VZCZCXRO1764
RR RUEHPA
DE RUEHMV #0599/01 1411805
ZNY CCCCC ZZH
R 211805Z MAY 07
FM AMEMBASSY MONROVIA
TO RUEHC/SECSTATE WASHDC 8607
INFO RUEHZK/ECOWAS COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 MONROVIA 000599 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR AF/W-PDAVIS, INR/AA-BGRAVES 
 
E.O. 12958: DECL: 05/21/2017 
TAGS: PGOV KDEM ECON LI
SUBJECT: LIBERIA'S CONTROVERSIAL LEGISLATIVE AUTONOMY ACT 
 
Classified By: POLITICAL OFFICER SILVIA EIRIZ FOR REASONS 1.4 (B) AND ( 
D) 
 
¶1. (SBU) The Senate introduced a bill entitled "An Act to 
Amend Certain Provisions of the Legislative Law to Provide 
Financial Autonomy to the Legislature," which it passed on 
April 23, 2007.  The House of Representatives passed the bill 
on April 24, 2007.  (See text of Act in paragraph 5). The 
judiciary has financial autonomy as a result of a similar law 
and some view the enactment of this law as an attempt by the 
legislature to exert its independence and equality with the 
other two branches of government.  The Chairperson of the 
Senate Committee on the Executive, Gloria Scott, was 
suspended by the Senate on May 8, 2007 for failing to 
transmit the Act to the President for signature.  Scott, who 
belongs to President Ellen Johnson Sirleaf's Unity Party 
(UP), presumably failed to take action since she suspected 
the President would not support the Act. 
 
¶2. (C) The International Monetary Fund (IMF) Resident 
Representative, Michael Tharkur, sent a May 4 letter to 
Minister of Finance Antoinette Sayeh laying out IMF concerns 
regarding the Act.  Tharkur wrote that if the Act were to 
become law it "would pose serious challenges for the 
government's public financial management reforms" and for the 
government's "ongoing initiatives to promote fiscal 
transparency and accountability."  Tharkur's letter was 
accompanied by a note with IMF/World Bank Joint Staff 
Comments on the Act.  The note stated that the following four 
elements of the Act are of particular concern: 1) that the 
legislature would determine its own level of appropriation in 
the budget without the possibility of revision by any other 
government entity; 2) that expenditures made by the 
legislature would be made outside of the commitment control 
system; 3) that allowances and benefits would not be subject 
to taxation; and 4) that the legislature would only be 
subject to public audit of its spending at its own request. 
IMF and World Bank staff expressed concern that "allowing the 
legislature to independently set its appropriation without it 
being subject to the budget review process is not common 
practice."  They stated that "absence of oversight of this 
process by any government entity outside the legislature 
could compromise the efficient allocation of resources in the 
budget planning process and, in the context of a severely 
limited budget, undermine the implementation of the poverty 
reduction strategy."  The IMF and World Bank also stated that 
the financial autonomy provisions of the Act circumvent the 
commitment control system of the government and undermine the 
tracking and reporting of the approved budget. IMF and World 
Bank staff noted that "The Act not only circumvents the 
safeguards of the commitment control process, but also 
circumvents the requirements of public auditing under the 
General Auditing Commission (GAC)", which requires that all 
government agencies and government organizations shall be 
subject to a comprehensive audit once a year.  The Financial 
Autonomy Act provides that such audits would only be 
conducted at the request of the legislature. 
 
¶3. (C) Embassy has obtained a copy of a memo regarding the 
Act to the President from Minister of Justice Frances 
Johnson-Morris and Solicitor General Tiawan Gongloe.  They 
advise the President that the Act contravenes the 
Constitution because: 1) the Act was improperly enacted since 
financial bills must originate in the House of 
Representatives; 2) the Act's penalty of contempt for 
non-compliance with the provisions of the Act is an abuse of 
this power; 3) officials of the government cannot be removed 
at the displeasure of the legislative branch; 4)the Minister 
of Finance cannot legally comply with the provision requiring 
that funds be deposited in four distinct and separate 
accounts because appropriations require "legislative 
enactment" and a "warrant of the President." 
 
¶4. (SBU) Speaker of the House of Representatives Jenekai Alex 
Tyler and President Pro Temp of the Senate Isaac Nyenabo told 
Poloff May 21 that the Act was transmitted to the President 
on May 9.  They said that she has 20 days to take action on 
it and can sign it, veto it in its entirety, or veto portions 
of it.  Tyler and Nyenabo said that if she takes no action on 
it by May 29, it will become law.  Tyler and Nyenabo noted 
that a vote by two-thirds of both houses of the legislature 
can override a veto by the President.  Nyenabo said he and 
Tyler have been discussing the Act "behind the scenes" with 
the President as well as with IMF and World Bank 
representatives. 
 
¶5. (U) Text of An Act to Amend Certain Provisions of the 
Legislative Law To Provide Financial Autonomy to the 
Legislature: 
 
Begin Text. 
 
MONROVIA 00000599  002 OF 002 
 
 
It is enacted by the Senate and the House of Representatives 
of the Republic of Liberia in Legislature Assembled: 
Section 1: All Allowances and Benefits 
Fiscal appropriation of Chapter 1 section 11 of the 
Legislative Law which reads: "The salaries and traveling 
allowances of members of the Legislature and of its officers 
and employees shall be provided by annual budgetary 
appropriation" is hereby amended to read: "The Legislature 
which consists of two separate Houses shall each submit to 
the Bureau of the Budget annual estimates of appropriation, 
expenditure, supplies and services including personnel as 
well as fund appropriated for retirement benefit necessary 
for the maintenance and operation of both the Senate and 
House of Representatives." And such supplement and deficiency 
estimates as required from time to time for the same purpose 
according to law and such estimate shall be included in the 
National Budget estimate without revision, but subject to any 
recommendation of the Bureau of the Budget which may be 
included with the transmittal of the National Budget estimate 
from the President of Liberia to the Legislatures for action 
thereon. 
Legislative Accounts 
Upon the passage into law of the National Budget, all 
appropriation of funds to be expanded by the Senate and the 
House of Representatives shall be disbursed by the Ministry 
of Finance to the Legislature in four equal quarterly 
installments, the first such installment to be disbursed at 
the beginning of the first quarter of the fiscal year after 
the passage of the Budget and quarterly thereafter.  In any 
event, each installment must be disbursed to the Legislature 
within 15 days as of the beginning of each quarter.  All of 
such funds shall be deposited in four distinct and separate 
accounts which shall be transparently operated and 
administered by each House under the supervision of the 
President Pro-Tempore of the Honorable Liberian Senate and 
the Speaker of the Honorable House of Representatives as 
class A signature and in their absence by the designated 
Presiding Officer as an alternate Class A signature and the 
Comptroller as class B signature and deputy comptroller as 
alternate class B signature to the account. 
Audit 
These accounts of the Legislature shall be subject to 
forensic audit: (a) Task (b) Financial (c) System Audit and 
shall be subject to the General Auditing Commission upon the 
request of the Legislature (The Senate and the House of 
Representatives). 
Section 11b of the Legislature is hereby amended and revised 
to read as follows: The members of the Senate and the House 
shall receive salaries subject to taxes required by law 
provided that they shall not be diminished.  Allowances and 
benefits paid to Senators and Representatives shall not be 
subjected to taxation but may by law be increased but not 
diminished except under a national program enacted by the 
Legislature. 
Penalty 
Non compliance with the provision contained in the session 
above shall be punishable under article 44 of the 1986 
Constitution of the Republic of Liberia.  And that the 
Minister of Finance or any other subordinate/responsible 
officer(s) shall be held in contempt and may be removed from 
office during the next Legislative Session. 
Sessions. 2. 
Effective date of Amendment 
¶1. that effective immediately after the passage of the 
publication in Hand bill of this Act, this Act shall take 
effect. 
Any law to the contrary notwithstanding. 
End Text. 
Mazel