VZCZCXRO8703
RR RUEHRN RUEHROV
DE RUEHKM #0909/01 1491004
ZNY CCCCC ZZH
R 291004Z MAY 07
FM AMEMBASSY KAMPALA
TO RUEHC/SECSTATE WASHDC 8827
INFO RUCNIAD/IGAD COLLECTIVE
RUEHXR/RWANDA COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 03 KAMPALA 000909 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 05/22/2017 
TAGS: PHUM PGOV KCRM UG
SUBJECT: UGANDA: CORRUPTION SCANDAL'S POLITICAL 
RAMIFICATIONS 
 
 
Classified By: P/E Chief Kathleen FitzGibbon for reasons 1.4 (b) and (d 
). 
 
¶1.  (C)  Summary:  The arrests of former health officials 
implicated in an immunization fund scandal has set in motion 
a chain of events with an uncertain outcome and potentially 
damaging implications for the Museveni family and other key 
political actors.  Military and police arrested two former 
Health Ministry officials, Mike Mukula and Alex Kamugisha, on 
May 22 and Alice Kaboyo, a ruling party mobilizer from State 
House, on May 23 in connection with a misappropriation of 
$900,000 earmarked for the immunization of children from the 
Global Alliance for Vaccine and Immunization (GAVI).  Former 
Health Minister Jim Muhwezi turned himself in to police on 
May 28.  Muhwezi and Kaboyo claim that President Museveni 
directed them to use the funds to mobilize support for the 
Constitutional referendum and ruling party campaigns.  The 
move against Muhwezi was surprising given his ties and rumors 
of incriminating evidence against the President.  End 
Summary. 
 
- - - - - - - - - - - - - 
IMMUNIZATION FUND SCANDAL 
- - - - - - - - - - - - - 
 
¶2.  (C) In January 2006, President Museveni requested that 
the Inspector General of Government (IGG) investigate former 
Health Minister Jim Muhwezi and several others involved in 
expenditures related to the Global Alliance for Vaccine and 
Immunization (GAVI).  First Deputy Prime Minister Eriya 
Kategaya told PolChief that Museveni had asked the Permanent 
Secretary of Health how much money had been used to fund the 
 
SIPDIS 
Constitutional referendum and National Resistance Movement 
(NRM) campaigns in 2005 and 2006.  Museveni reportedly was 
astounded to find out that the money spent was three times 
bigger than he expected.  He ordered the IGG to investigate 
the fund.  Kategaya and another Cabinet official said that 
Museveni was furious with Muhwezi, with whom his relationship 
had badly soured, but who continued to receive protection 
from First Lady Janet Museveni.  The President also was 
surprised to learn the extent to which Janet Museveni was 
involved with the misappropriation.  In the case of Mukula, 
Museveni was angry that he had failed to deliver 
constituencies to the ruling NRM in Teso during the 
elections, despite having been given funds to mobilize party 
support. 
 
¶3.  (C)  On April 30, 2007 Justice Faith Mwondha submitted 
the IGG's findings to Museveni.  She told emboffs during a 
meeting with DAS Swan that she asked Museveni how to proceed. 
 The investigation reportedly implicated three former health 
ministers and two government officials in the misuse of funds 
for the immunization of children.  Regime insider Jim 
Muhwezi, Mike Mukula, Alex Kamugisha, and First Lady Janet 
Museveni's niece, Alice Kaboyo were implicated.  The IGG 
report accused the officials of abuse of office, theft, and 
causing financial loss in failing to account for $900,000 out 
of $4.6 million of funds from the GAVI.  The local media 
picked up on the story and began speculating that the IGG was 
going to arrest Muhwezi and the former ministers of state. 
On May 4, Muhwezi, himself a lawyer, filed a petition in the 
Constitutional Court to block Museveni's alleged order to 
arrest him.  Muhwezi's petition argued that the presidential 
directive for Muhwezi's arrest was illegal because the IGG is 
Constitutionally-mandated to exercise its powers independent 
of any other government institution. 
 
¶4.  (C) In response, Museveni swore an affidavit in the 
Constitutional Court disputing claims made by Muhwezi and 
Kaboyo on May 16.  The President denied interfering with the 
IGG investigation.  However, IGG Mwondha told us that she had 
requested a letter from Museveni directing her to arrest the 
suspects.  An alleged copy of this letter from Museveni to 
Mwondha circulated in Parliament on May 17.  On May 18, the 
IGG signed the arrest warrants for the implicated officials. 
 
¶5.  (C) The arrest warrant for Alice Kaboyo surprised many 
Ugandans because she was raised in the Museveni household and 
took care of the Museveni children.  Kaboyo turned herself in 
to police on May 23.  She claimed the misappropriated funds 
were used for the NRM to mobilize support for the campaigns 
for the Constitutional Referendum on term limits in 2005 and 
the Presidential and parliamentary campaigns in 2006.  She 
submitted a list of 110 individuals and 80 organizations that 
received the funds.  According to Kaboyo, she acted on 
personal conversations with President Museveni.  Sources 
close to the investigation indicate that Kaboyo is prepared 
to outline a pattern of informal dealings with Museveni which 
demonstrate that presidential directives were often made 
verbally. 
 
KAMPALA 00000909  002 OF 003 
 
 
 
¶6.  (C) Jim Muhwezi was in London at the time of the arrests. 
 When the military police arrived at Parliament to arrest 
him, Speaker of Parliament Sekandi produced Muhwezi's 
application for sick leave dated May 17.  Muhwezi returned to 
Uganda on May 28 and turned himself into police.  He was 
remanded to Luzira Prison, but has sought bail.  Mukula and 
Kamugisha were granted bail on May 25.  Kaboyo's hearing is 
May 29. 
 
- - - - - - - - 
A FAMILY AFFAIR 
- - - - - - - - 
 
¶7.  (C) Many Ugandans were happy to see Muhwezi and Mukula, 
members of the so-called "mafia", arrested for corrupt 
activities.  The plundering of health funds destined to 
immunize children is considered particularly odious.  The 
arrests, however, appear to be tied to internal family and 
party score-settling, according to some NRM insiders, Cabinet 
members, parliamentarians, and journalists.  The following 
are some of the explanations and potential implications that 
are circulating. 
 
¶8.  (C) Too Much or Inefficient Corruption. Kategaya and Musa 
Ecweru, Minister of State for Relief and Disaster 
Preparedness, told P/E Chief the core issue was that Muhwezi, 
Mukula, and Kamugisha took more money than they had been 
authorized and failed to account for it.  Muhwezi had been 
found "not politically responsible" in a Cabinet white paper 
follow-up on the Global Fund Investigation report in March. 
According to the Kategaya and Ecweru, the debate within the 
Cabinet over Muhwezi's fate was heated, but that ultimately a 
majority of ministers rallied behind Muhwezi because they 
themselves could be implicated for corrupt activities.  The 
President accepted the Cabinet recommendation, but still 
wanted to find a way to "clip Muhwezi's wings."  The 
President decided that the use of the immunization fund for 
personal gain would provide a strong case against Muhwezi. 
 
¶9.  (C) Succession Politics.  Another possibility, and not 
excluded by other theories, was that the arrests were an 
attempt by President Museveni to remove potential successors. 
 This includes both Jim Muhwezi and First Lady Janet 
Museveni.  Both have presidential ambitions and both profited 
beyond Museveni's expectations from the embezzlement. 
Muhwezi's financial independence, alleged ties to the Forum 
for Democratic Change's Kizza Besigye, and the perception 
that he was advancing his own political ambitions rather than 
the ruling party's could have contributed to the decision to 
arrest him at this time.  Several Cabinet members say that 
Muhwezi, the former Chief of Military Intelligence, has been 
allowed to get away with corrupt activities because he has 
files on key political players and the First Family and has 
threatened to use them. 
 
¶10.  (C)  Unraveling of the NRM.  A related issue is 
Museveni's problems with his own ruling party, which have 
made the return to multiparty rule particularly difficult for 
the President.  Younger party members, who Museveni considers 
disloyal and ungrateful, have extracted significant 
concessions from Museveni in parliament over car allowances, 
other perks and privileges, and substantive issues such as 
the Mabira Forest.  Museveni's action against Muhwezi, who 
alleges that he was authorized to use the funds to bankroll 
the Constitutional referendum and other NRM campaigns, could 
further weaken Museveni's grip on the party.  NRM 
parliamentarians rallied around Muhwezi.  The week before the 
arrest, Muhwezi sold land to a group of 70 parliamentarians 
in exchange for cash amounting to 1.6 billion shillings.  The 
NRM-dominated Parliament also selected Muhwezi to head the 
Parliamentary Group for the Commonwealth Heads of Government 
Meeting.  One Cabinet member told PolChief that there are 
signs of other politicians rallying to Muhwezi's side because 
they fear they could be next in line for an arrest warrant. 
Ecweru posted Mukula's bond to demonstrate ethnic solidarity. 
 The NRM ministers' willingness to blame the top civil 
servants, who diverted funds under orders from them, could 
slow down government business if the distrust between party 
and technocrats increases. 
 
¶11.  (C) War on Corruption.  The President's political 
advisors say that corruption related to the Global Fund for 
HIV/AIDS and now the immunization fund could no longer be 
tolerated.  The international donors were pressing for action 
against those responsible for stealing the funds and 
demanding improved accountability.  Government critics charge 
that the arrests were timed to demonstrate political will to 
fight corruption in advance of the upcoming Commonwealth 
Heads of Government Meeting.  An Internal Security 
 
KAMPALA 00000909  003 OF 003 
 
 
Organization officer said that Museveni's willingness to give 
an affidavit was an indication of how important Muhwezi's 
prosecution was to demonstrating to other ministers that no 
individual was above the law.  Kategaya was concerned that 
Museveni and the Government's legal team do not have a 
well-thought out legal strategy and that the case would be 
tied up in courts for years. 
 
- - - - 
COMMENT 
- - - - 
 
¶12.  (C)  The arrests are generating a significant amount of 
speculation regarding the future of the ruling party and 
implications for the war on corruption.  Many political 
contacts and other Western diplomats are wondering if 
Museveni has a clear game plan, desired outcome, or defined 
roles for the IGG and public prosecutors.  We need to know 
more about the precipitating event that led to the arrests to 
determine which way this story will unfold.  We hope that the 
arrests lead to good outcomes vis-a-vis the war on 
corruption.  However, it is the unintended consequences of 
Museveni's actions that could have lasting implications for 
the survival of the ruling party and stability of Uganda. 
CHRITTON