Cablegate: Uganda's All-You-Can-Eat Corruption Buffet

VZCZCXRO0762
RR RUEHGI RUEHLMC RUEHRN RUEHROV
DE RUEHKM #0005/01 0050911
ZNR UUUUU ZZH
R 050911Z JAN 10
FM AMEMBASSY KAMPALA
TO RUEHC/SECSTATE WASHDC 0069
INFO IGAD COLLECTIVE
RWANDA COLLECTIVE
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC

UNCLAS SECTION 01 OF 04 KAMPALA 000005

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL KCOR KDEM UG
SUBJECT: UGANDA'S ALL-YOU-CAN-EAT CORRUPTION BUFFET

REF: 09 KAMPALA 00999; 08 KAMPALA 01484; 09 KAMPALA 00846
09 KAMPALA 01356

1. (SBU) Summary: Uganda's failure to prosecute corrupt
government officials is rapidly eroding donor confidence and local
support for President Museveni. New evidence of worsening
government corruption appears almost daily in local media, and in
broader assessments like the Millennium Challenge Corporation's
(MCC) scorecard and Transparency International's Corruption
Perception Index. Senior officials from the Ministries of Foreign
Affairs, Security, Health, Education, Local Government, Trade,
Public Works, Finance, Agriculture, Interior Affairs, Tourism, the
Office of the Vice President, and the Office of the Prime Minister
are currently embroiled in a dizzying array of on-going corruption
scandals. Rampant government corruption will be a key campaign
issue for the February 2011 presidential election and a potentially
destabilizing factor for the government of Uganda. End Summary.

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Donors Call for Prosecutions

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2. (SBU) On December 2, the European Union Ambassador urged Uganda
to prosecute corrupt officials "to avoid impunity and also avoid a
situation where some people are immune to prosecution." On
December 10, the British High Commissioner said the U.K. wants "to
see charges brought against the culprits who have failed to account
for government funds." During a December 15 wrap up of the MCC's
two-year $10.4 million anti-corruption threshold program, the U.S.
Mission also encouraged Uganda to investigate and prosecute
government officials and members of the private sector involved in
corruption.

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Uganda's Deteriorating Anti-Corruption Scorecard

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3. (SBU) President Museveni frequently alludes to impending
arrests of corrupt government officials, warning that "traps" he
has placed to ensnare the corrupt will soon snap shut. In 2009,
however, Uganda did relatively little to investigate or prosecute
corruption. The anti-corruption court convicted seven officials
for corruption during the year, including four individuals for
stealing from the Global Fund to Fight AIDS, Tuberculosis and
Malaria. All seven individuals are low or mid level officials,
and all are out on bail pending appeal. Uganda's International
Donors' Accountability Assessment for 2009 concludes that "despite
the exponential growth in cases reported...there continues to be
lack of decisive political action to fight corruption."

4. (SBU) In 2009, Uganda failed the MCC's control of corruption
indicator for the first time since FY05, and dropped from 126 to
130 on Transparency International's Corruption Perceptions Index
(CPI). Uganda's MCC anti-corruption threshold program was designed
to strengthen the capacity of Uganda's anti-corruption
institutions, and support provided to the Auditor General, the IGG,
the Department of Public Prosecutions (DPP), the Criminal
Investigations Division, the Public Procurement and Disposal Agency
(PPDA), and the Anti-Corruption Court could serve as the basis for
continued assistance through other programs. However, lack of high
level Ugandan government support - and Uganda's failure to disburse
half of the $2.2 million in promised counterpart funding -
ultimately prevented the MCC program from realizing its full
potential (ref. A).

5. (SBU) Inspector General of Government (IGG) Raphael Baku said
Transparency's numbers are consistent with the IGG's own 2008

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National Integrity Survey, which revealed rampant corruption within
the police, local government, the judiciary, and the health sector
among others. The Director of the Anti-Corruption Coalition Uganda
(ACCU), Jasper Tumuhimbise, described the CPI score as a
"reflection of the truth" and predicted that Uganda's 2010 ranking
will be even lower. Relentless anti-corruption hearings by
Uganda's Parliamentary Accountability Committee (PAC) provide some
hope for anti-corruption efforts in 2010. Traditionally chaired by
a member of the opposition, the PAC continues to investigate
corruption scandals, frequently compelling Ministers and Permanent
Secretaries to testify publicly. The PAC cannot, however, refer
cases for prosecution and the DPP regularly declines to investigate
corruption exposed by PAC inquiries.

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Auld Lang Syne: The Year in Corruption

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6. (SBU) The Ugandan government is mired in a dizzying array of
corruption scandals. IGG Baku told local media in December that
"all government arms have been found to be corrupt" including the
Office of the IGG itself. The following provides a sample of
Uganda's current corruption scandals:

- The Commonwealth Heads of Government Meeting (CHOGM): In 2008,
the Auditor General revealed approximately $27 million in
unexplained expenditures related to CHOGM, which was held in
November 2007. Recent CHOGM investigations led by the PAC have
implicated 12 government ministries and several Cabinet Ministers -
including Foreign Minister Sam Kutesa, Public Works Minister John
Nasasira, Tourism Minister Serapio Rukundo, and Vice President
Gilbert Bukenya - for rigging vehicle purchasing contracts, paying
local construction firms for non-existent infrastructure projects,
and funneling money to hotels still under construction and never
used for CHOGM activities.

- National Agricultural Advisory Services (NAADS): Launched in
2002, NAADS was intended to provide farmers with increased access
to information and agricultural technology. A 2009 Auditor General
audit could not account for $40 million advanced to local districts
from 2006 to 2008. Opposition parties allege that NAADS funds are
being diverted to support President Museveni's 2011 re-election
campaign. In October, more than 200 local NAADS coordinators
testified before the PAC but provided no additional information on
the missing funds. The Ministry of Agriculture has launched a
National Task Force to investigate the scandal.

- National Social Security Fund (NSSF): In 2004, the NSSF lost $4
million in a land deal involving the former Minister of Gender, the
NSSF's former Managing Director, and the former Chairman of the
NSSF board. The government subsequently transferred oversight for
the NSSF to the Ministry of Finance. In 2008 the NSSF was
embroiled in a second $5-7 million land sale scandal, this time
involving Security Minister and National Resistance Movement (NRM)
Secretary General Amama Mbabazi, former Finance Minister Ezra
Suruma, and a local businessman (ref. B). An August 2009 audit
documented losses of $550,000 from premature sales of government
bonds, and revealed that NSSF granted a $1 million low interest
loan to a company partially owned by the NSSF's Managing Director -
on leave since the 2008 land scandal - and another senior NSSF
official. The audit also revealed that the NSSF's Managing Director
spent $8,721 in NSSF funds at casinos in Las Vegas and owes NSSF
$122,000.

- National Forestry Authority (NFA): In October, police uncovered
$450,000 in cash under the NFA Director's bed. The Minister of
Water and Environment subsequently placed the NFA Director on three
months leave. The Auditor General, IGG, and the Police Criminal
Investigations Division (CID) are now investigating suspected
illegal activities of several senior NFA officials. In what was
perhaps a related event on December 11, vandals with knowledge of

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NFA's security and computer systems let themselves into NFA
headquarters and destroyed approximately $2 million in computer
equipment and memory cards.

- Health Sector: Uganda's health sector is home to multiple
corruption scandals. Investigations into the $1.5 million 2006
Global Alliance for Vaccines and Immunization (GAVI) scandal remain
ongoing. Uganda has yet to act on commitments to recover $780,000
in misused Global Fund money, and $2.3 million in Global Fund money
remains missing. In July, vandals with knowledge of the DPP's
security and computer systems let themselves into DPP headquarters
to steal Global Fund investigative materials and DPP computer
equipment (ref. C). In August, a forensic audit of a portion of
Uganda AIDS Commission (UAC) programming could not account for
$200,000 in donor funds. In October, President Museveni fired the
Health Ministry's Permanent Secretary, allegedly for corruption.
However, the international donors' 2009 Accountability Sector
Review describes the Permanent Secretary's removal as "surrounded
with suspicion of ulterior motives," and many believe the Permanent
Secretary was fired for fighting corruption rather than spreading
it. The IGG investigated the Health Ministry's Principle
Accounting Officer for submitting a false declaration of wealth,
and concluded that the Accountant's wealth is not commensurate with
his income. In November, local media reported the discovery of
more than 100 fully stocked and staffed health centers on the
Ministry's books, yet none of them existed at all. The Minister of
Health recently made a surprise visit to the Embassy to appeal for
more funds, and said corruption is the Ministry's biggest problem.

- Ministry of Education: In 2009, President Museveni directed a
Judicial Commission of Inquiry to examine misuse of government
funds allocated to the Universal Primary Education and Secondary
Education programs following reports that education officials were
using "ghost pupils" to defraud the government. In June, a "Rapid
Headcount Exercise" by the Ministry revealed that approximately one
quarter of students listed on school registers are likely
non-existent. The Judicial Inquiry is ongoing. In December, local
media reported that the Education Ministry's Permanent Secretary
has stacked the Ministry with as many as 30 family members and
close relatives.

- Uganda National Roads Authority: The Ministry of Works created
the Uganda National Roads Authority in July 2008. After just more
than one year in existence, the Authority has suspended 70
employees working on five different bridges across the country for
bribery and extortion. An inquiry by the Ministry of Works is
ongoing.

- Uganda Revenue Authority (URA): Transparency International's East
African Bribery Index for 2009 listed the URA as the most corrupt
tax authority in the three east African nations - Kenya, Tanzania,
and Uganda - sampled.

- Uganda National Bureau of Standards (UNBS) - Trade Minister, Gen.
Kahinda Otafiire, dissolved the UNBS in December, accusing the UNBS
of extravagant spending and failing to respect his authority.
Otafiire and the UNBS board are at odds over a contract for the
pre-inspection of imported vehicles and other goods.

- Water Sector: A 2009 report commissioned by the Ministry of Water
and Environment concluded that $25.5 million was lost to corruption
between 2002 and 2009 in the water sector. The report cited
contracting irregularities for water installations and bribes to
bypass water meters.

- Uganda Police Force: A number of mid and low-level police
officials were reprimanded or fired for corruption, including at
least two dozen officers and the Police Department's Accounting
Officer. In August, six police officials and a principal analyst
at the Ministry of Finance were charged with embezzling $1.5
million by creating 4,500 "ghost" police officers. The arrests

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followed an inquiry ordered by the Inspector General of Police in
November 2008. All the seven individuals were subsequently
released on bail. The most frequent accusations of corruption
toward the police stem from traffic shakedowns, requests for money
to finance investigations, and requests for fuel. Contributing
factors to petty corruption among police are low and infrequently
paid salaries, poor living conditions, and poor education and
health services.

- Oil Sector: On January 3, local press reports highlighted growing
concerns about potential corruption in Uganda's nascent oil
industry (ref. D).

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Comment: Transparency Without Accountability

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7. (SBU) The local chairman of the African Peer Review Mechanism
(APRM) describes Uganda's anti-corruption strategy as "transparency
without accountability." Government corruption is a daily theme in
Uganda media, and the most corrupt government officials and
institutions are well known to the general public. Shining very
public and bright lights on these officials' misdeeds, however,
seems to have little impact as a deterrent or accountability
measure. Many Ugandans believe President Museveni will never hold
top NRM officials - like Security Minister Amama Mbabazi, Foreign
Minister Sam Kutesa, and Trade Minister Kahinda Otafiire -
accountable for corruption, and Uganda's continued failure to
seriously investigate and prosecute allegations of corruption
involving senior government officials seemingly supports such
conclusions.

8. (SBU) All seven of the officials convicted of corruption by the
Anti-Corruption Division of the High Court during the year are free
on bail pending appeal. Anti-Corruption Court officials told the
Mission that another three corruption cases are in progress, and
that the court granted 190 applications for bail during the year
for individuals arrested on suspicion of corruption but not
charged. Such paltry prosecution rates are not surprising given
that the anti-corruption court has only 3 judges, 5 magistrates,
and extremely limited resources. The court is also dependent on
the DPP and the IGG to forward corruption cases for prosecution.
The DPP and IGG's continued hesitancy to tackle serious corruption
cases - presumably for political reasons - is a major impediment
for anti-corruption efforts. If the DPP and IGG continue to shy
away from prosecuting tough cases in 2010, local government
services, public support for President Museveni, foreign
investment, and donor confidence will continue to suffer. Uganda's
image as a model for good governance is essentially a thing of the
past.
LANIER

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