Global Policy Forum

By Christian Fraser

Former Zambian president Frederick Chiluba is on trial accused of the theft of millions of dollars while in office. This is the first of two trials in which the former president is accused of diverting state funds into privately held accounts.

He was a bus conductor, who went all the way to the presidential office, but his fall from grace could be almost as spectacular. Mr Chiluba is charged with the theft of tens of millions of dollars during his 10 years in office. The prosecution alleges this is merely the tip of the iceberg - investigators believe millions more were laundered and re-directed into private accounts and property they have not yet found. Over the last year, thousands of hours have been spent uncovering what the prosecution has described as a highly organised network, through which the former administration is said to have bled the national treasury. It has been dubbed the "matrix of plunder". The prosecution says the trail goes to Belgium, the UK, the US, South Africa and the Caribbean. Mr Chiluba has previously denied the allegations of theft against him saying they are politically motivated.

'Slush fund'

Mr Chiluba is facing two trials which will run concurrently. In this, the first trial, he is charged along with his former intelligence chief, Xavier Chungu, and several former ministers and senior officials, with 168 counts of theft totalling more than $40m. It is alleged that money was diverted from the Ministry of Finance into an account held at the London branch of the Zambia National Commercial Bank (Zanaco). Mr Chiluba says the account was used by the country's intelligence services to fund operations abroad. But investigators say it was a slush fund, used to meet Mr Chiluba and Mr Chungu's private and personal expenses. It is alleged that a UK-based investment banking firm, with the help of two UK law firms, moved money into a variety of offshore accounts, trust funds and investment portfolios. The prosecution says some of the money was used to buy political support, some of it paid to members of the Chiluba family. The former president denies the charges, insisting the investigation is a political witch-hunt.

'Delight to see'

The UK and US governments have supported the prosecution throughout, donating funds and expertise to the investigation UK High Commissioner Tim David said in light of the serious nature of the allegations, it was important for everyone in Zambia that justice was seen to be done. "This campaign against corruption is a delight to see," he said. "The Zambian Government launched their investigations pretty soon after coming to office and they have been pursuing it pretty rigorously since then. "We are helping where we can, giving as much support as possible." Some observers say the trial could last up to six years. In the other trial, which will begin on 16 December, Mr Chiluba and Mr Chungu face another 65 charges of state theft, totalling $4m. It is alleged they stole this money from suspense accounts held at the Zambia National Commercial Bank in Lusaka. The Zambian anti-corruption task force, which was given a mandate to investigate Mr Chiluba's 10 years in office, has promised to continue investigating the cases however long it takes. Task force chairman Mark Chona says they have already confiscated 16 properties. Over 400 companies and 150 people are being investigated.

'Culture of corruption'

Mr Chiluba has fought hard to avoid this trial, putting together an expensive legal team to clear his name. Before he entered a plea his lawyers argued the constitution protected him from prosecution, but in July last year he was stripped of that immunity by his successor President Levy Mwanawasa. Zambia is now one of the poorest countries in the world. Its external debt stood at $5.4bn in Dec 2002. Debt servicing is now 20% of domestic revenue. Over 80% of the population live on less than a dollar a day and life expectancy is under 40. The anti corruption task force say the system allowed Mr Chiluba to preside over a "permissive culture of corruption." "That is fundamental to the predicament we find ourselves in today," said Mr Chona.

Waste

The UK High Commissioner supports that view. "This is a very poor country," says Mr David. "The amounts of money we are talking about would make a significant difference to Zambia's economy and the prospects of its people." Mr Chona believes some senior politicians were paid kickbacks and commission for awarding multi-million-dollar contracts. For years, he says, Zambia was paying an inflated price for the oil it imported, and they were underpaid for the copper they exported. Millions of dollars were wasted, he alleges, on contracts that were never honoured. "If that money had been properly invested, if it had been applied to well-thought-out economic projects, to the social sector, I don't think we would be in this quagmire," he said. "According to the evidence we have gathered, the Zambian public were betrayed."

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