U.S slams Zambia on graft after Chiluba ruling

LUSAKA (Reuters) - The United States questioned Zambia's commitment to fighting corruption on Saturday after authorities said they would not appeal a court's refusal to allow recover funds from former President Frederick Chiluba.

In 2007, a British judge ordered Chiluba to repay $58 million to compensate for money he was accused of stealing during his 1991-2001 stint in office.

A Lusaka high court ruled last week that Zambian laws did not allow the enforcement of rulings made in London, causing an outcry from the main opposition Patriotic Front (PF) and anti-corruption groups.

Information Minister Ronnie Shikapwasha said the government had accepted the Lusaka court ruling and would not appeal.

A U.S. embassy official said Zambia had lost an opportunity to prove that it was serious in its fight against corruption.

"The whole world is watching to see how the Zambian government holds all people accountable to the same standard," said U.S embassy spokeswoman Priscilla Hernandez.

"Recovering the money would have sent a strong message about Zambia's commitment to good governance for the benefit of investors, U.S tax payers and other countries that provide assistance to Zambia."

The 2007 ruling, hailed as a turning point in Africa's fight against corruption, was made in London, where Zambian officials filed a civil case to try and recover assets owned by Chiluba and his friends in Britain and other European countries.

Western donors have expressed concern about corruption and have frozen aid three times in the last 18 months.

Nevertheless, foreign direct investment in Africa's top copper producer hit a record $2.4 billion in the first half of 2010, mainly in the manufacturing, mining and energy sectors.

Chiluba's acquittal in a separate criminal case last year sparked protests after the chief prosecutor said he would not lodge an appeal as it was unlikely to succeed.

The PF has accused President Rupiah Banda, a close Chiluba ally, of influencing the courts in that previous Chiluba acquittal. Banda has denied the accusation.

Chiluba, who is still a popular figure and has launched a campaign for Banda's re-election bid in 2011, says he is a victim of a political witch-hunt.