FIJI UPDATE -- CHAUDHRY PROBLEMS; BAINIMARAMA ON

C O N F I D E N T I A L SECTION 01 OF 02 SUVA 000075

SIPDIS

SIPDIS

PORT MORESBY PASS TO EAP PDAS DAVIES

E.O. 12958: DECL: 02/25/2018
TAGS: PREL PGOV MARR PHUM FJ
SUBJECT: FIJI UPDATE -- CHAUDHRY PROBLEMS; BAINIMARAMA ON
LAND, GCC, AND CORRUPTION

REF: SUVA 072

Classified By: Amb. Dinger. Sec. 1.4 (B,D).

Summary
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1. (C) Fiji newspapers confirmed over the weekend that
interim government (IG) Finance Minister Chaudhry is the
minister who allegedly engaged in tax evasion related to
income from around US$1 million placed in Australian bank
accounts by sources in India in the years after Fiji's 2000
coup. In a media event on Feb. 24, interim PM Bainimarama
said an investigation last year found no wrongdoing. He said
Chaudhry has asked for a new inquiry with the results to be
made public. Bainimarama did not say if that would happen.
It appears he does not intend to suspend Chaudhry, although
evidence continues to mount that the Military Council really
wants Chaudhry removed. Fiji Ambassador to China Jim Ah Koy
has confirmed he would like the Finance job. In the media
event, Bainimarama lambasted the IG's political opponents and
the media for misrepresenting IG policies on land use, the
Great Council of Chiefs (GCC),and corruption. We comment
that Fiji has plenty of hypocrisy on all sides, but the IG
protests too much. Bainimarama and others argue for clean,
fresh governance; but too often their behavior does not
reflect the values they espouse. End summary.

Chaudhry and tax-evasion charges
--------------

2. (SBU) For months, the Fiji Sun has been carrying detailed
tax-evasion allegations against an interim government (IG)
minister. Everyone knew it was Finance Minister Chaudhry,
but nobody named the name. Last week, Chaudhry, whose
portfolio includes the Fiji Islands Customs and Tax Authority
(FIRCA),dared the media to name the minister. On Saturday,
the Fiji Times, a Murdoch publication, did so in front-page
headlines. Leaked FIRCA documents indicate that sources
associated with the Haryana State Government, India, provided
Australian $1.5 million to Chaudhry bank accounts in
Australia during 2000-2003, after Fiji's 2000 coup. Some of
the money was transferred via India's Consulate in Sydney.
Chaudhry reportedly did not declare interest from those
accounts on his Fiji tax returns until FIRCA challenged him.
Allegedly, Chaudhry still owed FIRCA some F$60,000 as of last
August, just before Chaudhry declared an income-tax amnesty
to permit those with taxes owing to repay without further
penalty or criminal charges. Deposed PM Qarase, deposed
Opposition Leader Beddoes, Transparency International, and
others have called for Chaudhry to resign or at least step
aside pending investigation.


3. (SBU) On Sunday, Feb. 25, in a press event on a variety of
issues, interim PM Bainimarama, reading from a prepared text,
began by noting he had asked FIRCA to look into the Chaudhry
allegations last year, and FIRCA had reported back "no
breaches of the Income Tax Act." Bainimarama said Chaudhry
has now sent him a letter suggesting the IG carry out "any
necessary action to establish the truth" and make the
findings public. Bainimarama did not say if he would order a
new investigation. Later in a Fijian-language media
discussion, Bainimarama reportedly said he does not intend to
suspend Chaudhry, who has announced he will file defamation
suits shortly against the Fiji Times and Fiji Sun. On
Sunday, FIRCA announced it will investigate two former
employees who reportedly have become media sources. Last
year FIRCA fired both those men, and a number of other senior
employees, who reportedly had been working on the Chaudhry
case. The ex-employees say the firings were to protect
Chaudhry; FIRCA denies that.

Other intrigues: Military Council and Ah Koy
--------------

4. (C) One of the former FIRCA officials told the media on
Saturday that a representative of the Military Council asked
him for documents on Chaudhry's tax problem last week, and a
military officer phoned after Chaudhry issued his challenge
to name the minister, urging, "The time is now to speak out."
If true, those conversations would confirm recent rumors
that the Military Council is upset that Chaudhry remains
Finance Minister and wants him out. Also, Fiji's Ambassador
to China, Sir James Ah Koy, is back in Suva on a trade

SUVA 00000075 002 OF 002


mission. Before taking up his mission in China, Ah Koy had
made no secret of his view that Bainimarama should replace
Chaudhry, preferably with Ah Koy himself. On Sunday, Ah Koy
called on Chaudhry to stand aside or resign to allow a fair
investigation. Ah Koy said he would gladly take on the
Finance portfolio if asked.

Controversial "Land use" idea only a recommendation
-------------- --------------

5. (SBU) In the press conference, Bainimarama attempted to
defuse concerns in the ethnic-Fijian community about his
"land use" plans (see reftel). He said "categorically that
no de-reserving of indigenous land will take place if it does
not give any economic benefit to indigenous Fijians. It goes
without saying that the land owners need to consent to the
de-reserving..." He added that no decisions have been made.
He accused the media and IG opponents of being "liars" and
of stirring up controversy for their personal and political
gain. He said, "We as indigenous Fijians have to wake up and
realize that our lives will not improve simply because we
allow some chiefs and the elite to hold political positions.
Our lives will only improve when we all work together as a
nation...."

Clarifying GCC regulations
--------------

6. (C) Bainimarama then turned to the recent, incendiary flap
over IG plans to reform the Great Council of Chiefs (GCC),
with himself as Chair (reftel). After laying into the media
and IG opponents again, Bainimarama said the only substantive
deviation the IG made from a commission's report was to have
the Fijian Affairs Minister be Chair. The IG decided a
direct link between the GCC and the government of the day is
important. He said the "mere presence of a minister" out of
52 members does not make a body political; and he drew a
distinction between the Minister of Fijian Affairs and
himself, though he just happened to name himself to that post
in January. Comment: it seems obvious that Bainimarama made
the change to ensure he can control the new GCC, in
particular when that GCC is asked to appoint President and/or
Vice President nominees. End comment.

Combating corruption
--------------

7. (SBU) Bainimarama noted that the Fiji Independent
Commission Against Corruption (FICAC) has a series of cases
in the works. (FICAC called in Qarase for questioning over
the weekend, and reliable sources say charges are to be filed
against him in early March.) Bainimarama predicted that the
usual anti-IG complainants will attack FICAC's credibility
and will seek to undermine the independence of the judiciary,
including by using "friends and connections in international
and overseas agencies."

Accusing the media of anti-IG bias
--------------

8. (SBU) In the press conference, Bainimarama lambasted the
media repeatedly. He asked reporters to "strive harder to
recognize the truth...be fair"..."stop double standards in
reporting, stop getting used by people who want to conceal
the truth by dividing our nation."

Comment
--------------

9. (C) Bainimarama protests too much. He, Chaudhry, and
others in the IG have a natural desire to have the media and
the public always accept that their motives are pure and
their political opponents' motives are nasty. Fiji is more
complex than that, and all sides can justifiably be accused
of hypocrisy on many occasions. A reason that Bainimarama
and his IG colleagues have trouble gaining credibility is
that their policies, particularly on corruption, do not jibe
with their stated goals. Witness the Chaudhry mess. On a
wealth of issues, they leave an impression that they really
believe they can sell the public a bill of goods, and the
media and public should just salute, as good soldiers do.
DINGER