PRETORIA RESPONSE ON CANDIDATES FOR HEAD OF UN/OIOS

C O N F I D E N T I A L SECTION 01 OF 03 PRETORIA 002385

SIPDIS

IO/MPR FOR M.GLOCKNER AND B. HACKETT; USUN/MR FOR
B.RASHKOW, C. NORMAN

E.O. 12958: DECL: 11/17/2029
TAGS: PREL PGOV SF
SUBJECT: PRETORIA RESPONSE ON CANDIDATES FOR HEAD OF UN/OIOS

REF: STATE 117720

Classified By: Political Counselor Walter N.S. Pflaumer for reasons 1.4
(b) and (d).

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Summary
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1. (C) With respect to the three South Africans under
Department consideration for possible nomination as head of
the U.N. Office of Internal Oversight Services (OIOS)
(reftel),post herein provides assessments of the three
individuals' backgrounds, reputations, and overall
suitability. While all three candidates have sufficiently
weighty resumes, including in the realm of U.N. auditing,
each has his own drawbacks. Shauket Fakie is strongly
associated in South Africa with helping to covering up an
arms trade scandal under pressure from implicated senior
politicians. Terence Nombembe appears a safer candidate,
albeit one who has yet to make his most important
contributions at home. Mervyn King has the most leadership
flair and despite a few sketchy business ties is likely the
strongest choice of the three. End Summary.


2. (C) Inputs are based on online research plus discussion
with local staff at post and an external Embassy contact.
Post received no feedback from the SAG's Department of
International Relations and Cooperation (DIRCO),but we will
pursue a formal SAG opinion in future if any of the three
candidates is shortlisted.

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Fakie: Compromised by Political Scandal
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3. (C) Shauket Allie Fakie has an extensive background in
accountancy and audit, in South Africa and multilaterally.
After qualifying as a chartered accountant, he was a partner
in an audit firm in Australia then a consultant with Ernst &
Young in South Africa. Moving into the public sector, he
rose from provincial level to the highest national office of
Auditor General (AG) for the term 1999-2006, reporting to
Parliament. He also served in regional audit positions with
the Southern African Development Community (SADC) and as CEO
of the office responsible for auditing the World Health
Organization, reporting to the U.N. General Assembly.


4. (C) As South Africa's AG, Fakie was credited for
managerial competence, but he was excoriated by press and
public for apparently caving to political pressure on the
country's largest ever corruption scandal. Gavin Woods, a
member of the Audit Commission charged with oversight of the
AG's office (and member of an opposition party),wrote in
2006 that "the office has been impressively professionalised
and modernised" and "an impressive amount of work has been
done in order to raise the general auditing performance," yet
"it is the arms deal investigation... (that) cost Fakie the
respect of much of South Africa." Fakie acceded to the
governing ANC (the party under investigation) in allowing his
inquiry to be secret, without customary parliamentary
oversight. Woods characterizes the inquiry report as
"evasive, inconclusive... non-findings," with Fakie
scrambling to cover up contradictory leaks and "quash and
dismiss such challenges," all driven by a "preoccupation with
not upsetting members of the executive."


5. (C) Embassy contact Advocate Peter Mothle defended Fakie
as a victim of local South African context, but he conceded
that rightly or not Fakie would be dogged by his involvement
in the arms scandal. Mothle is a South African judge and
senior counsel, former anti-apartheid and human rights
Qactivist, and trusted Embassy contact. He maintained that
Fakie is a strong person in his own right, but in the arms
affair he was constrained by the weak powers of his office.
In the arms deal scandal, "the culprit is the ANC," said
Mothle, not only for the corruption in question but also for
holding such a stranglehold over every arm of government that
even ostensibly "independent" watchdogs like the AG are in
fact under ANC control. "In most countries the AG wouldn't
succumb, but the fabric of South Africa is like that...They
all cave in. It was just convenient to point to Fakie" as the
scapegoat. Nonetheless, Mothle agreed Fakie would be
indelibly tarred by the arms controversy in any U.N.
nomination process, and no SAG politicians would stand up to
defend him.


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Nombembe: Promising - but Not Yet Ripe?
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6. (C) Terence Nombembe's career path is similar to Fakie's,
for whom he was deputy AG before himself becoming AG for the
term of 2006-13. Nombembe rose through private sector
auditing with such major multinationals as Unilever and BP,
then was a founding partner in a local auditing firm, before
moving to government service. As national AG of a U.N.
member state, he serves on the U.N. Board of Auditors where
he now holds for 2009-10 the rotating chairmanship. As AG he
has built on Fakie's efforts to improve the quality of public
audits, an uphill battle against government departments
woefully short of skilled officers. Nombembe appears
regularly in the press, which follows his continual reporting
to Parliament of unsatisfactory audits, routine failures by
ministries to meet reporting requirements, and apparent
widespread corruption as numbers do not add up or are simply
unavailable.


7. (C) Nombembe's persona in the press has a workaday tone,
a bit lacking in personality, but that could easily be a
function of the technical task he manages and the difficult
hand he has been dealt. When he assumed the AG post in 2006,
Business Day reporter Linda Ensor said he was "bursting with
enthusiasm and... ambitious plans" to clean up accounting,
root out corruption, and improve the image of his office
still under the cloud left by Fakie. (Note: although he
inherited the arms deal mess, Nombembe declined to reopen a
proper investigation, evidently preferring to dodge the whole
controversy. End Note.) Ensor described Nombembe as a
"quiet, humble, affable man" who was also known as "strong
and stubbornly independent" in the face of political
pressure. Three years on, in October 2009 respected
columnist Steven Friedman wrote sympathetically of the
"frustration" of Nombembe, who was "understandably unhappy at
the slight progress his office has achieved." Friedman
referred to the AG office as "one of the unsung successes" of
the past 15 years, praising Nombembe's commitment even if as
a "well-meaning technician" his impact had been limited.


8. (C) Mothle shared Friedman's views, adding that Nombembe
is "at a critical stage on the corruption issue, where he is
going to be key," so a U.N. nomination could meet with a
backlash from those leading the charge for transparency.
Mothle chuckled and said he did not mean to block
opportunities for Nombembe, and politically it would be
wonderful to see an African in such a U.N. role, but for now
"We really need him here.... If he left now it would be a
crisis." Mothle confided that when Nombembe first assumed
the AG title, he required a bit of extra coaching and was
seen as a bit unready or unripe, but that he is growing into
the role and shows real promise of leaving a positive mark on
South Africa. In this context, Mothle agreed that Nombembe
should be considered for the next OIOS cycle, in 2015.

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King: Supremely Qualified, Somewhat Controversial
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9. (C) Mervyn E. King is supremely qualified to head up the
OIOS, drawing on a career focused on corporate governance and
public policy. His work has been at the highest levels,
including as a judge on the Supreme Court of South Africa and
Qincluding as a judge on the Supreme Court of South Africa and
at the ICC International Court of Arbitration in Paris; and
extending internationally to work with the World Bank, the
British Commonwealth, Asian Centre, and United Nations. At
the latter in 2006 he chaired the Eminent Persons' Committee
on governance and oversight of the U.N. itself, perhaps an
ideal stepping stone to the OIOS. Within South Africa he is
best known for leading the so-called King Committee to
formulate standards of corporate governance, first published
in 1992 and adopted by the Johannesburg Stock Exchange (JSE).
(Various versions of the codes, updated in 2002 and 2008,
are commonly known as "King 1," "King 2," and "King 3.") His
executive leadership roles have spanned private companies,
chambers of commerce and business federations, and academic
and athletic organizations.


10. (C) King's reputation is overwhelmingly a positive one,
but some critics have accused him of parlaying that
reputation into lucrative appointments with companies needing
the cover of legitimacy. His long list of chairmanships and
directorships shows that his name carries great value -- but
his detractors charge that he has lent that prestige for
profit. Business weekly The Financial Mail in a July 2007

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article acknowledged that King was "the face of SA corporate
governance" but charged he "often appears to be the exemplar
in brand more than in substance." Elsewhere the media has
alleged that in two cases -- for a dodgy furniture company
and a family trust immersed in a fraud scandal -- he accepted
appointments to remove the taint of corporate misconduct.


11. (C) More generally, some commentators suggest that King
is as much a promoter of himself as of his principles. The
Financial Mail quotes an unnamed international governance
expert as saying, "Cadbury never referred to his report as
the Cadbury Report... but the King Report is presented as all
about me." The Mail cites a JSE consultant on social
responsibility as saying, "King has done a lot. He's a
figurehead and provides guidance, but whether he's the right
guy to carry the brand or not, I don't know." In a similar
vein, Mothle cautioned that he does not know King well, but
his overall impression is that King "seems a bit prone to
publicity... I can't say if I see him as a diplomat." With
his dizzying list of paid part-time engagements (see
www.mervynking.co.za),concentrated in South Africa where he
is a big fish in a small pond, King might be unwilling to
accept a full-time five-year commitment based in faraway New
York.

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Comment: Tainted, Premature, or Flashy?
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12. (C) All three candidates have strong and relevant career
qualifications for the OIOS role. Each has even served in an
oversight capacity within U.N. bodies. Qualities of
character and leadership are what most differentiate the
three, with each man having his own drawbacks. Fakie will
forever bear the taint of allegedly burying the inquiry into
the country's most serious and top-level corruption case --
which ongoing inquiries in the U.K. and Germany could any day
unveil. Nombembe appears a competent candidate, albeit one
who has not yet made his full mark in South Africa and would
be a better candidate in future. King undoubtedly has the
greatest status as an innovator and trail blazer, and his
high-flyer persona and business ties are unlikely to dog him
beyond the small media circles of South Africa. King is
probably the strongest choice of the three, but his age of 73
in 2010 may make him loathe to take on a five-year job so far
from home. End Comment.
GIPS