VZCZCXRO0762
RR RUEHGI RUEHLMC RUEHRN RUEHROV
DE RUEHKM #0005/01 0050911
ZNR UUUUU ZZH
R 050911Z JAN 10
FM AMEMBASSY KAMPALA
TO RUEHC/SECSTATE WASHDC 0069
INFO IGAD COLLECTIVE
RWANDA COLLECTIVE
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC

UNCLAS SECTION 01 OF 04 KAMPALA 000005 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KCOR KDEM UG
SUBJECT: UGANDA'S ALL-YOU-CAN-EAT CORRUPTION BUFFET 
 
REF: 09 KAMPALA 00999; 08 KAMPALA 01484; 09 KAMPALA 00846 
09 KAMPALA 01356 
 
¶1.  (SBU)  Summary: Uganda's failure to prosecute corrupt 
government officials is rapidly eroding donor confidence and local 
support for President Museveni.  New evidence of worsening 
government corruption appears almost daily in local media, and in 
broader assessments like the Millennium Challenge Corporation's 
(MCC) scorecard and Transparency International's Corruption 
Perception Index.  Senior officials from the Ministries of Foreign 
Affairs, Security, Health, Education, Local Government, Trade, 
Public Works, Finance, Agriculture, Interior Affairs, Tourism, the 
Office of the Vice President, and the Office of the Prime Minister 
are currently embroiled in a dizzying array of on-going corruption 
scandals.  Rampant government corruption will be a key campaign 
issue for the February 2011 presidential election and a potentially 
destabilizing factor for the government of Uganda.  End Summary. 
 
 
 
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Donors Call for Prosecutions 
 
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¶2. (SBU)  On December 2, the European Union Ambassador urged Uganda 
to prosecute corrupt officials "to avoid impunity and also avoid a 
situation where some people are immune to prosecution."  On 
December 10, the British High Commissioner said the U.K. wants "to 
see charges brought against the culprits who have failed to account 
for government funds."  During a December 15 wrap up of the MCC's 
two-year $10.4 million anti-corruption threshold program, the U.S. 
Mission also encouraged Uganda to investigate and prosecute 
government officials and members of the private sector involved in 
corruption. 
 
 
 
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Uganda's Deteriorating Anti-Corruption Scorecard 
 
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¶3. (SBU)   President Museveni frequently alludes to impending 
arrests of corrupt government officials, warning that "traps" he 
has placed to ensnare the corrupt will soon snap shut.  In 2009, 
however, Uganda did relatively little to investigate or prosecute 
corruption.  The anti-corruption court convicted seven officials 
for corruption during the year, including four individuals for 
stealing from the Global Fund to Fight AIDS, Tuberculosis and 
Malaria.   All seven individuals are low or mid level officials, 
and all are out on bail pending appeal.  Uganda's International 
Donors' Accountability Assessment for 2009 concludes that "despite 
the exponential growth in cases reported...there continues to be 
lack of decisive political action to fight corruption." 
 
 
 
¶4. (SBU) In 2009, Uganda failed the MCC's control of corruption 
indicator for the first time since FY05, and dropped from 126 to 
130 on Transparency International's Corruption Perceptions Index 
(CPI).  Uganda's MCC anti-corruption threshold program was designed 
to strengthen the capacity of Uganda's anti-corruption 
institutions, and support provided to the Auditor General, the IGG, 
the Department of Public Prosecutions (DPP), the Criminal 
Investigations Division, the Public Procurement and Disposal Agency 
(PPDA), and the Anti-Corruption Court could serve as the basis for 
continued assistance through other programs.  However, lack of high 
level Ugandan government support - and Uganda's failure to disburse 
half of the $2.2 million in promised counterpart funding - 
ultimately prevented the MCC program from realizing its full 
potential (ref. A). 
 
 
 
¶5. (SBU) Inspector General of Government (IGG) Raphael Baku said 
Transparency's numbers are consistent with the IGG's own 2008 
 
KAMPALA 00000005  002 OF 004 
 
 
National Integrity Survey, which revealed rampant corruption within 
the police, local government, the judiciary, and the health sector 
among others.  The Director of the Anti-Corruption Coalition Uganda 
(ACCU), Jasper Tumuhimbise, described the CPI score as a 
"reflection of the truth" and predicted that Uganda's 2010 ranking 
will be even lower.  Relentless anti-corruption hearings by 
Uganda's Parliamentary Accountability Committee (PAC) provide some 
hope for anti-corruption efforts in 2010.  Traditionally chaired by 
a member of the opposition, the PAC continues to investigate 
corruption scandals, frequently compelling Ministers and Permanent 
Secretaries to testify publicly.  The PAC cannot, however, refer 
cases for prosecution and the DPP regularly declines to investigate 
corruption exposed by PAC inquiries. 
 
 
 
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Auld Lang Syne: The Year in Corruption 
 
--------------------------------------------- -- 
 
 
 
¶6. (SBU) The Ugandan government is mired in a dizzying array of 
corruption scandals.  IGG Baku told local media in December that 
"all government arms have been found to be corrupt" including the 
Office of the IGG itself.  The following provides a sample of 
Uganda's current corruption scandals: 
 
 
 
- The Commonwealth Heads of Government Meeting (CHOGM): In 2008, 
the Auditor General revealed approximately $27 million in 
unexplained expenditures related to CHOGM, which was held in 
November 2007.  Recent CHOGM investigations led by the PAC have 
implicated 12 government ministries and several Cabinet Ministers - 
including Foreign Minister Sam Kutesa, Public Works Minister John 
Nasasira, Tourism Minister Serapio Rukundo, and Vice President 
Gilbert Bukenya - for rigging vehicle purchasing contracts, paying 
local construction firms for non-existent infrastructure projects, 
and funneling money to hotels still under construction and never 
used for CHOGM activities. 
 
 
 
- National Agricultural Advisory Services (NAADS): Launched in 
2002, NAADS was intended to provide farmers with increased access 
to information and agricultural technology.  A 2009 Auditor General 
audit could not account for $40 million advanced to local districts 
from 2006 to 2008. Opposition parties allege that NAADS funds are 
being diverted to support President Museveni's 2011 re-election 
campaign.  In October, more than 200 local NAADS coordinators 
testified before the PAC but provided no additional information on 
the missing funds.  The Ministry of Agriculture has launched a 
National Task Force to investigate the scandal. 
 
 
 
- National Social Security Fund (NSSF): In 2004, the NSSF lost $4 
million in a land deal involving the former Minister of Gender, the 
NSSF's former Managing Director, and the former Chairman of the 
NSSF board.  The government subsequently transferred oversight for 
the NSSF to the Ministry of Finance.  In 2008 the NSSF was 
embroiled in a second $5-7 million land sale scandal, this time 
involving Security Minister and National Resistance Movement (NRM) 
Secretary General Amama Mbabazi, former Finance Minister Ezra 
Suruma, and a local businessman (ref. B).  An August 2009 audit 
documented losses of $550,000 from premature sales of government 
bonds, and revealed that NSSF granted a $1 million low interest 
loan to a company partially owned by the NSSF's Managing Director - 
on leave since the 2008 land scandal - and another senior NSSF 
official. The audit also revealed that the NSSF's Managing Director 
spent $8,721 in NSSF funds at casinos in Las Vegas and owes NSSF 
$122,000. 
 
 
 
- National Forestry Authority (NFA): In October, police uncovered 
$450,000 in cash under the NFA Director's bed.  The Minister of 
Water and Environment subsequently placed the NFA Director on three 
months leave.  The Auditor General, IGG, and the Police Criminal 
Investigations Division (CID) are now investigating suspected 
illegal activities of several senior NFA officials.  In what was 
perhaps a related event on December 11, vandals with knowledge of 
 
KAMPALA 00000005  003 OF 004 
 
 
NFA's security and computer systems let themselves into NFA 
headquarters and destroyed approximately $2 million in computer 
equipment and memory cards. 
 
 
 
- Health Sector: Uganda's health sector is home to multiple 
corruption scandals.  Investigations into the $1.5 million 2006 
Global Alliance for Vaccines and Immunization (GAVI) scandal remain 
ongoing.  Uganda has yet to act on commitments to recover $780,000 
in misused Global Fund money, and $2.3 million in Global Fund money 
remains missing.  In July, vandals with knowledge of the DPP's 
security and computer systems let themselves into DPP headquarters 
to steal Global Fund investigative materials and DPP computer 
equipment (ref. C).  In August, a forensic audit of a portion of 
Uganda AIDS Commission (UAC) programming could not account for 
$200,000 in donor funds.  In October, President Museveni fired the 
Health Ministry's Permanent Secretary, allegedly for corruption. 
However, the international donors' 2009 Accountability Sector 
Review describes the Permanent Secretary's removal as "surrounded 
with suspicion of ulterior motives," and many believe the Permanent 
Secretary was fired for fighting corruption rather than spreading 
it.  The IGG investigated the Health Ministry's Principle 
Accounting Officer for submitting a false declaration of wealth, 
and concluded that the Accountant's wealth is not commensurate with 
his income.  In November, local media reported the discovery of 
more than 100 fully stocked and staffed health centers on the 
Ministry's books, yet none of them existed at all.  The Minister of 
Health recently made a surprise visit to the Embassy to appeal for 
more funds, and said corruption is the Ministry's biggest problem. 
 
 
 
- Ministry of Education: In 2009, President Museveni directed a 
Judicial Commission of Inquiry to examine misuse of government 
funds allocated to the Universal Primary Education and Secondary 
Education programs following reports that education officials were 
using "ghost pupils" to defraud the government. In June, a "Rapid 
Headcount Exercise" by the Ministry revealed that approximately one 
quarter of students listed on school registers are likely 
non-existent.  The Judicial Inquiry is ongoing.  In December, local 
media reported that the Education Ministry's Permanent Secretary 
has stacked the Ministry with as many as 30 family members and 
close relatives. 
 
 
 
- Uganda National Roads Authority: The Ministry of Works created 
the Uganda National Roads Authority in July 2008.  After just more 
than one year in existence, the Authority has suspended 70 
employees working on five different bridges across the country for 
bribery and extortion. An inquiry by the Ministry of Works is 
ongoing. 
 
 
 
- Uganda Revenue Authority (URA): Transparency International's East 
African Bribery Index for 2009 listed the URA as the most corrupt 
tax authority in the three east African nations - Kenya, Tanzania, 
and Uganda - sampled. 
 
 
 
- Uganda National Bureau of Standards (UNBS) - Trade Minister, Gen. 
Kahinda Otafiire, dissolved the UNBS in December, accusing the UNBS 
of extravagant spending and failing to respect his authority. 
Otafiire and the UNBS board are at odds over a contract for the 
pre-inspection of imported vehicles and other goods. 
 
 
 
- Water Sector: A 2009 report commissioned by the Ministry of Water 
and Environment concluded that $25.5 million was lost to corruption 
between 2002 and 2009 in the water sector.  The report cited 
contracting irregularities for water installations and bribes to 
bypass water meters. 
 
 
 
- Uganda Police Force: A number of mid and low-level police 
officials were reprimanded or fired for corruption, including at 
least two dozen officers and the Police Department's Accounting 
Officer.  In August, six police officials and a principal analyst 
at the Ministry of Finance were charged with embezzling $1.5 
million by creating 4,500 "ghost" police officers. The arrests 
 
KAMPALA 00000005  004 OF 004 
 
 
followed an inquiry ordered by the Inspector General of Police in 
November 2008.  All the seven individuals were subsequently 
released on bail.  The most frequent accusations of corruption 
toward the police stem from traffic shakedowns, requests for money 
to finance investigations, and requests for fuel.  Contributing 
factors to petty corruption among police are low and infrequently 
paid salaries, poor living conditions, and poor education and 
health services. 
 
 
 
- Oil Sector: On January 3, local press reports highlighted growing 
concerns about potential corruption in Uganda's nascent oil 
industry (ref. D). 
 
 
 
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Comment: Transparency Without Accountability 
 
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¶7. (SBU)  The local chairman of the African Peer Review Mechanism 
(APRM) describes Uganda's anti-corruption strategy as "transparency 
without accountability."  Government corruption is a daily theme in 
Uganda media, and the most corrupt government officials and 
institutions are well known to the general public.  Shining very 
public and bright lights on these officials' misdeeds, however, 
seems to have little impact as a deterrent or accountability 
measure.  Many Ugandans believe President Museveni will never hold 
top NRM officials - like Security Minister Amama Mbabazi, Foreign 
Minister Sam Kutesa, and Trade Minister Kahinda Otafiire - 
accountable for corruption, and Uganda's continued failure to 
seriously investigate and prosecute allegations of corruption 
involving senior government officials seemingly supports such 
conclusions. 
 
 
 
¶8. (SBU) All seven of the officials convicted of corruption by the 
Anti-Corruption Division of the High Court during the year are free 
on bail pending appeal.  Anti-Corruption Court officials told the 
Mission that another three corruption cases are in progress, and 
that the court granted 190 applications for bail during the year 
for individuals arrested on suspicion of corruption but not 
charged.  Such paltry prosecution rates are not surprising given 
that the anti-corruption court has only 3 judges, 5 magistrates, 
and extremely limited resources.  The court is also dependent on 
the DPP and the IGG to forward corruption cases for prosecution. 
The DPP and IGG's continued hesitancy to tackle serious corruption 
cases - presumably for political reasons - is a major impediment 
for anti-corruption efforts.  If the DPP and IGG continue to shy 
away from prosecuting tough cases in 2010, local government 
services, public support for President Museveni, foreign 
investment, and donor confidence will continue to suffer.  Uganda's 
image as a model for good governance is essentially a thing of the 
past. 
LANIER