US embassy cable - 02KATHMANDU1284

UNCLAS SECTION 01 OF 02 KATHMANDU 001284 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR INL/C/LUNA AND BRANDOLINO 
LONDON FOR POL/RIEDEL 
 
E.O. 12958: N/A 
TAGS: KCRM, PGOV, SNAR, PINR, NP, Government of Nepal (GON) 
SUBJECT: Anti-Corruption Efforts in Nepal 
 
REF: A) STATE 90733, B) KATHMANDU 800, C) 01 KATHMANDU 843 
 
1. (U) Ref A requested a brief summary of recent and 
notable anti-corruption efforts in Nepal by the 
government, civil society and the private sector. 
 
2. (SBU) Corruption is a serious and pervasive problem  in 
Nepal, and is being recognized increasingly by both donors 
and government leaders as a fundamental cause of the 
current Maoist insurgency.  The Government of Nepal (GON) 
has begun to take tentative steps to address it, but many 
of its initiatives have yet to be effectively implemented. 
Presently Nepal's Finance Ministry is in the process of 
drafting a new anti-corruption strategy. 
 
AG and CIAA Main Government Players 
----------------------------------- 
 
3. (U) Under Nepal's 1990 Constitution, two governmental 
bodies are charged with investigating corruption: the 
Auditor General and the Commission for the Investigation 
of Abuse of Authority (CIAA).  Both face expanded 
responsibilities and workloads without proportionate 
increases in staffing or funding.  For example, a recent 
Act of Parliament disbanded the national police force's 
special anti-corruption unit, staffed by 100 officers. 
Its responsibilities were shifted to the CIAA, which had 
to take on the unit's duties without an increase in staff. 
The CIAA has only 35 investigating officers. 
 
High-Level Investigation, but Still No Convictions 
--------------------------------------------- ----- 
 
4. (U) The CIAA's most-publicized case to date was a 
bribery scandal related to the government's lease of a 
passenger jet.  As part of its investigation, the CIAA in 
May 2001 was able to question then-Prime Minister Gijira 
Prasad Koirala about his role in affair (Ref C).  As a 
result of the CIAA's work, the Executive Chairman of 
Nepal's national airline was suspended from his post and 
cases were brought against ten individuals.  Appeals 
continue and as yet no one has been punished.  The CIAA 
blames difficulties in proving white-collar crime and 
unsympathetic judges for the fact that they lose nearly 
all the cases they bring to court. 
 
5. (U) In recent months Nepal's media have focused on the 
CIAA's investigation into the use of falsified 
documentation to secure government employment.  The use of 
fraudulently obtained graduation certificates and other 
documents--many obtained from India--is widespread in 
Nepal's bureaucracy. 
 
Multilateral Aid 
---------------- 
 
6. (U) The Asian Development Bank (ADB) has taken the lead 
in working with Nepal on anti-corruption initiatives.  The 
ADB works primarily through the CIAA and the Ministry of 
General Administration.  According to the ADB's Senior 
Governance Officer, on-going anti-corruption and civil 
service reform programs resulted in the passage of four 
new anti-corruption acts during the last session of 
Parliament (Ref B).  To date, few provisions of the new 
act have taken effect, however.  An exception is a new 
requirement that civil servants fill out asset disclosure 
forms.  [Note:  Several government officials have 
complained to us about having to fill out these forms, so 
the requirement is being enforced and could have an impact 
on corrupt practices.  End Note.] 
 
Bilateral Assistance 
-------------------- 
 
7. (U) The Danish aid agency, DANIDA, provides support and 
technical assistance to CIAA.  The British development arm- 
-DFID--funds a governance program with an anti-corruption 
component.  Currently USAID does not have specific 
programs targeted against corruption. 
 
Civil Society 
------------- 
 
8. (U) Transparency International and Pro-Public both 
conduct anti-corruption awareness campaigns in Nepal.  In 
addition, Pro-Public has worked closely with the CIAA to 
improve its capacity. 
International Pressure 
---------------------- 
 
9.  (U) The public statement issued after the June 19-20 
meeting in London of major aid donors to Nepal welcomed 
the expressed commitment of the Government of Nepal to 
address, inter alia, the problem of corruption.  Although 
much remains to be done to reduce corruption, the GON is 
under growing pressure by the international community to 
implement reforms to increase transparency, 
accountability, and the rule of law. 
MALINOWSKI