VZCZCXYZ0002
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DE RUEHNR #1829/01 2440858
ZNY SSSSS ZZH
P 010858Z SEP 09
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 0826
INFO RUEHLO/AMEMBASSY LONDON PRIORITY 3308
RHEHNSC/NSC WASHDC PRIORITY

<<223100>>
09.01.2009 08:58
09NAIROBI1829
Embassy Nairobi
SECRET
08STATE81854
VZCZCXYZ0002
PP RUEHWEB

DE RUEHNR #1829/01 2440858
ZNY SSSSS ZZH
P 010858Z SEP 09
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC PRIORITY 0826
INFO RUEHLO/AMEMBASSY LONDON PRIORITY 3308
RHEHNSC/NSC WASHDC PRIORITY
TAGS: CVIS KCOR KCRM PGOV PREL ECON KE
SUBJECT: VISAS DONKEY: CORRUPTION 212(F) VISA DENIAL 
REF: A. 2008 STATE 81854


S e c r e t nairobi 001829

Sensitive
sipdis

Dept for a/s carson, inl/c/cp, jane becker; nsc for senior
director gavin

E.o. 12958: decl: 08/27/2019
Tags: cvis, kcor, kcrm, pgov, prel, econ, ke
Subject: visas donkey: corruption 212(f) visa denial

Ref: a. 2008 state 81854
b. Td-314/081112-08
c. Td-314/081567-08
d. Td-314/083973-08

Classified By: Ambassador Michael Ranneberger, Reasons 1.4 b,d

¶1. (C) Embassy is seeking a security advisory opinion under
Section 212(f) of the Immigration and Nationality Act (INA),
Proclamation 7750, precluding the entry into the United
States of Henry Kiprono Kosgey and his family. Kosgey was
born in Nandi district, Rift Valley Province, Kenya on July
14, 1947. There is strong evidence that Kosgey has
consistently engaged in official corruption from at least
1987 to the present while holding a variety of ministerial
and parastatal director positions, and that corruption has
had serious adverse effects on both U.S. foreign assistance
goals and on the stability of Kenya's democratic
institutions. The following provides information requested in
ref A, paragraphs 26-28.

¶2. (C) Like many members of Kenya's political elite, Kosgey
has had a long career in politics and served in numerous
ministerial positions under the kleptocratic administration
of former President Daniel arap Moi. He has, however, also
continued to enrich himself at the public's expense while
serving as a member of Parliament (MP), as director of the
parastatal and now bankrupt Kenya National Assurance Company
and as Minister for Industrialization under the current
coalition government.

¶3. (C) Kosgey was first elected as MP of Tinderet
constituency in Rift Valley Province in 1979 under Moi's
Kenya African National Union (KANU) party. (Note: At that
time, Kenya was a single-party state.) He was re-elected as
MP in 1983, 1988, 1992, 1997, 2002, and 2007, when he ran as
a candidate under Prime Minister Raila Odinga's Orange
Democratic Movement (ODM) party. After becoming an MP, Kosgey
served under Moi as Minister for Transport and Communications
(1980-1985), Minister for Cooperatives Development
(1985-1986), and Minister for Culture and Social Services
(1987-1988). Kosgey, like Moi, is an ethnic Kalenjin from
Rift Valley province. Although he is a member of the Nandi
sub-tribe and not Moi's Tugen sub-tribe, he was for many
years a close and trusted associate of the former president.
From 1989 to 1992, he served as Executive Chairman of the
now-defunct parastatal Kenya National Assurance Company
(KNAC). From 1993 to 1996, he served as an MP but did not
hold a cabinet position. In 1996, he reentered the cabinet
when he was appointed by Moi as Minister for Environment and
Natural Resources (1996-1997). He subsequently served as
Minister for Tourism (1998-1999), Minister for Science and
Technology (1999-2001), and Minister of Education
(2001-2002). During President Kibaki's first term
(2003-2007), Kosgey reinvented himself as an ODM MP after Moi
left power in 2002. Following the formation of the coalition
government in February 2008, he was appointed by Prime
Minister Odinga as head of the newly-created Ministry of
Industrialization, a post he currently holds. He is also the
current chairman of ODM.

Embezzling funds, looting parastatal assets

¶4. (C) Open source reporting alleges that, when serving as
Minister of Culture and Social Services, Kosgey was part of
the team that brought in American marketing consultant Dick
Berg to assist Kenya in organizing and hosting the fourth
All-Africa Games in 1987. Berg's task was to assist the GOK
in raising funds to support the games; he is accused of
fleeing the country with roughly $2.6 million before the
games began. Kosgey is also alleged to have participated in
the looting of the assets of the Games' organizing committee
by misappropriating funds designated for costs associated
with the Games for his personal use. Kosgey is also accused
of looting the real estate assets of former parastatal Kenya
National Assurance Company (KNAC) when he served as its
director from 1989 to 1992. Under his management, KNAC is
also alleged to have made illegal loans and paid out
fradulent claims to politically connected individuals. By
illegally appropriating KNAC's most valuable assets, Kosgey
reduced the company to an undercapitalized shell that
ultimately collapsed and failed to meet its financial
obligations to pension and life insurance policy holders. At
the time the KNAC went into receivership, it held more than
$13 million in life insurance policies. As a result of the
collapse of KNAC, 900 employees lost their jobs and thousands
of Kenyans from all walks of life lost their pensions or did
not receive insurance payments upon the deaths of
beneficiaries. The former employees also allege that the
company owes them an estimated $655,000 in pension benefits.

Accused of grabbing public lands

¶5. (C) When President Kibaki first took office in 2003, he
ordered a number of commissions of inquiry aimed at examining
and correcting some of the worst corruption excesses of the
Moi era. Unfortunately, once the first blush of reformist
zeal had passed, there was almost no accountability for those
officials named in the commissions' reports or implementation
of the commissions' corrective recommendations. The Ndung'u
Commission was constituted in 2003 to investigate "irregular
allocation" or illegal privatization of public land in urban
areas, settlement schemes, forests, and reserves during the
Moi era. Its report, released in December 2004, was more than
2,000 pages long with annexes and provided the most
comprehensive analysis to date of shady land deals during the
Moi years (1978-2002). The commission recommended the
revocation of hundreds of land allocations, including many to
past and current political figures. To date, none of these
revocations have been implemented despite pledges by current
Minister of Lands James Orengo to do so.

¶6. (C) Kosgey (along with fellow minister Sally Kosgei) is
named in the Ndung'u report as the improper recipient of more
than 300 hectares of the South Nandi forest in 1999.
According to local anti-corruption NGO Mars Group Kenya, the
illegal carving out of a total of 1,170 hectares of forest
land was supposed to be part of a land swap in which Kosgey
and two other politicians would exchange the forest land for
farmland held by local farmers and the minority Ngerek
community. When the exchange took place, many of the intended
beneficiaries were excluded and rendered landless. In 1995,
Kosgey was serving on the board of directors of Kakuzi Tea
Company, which is still in existence and is publicly traded
on the Nairobi and London stock exchanges. He is accused of
colluding with other corrupt directors in stripping Kakuzi of
some of its prime assets by illegally transferring 97
hectares of Siret Farm (a tea plantation) to the Tinderet
Development Trust Company, a shell company co-owned by Kosgey
and his son Allan. In the face of declining global tea prices
and burdened by debt of more than $8.5 million, Kakuzi put
the remainder of Siret Farm up for public sale in 2007.

Involvement in post-election violence and opposition to
accountability

¶7. (S) In October 2008, Kosgey was named in the report of the
Commission to Investigate Post-Election Violence (CIPEV),
commonly known as the Waki Commission after its chairman,
Justice Philip Waki. The report alleged that Kosgey
participated in incitement, planning, and illegal financing
of post-election violence in and around his rural
constituency of Tinderet in the Nandi Hills district of Rift
Valley province. Tinderet is a tea-growing area, and many tea
pickers working on the plantations hail from western Kenya
and are ethnic Luo or Luhya. Many workers and their families,
who usually live in company-owned housing on the larger
plantations, fled or were driven out of the area during the
post-election violence by groups of youths who resented
non-Kalenjins being employed in the local tea industry.

¶8. (C) When the report was released, Kosgey joined a number
of his fellow ODM MPs in rejecting the Waki Commission's
findings, despite Odinga's public statements that the Waki
report's recommendations be fully implemented. Key
recommendations included setting up a local special tribunal
to try persons suspected of participating in post-election
violence and/or sending the dossiers on these individuals to
the International Criminal Court (ICC) for potential
prosecution. In his capacity as ODM chairman and as an MP,
Kosgey has repeatedly and publicly rejected both the local
tribunal and ICC options, joining some of the other MPs named
in the Waki report as instigators in calling instead for
healing and reconciliation. In public remarks on October 14,
2008, Kosgey stated that "the people in that list were not
given a chance to defend themselves. That is very unfair."

Questions on the maize scandal

¶9. (C) In early 2009, a national scandal erupted when a
number of prominent politicians, including Minister of
Agriculture William Ruto, were accused of speculating in
government-subsidized maize designated to feed the hungry
after the planting cycle was disrupted in many growing areas
by the post-election violence. (Note: Kosgey's constituency
was among those most affected, as it is located near the
epicenter of inter-ethnic violence in Rift Valley province.)
Twenty-one MPs and three ministers, including Kosgey, were
summoned for questioning by investigators at the Kenya
Anti-Corruption Commission (KACC) in February 2009. Local
media reported that Kosgey was asked about letters he sent to
the National Cereals and Produce Board requesting an
allocation of subsidized maize.

Hiring and firing without transparency

¶10. (C) As Minister of Industrialization, Kosgey is
responsible for overseeing the operation, management, and
privatization of the Kenyan government's ten state
corporations. He also oversees the implementation of the
GOK's new "quality mark" requirement without which many goods
cannot be sold in Kenya. Many private sector companies,
including major U.S. companies like Eveready and Sara Lee,
have protested this new requirement adds unreasonable costs
to importing goods and discriminates against products
manufactured outside Kenya. Major private sector advocacy
groups, including the Kenya Association of Manufacturers
(KAM), have also noted the great potential for corruption in
implementation of the new quality mark requirement. In June
2009, KAM also accused Kosgey of illegally and unilaterally
removing some of the private sector members of the board of
the Kenya Bureau of Standards, the entity charged with
implementing the quality mark program. xxxxxxxxxxxx have told us that they have credible
information that Kosgey is benefitting illegally from the
imposition of the quality mark requirements (i.e., by taking
bribes from local producers in lieu of their actual
compliance with the new quality standards) and that he is
deeply involved in corruption.

¶11. (C) In July 2009, Kosgey was publicly accused by his
Assistant Minister Nderiti Mureithi (a member of Kibaki's
Party of National Unity) of improperly firing three heads of
parastatals (the Industrial Development Bank, the Kenya
Industrial Research and Development Institute, and the Kenya
Industrial Estates) without following proper procedures and
without consulting the boards of directors of those
companies. In an interview with national TV outlet NTV,
Mureithi called Kosgey "a throwback to the dark days of the
Moi era" and alleged that the three directors were
unilaterally fired by Kosgey without any consultation and
replacements selected by him without a transparent or
competitive recruitment process as required by Kenyan law.
Odinga ultimately had to intervene in the dispute and ordered
that the directors remain in office until the correct
procedures could be instituted to remove them.

Negative impact on u.s. National interests

¶12. (S) Stability of Democratic Institutions and Impact on
U.S. Businesses: Kosgey's involvement in inciting
post-election violence in Rift Valley province directly
contributed to the deaths and displacement of Kenyans and
significantly undermined the stability and security of the
region. Non-Kalenjin tea workers had to flee their jobs and
the tea industry was hit hard by the disruption of production
and interference with local transport routes. Displacements
in the region also disrupted the planting and harvesting
cycles and directly contributed to hunger and official
involvement in speculation in the maize market. Kosgey's
corrupt activities also have an adverse impact on U.S.
national interests in promoting the reform agenda agreed upon
in the Annan accord. Because he is an influential voice in
the Kalenjin community, Kosgey's repeated public opposition
to prosecution of perpetrators of violence, either locally or
internationally, has contributed to undermining public
confidence in the judiciary and will make it much more
difficult to pursue accountability in these cases. His
extensive illegally-acquired land holdings will motivate him
to oppose meaningful land reform legislation when it comes up
in parliament later this year. He is also likely to oppose
reform-oriented land policy changes in a new constitution.
His corrupt and unfair application of the quality mark
program has had a direct discriminatory impact on importers
and vendors of U.S. products in Kenya.

¶13. (C) U.S. Foreign Assistance Goals: Kosgey's diverse
corruption activities over decades have negatively impacted
U.S. foreign assistance goals in a number of ways. His
continuing ownership of illegally transferred forestry lands,
part of the greater Mau Forest which comprises Kenya's
largest water catchment area, has contributed to ethnic
conflict over land ownership in Rift Valley, and has also
contributed to deforestation and resulting drought and hunger
that currently plagues Kenya. Donors, including the United
States, have had to provide billions of dollars in emergency
food aid to Kenya over the last four years of chronic
drought, even in areas of Rift Valley that were historically
the most agriculturally productive regions of Kenya. His
looting of public and private company assets undermine
investor confidence, directly create job loss, and damage
public confidence in the security of pension funds. Kosgey
has repeatedly ignored government regulations for hiring and
firing directors of parastatals and, through these actions,
signals a profound disrespect for the rule of law which we
are striving to promote.

Additional information required for finding

¶14. (C) Kosgey has not been informed that he may be
ineligible for a U.S. visa under section 212(f) of the INA
and Proclamation 7750.

¶15. (C) Kosgey last traveled to the U.S. in November 2006. He
applied for and was issued U.S. visas in 1997, 1999, 2003,
2004, 2005, and 2006 (all G2 visas). His most recent
application was for a G2 visa to attend a parliamentary forum
at the UN General Assembly in New York. He was issued a G2
multiple-entry, 3-month visa on November 2, 2006 in
diplomatic passport D006890. He has not applied for a visa
since 2006. As a sitting minister and member of parliament,
he may intend to apply for a U.S. visa for either
professional or personal travel. However, we do not have any
clear indication that he intends to apply soon. He has two
sons who have made forays into politics: Allan Kosgey, who is
a co-director of the Tinderet Development Trust with his
father, and youngest son Alex Kosgey, an aspiring MP.

¶16. (C) Since almost the beginning of his long political
career, Kosgey has consistently availed himself of
opportunities to enrich himself at the expense of the Kenyan
taxpayer. His participation in official corruption led
directly to the financial collapse of one parastatal, and he
has also undermined stability and security in the Rift Valley
by instigating and planning inter-ethnic violence before,
during, and after the December 2007 elections. Post
recommends that he be excluded for travel to the U.S. under
section 212(f) of the INA and that no exception be granted.
Ranneberger