BANK OF TANZANIA TOWERS SCANDAL LANDS IN COURT; USG

					  UNCLAS DAR ES SALAAM 000072 
 
SENSITIVE 
SIPDIS 
 
AF/E FOR JLIDDLE 
TREASURY FOR REBECCA KLEIN, DEBRA VON KOCH 
STATE PASS USAID 
 
E.O. 12958:  N/A 
TAGS: ECON EAID KMCA PGOV PREL TZ
SUBJECT: BANK OF TANZANIA TOWERS SCANDAL LANDS IN COURT; USG 
ASSISTANCE A KEY FACTOR 
 
REF: 2008 DAR ES SALAAM 778 
 
					

1. (U) The Government of Tanzania launched prosecutions January 27
of two former Bank of Tanzania (BOT) officials for their role in the
construction of the BOT towers. Amatus Liyumba, former director of
personnel and administration, and former project manager Deogratius
Kweka were charged with causing the GOT to lose USD 153 million on
the project, whose initial budget of USD 89 million nearly tripled
before completion. The charges cover a period from 2001 to 2006.
This is the third set of corruption-related charges to be prosecuted
by the Preventing and Combating Corruption Bureau (PCCB), and the
second to involve the BOT (reftel). Both Liyumba and Kweka had been
removed from their positions in early 2008 following investigations
into the EPA scandal.



2. (SBU) The U.S. Millennium Challenge Account-Threshold Program
played an important role in this prosecution. Using funds leveraged
from the UK Department for International Development, the Threshold
Program arranged for a team of investigators from New York City's
Department of Investigation (a police body tasked with investigating
procurement fraud) to provide advice and guidance to PCCB. At
PCCB's request, the New York City DOI team offered guidance
specifically on the BOT Towers case. PCCB officials have expressed
their gratitude for the support, which helped to prepare the case
against the indicted officials.



3. (SBU) Comment: It is not clear to what extent the massive cost
overruns at the BOT Towers resulted from corruption as opposed to
grandiose plans and poor management. Indeed, one of the charges in
the case is for failure to "discharge ... duties in a reasonable
manner." With the buildings as a focus of public discontent with
government management of public funds, the indictments show the
interest of PCCB and the GOT more generally in keeping actions
against corruption on the front pages. End Comment.

ANDRE