiir, explaining the situation and reportedly obtained the First Vice President's approval to dismiss Dr. Ahmed. - - - - - - - - - - - - - - - - - - - - - - - - - --- INITIAL REACTION TO THE GOVERNOR'S MOVE RAISES TENSIONS IN THE STATE - - - - - - - - - - - - - - - - - - - - - - - - - - - ¶7. (U) According to a number of SPLM sources, word initially spread that the Deputy State Governor Daniel Kodi put SPLA units at nearby Lake Abiad on alert. These sources indicated tensions around the state were high, with protests against the Minister's dismissal, and the Deputy Governor and citizens threatening to block roads if Dr. Ahmed was not reinstated. SPLM leaders and members of the Deputy Governor's advisory committee, including the SPLM co-chair of the Presidential Assessment and Evaluation Commission, the SPLM Secretary of the state and the SPLM Deputy Chairman of the state legislature, dismissed reports that the Deputy Governor had officially called for the SPLA to be on standby, while confirming reports of a protest in Dilling town and threats to close roads. Despite some unrest, they felt the situation would remain calm. According to the SPLM Secretary, the SPLM was informing the public of the Governor's unconstitutional management of Southern Kordofan. All SPLM sources state that the SPLM is prepared to freeze its participation in the state government if Dr. Ahmed is not reinstated. - - - - - - - - - - - - - - - - - - - - - - - - - - SPLM TAKES MATTER TO JUBA TO SEEK POLITICAL RESOLUTION - - - - - - - - - - - - - - - - - - - - - - - - - ¶8. (U) Immediately after Minister Ahmed's dismissal, SPLM members in Rashad reported to USAIDoff that Salva Kiir had called the Deputy Governor to deny that he had approved the action. On October 6, USAIDoff spoke with the Southern Kordofan SPLM Secretary, who was in Juba for meetings on the issue. He had explained the situation to GoSS Presidential Affairs Minister and Kiir-confidant Luka Biong Deng and scheduled a follow-on meeting with party leaders Ann Itto and Pagan Amum, who are expected to arrange another meeting with Salva Kiir. State SPLM Secretary Arnu was still waiting for confirmation that Salva Kiir did not approve of the minister's dismissal. Arnu confirmed Dr. Ahmed's version of the chain of events leading to his dismissal. - - - - - - - - - - - - - - - - - - - - - - - - - STATE PARLIAMENT DRAWS BIPARTISAN SUPPORT AGAINST CONSTITUTIONAL ABUSES - - - - - - - - - - - - - - - - - - - - - - - - - ¶9. (U) According to Southern Kordofan SPLM leaders, including the Finance Minister and SPLM State Parliament Deputy Chair, the state KHARTOUM 00001603 003.2 OF 003 parliament has drafted ten resolutions, six directives and 12 recommendations opposing the Governor's corrupt practices, which they plan to adopt when meetings resume on October 15. They indicate that a number of NCP parliamentarians support these measures, either officially or privately. According to the Finance Minister and the Parliament Deputy Chair, a group of NCP parliamentarians has been lobbying national NCP leaders, including Presidential Advisor Nafie Ali Nafie, to dismiss the Governor. In response, the Governor has attempted to dismiss a number of NCP parliamentarians, all of whom cited the move as unconstitutional and refused to leave office. In an October 6 conversation with USAIDoff, NCP Chairman of the State Parliament Bellandia denied reports of action by legislators, indicating that the issue did not involve the parliament and that parliamentarians are not involved. ¶10. (U) Neither the NCP Chair nor the SPLM Deputy Chair believes the executive knows how to administer the state, indicating that partisan politics keep the administration divided and unable to compromise and make decisions. Conversely, they see the state legislature working in a more bipartisan manner, compromising and collaborating on important issues. They attribute this success to a USAID-supported SPLM/NCP joint training in Uganda, where parliamentarians studied democratic institutions and processes, and were able to meet with Ugandan opposition party leaders to learn how parties can work together to serve constituents' interests. Twenty-six parliamentarians acquired negotiation, debate and administrative skills, allowing them to effectively run meetings, debate, and compromise to arrive at decisions. The Chair and Deputy Chair maintain that the state executive must also understand how a decentralized democracy works - including how the executive interacts with the legislature - if the state government is to function. - - - - COMMENT - - - - ¶11. (U) This recent drama is a reminder of the very tenuous state of affairs in Southern Kordofan state, currently the most volatile of the "three areas" given special status under the CPA. If it is determined that Salva Kiir did in fact approve the Minister's dismissal, then the Nuba SPLM are likely to feel further alienated from the national SPLM party. If Kiir did not approve the dismissal, then a line drawn in the sand between the two parties could lead to a crisis, with the SPLM freezing participation in state government. Given the highly militarized nature of the state, any major political confrontation risks boiling over into confused, widespread conflict. (Note: previous reports of an arms build-up among Misseriya Popular Defense Forces (PDF) have been confirmed by Ahmed Gour, the SPLM Misseriya member of the Presidential Assessment and Evaluation Commission. In a discussion with USAIDoff on October 1, Gour expressed concern over the Sudan Armed Forces' SAF channeling of arms to the PDF through the Babanosa and Kailak Commissioners in preparation for a potential retaliation by the SPLA Nuer over last year's fighting in Kharasana (REF A). End note.) ¶12. (U) Electoral politics no doubt play a role in the hardening of both sides' positions, as each side attempts to convince the public that the other party is corrupt. However, detailed financial reform plans provided to USAIDoff by the Finance Minister over the past six months, along with the Governor's repeated requests that donors "give him their money in a sack" because he has trusted contractors that can "get the work done," lends legitimacy to the Minister's version of the events that led to his dismissal. ¶13. (U) Both SPLM and NCP Southern Kordofan state officials believe that the involvement of national-level officials is needed to resolve this issue. Last time, Presidential Affairs Minister Bakri Salih, a Bashir crony, and SPLM Governor of next-door Blue Nile state, Malik Agar, were able to defuse tensions. The recurrent need for national officials to intervene to resolve political stalemates at the state level reflects the sad state of affairs in Southern Kordofan and the state government's inability to function effectively. USAID's Democracy and Governance office is initiating a program to provide technical support and training to select state ministries and the legislature to improve management capacities for administering state affairs. FERNANDEZ