US embassy cable - 02KATHMANDU1618

Seventeen Nepalese Bureaucrats Arrested in Anti- Corruption Drive

Identifier: 02KATHMANDU1618
Wikileaks: View 02KATHMANDU1618 at Wikileaks.org
Origin: Embassy Kathmandu
Created: 2002-08-20 12:42:00
Classification: UNCLASSIFIED//FOR OFFICIAL USE ONLY
Tags: PGOV KCRM SNAR PINR NP Government of Nepal
Redacted: This cable was not redacted by Wikileaks.
This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 KATHMANDU 001618 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR INL/AAE, INL/C, SA/INS AND DS/ATA 
JUSTICE FOR OPDAT 
LONDON FOR POL/RIEDEL 
 
E.O. 12958: N/A 
TAGS: PGOV, KCRM, SNAR, PINR, NP, Government of Nepal (GON) 
SUBJECT: Seventeen Nepalese Bureaucrats Arrested in Anti- 
Corruption Drive 
 
REF: A) Kathmandu 800, B) 01 State 158542 
 
1. (U) This is an action message.  Please see para 10. 
 
2. (SBU) Summary.  Seventeen Nepalese public officials 
have been arrested after the government body charged with 
investigating corruption raided the homes of 22 revenue 
officers on August 17.  The houses of two joint 
secretaries were among those searched.  A special court 
 
SIPDIS 
has been named to hear the cases.  A commissioner from the 
anti-corruption body told us that more such raids are 
planned, and that state banks and other government 
agencies have been asked to help with the investigation. 
Recent legislation granted the CIAA greater powers and put 
the burden of proof on public officials to prove where 
they obtained their assets.  The CIAA has expressed an 
interest in obtaining bilateral aid to build its 
capacities.  The raids were widely lauded, but many 
observers hope the CIAA goes after higher-level 
bureaucrats and politicians next.  Now would be an 
opportune time to provide the INL-funded OPDAT course on 
prosecuting public corruption, which the GON agreed in 
February to accept.  End Summary. 
 
Corruption Body Arrests Sixteen in Nighttime Raids 
--------------------------------------------- ----- 
 
3. (U) Sixteen Nepalese civil servants were arrested 
during the night of August 17 after officers from the 
Commission for the Investigation of Abuse of Authority 
(CIAA) searched the houses of 22 officials for evidence of 
malfeasance or embezzlement.  A seventeenth official 
surrendered to authorities August 19.  Five individuals 
under investigation were out of town, and thus were not 
detained.  Most worked in offices charged with collecting 
taxes or customs duties. 
 
Two Joint Secretaries Among the Accused 
--------------------------------------- 
 
4. (U) The two highest-ranking individuals charged were 
joint secretary-level officers (equivalent to a U.S. 
Assistant Secretary): Sri Ram Pant, Chief of the Revenue 
Section at the Finance Ministry, and Janardan Sharma, 
Chief of the Inland Revenue Office, Kathmandu Area Number 
Two.  Pant was in Delhi at the time of the raid, and 
cancelled his planned return to the capital August 18, 
citing health problems. 
 
Special Court Nominated to Hear Cases 
------------------------------------- 
 
5. (U) A three-member Special Court will be constituted to 
hear these cases.  On August 20 Nepal's Judicial Council 
agreed to put forward the names of three Appellate Court 
judges to make up this body.  Embassy contacts confirm 
that all three judges have unblemished records and 
reputations for honesty and probity.  One contact noted, 
however, that the three had never before been tested in 
such high-profile cases. 
 
More Raids Planned 
------------------ 
 
6. (SBU) More raids are planned against other corrupt 
officials, a CIAA Commissioner told us.  He added that 
successful prosecution depends in large part on the level 
of cooperation the Commission gets from both the courts 
and the defendants.  With only limited personnel and 
resources, the CIAA has had to draft officers from other 
ministries to help with its investigation.  It has also 
asked for expert assistance from Nepal's state banks and 
line ministries to evaluate the evidence.  Funding from 
the Danish aid agency pays for two experts, which is a 
great help, the Commissioner noted. 
 
CIAA Exercising New Found Powers 
-------------------------------- 
 
7. (SBU) The CIAA Commissioner explained that the August 
17 raids were the Commission's first attempt to use new 
powers granted to it under recently enacted legislation 
(Ref A).  Under the new law, the CIAA can investigate 
anyone who appears to be living beyond his means.  The 
burden of proof is on the defendant to prove how the 
assets were obtained.  Those convicted of corruption face 
from two to ten years in prison, confiscation of their 
assets, and fines proportional to the value of the 
illegally acquired property. 
 
8. (SBU) The Senior Governance Officer at the Asian 
Development Bank (ADB) in Kathmandu echoed the 
Commissioner's comments about new legislation enlarging 
the scope of the CIAA's activities.  Moreover, the ADB 
also has concerns that the CIAA lacks the manpower and 
training necessary to implement these changes.  The CIAA 
has refused the ADB's offer of loans for this purpose, but 
has indicated its interest in receiving grant aid from 
bilateral donors. 
 
Comment 
------- 
 
9. (SBU) Corruption is rife in Nepal.  Unfortunately, 
previous attempts by the CIAA to prosecute corrupt public 
officials have failed in court.  The newly-enacted 
legislation described in Ref A should help to strengthen 
the Commission.  So far, public reaction to the CIAA's 
recent actions has been uniformly positive.  Even so, most 
observers--both Nepali and expatriate--add that until the 
CIAA lands a big fish (like a Minister or leading 
politician), the Commission's efforts will have limited 
impact. 
 
Action Request 
-------------- 
 
10. (SBU) Last year INL agreed to fund Post request for an 
OPDAT course titled "Prosecuting Public Corruption" (Ref 
B).  To obtain approval to sign the INL's letter of 
agreement for this course, Post engaged in protracted 
negotiations with Finance Ministry, which had to seek 
Cabinet-level approval before it would ink the document. 
A date for the course has yet to be set by DOJ.  Bringing 
the course to Nepal now would help to redress the CIAA's 
training deficit and send a strong signal that the USG is 
committed to helping Nepal combat corruption. 
 
MALINOWSKI 

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