UGANDAN ELECTIONS: PROFITS FIRST, TRANSPARENCY

C O N F I D E N T I A L KAMPALA 001278

SIPDIS

E.O. 12958: DECL: 11/03/2019
TAGS: PGOV PINR KDEM KCOR UG
SUBJECT: UGANDAN ELECTIONS: PROFITS FIRST, TRANSPARENCY
LATER

REF: KAMPALA 00979

Classified By: Pol/Econ Chief Aaron Sampson for
reasons 1.4 (b) and (d).


1. (C) Summary: The Electoral Commission's (EC) recent
announcement that it is postponing award of a $15 million
biometric voter ID contract - for which one U.S. company is
short listed - has sparked concerns about the priorities of
the Commission, and the competing business interests of
presidential insiders like Security Minister Amama Mbabazi
and Foreign Minister Sam Kutesa. On October 30, the EC
Secretary confirmed that the tendering process is on hold and
revealed that the Commission has dedicated all of its
available funding for 2010 to this single project, leaving no
resources for other activities that are more important to the
success of the February 2011 elections. End Summary.

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Allegations of Election Profiteering
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2. (SBU) Uganda's EC temporarily suspended procurement of a
$15 million biometric voter ID system on October 8, just five
days after inviting the U.S. firm L-1 Identity Systems to
present its ID system to the Commission. The contract is
intended to eliminate inconsistencies in voter registries for
selected urban areas in advance of the 2011 election.
Although the procurement is valued at $15 million, the total
contract could reach $60 million as Uganda is expected to
extend the voter ID system into a national ID program. L-1
has said it is one of four companies short-listed for the
contract.


3. (C) On October 26, Susan Katono, an official with L-1's
local partner Balton Uganda Ltd., attributed the new delay to
Ugandan interest in a Bangladeshi company that submitted an
unsuccessful bid on the tender. The EC's Chairman and
Secretary traveled to Bangladesh, along with officials from
the Internal Affairs Ministry, October 19-24. Katono accused
authorities of trying to transfer the project from the EC to
the Ministry of Internal Affairs, which would allow the
Internal Affairs Ministry to change the tender to a
time-sensitive, non-competitive bid. Transferring the
project will also transform what began as an attempt improve
Uganda's voter registry in time for 2011 into a three year
national ID system unrelated to the upcoming election.


4. (C) The alleged involvement of Foreign Minister Sam Kutesa
and Security Minister Amama Mbabazi complicates matters
further. Katono alleged that Kutesa has "close financial
ties" to the Bangladeshi company now reportedly under
consideration. The Secretary of the EC, Sam Rwakoojo, is
Kutesa's nephew. Katono, meanwhile, is Mbabazi's niece.
Both Kutesa and Mbabazi are National Resistance Movement
(NRM) insiders with rival political ambitions, competing
financial interests, and reputations tarnished by corruption.
An internal NRM report, commissioned by Mbabazi in his role
as NRM Secretary General and leaked to the press, accuses the
EC and specifically Rwakoojo of corruption and incompetence
(septel). The report recommends firing Rwakoojo "as he has
done the most to damage the NRM." After discussing L-1's
bid, Katono told EconOff that the NRM needs "fresh blood" and
that her uncle Mbabazi is the standard bearer of new NRM
leadership.

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Election Commission: Contracting Process Under Review
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5. (SBU) On October 30, Rwakoojo told EmbOffs that the voter
ID procurement was temporarily suspended due to a protest
lodged by another company, and that Uganda's Public
Procurement and Disposal of Public Assets Authority (PPDA) is
now reviewing the entire tendering process. The Embassy
stressed the importance of a fair and open bidding process
not only for the voter ID tender, but to set an example for
the 2011 elections. Rwakoojo said the process, once
restarted, would be fair, open and transparent. Rwakoojo
said the Commission's target award date of December, with
implementation starting in March 2010, is now likely
"overshot." He said the project could still be completed by
2011, but that the process will "be a bit rushed."

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The Commission's Strange Budget Priorities
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6. (SBU) The EC requested 198 billion shillings

(approximately $99 million) for the 2011 election cycle, with
$44 million for FY 2009/10 and $55 million for FY 2010/11.
The 2011 budget request is much higher than the $68 million
required for the 2006 elections and the $58 million needed
for elections in 2001. According to the Deepening Democracy
Project (DDP),which is a $25 million EU-funded basket
program to support the 2011 elections, the Commission spent
approximately $4.30 per registered voter to administer the
2006 elections. The Commission is now on pace to double
this, by spending $8.60 per voter in 2011.


7. (SBU) The higher 2011 budget is due to the Commission's
inclusion of sunk infrastructure costs for projected new
offices in all of Uganda's 80-odd districts plus Kampala, the
addition of permanent Commission staffers across Uganda, and
the biometric voter ID project. The Ugandan government
promised the Commission $18.5 million for FY 2009/10.
Rwakoojo said the Commission has so far received $13 million.
He said the budget shortfall forced the Commission to scale
back plans for the construction of new offices, the provision
of cars for presidential candidates, and vital activities
like the reorganization of polling stations and poll worker
training. Polling station reorganization and poll worker
training are critical to avoiding overcrowding and confusion
on election day. The massive budget shortfall has not,
however, changed the voter ID project. Rwakoojo listed the
voter ID project as the Commission's top priority, with all
available funding for 2010 currently dedicated to this
contract, and said other activities are dependent on
additional resources from the government or foreign donors.

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Comment: The Great Voter ID Gambit
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9. (SBU) We will continue to urge the Electoral Commission
to safeguard the transparency and fairness of the voter ID
tender. Failure to ensure transparency will adversely impact
the ID project, further tarnish the credibility of the
Electoral Commission (reftel),and undermine the integrity of
the elections the Commission is mandated to administer.


10. (C) The voter ID project will almost certainly not be
completed in time for the February 2011 elections, meaning
Uganda will enter the 2011 election with only minor changes
to its current electoral register. Even if the voter ID
project does move forward, the project targets just 17 towns
and cities in Uganda. Rwakoojo justified these parameters by
claiming that suspect voter registrations are most prevalent
in urban settings where citizens do not know their neighbors.
Towns and cities also happen to be opposition strongholds,
and according to 2009 World Bank data only 13 percent of
Uganda's population inhabit urban areas. Consequently, the
Electoral Commission is poised to spend 100 percent of its
available funding for 2010 on a project of doubtful
feasibility designed to issue specialized voter ID cards to
prevent fraud among a tiny slice of the Ugandan population
known for supporting opposition parties.
LANIER