05.07.2006: CORRUPTION IN TUNISIA PART III: POLITICAL IMPLICATIONS

C O N F I D E N T I A L TUNIS 001673

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STATE FOR NEA/MAG - HARRIS STATE PLEASE PASS USTR - BELL USDOC FOR CLDP - TEJTEL AND ITA/MAC/ONE (NMASON)

E.O. 12958: DECL: 07/02/2016 TAGS: PREL, ECON, PGOV, EFIN, ETRD, EINV, KDEM, TS SUBJECT: CORRUPTION IN TUNISIA PART III: POLITICAL IMPLICATIONS

REF: A. TUNIS 1630 B. TUNIS 1622 C. TUNIS 1255 D. TUNIS 311 E. 05 TUNIS 2266 F. 05 TUNIS 896

Classified By: AMBASSADOR WILLIAM HUDSON FOR REASONS 1.4 (b) AND (d)

1. (C/NF) SUMMARY: This is the third of a four cable series on corruptions impact on the Tunisian economy and political future. Domestic frustration is growing with the rumored vast commercial holdings of Tunisias First Family: President Ben Ali, wife Leila (Trabelsi) Ben Ali and their extended clan, and more and more Tunisians are willing to openly discuss the familys alleged corruption. However, severely limited freedom of speech and minimal political activism have restricted public discourse on the topic to date. Our ability to promote freedom of expression, a cornerstone of our Freedom Agenda for Tunisia, is directly hindered by the fact that greater freedom of expression would likely lead to public criticism of the Familys corruption. At the same time, the Familys interests complicate Ben Alis own avowed "plan" for political reform because any viable successor or opposition could be viewed as a threat to the familys economic interests. Part three of this series details the political implications of the familys alleged corruption. END SUMMARY.

THE IMPACT ----------

2. (C/NF) While corruption in Tunisia may be on a smaller scale than in some developing countries, the political relevance of the rumors is notable because corruption -- at least as a topic of public conversation -- is a relatively new phenomenon in Tunisia. Conspicuous consumption -- from extravagant properties to luxury cars -- was not common in Tunisia ten years ago. Tunisians are increasingly frustrated with this new development and are confused about its relevance to their daily lives. Under President Bourguiba, Tunisians focused on achieving a good education and comfortable lifestyle, both goals Bourguiba himself embodied. Today, elite Tunisians boldly, if not publicly, denounce Ben Ali and the Trabelsi family as uneducated and uncultured nouveaux riches whose conspicuous consumption is an affront to all patriotic Tunisians. Some fear that this new phenomenon is sucking the life-blood out of Tunisia -- leading to a spiraling educational, moral, social and economic decline. Worse, many civil society activists speculate that corruption -- particularly that of First Lady Leila (Trabelsi) Ben Ali and the broader Trabelsi clan -- is the fundamental impediment to meaningful political liberalization.

3. (C/NF) Despite this, most Tunisians seem to be focused on their personal standard of living and are unwilling to risk their own socio-economic status by publicly denouncing the Ben Ali clans rumored corruption. Unlike a generation ago, Tunisia now has a large middle class with typical middle class aspirations. A business contact explained that students are more interested in their prospects for a family, home ownership and buying a car than in being politically active. The European Commissions Head of Delegation believes that the average citizen is kept "happy" through increased consumption. While average Tunisians continue to complain about the rising cost of living and the Familys rumored corruption, some are beginning to reflect on the possible link between the two.

4. (C/NF) Despite this, embassy contacts do not yet believe any opposition movements could gain significant domestic support under the anti-corruption banner. Most dismiss the theory that Tunisias latent Islamist movement could obtain widespread support by advancing an anti-corruption platform similar to the one that led Hamas to victory in Palestinian elections. (NOTE: It remains unclear how non-elites might respond to this type of opposition. END NOTE.) Civil society activists, while quick to offer examples of the Ben Ali clans corruption, are more likely to complain about the lack of freedom and political space than to focus on corruption. It remains uncommon for Tunisians to suggest that Ben Ali should go on the basis of corruption alone or to make any

specific comment regarding the Presidents political future, other than that they expect him to stay for life. Thus, while international and domestic critics increasingly call for political reform, few Tunisians are willing to be politically active, and their concerns over corruption do not appear strong enough to motivate greater involvement.

THE FUTURE ----------

5. (C/NF) Meanwhile, the entrenched position of the President and his family only increases the difficulties domestic and international entities, including the USG, face in encouraging political reform in Tunisia. As Ben Ali himself has suggested that he will one day be a "retired" president (Ref D), it is not overly optimistic to believe that his glacially slow political reform "plan" may include increased political liberties and eventually his own departure. However, those who believe that Ben Ali is more of a benevolent father than a corrupt dictator argue that the Familys corruption (and particularly Leila Ben Alis personal influence) is the root cause of his refusal to leave office and/or accelerate political openness. Given the popularity of corruption as a topic of discussion in private circles, it is extremely likely that increased freedom of speech, one of our main Freedom Agenda goals, would spark public discussions of corruption and the Presidents family. In fact, it appears that the corruption rumors are directly contributing to the stagnant state of the domestic press. The prominent case of lawyer Mohamed Abbou, who was jailed after writing about Trabelsi family influence and corruption, shows the extent the GOT will go to prevent public criticism of the Familys activities (Ref F). One contact explains that Ben Ali and his family are "red lines" which Tunisians know not to cross.

6. (C/NF) In addition, the Familys vested financial interests mean that any presidential succession scenario would likely require some kind of financial guarantees for the Family that Tunisias still-developing economy may not be able to support or that Tunisian public opinion would reject. During a recent meeting with Deputy Secretary Zoellick (Ref C), a Tunisian representative of (text removed by Aftenposten) said that for a significant shift in the political status quo, it is necessary that those "close to the President" be given assurances that they would "continue to be taken care of" following the departure of Ben Ali. He added that such an arrangement would be a tall order for the USG diplomatically, but that without such assurances to Ben Alis inner circle, a more open political system would be difficult. Some surmise that a 2005 law regarding "the benefits for former presidents" was crafted precisely to provide for the economic well being of Ben Alis immediate family (Ref E) in the event of a peaceful transition. However, the benefits outlined in this law would not provide nearly the standard of living to which the President and his relatives are accustomed.

7. (C/NF) Others allege that President Ben Ali may have manipulated state coffers to provide for his future. As the Presidency has a separate budget account, it is possible that this funding source could have been utilized to allow Ben Ali to direct funds into personal accounts. Unlike some notorious rulers, however, there is limited evidence to support this allegation, and the Presidents almost nonexistent foreign travel does not foreshadow that he is planning a luxurious retirement in Europe or elsewhere. However, recently some rumors have circulated that the extended family is beginning to liquidate and consolidate its domestic holdings and shift some assets overseas in preparation for Ben Alis ultimate departure or demise. Contacts cite these rumors as evidence that the Ben Ali regime is entering its last days and the President and his family are looking to make off with their fortune.

8. (C/NF) There is other evidence that the Trabelsi family is positioning itself for a future political transition. Tunisians rarely discuss Ben Alis political maneuvers without mentioning Leila Ben Alis own political power and aspirations. Cabinet reshuffles and official appointments are generally believed to go to personal allies of the President, or the First Lady. The recent removal of a senior MOI official was believed to be due to a falling out with the President, while Foreign Minister Abdallah is rumored to been

"kicked out" of the Palace (and installed in the MFA) following an altercation with Leila Ben Ali. The scope of these political relationships are one way the Trabelsi clan are believed to be securing family members financial well-being -- by installing enough influential GOT allies to guarantee they will not be excluded.

9. (C/NF) COMMENT: The corruption rumors -- true or false -- are clearly working against our efforts to speed democratic reform in Tunisia. As long as such rumors continue to spread, it is unlikely the GOT will increase political space that could facilitate public discourse likely to be harshly critical of the President. Additionally, presidential succession options are limited by the need to cover-up past illicit activities. However, the lack of Tunisian political activism, or even awareness, seems to be a more serious impediment. While frustration with the First Familys corruption may eventually lead to increased demands for political liberalization, it does not yet appear to be heralding the end of the Ben Ali era. END COMMENT. HUDSON

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