VZCZCXRO2828
RR RUEHROV
DE RUEHKM #0444/01 1200505
ZNR UUUUU ZZH
R 300505Z APR 09
FM AMEMBASSY KAMPALA
TO RUEHC/SECSTATE WASHDC 1380
INFO RUEAWJA/DEPT OF JUSTICE WASHDC
RUCNIAD/IGAD COLLECTIVE

UNCLAS SECTION 01 OF 02 KAMPALA 000444 
 
DEPARTMENT PASS TO MCC (CHAKA) 
DOJ FOR ICITAP (TREVILLIAN, RODERICK, BARR, AND RAUCH) 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: PGOV PHUM EAID KCORR UG
SUBJECT: UGANDA: ANTI-CORRUPTION COURT SUCCESSFULLY TRIES TWO GLOBAL 
FUND CASES 
 
¶1.  Summary:  The investigations into the theft of money from the 
Global Fund for HIV/AIDS, Malaria, and Tuberculosis (the Global 
Fund) have taken years to produce results, but the recent 
convictions of two suspects have demonstrated the potential of 
Uganda's newly established Anti-Corruption Division (ACD) of the 
High Court.  A third trial commenced on April 27.  While the trials 
involve relatively low-level Global Fund scandal perpetrators, the 
two convictions could serve as a deterrent to other officials from 
pillaging donor funds.  The government plans to initiate additional 
prosecutions in the future, but it is not clear whether higher level 
officials will ever face trial.  End Summary. 
 
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GLOBAL FUND SCANDAL BACKGROUND 
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¶2.  The recent trials are not only the first cases to be tried in 
the ACD, but also the first prosecutions resulting from the 2005 
Global Fund scandal investigation.  In 2005, Uganda had received $47 
million in Global Fund money at the time it was discovered that 
approximately $1.5 million had gone missing.  The funds for fighting 
HIV/AIDS, Malaria, and Tuberculosis were allegedly diverted to fund 
ruling party activities in support of a Constitutional referendum to 
eliminate term limits for President, and for other political 
activities.  The funds were given to non-governmental organizations 
(NGOs), many of which existed only on paper, to hold "sensitization" 
programs for the public to raise awareness about the diseases. 
 
¶3.  In reality, many of these NGOs were backed by ruling party 
members or associates.  In 2006, the Global Fund suspended its 
funding to Uganda due to the scandal.  President Museveni named a 
Commission of Inquiry led by Justice James Ogoola, who conducted a 
ten-month investigation into the scandal.  Justice Ogoola's report 
concluded that it had collected enough evidence to immediately 
prosecute a significant number of cases, and with a little bit more 
investigation, could prosecute the great majority of institutions 
and individuals implicated in the report, including the former 
Minister and Ministers of State for Health Jim Muhwezi, Mike Mukula, 
and Alex Kamugisha. 
 
¶4.  Ogoola's report was challenged by the Cabinet, which produced a 
white paper protecting ministers from prosecution on the technical 
legal grounds that the Permanent Secretary in each Ministry, and not 
the Minister, has the authority to approve disbursements of funds. 
Dissatisfied and under pressure from donors, the Global Fund 
appointed an Inspector General to carry out his own investigation, 
urge the Government to hold officials accountable for the 
disappearance of funds, and ensure that long-term institutional 
arrangements were put in place to protect future disbursements. 
Under the threat of continued suspension of funds, and nearly two 
years after Justice Ogoola issued his report, the Government 
directed the police and prosecutors to carry out investigations and 
prosecutions.  It also developed a work plan to strengthen the 
accountability systems to better protect health funds from diversion 
and to prosecute those who misused the funds.  The Global Fund 
remains suspended, but its Inspector General will report to the 
board in May on the "safety" of the Long Term Institutional 
Agreements put in place to protect donor funds. 
 
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TRIALS BEGIN 
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¶5.  The Anti-Corruption Division's first success came in the trial 
of Fred Kavuma, former production manager of Uganda Television.  He 
received the maximum sentence of five years imprisonment for 
forgery, uttering false documents, and obtaining $19,339 from the 
Global Fund on March 13.  Kavuma also was ordered to refund the 
money.  Kavuma was charged with 14 offenses (forgery, uttering false 
documents, obtaining money by false pretence, abuse of office, 
impersonation, and fraudulent and false accounting) related to a 
$21,650 Global Fund fraud.  According to the prosecution, Kavuma 
secured the Global Funds claiming he would organize sensitization 
programs on HIV/AIDS through Uganda Television.  Kavuma applied for 
Global Funds using Lijac Promotional Services stationary without the 
knowledge and consent of the proprietor, Lillian Nabunnya and then 
diverted the money. 
 
¶6.  When Kavuma's application for funding was approved, Kavuma 
advised Nabunnya that he had used her company's name to obtain the 
funding.  Nabunnya consulted counsel and an agreement was reached 
that she would bear no responsibility for the acceptance, use, and 
accounting of the money.  However, Kavuma continued to use the Lijac 
Promotional Services' name and letterhead to submit false receipts 
and accountings.  The prosecution opened the case with Nabunnya's 
testimony to show that the conduct of the accused was a fraud from 
the outset. 
 
 
KAMPALA 00000444  002 OF 002 
 
 
¶7.  On April 8, the ACD convicted and sentenced Teddy Seezi Cheeye, 
the Director of Economic Monitoring in the Internal Security 
Organization (ISO) to a total of ten years of imprisonment.  The 
head of the ACD, Justice John Bosco Katutsi, found Cheeye guilty of 
embezzling $56,603 in Global Fund money meant for HIV/AIDS, malaria 
and tuberculosis control.  Cheeye was also found guilty of nine 
counts of making false account entries, six counts of forgery and 
eight counts of uttering false documents.  He was ordered to refund 
the $56,603 to the Global Fund. 
 
¶8.  The State Prosecutor proved that Cheeye was the sole director 
and signatory of the ironically-named "Center for Accountability", a 
local non-governmental organization.  His wife was the secretary. 
He was sole operator of the company's account, where the money was 
deposited.  Witnesses testified that Cheeye's company never carried 
out any of the activities it claimed to have performed in the 
districts of Kabale, Rakai, Mbarara, and Ntungamo. Cheeye received 
the money in February 2005, and he was supposed to disseminate 
information about HIV/AIDS and to support and strengthen condom use. 
 
 
¶9.  Cheeye and Kavuma are the first two people to be convicted over 
the Global Fund monies.  Though Cheeye is a relatively small fish in 
the Global Fund saga (compared to former Health Ministers Jim 
Muhwezi, Mike Mukula, and Alex Kamugisha), his case attracted 
significant media attention and represented the highest profile 
prosecution to date.  The irony of Cheeye's case was not lost on 
Ugandans.  He professed to be an anti-corruption crusader.  He rose 
to prominence in the early 1990s as the editor of the defunct Uganda 
Confidential, a newsletter that specialized in exposing financial 
scandals in government. 
 
¶10.  A third trial related to Global Fund abuses commenced on April 
¶27.  Analiza Mondon and Elizabeth Ngororano were former directors of 
Valued Health.  The two women are charged with 53 counts of 
embezzlement, making false entry, and uttering false documents.  As 
directors of Valued Health, the accused were awarded $22,750 in a 
Uganda Global Fund to Fight AIDS, Tuberculosis, Malaria Project 
(UGFATMP) contract to train service providers on how to deliver 
youth friendly services in line with Global Fund objectives.  The 
accused claimed to have arranged workshops and incurred vehicle hire 
and fuel expenses in support of their Global Fund activities. 
According to trial testimony, the workshops never took place and no 
Global Fund-related activities were undertaken. 
 
¶11.  The Directorate of Public Prosecutions reports it will initiate 
several more criminal cases against others who pilfered Global Funds 
in the coming months.  We have no indication that former health 
ministers will be prosecuted, even though the Criminal Investigative 
Division has opened cases on them. 
 
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GOVERNMENT COMMITMENT STILL WEAK 
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¶12.  These proceedings are the first trials in the ACD, which was 
established in 2008 to fulfill part of the Government of Uganda's 
(GOU) commitment under the Millennium Challenge Corporation (MCC) 
Threshold Country Plan.  The GOU provided $500,000 to support the 
ACD, but in a tacit acknowledgment that this is not nearly enough, 
it is also seeking over $12 million in donor funding to operate the 
ACD over the next four years.  It appears significant donor funding 
will help plug this gap.  While this is welcome, it also effectively 
lets the GOU off the hook.  Overall, it has met less than half of 
its financial commitments to the MCC program to provide increased 
financial support to the government institutions charged with 
fighting corruption. 
 
- - - - 
COMMENT 
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¶13.  Many Ugandans see these court verdicts as important milestones 
in the fight against corruption.  However, transparency activists 
are concerned about selective prosecution.  They point out that some 
government officials, including better-connected senior officials 
who may have committed worse crimes in the Global Fund scandal, have 
not been punished, and probably won't be.  Many Ugandans want the 
precedent to apply to other public officers who misuse public funds 
for personal gain. 
HOOVER