US embassy cable - 04MANAMA615

C O N F I D E N T I A L SECTION 01 OF 02 MANAMA 000615 
 
SIPDIS 
 
DEPARTMENT FOR NEA/ARP AND DRL/PHD, 
DEPARTMENT PASS TO USTR: CNOVELLI AND JBUNTIN 
CAIRO FOR STEVE BONDY 
LONDON FOR ETHAN GOLDRICH 
 
E.O. 12958: DECL: 04/27/2029 
TAGS: PGOV, PHUM, BA 
SUBJECT: PARLIAMENT STANDS FIRM - GOB FAILS TO STOP 
QUESTIONING OF MINISTERS 
 
REF: A. MANAMA 200 
 
     B. MANAMA 138 
 
Classified By: Charge d'Affaires Robert S. Ford for reasons 
1.4 (b) and (d). 
 
1.  (C) SUMMARY.  Our key FTA negotiator, Minister of Finance 
and National Economy Abdulla Saif, appears likely to survive 
a parliamentary effort to unseat him.  The GOB failed in its 
last minute attempts to cancel the parliamentary questioning 
of Finance Minister Abdulla Saif, but managed to rescue 
Minister of State Abd al-Nabi al-Shoala from questioning in 
relation to the pension funds scandal (refs a and b).  Many 
parliamentarians believe that Saif has allegedly bought off 
enough MPs to prevent his removal from office.  The 
investigation and questioning has raised the parliament's 
credibility with the public and may induce a cabinet 
reshuffle.  The rumors of MP vote-buying are troubling as is 
the emergence of Sunni extremist Shaikh Adel al-Moawda as the 
parliament's most influential member.  END SUMMARY. 
 
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PRIME MINISTER REQUESTS TO BLOCK THE QUESTIONING 
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2.  (C) On April 10, the Prime Minister sent a letter to the 
Council of Representatives(COR) requesting that the COR honor 
its promise not to question the ministers if the government 
implemented the recommendations of the ad-hoc committee,s 
report.  In his letter, the Prime Minister promised that 
"loans" from the Pension Fund Commission (PFC) and the 
General Organization for Social Insurance (GOSI) would be 
paid immediately with interest.  The next day the Arabic 
newspaper &Akhbar Al Khaleej8 published that the GOB will 
give BD8.6 million (USD22.8 million) to the PCF and BD7.6 
million (USD20.2 million) to GOSI. The GOB also amended the 
1975 and 1976 social security laws issued by Decree number 
(24), restructuring the administration of both GOSI and the 
PFC, and appointing a consultative company to prepare an 
actuary study on the possibility of merging both funds. 
(COMMENT: The constitution requires passage by the National 
Assembly of all laws; perhaps the newspaper, which often gets 
things wrong, meant that the amendments will be sent to the 
legislature for approval.  END COMMENT) 
 
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OTHERS JOIN FIGHT TO BAR QUESTIONING 
------------------------------------ 
 
3. (C)  On April 19 the Minister of Shura and Representative 
Council Affairs Abdul Aziz Al-Fadhel followed up the Prime 
Minister's lead by contesting the legality of the 
parliamentary motion to question the three ministers in a 
letter to the COR Chairman.  Al-Fadhel argued that the 
questioning includes accountability for actions taken by the 
ministers before the existence of the COR, and therefore the 
actions cannot be challenged according to Article (45) of 
Decree for law number (15) for the year 2002.  Al-Fadhel also 
referenced Article (146) of the Council,s bylaws that 
prohibits MPs to ask questions on topics previously discussed 
during the investigation.  The Parliament conceded these 
constitutional points related to Minister of State and former 
Minister of Labor and Social Affairs Abd al-Nabi al-Shoala, 
so they canceled his questioning. 
 
4.  (U)  The Government's communications emboldened COR 
Speaker Khalifa Al-Dhaharani to join the effort to block the 
questioning.  In a full session of the COR, al-Dhaharani 
introduced two motions to stop the process.  Contrary to 
expectations in local press reports that the government's 
last minute effort would divide the Parliamentary alliance, 
COR blocs and independent MPs expressed solidarity, easily 
defeating Al-Dhaharani,s motions.  After the votes, MP Hamad 
Al-Muhannadi (a Salafi member of the Al Asala Islamic 
Society) insisted that replenishing the retirement funds' 
money was insufficient; the people responsible needed to be 
punished. 
 
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SAIF APPEARS SAFE FOR NOW 
------------------------- 
 
5. (C)  The COR's Services Committee questioned Saif for five 
hours on April 20 and 21. MPs differed on their assessment of 
the Minister,s responses in the two-day session, casting a 
shadow on whether the COR would proceed to a vote of 
no-confidence.  MP Abdulhardi Marhoon in private with us 
charged on April 28 that Minister Saif "bought-off" several 
MPs.  According to MP Marhoon, on April 20, Minister Saif met 
separately with Shaikh Mohammed Khalid, Dr. Ibrahim 
Al-Abdulla, Ahmed Bezhad, Abdulla Al-Alali and several 
others.  Once proponents of unseating Saif, these MPs became 
virtually silent during the proceedings. On April 21 MP 
Mohammed Khalild said in the Bahrain Tribune that the 
minister surprised members with his poise and grace and 
produced all the documents that would stand as strong 
evidence in his favor.  However, other MPs strongly 
disagreed.  Deputy Abdul Nabi Salman asserted to POLFSN that 
Minister Saif evaded some questions and flatly refused to 
answer others.  Fareed Ghazi told POLFSN that reports and 
rumors of Saif's wonderful performance during the questioning 
are propaganda to deter a vote of no-confidence.  Many MPs 
expressed their doubts to PolFSN on April 28 that there will 
be enough votes now to remove Minister Saif.  MP Shaikh 
Mohammed Khalid told PolFSN on April 28 that he believes 
MOFNE will be divided into a Ministry of Finance and a 
Ministry of Planning and Economy.  He strongly believes that 
Minister Saif will be shifted to the Ministry of Planning and 
Economy. 
 
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COMMENT 
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6. (C) Daunted by constitutional disincentives to legislate, 
the COR has aggressively pursued its oversight authority. 
The COR's investigation of allegations of GOB corruption and 
mismanagement and its questioning of ministers has improved 
the legislatures credibility with many Bahrainis, and it 
possibly may produce a cabinet reshuffle.  The timing of the 
questioning also forced Minister Saif to cancel his visit to 
the recent IMF/World Bank meetings in the United States. 
Saif's apparent survival of this strong attempt to remove him 
from office leaves him weakened domestically but still able 
to act as Bahrain's lead negotiator for the Free Trade 
Agreement (even if he loses the Finance Ministry portfolio). 
On the other hand, the rumors of MP vote-buying are troubling 
for the near term health of Bahrain's democracy. 
 
7. (C) This scandal has highlighted the COR's new movers and 
shakers as well as spotlighted the end of others.  Some argue 
that Chairman Khalifa Al-Dhaharani,s blatant pro-government 
tendencies have weakened him.  The debate has further exposed 
First Deputy Chairman al-Marhoon's leadership shortcomings. 
As a result of their troubles, Salafi Second-Deputy Chairman 
Shaikh Adel al-Moawda now appears to be the strongest leader 
in the elected house. (NOTE: Al-Moawda, described by many as 
a &radical Islamist,8 heads the Council,s Salafi Al Asala 
Bloc. END NOTE) 
END COMMENT. 
FORD