US embassy cable - 04KATHMANDU251

C O N F I D E N T I A L KATHMANDU 000251 
 
SIPDIS 
 
STATE FOR SA/INS; LONDON FOR POL/GUERNEY, NSC FOR MILLARD 
 
E.O. 12958: DECL: 02/08/2014 
TAGS: ECON, ASEC, PTER, CASC, NP, Maoist Insurgency 
SUBJECT: NEPAL: MAOIST EXTORTION:  ONE BUSINESSMAN'S 
EXPERIENCE 
 
Classified By: POL PMAHONEY.  REASON:  1.5 (B,D). 
 
1.  (C) A prominent Nepali businessman who is also a member 
of the Nepal-USA Chamber of Commerce admitted to Econoff that 
his company paid approximately USD 800,000 to the Maoists 
"sometime last year."  The businessman indicated that he 
decided to pay after five Maoists strapped with grenades and 
carrying bombs entered his Lumbini hotel, threatening to blow 
it up if payment was not made within 24 hours.  The 
businessman said he contacted the municipal and security 
authorities for assistance, but his requests went unanswered. 
 He claimed that at least six other hoteliers in Lumbini paid 
similar amounts to the Maoists during the same timeframe, 
with one establishment owned by a Japanese company reportedly 
paying an even higher premium. 
 
2.  (C) Comment:  Nepali businessmen readily admit that they 
are regularly subject to extortion.  Rarely, however, do they 
admit (at least to us) that they pay.  Our contact's unusual 
candor offers a rare window into the scale of demands facing 
business owners--and the pressure they obviously feel to 
comply.  Our source's information, if accurate, also provides 
some equally rare insight into the sums of money the Maoists 
are able to command from frightened members of the besieged 
business community. End Comment. 
MALINOWSKI