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Cablegate: Zim Notes 12-14-2009

VZCZCXRO5096
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHSB #0966/01 3480944
ZNR UUUUU ZZH
R 140944Z DEC 09
FM AMEMBASSY HARARE
TO RUEHC/SECSTATE WASHDC 5213
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHAR/AMEMBASSY ACCRA 3207
RUEHDS/AMEMBASSY ADDIS ABABA 3316
RUEHRL/AMEMBASSY BERLIN 1743
RUEHBY/AMEMBASSY CANBERRA 2577
RUEHDK/AMEMBASSY DAKAR 2946
RUEHKM/AMEMBASSY KAMPALA 0004
RUEHNR/AMEMBASSY NAIROBI 0006
RUEHGV/USMISSION GENEVA 2486
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEFDIA/DIA WASHDC
RHMFISS/EUCOM POLAD VAIHINGEN GE
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHEHAAA/NSC WASHDC

UNCLAS SECTION 01 OF 03 HARARE 000966

AF/S FOR B. WALCH
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
NSC FOR SENIOR AFRICA DIRECTOR
STATE PASS TO USAID FOR L.DOBBINS AND J. HARMON
COMMERCE FOR ROBERT TELCHIN

SIPDIS

E.O.12958: N/A
TAGS: PGOV PREL ASEC PHUM ECON ZI
SUBJECT: ZIM NOTES 12-14-2009

-----------
1. SUMMARY
-----------

Ambassador Presents Credentials...
ZANU-PF Congress Begins...
Human Rights Day Marches...
Report on ZANU-PF Perpetrated Rape Released...

Kunonga Renews Attacks on Anglicans...
WOZA Cases Continue to Drag On...
Court Acquits Human Rights Lawyer...
MDC-T Suspends Corrupt Members...
Grain Marketing Board (GMB) Back on Market to Raise Money...
Interfin Holdings Limited Takes Over CFX Financial Services...
The National Railways of Zimbabwe (NRZ) Requires Money to Restore
Electric Locomotives...
LonZim Raises More Money to Support Recovery...

---------------------------------
On the Political and Social Front
----------------------------------

2. Ambassador Ray presented his credentials to President Mugabe on
Wednesday. During the hour-long meeting, Mugabe gave his usual
"history lesson" starting with the liberation struggle, continuing
through the Lancaster House agreement, British betrayal on land
reform, and ending on illegal sanctions. The Herald ran a front-page
article on Thursday announcing the new ambassador, "Another
ex-soldier to run U.S. embassy." The article explained, "Ambassador
Ray replaces Mr. James McGee, with both having served in the
disastrous Vietnam War of the 1960s and getting decorated for their
participation in that losing cause." On December 10, Ambassador Ray
also met with Prime Minister Morgan Tsvangirai. See Harare 955 and
Harare 959.

3. President Robert Mugabe gave the keynote address at the official
opening of the ZANU-PF Congress today. (Delegates and officials have
been meeting since December 8; the official Congress will last two
days.) The theme of the Congress is "United in Defense of Our
National Resources and People?s Economic Empowerment." Mugabe
focused much of his speech on U.S. and EU sanctions designed to
undermine the government so the West can gain access to Zimbabwe?s
resources. He sharply criticized the MDC for having supported
sanctions and for not having supported repeal of them. Showing
sensitivity to recent reports of serious ZANU-PF in-fighting,
Mugabe, and Vice President Joice Mujuru after him, implored the
several thousand people seated in the International Convention
Center to abjure factionalism. In the same vein, today?s banner
headline in The Herald was "President blasts factionalism," based on
Mugabe?s address yesterday to the ZANU-PF Central Committee. We
expect the Congress to ratify decisions already made by the Central
Committee and Politburo. See Harare 946.

4. Zimrights and Zimbabwe Lawyers for Human Rights led separate
marches in Harare on December 10 to commemorate Human Rights Day.
Hundreds participated in each of the marches and the groups were led
by police escorts. Although the two groups hoped to have one, large
march, police refused permission and forced them to hold separate
marches.

5. New York-based NGO AIDS-Free World released a report this week
Q5. New York-based NGO AIDS-Free World released a report this week
detailing politically-motivated rape perpetrated by ZANU-PF
supporters and members of Mugabe's regime.
The report is online at: http://www.aids-freeworld.org

6. On Sunday December 6, church services in every Anglican church
except one in Harare were interrupted by either police or supporters
of deposed Anglican Bishop Nolbert Kunonga. Police attempted to stop
services, lock churches, and intimidate priests who went ahead with

HARARE 00000966 002 OF 003


their services anyway. The disruptions are a continuation of a
nearly two-year dispute within the church as ZANU-PF-supported
Kunonga seeks to assert control over Anglican church-owned
property.

7. WOZA leaders Jenni Williams and Magodonga Mahlangu appeared in
Bulawayo Magistrate's Court on Monday December 7, only to learn that
their court record file was not accessible. Upon returning on the
8th, their lawyer, Kossam Ncube, was informed that the file was
locked in an "exhibit? room and the person with the keys was away on
leave. With the keys missing, the magistrate directed the State to
bring the file for yet another hearing scheduled for December 14.
WOZA members in solidarity in the court counted at least seven
plain-clothed state agents in the court room. Since returning from
the U.S. where they received the RFK Human Rights Award from
President Obama, they have been frequently followed by suspected
security agents.

8. On December 10, Magistrate Fadzai Mthombeni acquitted human
rights lawyer Alec Muchadehama and High Court Clerk Constance
Gambara of contempt of court. Police had argued that Muchadehama and
Gambara committed the offense when they arranged the release from
prison of three abductees, Kisimusi Dhlamini, Gandhi Mudzingwa and
Andrisson Manyere in April, after the state failed to appeal to the
Supreme Court against bail. The acquittal ends an eight month ordeal
for Muchadehama and Gambara, at least for now.

9. MDC-T Suspends Corrupt Members...On December 8, the MDC National
Executive suspended three party members accused of corruption and
inciting violence: former Chitungwiza Councilor Rangarirai
Mutingwende, former Mayor of Chitungwiza Israel Marange, and Zengeza
East Member of Parliament Alexio Musundire. Mutingwende was
sanctioned for two years while Marange was barred from party
activities for five years. The two stand accused of allocating
residential stands in Chitungwiza to party supporters in exchange
for money. Although Musundire was suspended from holding any
position in the party for two years, he will keep his seat in the
House of Assembly. MDC Director General Toendepi Shonhe told us the
party took drastic action to make it clear that it was not following
the corrupt and violent practices of ZANU-PF.

-----------------------------------
On the Economic and Business Front
----------------------------------

10. The GMB is planning to come onto the market to raise the USD2.5
million needed to purchase grain through grain bills even though
attempts to borrow an equal amount in November managed to raise only
USD1.6 million. The bills, which have a tenure of 90 days and
include other attractive features such as tax exemption, liquid
asset status and prescribed asset status, are designed to attract
funds from Pension and Provident Funds, Insurance Companies,
Commercial Banks and individuals.

11. The troubled CFX Financial Services, which failed to meet the
Q11. The troubled CFX Financial Services, which failed to meet the
Reserve Bank of Zimbabwe?s minimum capital requirements threshold
set for September 30, has been taken over by Interfin Holdings
Limited following a flop in its USD10 million rights offer to
existing shareholders. Only 1.38 percent of the required amount was
raised by previous shareholders leaving the underwriter, Interfin
Holdings Limited, to take up the under-subscribed ordinary shares up
to a maximum of 51 percent, giving it a controlling stake in CFX.

12. NRZ requires USD200 million to buy equipment to restore
electric locomotives that were suspended because thieves stole
overhead cables used to transmit power and the poles supporting the
cables as well as control equipment. In view of the key role played
by railways in improving competitiveness, government allocated
USD16.7 million to NRZ to kick-start the revival of the country?s
rail network.

HARARE 00000966 003 OF 003


13. The London alternative investment market (AIM) listed LonZim
raised 1.17 million pounds sterling designed to recapitalize its
Zimbabwean subsidiaries that include, among others, Celsys, Paynet,
Millpal Chemicals and Leopard Rock Hotel. In addition to this
portfolio, LonZim is also considering other investment opportunities
in Zimbabwe, including the operation of a low cost airline.
According to the company?s Executive Chairman, LonZim is taking
advantage of Zimbabwe?s economic recovery which he says is now quite
"tangible".

-----------------
Quote of the Week
-----------------

14. "As Mr. Ray probably knows, Zimbabwe Government officials, from
the ZANU-PF side, have been slapped with unjustified, politically
motivated travel restrictions which prevent them from traveling to
Western capitals to tell the Zimbabwean story, except on
multilateral business... We hope Mr. Ray, as the eyes and ears of
Washington here, will tell the real Zimbabwean story to his
principals back home and impress on them the importance of lifting
their ruinous economic sanctions to help 'restore the country to
prominence and prosperity'." -- Opinion column, The Herald, December
11, 2009.

RAY

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