Annonce

**Numidio** · 17 décembre 2010, 20h41

7. (C/NF) XXXXXXXXXXXX noted that Abdelhafid Ferghouli, former VP*
for downstream operations now appointed interim CEO, is the*
one (now former) Sonatrach VP with whom Anadarko was not*
acquainted. XXXXXXXXXXXX doubted he would last long or be*
effective in the top position. No one expects the Sonatrach*
executives under investigation to return to their previous*
positions.*

Continuity of Sonatrach Operations*
----------------------------------

8. (C/NF) Energy/Mines Minister Khelil's Jan. 17 assurances*
that company operations would be unaffected have not gone*
unchallenged. Several press reports sourced to industry*
insiders and experts say that fear has paralyzed Sonatrach*
upper ranks, who are all afraid to make a decision. XXXXXXXXXXXX*
view paralleled this assessment, and we have heard similar*
views from French -- quite concerned about Sonatrach because*
of the French oil company Total's exposure here -- and other*
diplomats. He said that all senior executives, at least in*
the upstream end of operations he is familiar with, are*
looking over their shoulders and afraid to make decisions or*
sign anything. The company would not sign amendments to*
XXXXXXXXXXXX insurance contracts on oil production necessitated*
by the 2009 budget amendments (Complementary Finance Law) --*
contracts for which former VP for Upstream Operations*
Belkacem was responsible. Sonatrach had contracted foreign*
insurance companies to provide this insurance. Now these*
companies were not getting paid. Before long, they would*
cease insuring XXXXXXXXXXXX production operations. If that*
happened, work would stop. XXXXXXXXXXXX said XXXXXXXXXXXX fields are*
the largest upstream project with foreign participation in*
Algeria.*

Leading Role of Algeria's Intelligence Services*
--------------------------------------------- --*

9. (C) All papers report that Algeria's equivalent to the*
DNI, the Departement du Renseignement et de la Securite*
(DRS), which is no longer under the Ministry of National*
Defense, carried out the investigation. Although DRS' move*
out of the shadows and into the limelight has been*
unprecedented, its special investigative service for internal*
corruption has been active for years (i.e., even as far back*
as the Boumedienne era). The magazine "Jeune Afrique"*
recently claimed, for example, that DRS had investigated 1650*
elected Algerian local officials (or about one out of ten)*
since 2002 for corruption. XXXXXXXXXXXX was well aware of DRS'
involvement in the Sonatrach case and related that former VP*
Belkacem, in many meetings with XXXXXXXXXXXX, had been extremely*
careful in what he said when others, even company waiters,*
were present. He was very guarded over the telephone.*
XXXXXXXXXXXX imputed this behavior to concern over DRS*
surveillance. XXXXXXXXXXXX confided that DRS has interviewed many*
of XXXXXXXXXXXX company's local staff.*

Political Ramifications*
-----------------------*

10. (C/NF) XXXXXXXXXXXX noted that no one believed Energy/Mines*
Minister Khelil's claims to know nothing of the*
investigation. Most believe Khelil exercised a guiding hand*
over Sonatrach operations. XXXXXXXXXXXX noted that his*
conversations with industry insiders had pointed to a cousin*

of the minister known only as Hemche who was a close adviser*
to former CEO Meziane. His sources believed Hemche was a key*
decision-maker, although Meziane did the signing. Early last*
December, Hemche reportedly abruptly retired and took up*
residence in Lugano, Switzerland.*

11. (C) Ambassador noted that Algiers is swirling with*
speculation about the political background of this and other*
scandals affecting several government ministries and public*
enterprises. Some believed it was a logical outcome of*
President Bouteflika's oft-stated commitment to attack*
corruption. Most, however, interpret the DRS move against*
high-level Sonatrach officials -- who all owed their jobs to*
Bouteflika-confidant Khelil -- as the military's retaliation*
via the DRS against the civilian control over it that*
Bouteflika had imposed since his reelection to a second term*
in 2004.*

Comment*
-------*

12. (C) The investigation against the leadership of the*
company that finances over half the country's budget and*
produces 98 percent of its export revenue has shocked the*
country and generated rampant speculation about the political*
motivations behind it. In a country where power*
relationships and processes are opaque, speculation is as*
rife as hard evidence is scarce. A visiting analyst of a*
leading U.S. risk analysis firm told Poloff the week of*
January 31, for example, that all his contacts believe the*
DRS shaped the investigation to send a message to Bouteflika,*
either that he should allow relatives of leading generals a*
greater slice of the economic pie, or that Bouteflika's*
western Algerian "clan" should cede power back to the*
military (which many regard as dominated by eastern*
Algerians), or simply that the civilian-dominated authority*
should restore more behind-the-scenes influence to the*
military. Despite this theory and others we have heard, we*
see no hard evidence for any particular political*
interpretation. What is certain is that the alleged*
infraction and sums involved in this corruption case may only*
represent the tip of an iceberg -- which was precisely the*
point of an open letter to the DRS published by a former*
Sonatrach VP January 30 in the French language daily "El*
Watan." That article urged the DRS to look into a long list*
of much larger Sonatrach operations, including spot market*
sales to a handful of select customers connected to senior*
members of the power structure. The U.S. risk analyst's*
sources were certain the DRS planted this article as a*
further warning to civilian authority.*

13. (C) This case is the latest in a series of corruption*
investigations that started to surface with increasing*
frequency since last spring and which are now competing with*
indignation over TSA measures and Algeria's failed bid to win*
the African Cup of Nations football tournament for the main*
headlines in the daily press. Two of the larger cases*
already underway are alleged wrongdoing in the construction*
of the East-West Highway and in the awarding of fishing*
licenses to Turkish companies. Others involve*
state-controlled telephone operator Algerie Telecom, BRC*
(mentioned previously), and the National Bank of Algeria.*
Few cases have yet produced a trial or conviction, helping*
harden the widespread view that leading public officials*
continue to enrich themselves with impunity at public*
expense. With DRS "commissars" believed present in virtually*
every public company or ministry front office, senior*
officials are said to be worried that every visitor,*
especially non-Algerians, is duly noted and reported. DRS*
files, already swollen with decades of political and personal*
financial dirt on practically all notable Algerians, are said*
to be growing fatter with information on suspicious business*
dealings or allegations of special favors. The big question*
no one can answer definitively is whether Bouteflika is*
orchestrating this anti-corruption blitz, as PM Ouyahia has*
publicly claimed and as would be consistent with Bouteflika's*
longstanding intention, or is its ultimate target. His*
silence, noted by the press, has only fueled the speculation.*
PEARCE*

Annonce

Wikileaks: Wikileaks: DIRECTORS OF NATIONAL OIL COMPANY INVESTIGATED FOR CORRUPTION

Wikileaks: Wikileaks: DIRECTORS OF NATIONAL OIL COMPANY INVESTIGATED FOR CORRUPTION

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