Chapfika was involved with collapsed ENG

David Chapfika, chairman of the Parliamentary Committee on Budget and Finance, was involved in facilitating matters for the collapsed ENG Capital Asset Management, according to the United States embassy.

It disclosed this after the arrest of flamboyant businessman Phillip Chiyangwa who was also linked to the company and had reportedly been enlisted to protect two ENG principals from creditors.

ENG collapsed after its principal director Gilbert Muponda and Nyasha Watyoka allegedly defrauded it of Z$61 billion.

Full cable:

Viewing cable 04HARARE73, RULING PARTY TURNS ON ONE OF ITS OWN

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This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000073

SIPDIS

AF/S FOR S. DELISI, L. AROIAN, M. RAYNOR

NSC FOR SENIOR AFRICA DIRECTOR J. FRAZER, D. TEITELBAUM

LONDON FOR C. GURNEY

PARIS FOR C. NEARY

NAIROBI FOR T. PFLAUMER

E.O. 12958: DECL: 01/12/2009

TAGS: PGOV PHUM ECON EFIN ZI ZANU PF

SUBJECT: RULING PARTY TURNS ON ONE OF ITS OWN

REF: 03 HARARE 2364

Classified By: Political Officer Win Dayton under Section 1.5(b)(d)

¶1. (C) SUMMARY: Flamboyant ZANU-PF MP and prominent

businessman Philip Chiyangwa was arrested January 10 on

charges relating to a GOZ investigation of troubled ENG

Capital Asset Management (ENG). His arrest manifests

divisions within the ruling party that probably are based on

business considerations and personal rivalries, not political

views. Chiyangwa’s difficulties may foreshadow additional

intramural combat stemming from failing economic fortunes of

selected principals and machinations among ambitious or

insecure ZANU-PF politicians. END SUMMARY.

¶2. (C) Chiyangwa, the ZANU-PF MP for Chinhoyi, has remained

in jail since his arrest, emerging only for court hearings

over the weekend and again January 12. The High Court ruled

over the weekend that police had no grounds to hold Chiyangwa

but police refused to release him. According to the

government-controlled Herald newspaper, police claimed that

the High Court order was technically invalid because it had

been addressed to the wrong official. Late January 12 a

magistrate’s court heard defense counsel’s petition to have

charges dismissed. The magistrate reserved judgment and

remanded Chiyangwa into police custody. The magistrate is

expected to decide this week whether Chiynagwa has a case to

answer and, if so, to consider application for bail. An

attorney with the law firm representing Chiyangwa told the

embassy that police had been unavailable to discuss the

matter with counsel and would not predict when Chiyangwa

might be released.

¶3. (U) Chiyangwa reportedly faces charges of obstructing

justice, perjury, and contempt of court. The first two

charges relate to his alleged lack of cooperation with

authorities in their investigation of ENG during the last two

weeks. Two ENG principals reportedly had enlisted

Chiyangwa’s support in protecting them from creditors and in

getting a criminal fraud investigation against them scotched

(Chairman of the Parliamentary Budget, Finance, and Economic

Planning Committee David Chapfika reportedly also was

involved in “facilitating” matters for ENG). Chiyangwa

allegedly had sheltered some of the ENG principals’ cars from

creditors and obstructed police efforts to recover them. The

second charge stemmed from Chiyangwa asserting in open court

last week during proceedings on ENG that he “would deal with”

police connected to the case. He refused the sitting

magistrate’s instruction to retract the statement.

¶4. (U) Media reports during recent months indicated that

many components of Chiyangwa’s diversified business empire

were overleveraged or being sold at distressed prices. The

government-oriented Mirror on January 11 further reported

that Chiyangwa was attempting to extort ZD400 million (USD

60,000) from FSI Agricom Holdings through an illegal lease

arrangement relating to a farm he had seized — allegedly

outside the terms of the GOZ land reform program. The

article added that Chiyangwa had sent thugs from the

so-called Chinhoyi-based “Top Six” gang to suppress violently

FSI’s efforts to remove its equipment from the property.

¶5. (C) Curiously, the law firm retained by the ruling party

stalwart is known best for election petitions and other

actions aligned with the opposition. One lawyer from the

firm noted that the actions supporting the charges against

Chiyangwa — sheltering the cars and then threatening the

police — would normally have required arrest on the spot or

no arrest at all. Indeed, the magistrate who heard the

threat to police took no action when Chiyangwa refused his

instruction to retract it. It was only later that he was

arrested, which the lawyer suggested indicated the

intervention of high-level officials.

¶6. (C) In his diatribe against party members who put

personal interests ahead of the party, President Mugabe

singled out Chiyangwa (and only Chiyangwa by name) for

warning during December’s national ruling party conference.

Vice-President Joseph Msika was one who had it in for

Chiyangwa; his January 9 warning to unnamed politicians who

abused their position and threatened law enforcement

authorities was widely reported by national media as a stern

warning to Chiyangwa. Perhaps reflecting more than

coincidence, Msika’s remarks were made at the opening of a

grocery store owned by ZANU-PF Central Committee member James

Makamba, who reputedly fought Chiyangwa over a farm seized

under land reform. A close relative of Msika confided to

DATT that Msika indeed had played a role in driving

proceedings and had waited to take action against Chiyangwa,

a distant Mugabe relation, until Mugabe was out of the

country and Msika himself would be acting president. A

second source who knows Msika well told us (on what basis we

do not know) that Msika informed Mugabe in advance of his

intention to act against Chiyangwa.

¶7. (C) COMMENT: A cocky favorite with the local media,

Chiyangwa is one of the most prominent of a new breed of

ZANU-PF young turks who have translated their position into

phenomenal business success by hook or by crook. The 44-year

old is a rough cut: during the run-up to the 2002 elections,

he took out ads promising money to supporters and appeared in

video clips encouraging violence against white farmers and

MDC supporters. More recently, his notorious “Top Six” gang

has been implicated in violently preventing MDC political

candidates from filing nomination papers, as well as in the

violent seizure of farm properties. A high profile black

empowerment advocate, Chiyangwa is a lightning rod who

provokes strong reactions among Zimbabweans; dozens of his

supporters (including other politicians) chanted

revolutionary songs (and, curiously, anti-opposition slogans)

in his support at the courtroom during his hearing January 10.

¶8. (C) COMMENT (CONT’D): Notwithstanding his national

prominence and appeal to many, Chiyangwa clearly lost favor

with those who matter. His alleged improprieties generally

conformed to popular practice in Zimbabwe; that they did not

enjoy customary impunity substantiates the political nature

of his prosecution. Although the youthful Chiyangwa’s

political career may not be over for good, the rising star’s

rather sudden eclipse offers some lessons. First, it

underscores the precariousness of power among those who

jockey for position below the ruling party’s pinnacle. We do

not know fully what led to Chiyangwa’s apparent demise;

however, the braggadocio and colorful disdain for authority

that contributed to his fast rise to prominence appears also

to have been instrumental in his fall. In a party with but

one leader and voice, individualism and ambition often

provoke suspicion, jealousy and a concerted drawing of

daggers among rivals who view power as a zero sum game. His

plight, prominently chronicled in humiliating detail by the

government media, is a warning to other party mavericks and

rising stars. The turning of the state media, always under

the control of Information Minister Jonathan Moyo, against

Chiyangwa is itself an object lesson on the fickleness of

cronyism.

¶9. (C) COMMENT (CONT’D): The decline of Chiyangwa’s business

empire certainly reduced his value to the party and to those

in the party who might have protected him. In that vein,

there are other party business moguls who, like Chiyangwa,

are finding themselves dangerously overextended — and

increasingly expendable — as the economy continues its

downward spiral. Those who, like Chiyangwa, have built

economic and political success at the expense of rule of law

may increasingly find themselves hoisted on their own petard

should Zimbabwe continue on its current course. The

situation appears ripe for additional intrigue and

bloodletting within the ruling party but, with depth of

personal loyalty to Mugabe being the principal credential for

career security and advancement, little of this augurs well

for a healthier policy-making environment.

SULLIVAN

(55 VIEWS)