JAMAICA: PRIME MINISTER BRUCE GOLDING'S GOVERNMENT

C O N F I D E N T I A L KINGSTON 001040 SIPDIS DEPT FOR WHA/CAR (ANDRE CADIEUX) INR/IAA (PETER KNIGHT) TREASURY FOR IA/WH (ERIN NEPHEW) PASS TO CENTRAL AMERICAN CARIBBEAN BASIN COLLECTIVE E.O. 12958: DECL: 12/10/2018 TAGS: PREL PGOV PINR SNAR EFIN ASEC KCOR CARICOM IBRD, IDB, FBI, JM, XL SUBJECT: JAMAICA: PRIME MINISTER BRUCE GOLDING'S GOVERNMENT UNDER SIEGE; POSSIBLE CABINET RESHUFFLE? REF: A. 07 KINGSTON 1336 (042044Z SEP 07)(NOTAL) ¶B. 07 KINGSTON 1462 (251614Z SEP 07)(NOTAL) ¶C. 07 KINGSTON 1629 (021501Z NOV 07)(NOTAL) ¶D. 07 KINGSTON 1681 (19200Z NOV 07)(NOTAL) ¶E. KINGSTON 571 (251519Z JUN 08)(NOTAL) ¶F. KINGSTON 596 (031845Z JUL 08)(NOTAL) ¶G. KINGSTON 809 (161457Z SEP 08)(NOTAL) ¶H. KINGSTON 972 (171906Z NOV 08)(NOTAL) ¶I. KINGSTON 1016 (011931Z DEC 08)(NOTAL) ¶J. KINGSTON 837 (222015Z SEP 08)(NOTAL) ¶K. KINGSTON 707 (052139Z AUG 08)(NOTAL) Classified By: CDA JAMES T. HEG, Reasons 1.5 (B) AND (D) Summary and Analysis -------------- 1.(C) Besieged by an alarming wave of violent crime, resurgent inflation, pressure on the Jamaican dollar, high unemployment, heavy damage to the agriculture sector from hurricanes Dean and Gustav, and a recent downgrade of the country's financial rating, until recently Prime Minister (PM) Bruce Golding's Jamaica Labour Party (JLP) at least could claim progress in the area of good governance and transparency. Unfortunately, recent events have undermined this claim, leading many to wonder whether the current government is any cleaner than its predecessor. 2.(C) Speculation is rife regarding a possible cabinet reshuffle by Golding. However, the JLP's razor-thin 32-28 parliamentary majority limits his options; any reshuffle would have to avoid antagonizing the current cabinet, or indeed any sitting JLP members of parliament. Nor, with the country reeling from crime and economic weakness, can Golding risk calling a snap general election in hopes of winning a stronger majority: Opposition Leader and former PM Portia Simpson Miller (PSM),a charismatic populist recently reelected as Chairman of the People's National Party (PNP), might well be returned to power. End Summary and Analysis. Alleged Corruption at State-Owned Bus Company -------------- 3.(SBU) The Office of the Contractor General (OCG),headed by Greg Christie, recently completed an investigation of alleged cronyism and breaches of procurement guidelines at the Jamaica Urban Transit Company, Ltd. (JUTC),which operates the country's notoriously inefficient state-owned bus system. Christie's 104-page report, delivered to Minister of Transport and Works Mike Henry, reportedly: -- paints a damning picture of rampant corruption dating back several years; -- accuses JUTC Acting Managing Director Bindley Sangster of criminal offenses; -- strongly criticizes the leadership of the late Douglas Chambers, who served pro bono publicum as JUTC Chairman, ostensibly to clean up the organization, until he was assassinated gangland-style on June 27, apparently by workers facing layoffs (reftel F). The OCG's investigation had been launched following Chambers' murder. Possible Cabinet Reshuffle? -------------- 4.(C) In recent days, Sangster, together with JUTC procurement committee members Dennis Chung and Raphael Barrett, have resigned from the JUTC Board ) thus lending credence to Christie's allegations. Chambers had been widely perceived as one of a handful of crusading figures installed in key positions (the new Police Commissioner, Customs Director, Finance Minister) by Golding in an effort to clean up Jamaica's corrupt institutions following 17 years of rule by the opposition PNP. PNP Chairman Robert Pickersgill publicly has called on Golding to replace Minister Henry, who thus far has had little comment. Speculation abounds regarding a possible cabinet reshuffle by Golding. He is said for example to be displeased with National Security Minister MacMillan (who has yet to get a grip on the soaring crime problem) and Energy Minister Mullings. However, in post's estimate, the JLP's razor-thin 32-28 parliamentary majority limits his options; any reshuffle would have to avoid antagonizing the current cabinet, or indeed any sitting JLP members of parliament. Fertilizer Imbroglio -------------- 5.(SBU) In a separate development, Agriculture Minister Dr. Chris Tufton has announced a full-scale investigation into the circumstances surrounding the purchase of 6,000 tons of fertilizer by Jamaica Cane Product Sales (JCPS) from the Indian company Shreeji Impex Corp. Under the terms of a deal brokered in March, JCPS deposited USD 1.4 million with agents of Shreeji Impex in New York. However, the shipment of fertilizer, scheduled to arrive in April/May, was never delivered. JCPS reportedly has recovered only USD 250,000 from the New York-based agents, and thus has lost USD 1.15 million at a time when Jamaica's vital agriculture sector has been devastated by hurricanes Dean and Gustav and as the Government faces extreme budgetary pressures (reftel I). Ammunition Purchase from Unlicensed Arms Dealer -------------- -- 6.(SBU) On another front, local media have reported that the Government has been unable to recover any of the USD 81,100 expended to purchase ammunition from unlicensed arms broker Lance Brooks, the owner of Florida-based Taylor and Associates, whose bank accounts reportedly have been frozen by U.S. authorities (reftel G); however, post understands that in fact the FBI has recovered, and will return to the Government of Jamaica (GoJ),at least USD 20,000. In a letter to the PM, Commissioner of Police Hardley Lewin reportedly has asserted that "every effort is being made to recover the money paid and, from the lessons learnt, controls instituted to prevent a recurrence of this nature." Gang-related Gunfight at Annual JLP Party Conference -------------- -------------- 7.(C) At the JLP's annual conference held at the national arena on November 16, before a crowd of thousands, as Finance Minister Audley Shaw accused the previous PNP government of gross mismanagement, gunfire erupted immediately behind the stage and gang-related mayhem ensued, leaving one dead and two wounded (reftel H). This incident served as a stark reminder of the historical ties of both major political parties to Jamaica's powerful criminal elements, whose "dons" control entire garrison districts in Kingston, Spanish Town, and Montego Bay. While the Golding Government may have made progress in cleaning up Customs, replaced a disreputable Commissioner of Police, and indicted a senior police superintendent on corruption charges (reftels C,D,K),the JLP cannot claim to have severed its ties to organized crime. Minister's Residence Searched in U.K. Investigation -------------- -------------- 8.(C) Finally, an ongoing international investigation by the British Serious Fraud Office (SFO) led the Jamaican Serious and Organized Crime Branch to search the home of the JLP Member of Parliament (MP) for East Rural St. Andrew and Minister of State in the Ministry of Transport and Works Joseph Hibbert on the morning of December 9. The police reportedly sought evidence relevant to the dealings of an unnamed U.K.-based firm in Jamaica some 15 years ago, when Hibbert served as a civil engineer with the Ministry of Housing and Works in the previous JLP Government of former PM Edward Seaga. Hibbert's attorney has stoutly denied any wrongdoing by his client, and a JLP press release maintains there has been no impropriety on Hibbert's part, and that the case will be resolved in the U.K. courts. However, post's sources indicate that he may have continued to receive payments after having relinquished his position as a civil engineer. Johnson