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Viewing cable 06TUNIS1630,
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
06TUNIS1630 | 2006-06-29 13:06 | 2011-06-08 00:00 | CONFIDENTIAL//NOFORN | Embassy Tunis |
Appears in these articles: http://www.aftenposten.no/spesial/wikileaksdokumenter/article3990373.ece |
VZCZCXYZ0000
PP RUEHWEB
DE RUEHTU #1630/01 1801306
ZNY CCCCC ZZH
P 291306Z JUN 06
FM AMEMBASSY TUNIS
TO RUEHC/SECSTATE WASHDC PRIORITY 1139
INFO RUEHAS/AMEMBASSY ALGIERS PRIORITY 7238
RUEHRB/AMEMBASSY RABAT PRIORITY 8169
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
C O N F I D E N T I A L TUNIS 001630
SIPDIS
NOFORN SIPDIS
STATE FOR NEA/MAG - HARRIS STATE PLEASE PASS USTR - BELL USDOC FOR CLDP - TEJTEL AND ITA/MAC/ONE (NMASON)
E.O. 12958: DECL: 06/28/2016 TAGS: PREL ECON PGOV EFIN ETRD EINV TS
REF: TUNIS 1622
Classified By: AMBASSADOR WILLIAM HUDSON FOR REASONS 1.4 (b) AND (d)
¶1. (C) SUMMARY: This is the second of a four cable series on corruptions impact on the Tunisian economy and Tunisias political future. Despite the Tunisian economys success, Tunisians increasingly complain about corruptions negative impact. Traditional corruption and bribery exists in Tunisia as elsewhere in the world, but most complaints focus specifically on the disproportionate power and influence wielded by a few elites, chief among them Tunisias First Family: President Ben Ali, wife Leila (Trabelsi) Ben Ali and their extended clan. While the extent of this corruption is rumored to encompass all the major sectors of the economy and is impossible to accurately measure, the domestic frustration the subject generates is perhaps more significant than the facts on the ground. Part two of this series addresses how corruption has manifested itself in the Tunisian context. END SUMMARY.
CATEGORIES OF CORRUPTION ------------------------
¶2. (C) SIMPLE: There are four main categories of corruption in Tunisia. First, there is basic bribery and extortion, which most commonly is seen among the police and security forces. Tunisias "police state" image includes a policeman on nearly every corner, whose main job appears to be checking car paperwork, identification cards and generally intimidating citizens. Any infraction can result in the seizure of ones documents, which requires hours of subsequent bureaucratic red tape to resolve. Thus, for a small fee, one can avoid any potential negative consequence of the stop and proceed normally. Given the low salaries paid to police officials (approximately TD 300/USD 230 per month), it is no surprise this has become increasingly widespread as civil servants try to cope with a rising cost of living. However, this type of simple corruption has yet to become a phenomenon in Tunisia.
¶3. (C) BUREAUCRATIC: This type of corruption is the main target of GOT efforts to investigate, convict and punish offenders. Usually identified among mid-level civil servants, this type of corruption can involve everything from bribes paid to "experts" who provide evidence in court cases to siphoning from government accounts. For example, one FSN reported that he had to bribe a series of experts to conduct the property assessments needed to finalize the inheritance issues related to his fathers death. He believed that without bribes, the case could have dragged on unresolved for years. Investigated by the Tunisian equivalent of the U.S. Government Accountability Office, such cases - when identified - typically result in conviction and punishment. However, the fact that only mid-level officials ever seem to be investigated leads many to assume that this system is simply designed as a bureaucratic facade. The GOT can claim to take anti-corruption steps without addressing the major corruption that causes economic distortion. Meanwhile, Tunisians increasingly feel this type of corruption is pervasive, and that only by manipulating the system or bribing an official, can they obtain the desired result.
¶4. (C) INFLUENCIAL: While the first two categories of corruption are widely accepted as present in Tunisia by the GOT, which has developed control mechanisms to contain them, the third type is not publicly addressed, as it involves more senior government officials such as ministers. Generally, this type of corruption involves the misuse of official government entitlements for personal benefit. For example, some military officials who receive government cars and drivers are rumored to use this transportation to take their children to school or go to the beach on the weekend. Ministers are also believed to utilize their name and influence in order to purchase government property at discounted prices. Further, it is assumed that ministers utilize influence and information to ensure business contacts -- including family and friends -- have inside details on government contracts, which lead to profitable kickbacks. Regardless of the extent of this type of corruption, Tunisians generally consider such officials technocrats more than politicians. Thus, few complain significantly about this phenomenon although many wish a stronger system of
checks and balances existed to root it out.
¶5. (C/NF) FIRST FAMILY: The last type of corruption is that about which Tunisians from all strata of society are complaining: President Ben Ali and his familys exploitation of the Tunisian economy for personal gain. Despite increasingly liberal economic legislation, all key decisions, especially related to investment and privatization, are made at the highest levels of the government -- probably by the President himself. This arrangement has permitted President Ben Alis extended family (siblings, in-laws, and distant relatives) to become aware of, to assert interests in, and to carve out domains in virtually every important sector of the Tunisian economy. This dominance leads Tunisian public perception to believe that connections to the First Family (if not outright partnership with them) are essential for businesses of any significant size to survive. Worse, people are now convinced that the First Family is an insatiable economic animal bent on gratuitous enrichment and unchecked influence-wielding.
THE FAMILY BUSINESS -------------------
¶6. (C/NF) The Familys interests are rumored to extend to virtually every corner of the economy from information and communication technology, to manufacturing, retail, transportation, tourism, banking, and agriculture and food processing. The EU ambassador to Tunisia notes that foreign direct investment has stalled in recent years due largely to perceptions that "political control has grown to such a level that all goes up to Carthage (the Presidential Palace) for decision." He added that the family uses tactics such as "compulsory partnerships," and that he has heard "countless examples of threats (to extort) when companies are get too big or become too successful," which further limits economic growth and entrepreneurial activity for fear of attracting the first familys attention.
¶7. (C/NF) Every Tunisian seems to have an account of how the Trabelsi or Ben Ali clan has intimidated legitimate businessmen or manipulated regulations for its own benefit. A local journalist told Poloff that a government office for real estate was opened on a Sunday so no one would see property registered in the name of Ben Alis son. The journalist also reported laws are being altered to allow a son-in-law to gain control of a major commercial port. (NOTE: A detailed list of family members and their alleged business holdings will be reported in part four of this series. END NOTE.) Political connections are also believed to be behind the circumvention of investment policies regulating French mega-distributor Carrefours entrance in the market. Another son-in-law is rumored to have assisted Carrefours launch of the first international franchise operation here, enriching first family members in the process through ownership stakes.
¶8. (C/NF) These tactics have also negatively impacted U.S. investment -- the prime example of which is McDonalds unsuccessful seven-year effort to invest in Tunisia in the 1990s. McDonalds undertook lengthy market research, obtained necessary licenses and real estate leases, entered commercial agreements, secured a local partner, and established necessary product supply chains. Their investment, however, was scuttled by a last minute intervention by First Family personalities who reportedly told McDonalds representatives that "they had chosen the wrong partner." The implication was clear: either get the "right" partner or face the consequences: McDonalds chose to pull out completely at great cost. Tunisian business contacts decry the McDonalds case as a black mark on Tunisia,s international investment reputation, as it indicates Tunisia does not play fairly or always act rationally. This example is also frequently related to illustrate the First Familys tactics and ultimate influence.
HOW ITS RUN ------------
¶9. (C/NF) While widespread, such rumors of coercion or extortion may be overblown, in part due to tight control over Tunisias media that prevents public airing of corruption or improper influence. The editor of (text removed by Aftenposten) paper cannot report on the corruption issue without documentary evidence that would stand up in the Tunisian legal system. Regardless of the rumors, Ben Ali and his family have clearly benefited from their unique access to key business and economic information. In fact, it appears that the link between state-managed growth programs and personal interests have overlapped in the form of privatization. A main driver of the Tunisian economy, privatization and liberalization plans that were launched in the 1990s seem to have also directly enriched the Ben Ali clan. The family is believed to have gained control of several key industries through privatization, and has also benefited from GOT efforts to encourage competition. For example, Leila Ben Alis brother successfully launched a new airline Karthago, in part due to GOT privatization incentives. Lucrative charters that state-owned Tunisair had previously operated were transferred to Karthago, which also borrows Tunisair planes when needed.
¶10. (C/NF) The family further benefits from a general lack of transparency in the Tunisian economy. Zoning laws have allegedly been manipulated to allow family members and other insiders to buy agricultural lands at low prices before developing the land as profitable commercial or residential real estate. Tunisians allege that Ben Alis relatives have also exploited the parallel market, illegally importing everything from cars to electronic goods. The weak financial system has also been manipulated. One local financial expert blames the Family for chronic banking sector woes due to the great percentage of non-performing loans issued through crony connections, and has essentially paralyzed banking authorities from genuine recovery efforts.
FIGHTING BACK -------------
¶11. (C/NF) While every Tunisian seems to have a story about how Ben Alis family has exploited Tunisias economy for its own benefit, some have successfully protected their business interests from family interference. Senior officials from Tunisiana, the profitable private mobile phone services company, report no one has ever contacted them about giving the Family a cut of their business. A local shipping magnate says shipping is "too complicated" for the First Family, which has never suggested they wanted in on her successful operations. (COMMENT: Nonetheless, this businesswoman was approached for a donation to a Leila Ben Ali-associated charity. When she declined, her firm was subject to a "random" state audit that ended when she wrote a laudatory press article about the President. END COMMENT.) A Tunisia-based regional advertising firm reports that, although it has faced pressure from Ben Alis relations, the firm has simply refused to be cowed. Thus, like all types of corruption in Tunisia, it remains unclear how much of the phenomenon is exacerbated by fearful businesses giving in to extortionary tactics. One businessman who has gone head to head with the Trabelsis on two occasions (text removed by Aftenposten) says, "We are a nation of ten million cowards. You have to stand up. If you do, they will move on to an easier target."
¶12. (C/NF) COMMENT: The extent to which the President personally benefits from his own economic activities or those of other family members remains unclear. One European ambassador reports that seven employees manage Ben Alis investments in that country alone. Contacts have conflicting reports - some believe nothing happens without his knowledge, others say his family and advisors hide their corruption from him. Whatever the case, Tunisians now ruefully comment that if first president Habib Bourguiba thought he was the "father" of Tunisia, Ben Ali acts like its "owner". The political implications of this impression will be reported in part three of this series. END COMMENT.
HUDSON