VZCZCXRO4833
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHPS #0561/01 1801524
ZNY CCCCC ZZH
O 291524Z JUN 06
FM USOFFICE PRISTINA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6264
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 0745
RHMFISS/CDR USEUCOM VAIHINGEN GE
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHFMISS/AFSOUTH NAPLES IT
RHMFISS/CDR TF FALCON
RHEFDIA/DIA WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUEPGEA/CDR650THMIGP SHAPE BE
RHEHNSC/NSC WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUFOANA/USNIC PRISTINA SR

C O N F I D E N T I A L SECTION 01 OF 02 PRISTINA 000561 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR DRL, INL, EUR/SCE, AND EUR/SSA, NSC FOR BRAUN, 
USUN FOR DREW SCHUFLETOWSKI, USOSCE FOR STEVE STEGER 
 
E.O. 12958: DECL: 06/29/2016 
TAGS: PGOV KCOR KDEM PREL UNMIK YI
SUBJECT: KOSOVO: ASSEMBLY AUDIT REVEALS FISCAL MALFEASANCE 
UNDER FORMER SPEAKER NEXHAT DACI 
 
 
Classified By: COM PHILIP S. GOLDBERG FOR REASONS 1.4 (B) AND (D). 
 
¶1. (C) SUMMARY.  An external audit of the Kosovo Assembly's 
budget under former Speaker Nexhat Daci has revealed serious 
fiscal irregularities.  The audit states that Daci and his 
Assembly staff used Assembly finances for expensive armored 
vehicles, a convention/conference center in a suburb of 
Pristina, and personal expenses such as dental work, 
eyeglasses, clothes, and general maintenance at Daci's 
private home in Pristina and lodge near a ski resort in 
Brezovica.  Current Assembly Speaker Kole Berisha, who gave 
free rein to the auditors during May and June, provided COM a 
draft copy of the report on June 22; its contents also 
appeared in the local press on June 28.  This leaking of the 
report comes on the heels of the June 24 arrest of Daci's 
former aide-de-camp, Ahmet Alishani, on unrelated bribery 
charges represent a setback for Daci in his bid to become the 
head of the Democratic League of Kosovo (LDK) in its autumn 
party elections.  END SUMMARY. 
 
"DACI, WHERE'S MY CAR?" 
----------------------- 
 
¶2. (C)  A June 15 draft external audit report on Assembly 
finances from July 1, 2004 to April 24, 2006, revealed fiscal 
malfeasance by former Assembly president Nexhat Daci and his 
staff, particularly the Assembly's Secretary General, Isuf 
Demaj.  The draft report was leaked to the press and appeared 
in the June 28 edition of the daily Zeri newspaper. 
Significant findings included irregularity in the purchase of 
a 236,500 euro armored vehicle for Daci that was never 
delivered, and payments not approved by the Assembly 
Presidency totaling 1,651,000 euros for construction of a 
convention center in the Germia area of Pristina.  Berisha 
told COM June 22 that although Isuf Demaj signed a receipt 
indicating that he had received the car on November 25, 2005, 
its whereabouts are still unknown.  The Germia convention 
center is only half-finished, but on June 23 the Assembly 
presidency unanimously decided to continue construction of 
the complex since demolition of the building would cost more 
than the funding already invested in the project, and the 
Assembly could choose to rent or sell the facility after its 
completion. 
 
¶3. (C)  The Democratic League of Kosovo (LDK), the largest 
party in the Assembly, replaced Daci with the current 
Assembly president, Kole Berisha, on March 10, 2006.  Berisha 
made cleaning up the budgetary and procedural mess Daci left 
a priority and gave free rein to the auditors during May and 
June.  The Assembly presidency had already decided on March 
31 that no legal provisions or grounds existed to grant 
Daci,s request for two offices, a car, staff, protection, 
and continued payment of a supplemental salary (i.e. beyond 
his pay as a regular member of the Assembly), as are provided 
to Kosovo's former prime ministers.  Berisha told the COM on 
June 28 that he "enjoyed the complete support of the Assembly 
Presidency and its members from all political parties on this 
issue." 
 
FORMER ASSEMBLY STAFFERS IMPLICATED 
----------------------------------- 
 
¶4. (C) The report, which Berisha gave to COM on June 22, 
identifies over 50 Assembly payments made in contravention of 
the law on Public Procurement.  All were signed by Isuf 
Demaj, and involved invoices issued before contracts were 
signed, instances in which multiple invoices showed multiples 
of exactly 500 euros (the maximum amount allowed under the 
law for a single purchase) to the same supplier for the same 
goods, and payment for personal items for Daci and Assembly 
staff.  The latter includes expensive eyeglasses for Daci 
(590 euros); dental work for Daci (950 euros); purchases of 
clothes for former staff; and purchases of medication.  For 
example, purchases listed as aftershave, clothes, alcohol, 
perfume, watches and cigarettes in Zurich airport, Ljublijana 
airport and in France totalled 1,364 euros and purchases of 
medication and medical services for Isuf Demaj totalled 3,141 
 
PRISTINA 00000561  002 OF 002 
 
 
euros.  The report lists petty cash advances of over 48,000 
euro in 2005.  Berisha suspended Demaj as Secretary of the 
Assembly on June 23. 
 
A SETBACK FOR DACI 
------------------ 
 
¶5. (C) Police arrested Ahmet Alishani, Daci's aide-de-camp 
and head staffer in the Office of the Assembly President, 
June 24 on unrelated charges for accepting a 20,000 euro 
bribe in January 2003 from the son of Macedonian politician 
Nevza Halili for his father's release from a Kosovo jail 
after being charged with terrorism.  Daci's hasty reaction 
June 24 was to call a press conference during which he 
proclaimed Alishani's innocence as the target of a 
"conspiracy" and "personal attack" "just as (Daci) was 
running for head of the LDK." A local judge extended 
Alishani's detention by 30 days on June 28.  In answer to a 
weekly publication's question June 28 as to whether Daci 
believes he will be arrested, Daci said "I don't think so, 
but if justice needs me, a citizen, an MP, and a candidate 
for the LDK chair, I'm obliged to obey." 
 
¶6. (C) LDK vice-president Eqrem Kryeziu reacted to the audit 
and Daci's comments to Alishani's arrest by saying June 29 to 
the press:  "I'm sorry if Mr. Daci interprets this arrest in 
this way...no, absolutely not, this arrest has nothing to do 
with politics."  Even firm Daci supporter Sejde Tolaj, leader 
of the LDK's influential youth wing, responded to the report 
carefully by telling the media he cannot comment on the 
report until he sees it. 
 
¶7. (C) COMMENT.  Although the lesser purchases outlined in 
this draft audit do not necessarily rise to the level of a 
criminal investigation, taken as a whole, they lend credence 
to opposition party refrains of corruption in the government. 
 Daci has announced his candidacy for the powerful position 
of head of Kosovo's largest party, the Democratic League of 
Kosovo (LDK), and through LDK spokesperson Lulzim Zeneli, 
said that he will not react publicly to the audit before a 
July 8 LDK presidency meeting which will schedule the party's 
long-overdue convention (after which Daci gave an extensive 
interview to a local newspaper).  The report and allegations 
that Daci was somehow complicit in corruption -- and his 
ill-advised comments charging political motives for the 
allegations -- represent a setback in his efforts to become 
LDK leader.  END COMMENT. 
 
¶8. (U) U.S. Office Pristina clears this cable for release in 
its entirety to U.N. Special Envoy for Kosovo Martti 
Ahtisaari. 
GOLDBERG