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