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Cablegate: Ugandan President Intervenes in Nssf Scandal To

VZCZCXRO8900
RR RUEHGI RUEHRN RUEHROV
DE RUEHKM #1484/01 3171351
ZNR UUUUU ZZH
R 121351Z NOV 08
FM AMEMBASSY KAMPALA
TO RUEHC/SECSTATE WASHDC 0862
INFO RUCNIAD/IGAD COLLECTIVE
RUEHXR/RWANDA COLLECTIVE

UNCLAS SECTION 01 OF 03 KAMPALA 001484

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PGOV KCOR KDEM UG
SUBJECT: UGANDAN PRESIDENT INTERVENES IN NSSF SCANDAL TO
SAVE MINISTERS, RULING PARTY

REF: A. KAMPALA 1220
B. KAMPALA 1350

1. (SBU) Summary. President Museveni stepped in to spare
the ruling party from protracted and bitter infighting in the
ongoing scandal involving the National Social Security Fund
(NSSF). In doing so, Museveni cleared the Ministers of
Finance and Security of any wrongdoing after a parliamentary
committee majority report recommended both men be sanctioned
for their roles in a land purchase scandal. Museveni told
parliamentarians to adopt a parliamentary minority report,
which had dubious authorship. The saga might not be
completely over, as the opposition walked out of Parliament
over presidential interference and the Inspectorate General
of Government could investigate the various leadership code
violations. Nonetheless, the scandal exposed deep divisions
within the ruling party. Last week's ruling party caucus
meeting saw the First Lady, Janet Museveni, demand the
ministers resign and pay back the funds from the land deal.
She raised questions about the government's "zero tolerance
of corruption." Museveni's actions also raise doubts about
his willingness to respect checks and balances, such as
decisions of parliamentary oversight committees. The
President's backing of his longtime friend, Security Minister
Amama Mbabazi, who is highly unpopular within the ruling
National Resistance Movement (NRM), could have serious
implications for the party, the President's primary vehicle
for re-election in 2011. End Summary.

- - - - - - - - - - - -
GAMES THAT WERE PLAYED
- - - - - - - - - - - -

2. (SBU) Daily twists and turns in the NSSF scandal have
captivated Ugandans since August as a parliamentary committee
investigated Minister of Security Amama Mbabazi and Finance
Minister Ezra Suruma. (Ref A) The two ministers were
investigated for conflict of interest and influence peddling
in a land sale to the NSSF, which was under Suruma's
authority. From the outset, Mbabazi, the NRM Secretary
General, pushed for the issue to be dealt with by the party.
However, he was surprised when he met resistance at an NRM
Central Executive Committee (CEC) meeting on September 9.
(Ref B) By all accounts of the CEC meeting, the President had
asked Mbabazi if he had followed the proper public
procurement procedures. Mbabazi's response did not satisfy
Museveni. CEC members pushed for Mbabazi and Suruma to
resign. The President and the CEC decided to punt and agreed
to wait for the report of the parliamentary investigation
before deciding on a course of action.

3. (SBU) Mbabazi quickly went on the offensive, claiming to
be the victim of an ethnic witch hunt within the party. (Ref
B) When his accusations fell on deaf ears, Mbabazi co-opted a
business associate to help him attempt to frame his
archenemy, former Minister of Health Jim Muhwezi, who
championed the call for Mbabazi's resignation, on bank
robbery charges. This too failed because the Director of
Public Prosecutions, Richard Buteero, found no basis for
charging Muhwezi. The Parliamentary Committee on
Commissions, Statutory Authorities, and State Enterprises
conducted public hearings. NSSF Chairman Chami Jamwa
requested a closed door appearance. Jamwa testified he was
under considerable pressure from the ministers to buy the
land so that they could save their bank, the National Bank of
Commerce, from a Nigerian take-over. Just prior to writing
the committee report, NRM members of the committee were
invited to meet with the Parliamentary Chief Whip and
Mbabazi. President Museveni also called them to State House
to make Mbabazi's case that the land sale was an investment
and did not need to follow public procurement procedures.
Museveni argued that Mbabazi was not directly involved in the
deal because he had given power of attorney to his business
partner. Suruma attempted to resign twice during this
period, but Museveni refused to accept it.

4. (SBU) During the committee retreat to write the final
report, its members came under intense pressure, with offers
of money and women to entice members to clear the ministers,
according to the committee member Abdu Katuntu. The final
committee report found the two Ministers had a conflict of
interest and had peddled influence in the land deal.
Fourteen committee members signed it, including nine NRM
members. The penalty recommended under the Leadership Code,
upon which the committee relied for its recommendations, is
removal from office. The pro-Mbabazi forces scrambled to
persuade six committee members from the NRM to sign a
minority report. Other committee members claimed that the
minority report was not drafted by its own members, but
instead, by Minister of General Duties, Adolph Mwesige, and

KAMPALA 00001484 002 OF 003


Mbabazi's sister-in-law, Hope Mwesigye, the Minister of State
for Local Government. The minority report also did not
follow proper parliamentary procedures. It exonerated the
ministers of any wrongdoing, arguing that the NSSF deal was
an investment and public procurement procedures did not
apply. It also argued that Parliament does not have the
authority to enforce the Leadership Code.

- - - - - - - - - - - -
PRESIDENTIAL PREROGATIVE
- - - - - - - - - - - -

5. (SBU) President Museveni chose to adopt the minority
report. Prior to the parliamentary floor debate on the
majority and minority reports, he called an NRM parliamentary
caucus meeting on November 3. In another long, stormy
meeting with NRM parliamentarians, the President continued to
defend Mbabazi. Museveni had ordered Mbabazi and Suruma to
apologize to the caucus and ask for the parliamentarians to
help the ministers for the sake of the party. According to
several members, Mbabazi fell short of apologizing, instead
saying that he should have paid more attention to the
transaction, while Suruma was on the verge of tears when he
spoke. Opposition from Janet Museveni, the First Lady and a
parliamentarian, took the President completely by surprise.
The First Lady stated that the two ministers should resign
and pay back the money in order to save the principles of the
party. She said that the saga called into question the NRM's
commitment to "zero tolerance on corruption." Museveni was
visibly shocked that his wife would openly oppose him in a
public venue and told the caucus that Mrs. Museveni's
statement was "not the family position." He called for a
recess. According to NRM parliamentarians, the caucus was
pressured into adopting the minority report and to argue that
Parliament had no authority to enforce the leadership code,
which was the responsibility of the Inspectorate General of
Government. The NRM then used its majority position during
the floor debate, which prompted the opposition to walk out
of Parliament.

- - - - - - -
IMPLICATIONS
- - - - - - -

6. (SBU) There will be significant fall-out from the
scandal in days to come. Museveni allegedly made several
statements to ruling party members that he was in charge of
the party and would not allow it to be torn apart. Mbabazi
and Suruma have kept their jobs for now, but allegations of
other improprieties are surfacing. Museveni enforced ruling
party discipline to save Mbabazi in Parliament, but he will
not be able to do so at the NRM party delegates' conference
later this year where parliamentarians can vote their
conscience. We expect young NRM parliamentarians could
combine forces with powerbroker historicals General Kahinda
Otafiire and Defense Minister Crispus Kiyonga to remove
Mbabazi from his position as Secretary General of the NRM.
Museveni will need NRM parliamentarians to pass several
amendments to the Constitution and electoral code. Some have
told us that presidential patronage will become more
expensive in order to maintain discipline as ruling party
divisions continue to grow.

7. (SBU) The ruling party will grapple with the long-term
costs of the short-term move to spare Mbabazi and Suruma.
The First Lady's statements critical of the signal that the
President's rescue of his friend sent to the outside world
and its impact on the ruling party's founding principles
struck a note with many NRM members. These concerns will
likely deepen if Mbabazi exacts revenge, as expected, against
party members who opposed him, such as Muhwezi. Members of
Mbabazi's staff have told us that corruption cases against
the Minister's enemies will be stepped up. The Public
Accounts Committee says it will move ahead with
investigations of other senior ruling party officials, such
as Foreign Minister Sam Kutesa, which could make it difficult
for Museveni to save all of his cronies.

8. (SBU) The opposition walk-out was stated to highlight
Museveni's intervention as an example of his unwillingness to
live with the checks and balances that come with multi-party
democracy, according to Morris Latigo, the Leader of the
Opposition. For ordinary Ugandans, the outcome of the saga
fit a predictable pattern of corruption within the inner
circle and the lack of political will to sanction against the
corrupt officials. The outcome of the NSSF saga will
reinforce the public opinion that President Museveni has
failed to implement his promise to fight corruption. A May
2008 poll, indicates that 54% of Ugandans do not believe that
Museveni has fulfilled his pledge to fight corruption, 36%

KAMPALA 00001484 003 OF 003


believe that he has implemented his pledge to a small degree,
and only 4% said that they believe Museveni had fought
corruption to a "great extent".
BROWNING

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