US embassy cable - 03KATHMANDU2006

C O N F I D E N T I A L SECTION 01 OF 02 KATHMANDU 002006 
 
SIPDIS 
 
STATE FOR SA/INS, LONDON FOR POL/GURNEY, NSC FOR MILLARD 
 
E.O. 12958: DECL: 10/15/2013 
TAGS: PGOV, KCOR, NP 
SUBJECT: NEPAL: ONE EX-MINISTER AND TWO SECRETARIES 
ARRESTED ON CORRUPTION CHARGES 
 
REF: KATHMANDU 975 
 
Classified By: DCM Robert K. Boggs for Reasons 1.5 (b,d). 
 
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SUMMARY 
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1. (C) On October 13, Nepal's anti-corruption agency, the 
CIAA, arrested three former senior government officials, 
including former minister and Deputy General Secretary of the 
Nepali Congress Party Govinda Raj Joshi, as well as two 
former government secretaries.  Joshi's arrest represents the 
second time that the CIAA has filed formal charges against a 
high-level political figure and former minister.  CIAA Chief 
Commissioner Upadhyay asserted that the cases against Joshi 
and the two ex-secretaries are very strong and anticipates 
successful convictions.  Another CIAA official, however, 
feared that the cases would drag out for a long period due to 
political pressure on the Special Court judges to avoid 
prosecutions.  End Summary. 
 
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FORMER HIGH-LEVEL OFFICIALS ARRESTED 
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2. (U) On October 13, the Commission to Investigate Abuses of 
Authority (CIAA) arrested former minister and Deputy General 
Secretary of the Nepali Congress (NC) party, Govinda Raj 
 
SIPDIS 
Joshi, and two former government secretaries, Chakra Bandhu 
Aryal and Padam Prasad Pokharel.  Life-long bureaucrats, 
Aryal was formerly Secretary of the Defense Ministry, while 
Pokharel was formerly Secretary of the Home Ministry.  Joshi, 
a close associate of NC President G.P. Koirala, was most 
recently Minister of Local Development (2001), prior to which 
he was Minister of Home (2000), Water Resources (1999), and 
Education (1995-1997).  Joshi is the second former minister 
and high-level political leader to be prosecuted by the CIAA. 
 The first was Khum Bahadur Khadka, former Home Minister and 
General Secretary of the Nepali Congress (Democratic), who 
resigned his party position in May 2003 after his indictment 
(reftel). 
 
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SUSPECTS ALLEGE THE CIAA IS POLITICALLY MOTIVATED 
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3. (C) After receiving the first CIAA summons in May 2003 
along with Khadka and others, Joshi and Pokharel filed 
similar cases with the Supreme Court contesting the legality 
of the CIAA's actions, claiming that the CIAA was politically 
motivated and lacked legal legitimacy.  These cases are still 
pending within the Supreme Court.  In a meeting with PolOff 
on October 15, CIAA Head Commissioner Surya Nath Upadhyay 
dismissed these allegations, asserting that the CIAA is 
constitutionally mandated with conducting investigations, 
arrests and prosecutions of any public official who has 
misused his position for personal benefit.  Additionally, he 
said, the Commission's actions show that it is not 
politically biased; the CIAA has filed cases against members 
of all the major political parties, Upadhyay explained. 
However, Upadhyay admitted that the majority of CIAA cases 
are filed against NC members because that party held power 
for most of Nepal's 12 years of democracy.  Consequently, 
most corruption at the political level will be found in the 
NC and NC (Democratic) parties, he said.  Upadhyay also 
pointed out that, on October 13, the CIAA issued an arrest 
warrant for Rabindra Nath Sharma, a key leader of the 
royalist Rastra Prajatantra Party (RPP).  Sharma was not 
arrested, however, as he is reportedly abroad on official 
travel. 
 
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CIAA ANTICIPATES SUCCESSFUL CONVICTIONS, BUT DELAYS COULD 
OCCUR 
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4. (C) Upadhyay further noted that the arrests were made 
after nearly four months of investigation into the suspects' 
property holdings, as well as the property of their close 
relatives, across all 75 districts of Nepal and in India. 
Although he was unable to give approximate amounts of the 
suspects' illicitly- accumulated wealth, Upadhyay suggested 
that Joshi had acquired wealth in the "range of tens of 
millions of rupees" while former secretaries Aryal and 
Pokharel had acquired even more.  Upadhyay was able to 
provide examples of the type of evidence the CIAA was 
investigating.  For example, the CIAA discovered that Joshi's 
octogenarian, widowed mother-in-law holds the title to a 
property worth more than NRs 10 million (USD 134,000), but 
has been unable to show investigators how she legitimately 
acquired the property.  In another instance, Upadhyay said, 
Joshi's brother-in-law, a low-level government clerk, 
possesses a "palatial estate" but also is unable to show how 
it was acquired.  The Commissioner noted that with access to 
Joshi's property documents and bank statements, as well as 
those of his relatives, the CIAA "has developed a very strong 
case against Joshi." 
 
5. (C) On October 14, the CIAA presented to the Special 
Anti-Corruption Court a motion seeking to hold the suspects 
in detention for one month in order to complete the 
investigation.  According to CIAA Joint Secretary Surya 
Koirala, the CIAA will likely seek a six-month extension of 
the detention period to ensure that the defendants do not 
destroy evidence or attempt to flee the country.  The court, 
however, will likely decide to release the suspects on bail 
as they did in the case of former minister Khadka in May, he 
said.  Koirala also confided that the cases likely would take 
over a year to prosecute because of political party pressure 
on judges not to convict political leaders. 
 
6. (SBU) Koirala pointed out that the CIAA's success rate in 
convictions is high, although most cases have involved false 
certificates of academic or professional qualifications that 
are easily adjudicated.  In June, the CIAA was successful in 
convicting its first property case when the former Executive 
Director of Royal Nepal Airline Corporation, Mr. Hong Kong 
Rana Magar, was sentenced to three years in jail and a fine 
of USD 700,000, after he failed to procure an aircraft 
despite entering into a contractual lease and paying USD 
700,000 to U.S. company Chase Air, Inc.  Koirala echoed the 
Commissioner's sentiment that the current cases are solid and 
will result in successful convictions. 
 
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COMMENT 
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7. (C) The arrest of former minister Joshi and former 
secretaries Aryal and Pokharel are landmark achievements for 
 
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Nepal's anti-corruption agency, which remains under 
significant pressure from political parties, private business 
and the media to relent in its effort to root out corruption 
by public officials.  Despite Commissioner Upadhyay's strong 
stewardship, political pressure may make it difficult for the 
Commission to convict high-profile cases successfully. 
Former ministers Khadka and Joshi will be litmus tests for 
the CIAA's future legitimacy and success.  End Comment. 
MALINOWSKI