In the first week of February 2002, many of us watched the Prime Minister reporting on the performance of "everything" and/or "everybody" to the parliament. As rightly captured in the editorial of the weekly Reporter newspaper (Feb. 3rd, 2002, Amharic), he reported, on the performance of his government, the judiciary, the regional government and even the parliament. This was followed by a very unbalanced debate, in the sense that the PM and his henchmen talked for over six hours while the opposition was allowed a fraction of it. Still, it was a debate and, as such, encouraging.

In the course of this session we learnt a lot about the state of our general affairs as a nation. We learnt about the capabilities of our leaders. But more importantly, we learnt about the ignorance of all those who tried to defend the PM's report, typically, Ato Addisu and Ato Bereket. Once again, we saw our PM trying to deceive and cheat us all-nothing new in that.

An opposition MP, Major Admasu asked or raised some issues in relation to the current "campaign against corruption", the Commercial Bank of Ethiopia, the previous relationships between the Commercial Bank of Eritrea and Ethiopia, etc. In response, the PM tried really hard to cover up in front of the camera and inadvertently called in the IMF/WORLD BANK as supporting witnesses in defense of some of his outrageous claims. Hoping that the witnesses he called will indeed respond, here are some points that need to be considered by all.

Let me start with the simplest of the issues, the outstanding balance with the Commercial Bank of Eritrea. It had already been proven, both by the auditors of the CBE and its management, that the Commercial Bank of Ethiopia has a claim of more than 1.2 billion birr against the Eritrean Bank. This fact has been previously confirmed by the written letter of the Minister of Finance and has not been denied by the Prime Minister in his report.

In his attempt to tell us what he admittedly knows very well, the PM, however, went out of his way to create an analogy between his story and the story of two traders trading between two Ethiopian cities via two banks located at both ends. He then tried to reduce the whole issue to a mere imbalance of trade between these two traders, whose relationship, was abruptly disrupted due to the war, a "force majeur".

Furthermore, he tried to relate this issues with the problem surrounding the currency change in both countries and the fate of the "unknown quantity" of birr notes collected in Eritrea. He finally called in the IMF/WORLD BANK to testify on the veracity of his story. Let's raise two questions:

1. Was it a simple trading issue between two traders? No! The relationship between the two banks was never based on a commercial contract and mutual trust. It was created and imposed on the Commercial Bank of Ethiopia (CBE) by the PM himself. The CBE has credit lines with many other foreign banks. They are all based on mutual consent and are protected by standard contracts including periodic clearing or other settlement arrangements. However, the relationships between the Ethiopian and Eritrean banks were never based on an internationally acceptable commercial contract but rather, on the personal understandings of the two countries' leaders. There was no built-in mechanism of redress or settlement, and the only recourse in times of dispute was reporting it to the leaders.

More importantly in this particular arrangement, there was no limit to the liability. We are now talking about birr 1.2 billion, but it could as well have been 12 billion or more. Simply, there was just no limit. Regarding beneficiaries, CBE can only tell us who drew how much. Unlike other banks, it had no means of identifying the reason or purpose of payment. CBE was obliged to honor all payment instructions issued by the Commercial Bank of Eritrea and post all transactions in its books.

2) Was this operation in any way related with the currency change? No and never. The problem with the two accounts or the "imbalance" as the PM called it was brought to the attention of the PM at least a year or so before the currency change issue came up. During this time, the figure started growing fast and the worried top executives of the CBE tried to look for a solution within their capacity. They even went to Asmara and discussed the matter with their counterparts. The then Governor of National Bank of Eritrea, Teklie Beyene, an ex-clerk in the CBE, told his ex-bosses from the CBE, bluntly, that this was not a matter for him to get involved. He also told them that it was a matter between the two states leaders. The team came back and reported the matter to PM Meles. Further exacerbating the problem at hand, the Eritrean Bank stopped honoring payment instructions originating from the CBE. On the other hand, the CBE was instructed to be patient and continue honoring Eritrean Bank payment instructions. In the meantime, the CBE was forced to physically transport huge loads of cash by plane to Assab in order to pay for the port services and other expenses, including salaries of Ethiopians working in Assab. As a result, the debt balance ballooned in a short period of time (from approx. birr 800 million to birr 1.2 billion).

All these happened long before the currency change and more than a year before May 1998's aggression. Therefore and contrary to what the PM said, the issue of the 1.2 billion birr being raised everywhere nowadays, had nothing to do with currency change or the war and there was no room for IMF/WORLD BANK involvement. As discussed above, none of these show that this is a consequence of trade imbalance, for it was not in any way connected with the standard trading instruments. In fact, the CBE was particularly used as an unlimited drawing account for the shoddy businesses of Eritrea, including the illegal foreign exchange trading in Ethiopia.

The list of beneficiaries as then reported by the CBE to PM Meles clearly showed the motive and scope of the operations that were being financed with this money. The currency problem came in August - September 1997 and was not a problem as such, because by simultaneously changing the Ethiopian bank notes, the old notes both in Eritrea and Ethiopia became useless paper overnight. Not knowing that the Ethiopian notes were also being changed, the Eritreans were hoping to raise outrageous demands in exchange for the birr notes they were to collect from Asmara, but this was rendered useless by the decision to introduce new birr notes, in tandem with the introduction of the Nakfa in Asmara.

Another important point PM Meles touched upon in his report to the parliament is the newly launched anti-corruption campaign at the CBE. To start with, it was "gracious" of him to have accepted partial or "political" responsibility for the problem though he deliberately limited his involvement to "political" leadership and thereby relieved himself of any responsibilities with regards to credit decisions and operations. To the casual observer, that might sound fair and true, for we may not find his name in any of the credit reports or loan contracts of the bank. But given the fact that, he appoints the Bank Governor, oversees the banks through the Supervisory Authority and the Board, etc., and his involvement in micro-management of loan handling through his chairmanship of a committee overlooking banking operations, that excuse can't be said to carry water. In civilized countries where the rule of law is paramount and accountability is more than a matter of honor but of acknowledging responsibility, such a leader would be expected to automatically resign and accept what rightly comes to him. Not so in our country.

Still, PM Meles cannot that easily escape responsibility for whatever happened at the CBE. Furthermore, is it not public knowledge that the PM himself chairs the Financial Sector Steering Committee (FSSC)? Wouldn't trying to deliberately avoid taking full responsibility for what has happened be just an exercise of fooling himself--in fact, another clear demonstration of his trademark contempt for the Ethiopian people and utter disregard for what they might think? This infamous FSSC, under his chairmanship, defines policies and strategies for the banks, appoints board of management and executives for the banks and routinely monitors their operations. The board chairmen of the respective banks, Ato Felipos of the CBE, Ato Girma Birru of the DBE (Development Bank of Ethiopia) and Ato Haile Assegdie of CBB (Construction and Business Bank) along with the Deputy Prime Ministers, the Governor of the NBE (National Bank of Ethiopia, the regulator), the PM and Ato Sufian, the Minister of Finance were/are all members of the FSSC. As such, they all know the status of the major loans of all the banks. They routinely monitor the general status and breakdown of NPLs (Non-Performing Loans) at the banks and more particularly the CBE. (CBE accounts for more than 75% of all the loans combined in Ethiopia). This committee initiated the restructuring of all government banks and the enactment of the foreclosure law and oversaw its vigorous enforcement over the years.

Hence, as the Chairman of this committee, PM Meles knows who the major performers or delinquent clients of the banks are. As a chairman of the EPRDF, the ruling party and an owner of all the party affiliated businesses, he should and does know more of many things hidden to the rest of the FSSC members. He knows that EPRDF's trading companies, viz, Guna, Ambassael, Dinsho and Wondo were fully kicked out of the merchandise business (notably the sugar business) due to the fierce competition they faced from private companies (e.g. Star, Yegeta, Abeba Co., etc).

These companies are now at the verge of total collapse, along with close to a billion birr loan from the CBE. Certainly, PM Meles also knows that his party's transport companies viz. TESCO, Tikure Abay, Dansho Transport, etc. are constantly in crisis. The status of his party's manufacturing business is dismal-the textile mill in Adowa, the pharmaceutical plant in Adigrat, the cement factory in Makalle and the brewery in Gondar are all in a miserable situation. The total loan advanced to all the party affiliated companies from the three public banks, (all three steered by PM Meles), is well above the three billion mark, (90% of these loans come from the CBE).

These loans have been restructured and rescheduled perpetually to make them look genuinely performing, but all to no avail. Two factors now seem to have made this indefinite "ever-greening" difficult. One is the comprehensive audit of CBE's loan portfolio requested by the IMF and to prepare a document for a contract management of the bank. The other is, the very fact that new managers are to be hired for the bank. In this circumstance, no wonder that PM Meles spent half an hour to respond to Dr. Beyene's remark regarding the attire and uniforms of our army officers while he deliberately ignored the sensitive question of the performance of the loans advanced to his party's affiliated businesses. No wonder, he chose to confuse his fellow MPs on the definition of a "leadership" and a "non-leadership" responsibility, when it is just obvious that what is required of him is an honest leadership including the management of the financial sector. Finally, no wonder that the contract managers (State Bank of India) refused to take over the CBE's management as the president of the CBE, Ato Tilahun, and his senior officials ended up in jail along with several best performing clients of the bank.

All this disaster was reported as "success" in the fight against "corruption". But is it really against corruption that we are fighting? The answer, is no. It is rather a concerted campaign to cover up corruption and power abuse, while at the same time undermining and/or annihilating political dissent and business competition.

Look at the charges leveled against the Bank Managers and the business-people. The charge starts by identifying about forty or so banking operations, constituting almost the entire credit operations of Commercial Banking industry and here defined all as "offences". In a bank of about forty thousand or more borrowers 12 or so businesspeople were deliberately hand picked and jailed in the last 8 months. After denying them bail by enacting an unconstitutional "law" in 24 hours, (the so-called Seye's proclamation), they emasculated their businesses short of nationalization. They froze all their bank accounts, assigned administrators and controllers on all their businesses and assets and police searched their homes and other personal belongings.

The recently established 'Federal Ethics and Anti Corruption Commission' (FEACC) has now charged these businesspeople for "unlawfully" borrowing money from the CBE and the bankers for lending this money. In as much as lending is the raison-d-étre of the bank, borrowing is only natural to businesses and businesspeople. This relationship is based on a legally binding contract signed by both parties. It is a business contract, administered and enforced according to existing Commercial and/or Civil Codes of the country. Any probe or investigation on corruption should have started with an appraisal of the loan contracts and the performance of the loans—since, wrong and corrupt lending decisions should normally lead to a non-performing loan, hence, a failed loan contract. It is this non-performance and failure that should have led backwards, towards investigating wrong deeds.

The PM and his henchmen have indeed conducted a full-fledged audit and inspection on almost "everything" related to these businesspeople. Having failed to come up with something irregular, they ended up with fabricating a charge that deliberately says nothing about the loan contract and its performance but a lot about a non-offence at all. This is deliberate because PM Meles and the (FEACC) know very well about the consequence of mentioning anything with regards to loan performance. If non-performance of loans was to be the criterion, it would have been the PM and his henchmen that would have gone to jail and not the 12 leading performers and senior bankers.

From this charge, one sees competition being silenced and revenge of a sort against the 12 businesspeople constituting the major part of the arch business-enemies of Bereket of Ambassel, Sebhat of Guna, Arkebe of TESCO, Girma of Dinsho, Dr. Kassu of Wondo, Wondwossen of Tikur Abay Transport etc. Not surprisingly, all these persons happen to be chairmen and executives of these companies (major loan repayment defaulters), chairmen and supervisors of public banks and of course, party politburo members and senior government officials.

Ato (now Minister) Bereket chairs both the Board of Ambassel, his party's company and its rival public enterprise, the former AISCO, both competing in the distribution of fertilizers. Minister Girma sits on the board of NBE, he chairs the Boards of DBE and that of Dinsho, his party's company. PM Meles as well chairs all meetings everywhere as necessary, heads the Party, the government and more importantly, the "Anti Corruption Commission." What a conflict of interest! Excuse me, what a wonderful harmony of interest!!

In addition to the above-mentioned deceit and cover up, PM Meles has deliberately used this campaign to divert public opinion through fabrications and intentional exaggerations. Through a series of false rumors and fabrications generated at the close direction of the late Security Minister Kinfe, he tried to create a link between his party dissidents and said businesspeople. Endless rumors were churned out, volumes written and allusions made to the relationships between Ato Seye's brothers and the owners of Star Business Groups and other businesspeople. The former Chief of Staff, General Tsadkan and these same groups were also implicated in a similar fabrication. Ato Tilahun Abay, the then president of the CBE, was selected as a lynchpin connecting Ato Seye, General Tsadkan and the businesspeople.

On the other front, the Ethiopian Privatization Agency (EPA), in which Ato Tilahun and Ato Assefa (Ato Seye's brother) used to be board members, the sugar companies, in which Ato Tilahun and General Tsadkan also were involved as board members, were included in the target. A fateful farce was composed and played around these individuals and the institutions they either headed or got remotely involved in. They also tried to implicate these people on glaringly obvious fabricated charges of misdeeds in the regular public sugar auctions. While it is clearly known to everybody that sugar is traded in the full knowledge of PM Meles and his cronies, in very transparent periodical auctions, a rigorous attempt was made to find "something" to incriminate these individuals. After almost seven months of audit and investigations, from sugar production to marketing, they came out with ridiculous charges such as accusing company executives of accepting an endorsed Bankers/Certified check in settlement of sugar sales invoice. Although the courts are expected to make a ruling in this case, it is disheartening to see that the prosecutor filed charges and the accused are still behind bars. I mean, there is no question that corruption was and still is—(in as much as the real perpetrators are at large)—rampant in our country. One need only ask a few simple questions to know who these people really are. For instance, one can ask whose children (among the past and present leadership of the EPRDF) go to Sandford School, an elite "international community" school where the tuition and incidental fees amount to over Birr 32,000 per annum per child? Where would PM Meles, Foreign Minister Seyoum, the late Security Minister Kinfe, etc., source such amount of money—an amount greater than their total annual official salary and benefits combined—to send their children to this outrageously expensive school? Why did these same people vigorously oppose the proposal that everyone of the EPRDF's leaders and their relatives be investigated for illegal gains/corruption? One can ask but, one shouldn't expect answers to come voluntarily from these people.

Another point in focus these days is privatization. Privatization is not only a national program. It is rather an international or multi-lateral program. The program is primarily a "negotiated" result of the IMF/WORLD BANK and the Ethiopian government. Its implementation is closely monitored by both parties. Every transaction is recorded both at the PM's office and Washington. PM Meles has a complete copy of all contracts of sale between the Agency and every single buyer. There are close to 200 contracts. Almost all transactions were made through public tenders. Some were negotiated sales. PM Meles, Dr. Kassu, DPM Teffera, Minister Girma, Minister Sofian etc. were all involved in their respective capacities, some are board members of EPA and know everything about every transaction. Out of all the people involved and particularly out of eight or so board members of EPA, Ato Assefa and Ato Bitew were targeted for jail. Out of all the 200 buyers two businessmen were handpicked and included in the jail package. What would have been a laughable farce if it weren't for the lives and livelihoods being destroyed was played around these people and Ato Beshah, the General Manager of the EPA. They were all charged for "corruption" and have been in detention for the last 8 months. All of this abuse of human rights is done in the name of the convenient and suspiciously timely "anti-corruption campaign."

However, the simple truth of all these fabrications revolves around the dissidents, viz., Ato Seye, Ato Bitew and General Tsadkan. This expands to include their close family members and through Ato Tilahun, they try to link them to the Bank and the said businessmen. We hear that Ato Tilahun was repeatedly asked to testify against Ato Seye and Ato Assefa, in exchange for an amnesty. He refused and hence, triggered the arrest of more than forty executives and officers of the bank in just one single day.

In an attempt to cover up all these scandals, PM Meles talked for hours in the parliament. He tried to relate totally unrelated events in the Ethio-Eritrean banks' affairs. He tried to distinguish between what he called "political leadership" or "responsibility" and a non-political one. He farted about the achievement of his anti-corruption campaign and finally flunked out when it came to the crux of the matter, viz., the performance of the loans that he sanctioned and approved to his party's companies. Deceit and pretension are not new to PM Meles. What is new is that he dared to mention IMF/WORLD BANK as witness to his irresponsible and unpatriotic handling of Ethio-Eritrean banks' affairs in front of a camera and on record.

Many of us know that the IMF/World Bank have their own vision for today's world. Certainly, not all of us agree on the ways and means used to achieve their set objectives. Free enterprise is something adored by these institutions and eventually privatizing huge enterprises such as the CBE or others is something inevitable. They may even prefer to have the CBE divided into few smaller but strong, dynamic and efficient entities. All these could be done in good faith and even help improve the standard of living in the country. One, therefore, would not expect them to fall victim and be party to PM Meles' self-serving sophistry and the political machinations of a dictator in the making. It is high time that they explain and/or exonerate themselves.