US embassy cable - 02KATHMANDU1748

C O N F I D E N T I A L KATHMANDU 001748 
 
SIPDIS 
 
STATE FOR SA/INS 
LONDON FOR POL - RIEDEL 
 
E.O. 12958: DECL: 09/09/2012 
TAGS: PGOV, NP, Government of Nepal (GON) 
SUBJECT: NEPAL:  INFLUENTIAL MINISTER ACCUSED OF CORRUPTION 
RESIGNS 
 
REF: A. (A) KATHMANDU 1618 
 
     B. (B) KATHMANDU 1007 
     C. (C) KATHMANDU 0485 
 
Classified By: POL PMAHONEY.  REASON:  1.5 (B,D). 
 
1.  (U)  Minister for Physical Planning Chiranjibi Wagle, a 
close confidante of Prime Minister Sher Bahadur Deuba and 
perhaps the most influential member of his Cabinet, submitted 
his resignation from the Cabinet to the PM September 9.  The 
resignation follows in-depth press coverage of Wagle's 
failure to disclose his own and his family's personal assets 
to a judicial commission specially appointed by the PM last 
March to review the finances of public officials (Ref C). 
Wagle, whose ministry controls the awarding of sought-after 
contracts for road construction and other infrastructure 
projects, had told the commission his personal savings 
amounted to less than USD 8,000.  Journalists for the 
Kathmandu Post, Nepal's largest-circulation English daily, 
however, reported that his son, owner of a long-defunct 
travel agency, had failed to report hundreds of thousands of 
dollars in Nepali bank accounts--as well as a pricey piece of 
property in the heart of Kathmandu's tourist district--to the 
authorities.  The story broke while the PM was on an official 
visit to EU headquarters in Brussels, leaving Wagle, the 
seniormost member of his Cabinet, as acting PM. 
 
2.  (SBU)  Upon his return to Kathmandu Sept. 2, Deuba 
reportedly summoned his long-time friend and political ally 
to explain the controversy.  Within a week, newspapers were 
reporting that the minister had submitted his resignation to 
the PM. 
 
3.  (C)  One NGO activist told us Wagle followed up his 
resignation with a fence-mending visit to the PM's political 
rival, former Prime Minister Girija Koirala.  A highly placed 
source within the PM's Nepali Congress Party told the 
Ambassador to expect more resignations to follow Wagle's. 
The Prime Minister will accept the resignations under the 
face-saving pretext that the former Ministers need time off 
to prepare for November 13 national elections.  The PM will 
then form a more streamlined, leaner Cabinet.  The source was 
unable to advise if the new Cabinet will be composed 
primarily of technocrats--as we and the British have advised 
(Ref B)--or members of the party faithful. 
 
4.  (C) Comment:  Rumors about Wagle's personal corruption 
have long been circulating.  The recent moves by the 
Commission to Investigate the Abuse of Authority (Ref A) to 
bring corrupt officials to book have resulted in an 
outpouring of positive public support--always desirable 
during an election season--for the initiative.  Accepting 
Wagle's resignation--and encouraging similar moves by other 
members of his bloated Cabinet--could be a fairly painless 
way for the PM to capitalize on this groundswell.  We hope 
the PM will use this opportunity to make some long-needed 
changes in the composition of his Cabinet, replacing some of 
his political cronies with qualified, non-partisan 
technocrats who can oversee the administration of his 
government during this crucial period. 
MALINOWSKI