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DE RUEHPU #1522/01 3041957
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P 301957Z OCT 08
FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 9064
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UNCLAS SECTION 01 OF 03 PORT AU PRINCE 001522 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/CAR, DRL, S/CRS, INR/IAA 
SOUTHCOM ALSO FOR POLAD 
STATE PASS AID FOR LAC/CAR 
TREASURY FOR MAUREEN WAFER, ERIN NEWPHEW 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KCOR HA
SUBJECT: ANTI-CORRUPTION EFFORTS PICK UP STEAM 
 
REF: A. PORT AU PRINCE 01460 
     ¶B. 07 PORT AU PRINCE 1442 
     ¶C. 07 PORT AU PRINCE 1126 
 
¶1.  This message is sensitive but unclassifed -- please 
protect accordingly. 
 
Summary 
------- 
 
¶2. (SBU) After doing virtually nothing over the past year to 
prosecute corruption cases, law enforcement authorities in 
October moved against a handful of corruption suspects.  The 
most significant case involves accusations of misuse of funds 
in Haiti's National Retirement Office (ONA).  The Mayor of 
Leogane was arrested October 20 for allegedly embezzling over 
USD 250,000.  Large infusions of disaster recovery money have 
generated widespread suspicions and accusations that mayors 
are diverting funds.  The latest steps typify the 
shortcomings of all judicial action in Haiti:  dubiously 
grounded and overly hasty prosecutorial actions, halting 
judicial follow-up, and parliamentary criticism at times 
motivated by elected officials' own implication in cases 
under investigation.  End summary. 
 
ONA Director Sandro Joseph Accused 
---------------------------------- 
 
¶3. (SBU) Law enforcement authorities have mounted no major 
anti-corruption cases since the splashy arrests of the 
Brandts in a customs fraud case in July of last year (ref C), 
and of Frank Cine in the Socabank scandal in June (ref D). 
The Anti-Corruption Unit (ULCC) in the Ministry of Justice, 
however, is now mounting new investigations.  The first and 
most prominent target was the ''National Retirement Office 
(ONA),'' the government body charged with administering the 
private sector's pension system.  The Prosecutor's Office 
charged that ONA Director Sandro Joseph purchased a car for 
his former mistress in February 2007 with ONA funds.  He 
allegedly paid approximating USD 27,000 to an auto dealer in 
cash, violating the law on making cash payments above a 
certain amount.  Joseph was also accused of purchasing 
personal real estate in the amount of 56 million Haitian 
Gourdes (USD 1.4 million) for the construction of 300 housing 
units. 
 
¶4. (SBU) These revelations came after Joseph announced in 
August that ONA had invested in a coffee co-operative in 
southeast Haiti.  The private sector reacted, demanding that 
ONA act more responsibly with its members' savings and 
demanded that the Government of Haiti (GOH) install a board 
of directors at ONA, as required by the institution's 
regulations. 
 
Controversial Raid 
------------------ 
 
¶5. (SBU) However scandalous these revelations, Port-au-Prince 
Chief Prosecutor Joseph Manes Louis' initial pursuit of the 
case weakened the state's case.  He conducted a raid on ONA's 
office October 9, ostensibly to arrest Joseph.  The Director 
had been tipped off, and left the building before Manes Louis 
and hooded agents of a special unit of the Haitian National 
Police (HNP) arrived, and roughed up members of the ONA 
accounting department.  Members of both houses of parliament 
protested the harsh incursion into ONA premises and 
questioned its legal authority.  Chief Prosecutor Manes Louis 
subsequently admitted that an arrest warrant for Joseph had 
not been issued until October 11, and that the October 9 raid 
had only sought to bring Joseph in for questioning. 
 
Some Senators Implicated in ONA 
------------------------------- 
 
¶6. (SBU) At the same time it emerged that three senators of 
the Lespwa party benefited from favorable ONA loans.  Senate 
President Kely Bastien allegedly received a loan from ONA of 
7,800,000 HTG (USD 200,000) payable over 25 years.  Senator 
Joseph Lambert obtained a loan valued at 2,900,000 HTG (USD 
74,000) payable over 15 years, and former senator Ultimo 
Compere purportedly benefited from a loan of approximately 
2,000,000 HTG (USD 51,000). 
 
Parliament Reacts 
----------------- 
 
PORT AU PR 00001522  002 OF 003 
 
 
 
¶7. (SBU) The Senate called Prime Minister (and Minister of 
Justice) Michele Pierre-Louis to testify on the case in 
secret session October 16, where she said that the case had 
been transferred from the Prosecutor to an investigative 
magistrate (juge d'instruction).  Members of the Cour 
Superieur des Comptes et du Contentieux (CSCC) -- somewhat 
equivalent to the U.S. General Accountability Office -- 
appeared before the Senate Justice Commission October 22. 
Senators called for a review of ONA's management practices 
and appealed for a special investigation into mortgage loans. 
 Chamber of Deputies Finance Commission President Jean-Marcel 
Lumerant accused the ULCC and the Public Prosecutor's office 
of trying to arrest Joseph without adequate legal basis. 
Lumerant maintained the issue was under the authority of the 
CSCC where it should be resolved.  Senator Jean-Hector 
Anacasis, on the other hand, demanded that Preval fire Joseph 
for corruption.  President Preval stated on October 21 that 
Joseph would be removed from his position at ONA -- but this 
has yet to happen. 
 
PM Calls for Normal Judicial Procedure 
-------------------------------------- 
 
¶8. (SBU) The ONA Director remains a free man, and has yet to 
appear in the Prosecutor's office for questioning.   The only 
legal result of the scandal to emerge thus far is that the 
Prime Minister said October 16 that this and other cases 
should be handled in normal legal channels by the Prosecutor 
handing them to an investigating magistrate (juge 
d'instruction) for investigation and possible prosecution. 
The PM also warned prosecutors to ''respect the fundamental 
rights of citizens'' and not to reveal details of ongoing 
cases to the press.  She promised that authorities would 
handle this and all future corruption cases in strict 
conformity with the law. 
 
Corruption Accusations Over Disaster Relief 
------------------------------------------- 
 
¶9. (SBU) The goods beginning to cascade down to local 
authorities from the nearly USD 200 million in GOH emergency 
disaster relief funds have provided ample material for 
corruption, or at least the appearance thereof.  Police on 
October 27 discovered a warehouse in Gonaives filled with 
apparently diverted relief supplies.  The warehouse belongs 
to a security official in the office of the Mayor of 
Gonaives, Stephen Moises.  MINUSTAH officials in Gonaives 
told the Ambassador October 22 there is widespread suspicion 
that mayors of Gonaives and many other towns in the 
Artibonite Department are distributing relief supplies for 
partisan purposes, or even diverting aid for their own 
profit.  There have been small demonstrations in Gonaives and 
other towns in the Artibonite Department protesting suspected 
corruption in aid distribution by municipal administrations. 
The CSCC has implicated the mayor of Savanette of diverting 
millions of Haitian gourdes intended for the state of 
emergency, according to an October 22 media report. (Note: 
The Center Department, which includes Savanette, did not 
suffer substantial losses due to August/September floods. End 
note) 
 
¶10. (SBU) To date, however, there has been only one arrest. 
Herold Romeus, Mayor of Grande Saline, a municipality in the 
Artibonite Department, was arrested October 24 after an 
incident where citizens pressed him to account for funds he 
received to assist with emergency response to the 
hurricanes/floods.  Romeus reportedly discharged his personal 
weapon and may have injured some residents.  Romeus was 
subsequently arrested and held in St. Marc, but was released 
the weekend of October 25 after convincing the magistrate 
that he had acted in self-defense. 
 
¶11. (SBU) The Mayor of Leogane, Santos Alexis, was arrested 
along with the City Hall Administrator at the Malpasse border 
crossing as he attempted to flee to the Dominican Republic. 
They are suspected of embezzlement of approximately 8 million 
Haitian gourdes (USD 250,000) and improper use of public 
funds.  The mayor's supporters responded by burning tires on 
National Road number 2 and other roads in the city. 
Protesters said they are ready to ''paralyze'' the city and 
all economic activity until the mayor is released.  (Note: 
Funds allegedly embezzled in this case may not have been tied 
to disaster relief.  End note) 
 
 
PORT AU PR 00001522  003 OF 003 
 
 
¶12. (SBU) Subsequent to these cases, the Regional Delegate of 
the Western Department (Haiti's most populous Department, 
which includes Port-au-Prince) M. Michel Bernardin required 
that the mayors of the twenty municipalities in the 
department submit a financial report by the 10th day of every 
month outlining receipts and expenditures.  Bernardin said 
the submittals are intended to improve the functioning, 
transparency and management of the municipalities.  The 
reports will be submitted to the Ministry of Interior. 
 
Malversations in the Media 
-------------------------- 
 
¶13. (SBU) Several employees of Haiti's national television 
station (TNH) were arrested October 21 for renting 
retransmission equipment to the station even though it 
belonged to the station.  The equipment was withheld from 
inventory so as to be untraceable.  The television manager 
moved to fire the employees, prepare a complete inventory of 
equipment and other assets, and request the most recent audit 
of the station by the CSCC. 
 
Comment 
------- 
 
¶14. (SBU) The spectacular corruption cases brought in the 
summer of 2007 have yet to produce formal indictments.  This 
new set of cases does not necessarily amount to a concerted 
campaign, and it could fizzle.  The weakness of Haiti's 
criminal justice system leads us to doubt that many of these 
recent cases will produce prosecutions and convictions.  As 
noted in ref A, Vice President of the Supreme Court of 
Appeals Georges Moises accused the entire judiciary and 
associated government institutions of corruption, which he 
labeled the primary source of ''judicial insecurity'' in 
Haiti. 
 
¶15. (SBU) The one bright spot in the recent spate of 
corruption cases is the vigor of the Anti-Corruption Unit and 
the Cour Superieur des Comptes in investigating suspected 
embezzlers and money-launderers.  President Preval has long 
complained that Haiti (with assistance from the international 
community) must do more to arrest and imprison those engaged 
in financial crimes.  Preval has eagerly followed progress in 
the technical and legal assistance provided by advisors from 
the U.S. Treasury Office of Technical Assistance (funded by 
INL/NAS).  Since September 2007, they have worked to build 
capacity at the Financial Intelligence Unit (UCREF) and the 
Police Investigative Unit (BAFE), which both feed data to the 
ULCC for investigation, and to educate the banking community 
as to its reporting obligations.  End comment) 
SANDERSON