Identifier
Created
Classification
Origin
08KHARTOUM345
2008-03-10 07:08:00
CONFIDENTIAL
Embassy Khartoum
Cable title:  

A SNAPSHOT OF SOUTH SUDAN'S CORRUPTION

Tags:  PGOV PREL KPKO UN AU SU 
pdf how-to read a cable
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PP RUEHBC RUEHDE RUEHDU RUEHKUK RUEHMR RUEHPA RUEHRN RUEHROV RUEHTRO
DE RUEHKH #0345/01 0700708
ZNY CCCCC ZZH
P 100708Z MAR 08
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC PRIORITY 0146
INFO RUEHZO/AFRICAN UNION COLLECTIVE
RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNFUR/DARFUR COLLECTIVE
RUCNIAD/IGAD COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
C O N F I D E N T I A L SECTION 01 OF 03 KHARTOUM 000345 

SIPDIS

SIPDIS

DEPARTMENT FOR A/S FRAZER, S/E WILLIAMSON, AND AF/SPG
NSC FOR PITTMAN AND HUDSON
ADDIS ABABA FOR USAU

E.O. 12958: DECL: 03/10/2018
TAGS: PGOV PREL KPKO UN AU SU
SUBJECT: A SNAPSHOT OF SOUTH SUDAN'S CORRUPTION

REF: A. 07 KHARTOUM 2001

B. KHARTOUM 332

Classified By: CDA Alberto Fernandez, for reasons 1.4 (b) and (d)

C O N F I D E N T I A L SECTION 01 OF 03 KHARTOUM 000345

SIPDIS

SIPDIS

DEPARTMENT FOR A/S FRAZER, S/E WILLIAMSON, AND AF/SPG
NSC FOR PITTMAN AND HUDSON
ADDIS ABABA FOR USAU

E.O. 12958: DECL: 03/10/2018
TAGS: PGOV PREL KPKO UN AU SU
SUBJECT: A SNAPSHOT OF SOUTH SUDAN'S CORRUPTION

REF: A. 07 KHARTOUM 2001

B. KHARTOUM 332

Classified By: CDA Alberto Fernandez, for reasons 1.4 (b) and (d)


1. (C) SUMMARY: The Southern Sudan Anti-Corruption Commission
will roll out its inaugural anti-corruption strategy with USG
assistance in late March, 18 months after the Commission's
establishment. Anecdotal evidence suggests that GOSS
corruption will continue to seriously embarrass the SPLM as
it seeks to wrest power from the National Congress Party
(NCP) in the 2009 elections. Abdelaziz Helou has been
brought into the party leadership to clean the SPLM,s books
and potentially its ranks in the run-up to the Sudanese
electoral season. END SUMMARY.

--------------
THE PROBLEM
--------------


2. (C) Capacity issues, donor detachment, and greed
exacerbate wide-spread corruption in South Sudan. ConGen Juba
staff has seen various examples of corruption within the GOSS
that are well-known to officials (and in some cases to the
general public),but that have carried only limited
consequences for the offenders. While the Southern Sudan
Legislative Assembly has wider leeway than its Khartoum
counterpart to expose malfeasance, inquiries over the past
six months have done little more than generate headlines.
Some of the more vocal members of the Assembly who have
raised concerns about corruption are exploring hiring private
security personnel, citing threats from a "growing Juba
mafia" tied to former-Finance Minister Arthur Akuien Chol.

--------------
THE PROFITEERS
--------------


3. (C) According to Ministry of Finance sources, Vice
President Riek Machar,s office already had spent 87% of its
budget within a month of the start of the GOSS fiscal year.
Ministry sources note that the bulk of the expenditures have
been both off-the-books and unbudgeted, including the Vice
President's non-official travel in the vicinity of Malakal
and throughout Unity State appears. The Vice President is
also suspected of financing a character-assassination

campaign among his Nuer community against current Unity State
governor Taban Deng Gai. Machar's favored candidate to
unseat Taban is Machar's own wife, Government of National
Unity (GNU) State Minister for Energy and Minerals Angelina
Teny Machar.


4. (C) GOSS Ministry of Education officials have openly
discussed with partners their Undersecretary,s alleged
withdrawal of between US$50,000 and $100,000 (no one is sure
of the precise figure) from the Ministry's Multi-Donor Trust
Fund (MDTF) account to pay for his upcoming wedding. The
Undersecretary allegedly responded to criticisms from within
the Ministry's finance department by claiming "this is our
money, no one can tell us how to spend it." European
Community officials raised their concerns with the World Bank
Mission in Juba. GOSS officials were nonplused by the
allegation, asserting their inability to take action in
advance of their May mid-term review.


5. (C) Sources working with the SPLA told ConGen PolOff that
approximately $30 million has been disbursed to date to
construct the John Garang Military Academy outside of Juba.
However, only $2 million in actual expenditures can
reportedly be verified. Sources with access to SPLA budget
accounts claimed to ConGen PolOff that none of the remaining
$28 million can be accounted for. To date, the Academy
consists of a series of pup-tents and four bore-holes. SPLA
Chief of Staff Oyai Deng Ajak told PolOff in November 2007
that spending already had begun for the Academy and that he
anticipated the facility would be completed by April 2008.
Our sources claim they are unable to locate a corresponding
contract for the facility.

--------------
GOSS PAYS THE CONSEQUENCES
--------------


6. (C) GOSS Finance Minister Kuol Athian Mawien told ConGen
staff that oil revenues are being reduced by "occasional"

KHARTOUM 00000345 002 OF 003


abuse of the GOSS, duty-free status. Certain Ministers have
imported goods under their Ministerial authority for use in
private ventures. For example, the privately-owned Juba
conference center "Home and Away" is reported to have cost
US$3 million to construct. Former Finance Minister Akuien, a
primary financial backer, is widely suspected of having
brought the establishment's building materials and other
commodities into Juba via this "duty free" system.


7. (C) In an attempt to "catch up" with lost revenue, the
GNU subtracts from the South's share of oil proceeds the
amount of all tax exemptions issued by the GOSS. GNU revenue
officials staffing border customs posts note the value of
"dubious" tax-exempt shipments, then the GNU Finance Ministry
deducts this amount from the South's share of oil-revenues
the following month. Reportedly, this is the reason the
GOSS' share of oil revenues in March 2007 dropped to $34
million.


8. (C) Gabriel Changson Chang (Akuien,s immediate successor
as Finance Minister) told ConGen PolOff that GNU revenue
corrections "played a large part in the reduction," though he
asserted that open access for the SPLM at the central oil
pumping facility in Heglig would empower the GOSS to better
account for "financial discrepancies" either those generated
internally or forced upon the GOSS "externally."

--------------
TABULATING THE COST
--------------


9. (C) According to Finance Minister Mawien, the GNU has
established a board jointly staffed by SPLM and NCP technical
experts to study and account for non-oil revenue generation.
This will permit the GOSS to block fraudulent duty-free
claims. Mawien also is pushing the GOSS experts on the board
to compile data for a GOSS-wide analysis of how much
legitimate tax exemptions are reducing the GOSS share from
Sudan's oil revenues. It is unlikely that funds lost through
past corrupt transactions will be recovered: a UNDP technical
advisor in the Finance Ministry told ConGen PolOff that
then-FinMin Akuien spent all of the GOSS, $300 million
strategic reserve last year. GOSS catch-up contributions to
the reserve, plus exorbitant operating and payroll costs
borne by the fledgling government, reduced the Ministry of
Finance's cash holdings to only $50,000 in August 2007.

--------------
CRACKING DOWN AT LAST?
--------------


10. (C) While GOSS President Salva Kiir has publicly
committed his government (and internally, the SPLM) to a
policy of zero tolerance of corruption, critics note that
past corruption scandals have led to GOSS cabinet reshuffles,
but few have been evicted from the government. In the
meantime, some argue that a less public "housecleaning" could
be politically palatable at the state-level, thus shoring up
local-voter confidence in the SPLM as the 2009 elections draw
closer.


11. (C) In February, Kiir went beyond political rhetoric when
he removed the GOSS Auditor General and two of his immediate
deputies, after they attempted to block an external audit of
the GOSS Audit Chamber's performance. Kiir also supports the
efforts of Anti-Corruption Commissioner Pauline Riek. The
Anti-Corruption Commission, established in 2006, is
represented in six out of ten states, and currently is
preparing to roll-out a GOSS-wide anti-corruption strategy.


12. (C) Within the SPLM, Deputy General Secretary Abdelaziz
Helou has been tasked with managing the party's effort to
improve its anti-corruption image. Helou's first task: a
review of internal reports generated by the SPLM,s Interim
National Congress on specific (and in some instances,
allegedly senior) party members. Kiir has given him a
deadline of "before the National Convention." (COMMENT: We
note that, with Helou's Darfur duties as well, this will be a
tall order. END COMMENT.)

--------------
COMMENT
--------------


13. (C) Although numerous sources repeatedly accuse the GOSS

KHARTOUM 00000345 003 OF 003


of corruption, it is always difficult to obtain accurate
information. Though we cannot verify the accusations
contained in this cable, there is enough specificity in the
information provided to make it worth reporting as a way of
drawing attention to this growing issue.


14. (C) After years of sacrifice in the bush, many former
SPLA soldiers, now in the GOSS, have a sense of entitlement
to the perks that can come from power and access to public
funds. The resentment of average South Sudanese at this
behavior, when they are still awaiting the economic benefits
of the CPA, has been simmering for some time. There are
hopeful signs now that President Kiir is becoming serious
about addressing the problem. Of course Kiir must constantly
weigh party unity against party discipline, but there is a
risk that if left unchecked, corruption will be the factor
that brings down the SPLM. With US encouragement, President
Kiir should continue to address corruption in a deliberate
and pragmatic manner, but he faces the challenge of fighting
corruption while building a state from scratch and managing a
dangerous, and potentially fatal, political relationship with
Khartoum.
FERNANDEZ