LIBERIA: GENERAL AUDITING COMMISSION REAFFIRMS

UNCLAS SECTION 01 OF 02 MONROVIA 000102

SENSITIVE
SIPDIS

STATE PLEASE PASS TO GOVERMENT ACCOUNTABILITY OFFICE FOR
ACTING COMPTROLLER GENERAL GENE DODARO AND MANAGING
DIRECTOR FOR INTERNATIONAL AFFAIRS AND TRADE JACQUIE
WILLIAMS-BRIDGERS

E.O. 12598: N/A
TAGS: EFIN EAID ECON PINR LI
SUBJECT: LIBERIA: GENERAL AUDITING COMMISSION REAFFIRMS
ANTI-CORRUPTION COMMITMENT AND REPEATS REQUEST FOR ASSISTANCE

REF: 08 MONROVIA 936


1. (U) Summary: During an introductory call by the Ambassador,
Auditor General (AG) John Morlu II praised President Sirleaf's
commitment to anti-corruption and reaffirmed his support for her
efforts to improve transparency and accountability in government in
the face of frequent resistance. Morlu emphasized that the decision
to prosecute misconduct remained a "political" one but that the
imperative to improve financial management systems was a matter of
good governance and the audits produced by the General Auditing
Commission (GAC) were already encouraging several ministries and
agencies to act. Ambassador praised the GAC's work and stressed
that incidences of corruption revealed by the audits should be seen
as a testament to the President's commitment to transparency rather
than an indictment of her administration. Morlu thanked the U.S.
General Accountability Office (GAO) for inviting him to visit and
welcomed any support the GAO might be able to provide to further
improve capacity at the GAC. End Summary.


2. (U) In an introductory call January 26, Ambassador congratulated
AG Morlu for his work in rebuilding the GAC as an institution and
for the completion of several professional audits. She explained
that the audits were a crucial component of efforts to reform
economic governance in Liberia and emphasized that evidence of
corruption revealed by the audits and publicized in the press were a
testament to the new commitment to transparency of the GOL rather
than an indictment of the administration. Morlu agreed that support
for his work from the President had been resolute. He noted that
the President should be proud of her dedication to the independence
of the GAC. (Note: As part of her role on the Governance Reform
Commission in 2005, now-President Sirleaf pushed forward an
amendment to reinforce the independence of the GAC, shifting it from
the Executive Branch to an autonomous institution that reports to
the Legislature. She also gave up the right to recruit the AG in
2007 and instead turned over selection of an independent auditor to
a European Union-sponsored recruiting firm. End note.)


3. (U) Morlu said that initial audits confirmed that most
ministries and agencies lack appropriate financial management
systems and that large variance remains between ministry payrolls
and the official civil service rosters. In some cases (notably the
Ministry of Finance),he said the audits have spurred ministries to
take appropriate action while in other cases agencies have been less
willing to change. The AG emphasized that although the decision to
punish misconduct has a political dimension, the GOL should be firm
in support of GAC calls to improve internal control systems. He
also stressed the importance of getting all accounts (including
public corporations and autonomous agencies) on the national budget
so they are subject to transparency and accountability standards.


4. (U) The AG recounted his recent meetings in Washington with the
General Accountability Office (GAO) and thanked the Acting Director
for his support. Morlu explained that the GAC could use additional
assistance in building capacity through training programs,
scholarships or even audit manuals. He noted a particular need for
specialized technical assistance with upcoming financial audits of
the Central Bank of Liberia and the Public Procurement and
Concession Commission.


5. (SBU) COMMENT: The GAC audits are one of the most critical
elements of GOL efforts to institute sound financial management and
good governance. Publication of the audits is a milestone for
Liberian transparency and a catalyst for enhanced accountability.
The quality of the audits and Morlu's efforts to create a credible
supreme audit institution are unprecedented.


6. (SBU) Resistance to GAC audits remains widespread and personal.
For instance, at the President's State of the Union address January
26, a group of mid-level GOL officials reportedly attacked and
threatened the AG in a public scene. In response, the AG wrote to
the President to request that she investigate the incident.


7. (SBU) The AG has come under fire before and will continue to face
resistance, but thus far has seemed to counter those attacks. While
it is true Morlu does have some eccentricities, his reputation in
attacking corruption is strong. Post will continue to support GOL
efforts to improve public financial management systems through the
Governance and Economic Management Assistance Program (GEMAP) and
would welcome any additional direct assistance to the GAC proposed
by the U.S. GAO. END COMMENT.


8. (SBU) BIOGRAPHICAL INFORMATION: John Sembe Morlu II is the
nephew of former presidential candidate and former Commissioner of
the Bureau of Maritime Affairs, John S. Morlu. He was appointed
Auditor General through a competitive selection process managed by
the European Union which also funds the AG's salary and other

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assistance to the GAC. Before his appointment, Morlu worked for
Unisys Corporation as audit manager. He also worked for
BearingPoint (formerly KPMG) as senior consultant with the
Departments of Justice and Homeland Security and served as Senior
Financial Analyst for Teligent, ensuring compliance with US Security
and Exchange Commission public financial reporting guidelines.
Morlu holds an MBA in Finance from Johns Hopkins, a Masters in
International Commerce and Policy from George Mason University, and
double bachelors in Economics and International Relations from the
University of Virginia. Morlu also holds several professional
certifications including Certified Management Accountant (CMA),
Certified Fraud Examiner (CFE),Certified Financial Manager (CFM),
Certified Internal Auditor (CIA),Certified Government Auditing
Professional (CGAP),and Certified Masters in Business
Administration (CMBA). Morlu is often embroiled in controversy.
Soon after accepting the position as AG in April 2007, Morlu accused
the government of President Sirleaf of being "three times more
corrupt" than the interim government of Gyude Bryant. He then
criticized the GOL's 2008 draft budget as incoherent. The House of
Representatives fined him L$4,999 (US$ 900) in 2008 for failing to
honor a summons (the Supreme Court later ruled in Morlu's favor).
His downsizing policy at the GAC in 2008 was criticized by some
employees as a witch hunt. And he was involved in a public spat
with the Governor of the Central Bank of Liberia after he accused
the Bank of refusing to cooperate with the GAC audit. Currently he
is at war with the Deputy AG, who was appointed by the President but
is considered incompetent by Morlu. Often in these matters, the
President has intervened personally to resolve matters and defend
the AG.

THOMAS-GREENFIELD