VZCZCXRO0639
PP RUEHDU RUEHMR RUEHRN
DE RUEHLS #0441 1081216
ZNY CCCCC ZZH
P 171216Z APR 08
FM AMEMBASSY LUSAKA
TO RUEHC/SECSTATE WASHDC PRIORITY 5717
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHLMC/MILLENNIUM CHALLENGE CORP 0067
RUEATRS/DEPT OF TREASURY WASHDC

C O N F I D E N T I A L LUSAKA 000441 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR AF/S 
TREASURY FOR OTA/ENF 
 
E.O. 12958: DECL: 04/15/2022 
TAGS: KCOR PGOV PREL KMCA ZA
SUBJECT: GRZ (STILL) DELIBERATING ON CRITICAL 
ANTI-CORRUPTION MEASURES 
 
REF: A. 07 LUSAKA 537 
     ¶B. 06 LUSAKA 985 
 
Classified By: Ambassador Carmen Martinez for Reasons 1.4(b) and (d) 
 
¶1. (C) Summary.  In a wide-ranging conversation with DCM and 
Poloff on anti-corruption topics, Cabinet Secretary Kanganja 
noted little progress on anti-money laundering, but said that 
Cabinet is currently considering a National Anti-Corruption 
Policy, as well as guidelines governing the use of seized 
assets.  Although Kanganja is seemingly conversant with, and 
committed to, fighting corruption, his anti-corruption status 
reports are mere reiterations of what he and other GRZ 
officials have communicated for the past years and lend truth 
to rumors that senior members of Mwanawasa's government do 
not share his interest in fighting corruption.  End Summary. 
 
¶2. (U) On April 10, DCM and Poloff met with Secretary to the 
Cabinet Joshua Kanganja to discuss Zambia's anti-corruption 
strategy, areas of U.S. cooperation, and the status of key 
legislation.  The DCM shared Mission views on what an 
effective anti-corruption strategy should include, such as a 
capacity to combat financial crime, public sector financial 
management accountability, and judicial reform.  He also 
pointed to the need for new legislation, including asset 
disclosure, freedom of information, asset forfeiture, plea 
bargaining, whistleblower protection, anti-money laundering 
(AML), and procurement laws.  The DCM emphasized that 
Zambia's access to the Millennium Challenge Account and its 
success in attracting foreign investment are directly linked 
to its performance on anti-corruption. 
 
¶3. (SBU) Kanganja acknowledged USG assistance in drafting 
anti-corruption legislation, but admitted that he had not yet 
seen the bills.  Regarding AML, Kanganja said "we are already 
working on it" and pointed to the re-activation of an 
inter-agency working group.  Kanganja said that the Ministers 
of Finance, Home Affairs, and Justice were reviewing the 
adequacy of Zambia's existing AML law and whether the 
Financial Investigations Unit, located at the Drug 
Enforcement Commission (DEC), rules out the need for a 
Financial Intelligence Unit (FIU).  The DCM underscored the 
need for an internationally compliant AML regime and pointed 
out that, due to lack of GRZ progress, the USG had not 
renewed the contract of a USG resident advisor offering AML 
technical assistance.  (Note:  The DEC's Financial 
Investigations Unit is an enforcement unit that does not 
perform the full functions of an FIU.  It has little access 
to banking information, and lacks officers capable of 
analyzing financial data.  End Note.) 
 
¶4. (SBU) Kanganja said that the National Anti-Corruption 
Policy had been presented to Cabinet for approval, but had 
been withdrawn in order for the Minister of Justice to make 
revisions.  (Note:  The Policy was submitted to Cabinet in 
January 2007, according to UK diplomats.  End Note.) 
Kanganja projected that it would be resubmitted presently. 
The DCM said that he hoped the document would include 
provisions for enacting new laws and for implementing the 
United Nations Convention Against Corruption.  Kanganja 
affirmed that it would.  He also remarked that the Cabinet 
would shortly approve a policy governing the use of seized 
assets.  He said that the Task Force on Corruption had seized 
assets in Zambia valued at approximately USD 3.5 million and 
that the funds would be applied to projects of public 
benefit.  (Note:  Per ref B, Kanganja made similar promises 
to Ambassador in a meeting on asset disposal almost two years 
ago, in which he said the GRZ was doing "all it could" to 
dispose of the assets quickly.  End Note.) 
 
¶5. (C) Comment:  Although Kanganja appears to be conversant 
with, and committed to, fighting corruption, his status 
reports--that the GRZ is still deliberating--are mere 
reiterations of what GRZ officials have communicated over the 
past years (see reftels).  Until these key anti-corruption 
measures are implemented, it will continue to appear that the 
GRZ is better at telling donors what they want to hear, than 
making needed progress.  These delays also lend credence to 
rumors that senior members of Mwanawasa's government do not 
share his commitment to fighting corruption and are, for 
example, profiting from the rental incomes of seized 
properties in affluent Lusaka neighborhoods.  It is 
disappointing--and perhaps telling--that these measures, 
which require little more than political will to be 
implemented, are languishing. 
MARTINEZ