VZCZCXRO3456
RR RUEHMA RUEHPA
DE RUEHMV #0662 2541302
ZNR UUUUU ZZH
R 111302Z SEP 09
FM AMEMBASSY MONROVIA
TO RUEHC/SECSTATE WASHDC 1313
INFO RUEHZK/ECOWAS COLLECTIVE
RUEATRA/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAWJB/DEPARTMENT OF JUSTICE WASHDC 0021

UNCLAS MONROVIA 000662 
 
SENSITIVE 
SIPDIS 
 
E.O.12958: N/A 
TAGS: ECON EINV ENGR LI
SUBJECT:  LIBERIA:  PRESIDENT DISMISSES OIL COMPANY HEAD AMID 
CORRUPTION SCANDAL 
 
SENSITIVE BUT UNCLASSIFIED.  NOT FOR INTERNET DISTRIBUTION. 
 
¶1. (SBU) SUMMARY: President Ellen Johnson Sirleaf dismissed the head 
of the state-owned Liberia Petroleum Refining Corporation (LPRC) on 
September 5, following a Ministry of Justice probe into the alleged 
acceptance of bribes in exchange for a USD 24.8 million concession. 
Sirleaf's sacking of a long-time advisor and confidant illustrates 
the pressure she feels to demonstrate zero-tolerance toward 
corruption.  The action also signals that the checks and balances 
introduced to the concessions process since 2006 do indeed leave 
would-be crooks less opportunity to cut side deals for their 
personal enrichment.  END SUMMARY. 
 
¶2. (U) In July, LPRC Managing Director Harry Greaves signed a USD 
24.8 million contract with Zakhem International Construction, a 
British-based, Lebanese-owned construction company, to rehabilitate 
and expand the facilities at the LPRC's product storage terminal 
(PST).  The terminal needs major renovation and overhauling, as its 
1950s-era tanks are in very poor condition, and cannot accommodate 
Liberia's steadily rising demand for fuel.  The LPRC had issued an 
international competitive bid, which produced two finalists: Zakhem 
estimated the cost of the project at USD 24.8 million, while another 
construction company, Mechanical Engineering Group (MEG), submitted 
a USD 12 million bid. Despite the wide price discrepancy, Greaves 
unilaterally signed a contract with Zakhem, claiming MEG's proposal 
lacked the maintenance and improvements that Zakhem would offer. 
 
¶3. (U) Several weeks after Greaves signed the contract, members of 
the House of Representatives sounded the alarm.  Representative Zoe 
Pennue (Grand Gedeh County), the former LPRC deputy for operations, 
warned lawmakers that the contract's value was overstated and 
required clarification.  He also accused Greaves of contravening 
rules of the Public Procurement and Concession Commission, and 
failing to communicate with the House Committee on Public Utilities 
and Corporations, even though the Public Procurement and Concessions 
Act entitles the head of a state-owned enterprise to sign a contract 
without further consultations, provided it is not sole-source. 
 
¶4. (U) When Greaves refused to cooperate with a House committee 
formed to investigate the contract, President Sirleaf established a 
parallel committee headed by former Chief Justice Henry Reed Cooper. 
 However, Greaves accused a member of the President's committee, 
Deputy Minister of Justice Alousius Jappah, of soliciting a USD 
300,000 bribe in exchange for clemency, and proffered a tape 
recorded conversation to prove his claim.  Following the review of 
evidence, the President assembled yet another team to investigate 
those allegations. 
 
¶5. (U) The Zakhem committee, led by Justice Minister Christiana Tah, 
determined that both Jappah and Greaves committed bribery, citing a 
provision in Liberia's Penal Code that penalizes both the person who 
proffers the bribe, and the recipient who verbally accepts the bribe 
or fails to reject it outright or report it to the authorities (even 
if no money changes hands).  The President dismissed Jappah August 
27 and Greaves September 5. 
 
¶6. (U) The Zakhem affair was the second time Greaves unilaterally 
concluded contracts of an ambiguous or untransparent nature.  In 
2007, he announced a deal for Nigeria to supply 10,000 barrels of 
oil to Liberia.  The Legislature questioned the contract, and the 
media cried foul when Greaves refused to disclose the price of the 
oil or the terms of the contract.   While the GOL ultimately 
cancelled the deal, the President did not sanction Greaves. 
 
¶7. (SBU) COMMENT:  Greaves' political descent, after three decades 
as a protege, friend and close advisor to the President, is a matter 
of some curiosity.  While the Governance and Economic Management 
Assistance Program (GEMAP) advisor at the LPRC believed that the 
Zakhem contract complied with all concessions procedures, and 
observed no evidence of corruption, Greaves' reputation had been 
tarnished by the questionable Nigerian deal two years earlier.  On a 
positive note, the National Legislature played a rare role in its 
demand for a transparent and fiscally sound contract, even beyond 
what the law nominally requires.  The Legislature's constructive 
role may signal that unrelenting media coverage and GEMAP's efforts 
have sensitized Liberians to the need to hold political leaders to a 
standard of integrity that exceeds minimal procedural requirements. 
 
 
ROBINSON