US embassy cable - 05RANGOON148

C O N F I D E N T I A L RANGOON 000148 
 
SIPDIS 
 
STATE FOR EAP AND INL; DEA FOR OF, OFF; 
USPACOM FOR FPA 
 
E.O. 12958: DECL: 02/01/2015 
TAGS: SNAR, KCRM, EAID, BM 
SUBJECT: BURMA: UNODC REACTS TO WITHDRAWAL OF USG FUNDING 
 
REF: A. RUBEN/CLINE-RANGOON E-MAILS 2/1/05 
     B. RANGOON 138 
     C. RANGOON 88 
     D. RANGOON 66 AND PREVIOUS 
 
Classified By: COM Carmen Martinez for Reasons 1.4 (B,D) 
 
1. (C) Summary: UNODC's Burma representative was 
disappointed, but not surprised, to learn of a February 1 
decision by INL to withdraw funding from UNODC's supply 
reduction Wa Project.  Having been previously briefed on UWSA 
indictments, he was aware that U.S. funding for the program 
was in jeopardy.  Lemahieu is optimistic he can make up the 
$432,885 shortfall in the short-term, but is skeptical about 
the long-term viability of the counternarcotics project 
without his largest donor.  He has urged his headquarters to 
offer some resistance to the INL decision, but expects that 
UNODC Vienna will accept the withdrawal of the earmark and 
reprogram the funds to activities in other countries.  End 
Summary. 
 
2. (SBU) COM (joined by DEA country attache and Pol/Econ 
chief) called on UNODC representative Jean-Luc Lemahieu 
February 2 to deliver a copy of a February 1 letter from INL 
A/S Charles to UNODC Executive Director Costa (ref A), 
notifying UNODC that INL had withdrawn $432,885 (unexpended 
funds) from obligated funds originally earmarked for UNODC's 
Wa Project in Burma.  The COM explained, per information 
contained in the letter, that this action had been taken in 
light of recent federal indictments of senior UWSA leaders 
(ref D). 
 
3. (SBU) Lemahieu expressed disappointment, but said that he 
was not surprised by the development.  He had concluded, 
after receiving a sanitized briefing on the January 24 
unsealing of the indictments (ref C), that U.S. funding for 
the program was in jeopardy.  He said, however, that the 
withdrawal was a major setback to the project.  "More 
significant than losing the funds," he observed, "is that we 
are losing our largest donor."  UNODC, he explained, has in 
the past used U.S. support for the project as a hook for 
securing additional funding from other donors. 
 
4. (SBU) Although Lemahieu said he had no immediate plans to 
shut down the Wa Project, he was skeptical about the future 
viability of the project (scheduled to last through 2008). 
U.S. funding accounts for about half of the budget and UNODC, 
he said, "will find it difficult, if not impossible to find 
$2.1 million from other sources over the next three years." 
He was more optimistic that UNODC could find ways to make up 
the immediate shortfall resulting from the withdrawal of U.S. 
obligated funds. 
 
5. (C) Regarding the rationale behind the INL decision, 
Lemahieu said he was supportive of law enforcement actions 
targeting the UWSA and understood the need to stay clear of 
Wa leaders.  He added, however, that he was confused as to 
why the United States had supported the Wa Project in the 
past despite a 1993 indictment against Wei Hsueh Kang and the 
placement of Wei and the UWSA on the Kingpins list in 2000 
and 2003, respectively.  Nonetheless, he said, it was 
unlikely that UNODC would make any public statement regarding 
the withdrawal of the funds. 
 
6. (C) On February 4, Lemahieu told us that he had consulted 
with UNODC headquarters in Vienna on the withdrawal of funds 
and his hierarchy had expressed an understanding of the U.S. 
decision.  However, Lemahieu added, he said had urged Vienna 
to offer some resistance to the INL decision on the basis 
that "law enforcement and alternative development are 
complimentary to supply reduction; we can't have one without 
the other."  He admitted that Vienna would most likely accept 
the INL decision and reprogram the $432,885 to activities in 
other countries and not for other UNODC programs in Burma. 
Martinez