FPE Fraud: Kibaki’s Legacy of Corruption – Part 4 (Final)
Donors demand refund of FPE money
President Mwai Kibaki: Leaves behind a legacy of corruption, embezzlement of funds and zero prosecution.
In June 2011, Raila Odinga tabled in Parliament a new report titled: ‘Extended Forensic Audit of Kenya Education Sector Support Program’ indicating an adjusted figure of KSh4.6 billion up from Treasury’s KSh4.2 billion, lost through corruption. A new twist in the FPE fraud is the demand for a refund of cash from donors that was put in KESSP. Both the World Bank and DFID sent aid under the framework of Joint Financing Agreement. Similar demands have been echoed by the Canadian International Development Agency (CIDA), UNICEF and the Fast Track Initiative.
On November 1, 2011 Benjamin Muiruri wrote in the Daily Nation newspaper that Treasury had begun paying back the donor money stolen from the FPE program. In July, DFID received KSh14 million and at the end of October, another KSh164 million. The Canadians expect a refund of KSh52 million.
The refunded cash will be re-allocated to non-governmental organizations (NGOs) to continue the goal of aiding FPE. According to DFID spokesperson Rose Brown, “It is right for the UK government to be fully reimbursed for our share of funds that have been stolen as we have an obligation to our taxpayers to ensure that their money is used for the intended purpose.” DFID has already bought and distributed through NGOs, 2.6 million textbooks for more than 320,000 school children in Kenyan slums. If no money was stolen as had initially been claimed, why is the government paying money back to donors? Uhuru Kenyatta’s spokesperson Munyori Buku said that taxpayers will not lose a coin in the refunds because those found guilty will be surcharged. But do top Kenyan officials ever refund public money they have stolen? That’s a first.
State of the hoi polloi
In Okoth Osewe’s KSB article titled: ‘Is Kenya’s Independence for Real?’ (December 2, 2011), he analyzed the sad state of affairs for poor Kenyans this way: “Without money, you will never get an education in Kenya and millions of parents are sweating blood to educate their children because the government plays no role in its citizen’s education. One can argue that the government introduced free primary education but surely, what can a standard eight achieve with a standard eight education in today’s Kenya?
You are a university graduate and you have no job because the government no longer creates jobs to keep its citizens at work. We have a government without a “Labour Office” which the unemployed can visit to look for work because the concept of employment by the government evaporated eons ago. If graduates cannot get jobs, the case of school drop-outs cannot even be discussed. For Kenyans in this category, Independence is a meaningless word.”
The succulent fruits of Independence promised by Kenya’s first president Jomo Kenyatta, were picked by the chosen few whom he favored. Most of them were political cronies and relatives from his Kikuyu tribe. Because of corruption, they built a solid financial base that kept them powerful throughout former Dictator Moi’s era and currently under Kibaki’s presidency. They belong to the old money class, dominate Kenya’s corporate world, and maintain the status quo using political connections. Meanwhile, many other Kenyans can only dream of perpetual poverty.
There is a lot to be done for FPE to succeed. The 2011 Uwezo learning assessment report for Kenya titled: ‘Are Our Children Learning?’ presents grim disparities in schools across the country. Urban slums, arid and semi-arid areas in the North Eastern region have the worst outcomes, while children from socio-economically better homes do well. Public schools have worse levels of literacy compared to private schools, and so forth. Many rural areas also suffer disparities in the provision of educational resources. Uwezo (Kiswahili for capability) is a four year initiative for conducting annual learning surveys (numeracy and literacy) in Kenya, Uganda and Tanzania. Large scale household surveys are carried out on children from ages 6-16. (In: uwezo.net).
The thorny issue of internally displaced persons (IDPs) also affects children who sometimes cannot attend school as required because of the long distances from their camps, or due to insecurity. There are also many pupils with learning disabilities who need to be cared for. Kenya still lags behind in facilitating special needs education.
Occupants of informal settlements (slums) in Kenya are also left to fend for themselves in terms of accessing FPE. Research done by the Nation TV in 2009 and recorded in video links posted at the end of this article, indicated that children in these areas have the worst schooling imagined, provided by untrained teachers, and without basic learning materials. Why should they be in such situations if FPE is meant for all children? What are their local MPs doing to bring change? Who monitors how CDF is being used there?
The Standard newspaper’s ‘Madd Madd World’ cartoon series published December 17, 2011 illustrated the paradox of Kenya’s economic growth this way: “The economy is booming, the infrastructure is smoother, our national loot is bigger than any of our neighbors… So why are Kenyans poor?”
Is FPE realistic?
Uwezo found out that pouring billions of dollars into the education system does not translate to learning. Due to corruption, many school children lack learning materials, personnel and other provisions for quality education. Was Kibaki’s FPE promise a mere ploy to earn votes?
Although FPE has increased pupils’ participation, overcrowded classrooms cannot match the current low number of teachers, especially since the government has refused to employ more. At some schools, the pupil-teacher ratio is 100:1. The program is therefore an extension of the low quality 8-4-4 education system established by Moi’s regime in the 1980s. Apart from a government waiver on school fees and the provision of textbooks, families still bear the cost of other learning materials. In a report by Najum Mushtaq on October 16, 2008, such costs hinder access to schooling. He quoted a parent who said: “To call it free primary education is misleading. For my youngest daughter in Standard Four, I still have to pay for food, transport and uniform which adds up to 5000 shillings ($70) per term.” (ipsnews.net). The government pays KSh1,020 ($14) only, per pupil per term, to purchase textbooks, notebooks and to repair school facilities.
A 2007 report compiled by CREATE (Consortium for Research on Educational Access, Transitions and Equity) at Sussex University and funded by DFID, reviewed the progress of Kenya, Uganda and Tanzania towards universal education. Titled: ‘Policies on free primary and secondary education in East Africa’ it highlighted research which states that “while the Kenyan government raised its education budget in 2003-04 by 17.4 per cent and was strongly supported by donor funding in its free primary education initiative, this may not be sustainable.”
It was also noted in the report that: “The cost of providing free primary education is beyond the scope of the ordinary education budget, economic performance has not been strong and donor finance is often temporary. The free primary education initiative of 2003 was pursued as a matter of political expediency. It was not adequately planned and resourced and thus had the consequences of increased drop-out and falling educational quality.”
Kibaki’s legacy of corruption
Amidst all the economic improvement since Kibaki took over from former Dictator Moi, “misrule and ineptitude” have continued and his leadership has perpetuated the “era of anything goes.” By surrounding himself with golf buddies also known as the ‘Mount Kenya Mafia’, he reneged on a key section of his 2002 inaugural address which was: “We want to bring back the culture of due process, accountability and transparency in public office. The era of ‘anything goes’ is gone forever. Government will no longer be run on the whims of individuals. The era of roadside policy declarations is gone. My government’s decisions will be guided by teamwork and consultations.”
An article in the Observer newspaper by Xan Rice (February 3, 2008) blamed Kibaki’s ‘Kitchen Cabinet’ for some of his bad decisions as president. “Several of Kibaki’s Kikuyu golfing friends have assumed significant influence at State House in recent years. ‘Some of these people hold very strong thoughts about the superiority of the Kikuyus and their inherent right to govern,’ said a former government minister. ‘It’s a case of “We helped end British rule using the Mau Mau, and we are the ones that keep the economy ticking over. The other 42 ethnic groups are welcome to live in Kenya, but only we can rule.” He said he did not believe ‘the President is calling the shots at all. He always has to consult the hardliners around him’.” It is a pity that the politics of that period gave Kenyans Kibaki, who honed his political skills in the 1960s and has no record of connecting with the hoi polloi.
In his book: ‘Raila Odinga’s Stolen Presidency’, Stockholm-based Kenyan author and blogger, Okoth Osewe, describes how Kenya has been ruled by “an old generation of politicians at both the Presidential and Parliamentary levels” since independence in 1963. The first President, Jomo Kenyatta, surrounded himself with old men of his Kikuyu tribe whose inner circle was known as the “Kiambu Mafia”. His leadership was tainted with “abuse of power, mass subjugation, human rights violations, promotion of poverty and other unacceptable vices.” When former Dictator Moi took over in 1978, he declared that his presidency would be based on “Kenyatta’s footsteps” – (Fuata Nyayo in Swahili). When his term ended in 2002, “the country’s leadership was taken over by another breed of old guards who quickly surrounded Kibaki and set up a Mafia cartel that derailed the aspirations of the Kenyan people.” (Page 316). After Kibaki’s exit in 2012, Kenya will need a generational change to usher in a President with progressive thinking.
Kibaki’s lacklustre appraoch to governance entrenched corruption further during his two terms, yet he had all the resources and support to deal it a ‘coup de grâce’. Unfortunately, he proved that stamping out corruption was like “trying to cut down a mugumo (fig tree) with a razor”; a phrase he is credited for because he doubted KANU could be dislodged from power during the advent of mulitparty politics in the 1990s.
Wiping out corruption could have won Kibaki the coveted $5 million Mo Ibrahim Prize for Achievement in African Leadership after retirement. The immediate former President Pedro Pires of Cape Verde is this year’s winner. He was awarded because of his “vision in transforming Cape Verde into a model of democracy, stability and increased prosperity.” He successfully managed the transition of his country from a single-party autocracy to multiparty democracy. In only 10 years, he removed Cape Verde from the Least Developed category to a middle-income one, second only to Botswana in the whole of Africa. The country is now recognized for good governance and the championing of human rights. With a sound ecomonic growth of six per cent annually (real GDP) and per capita incomes rising by 181 per cent, Pires has improved the social capital of his citizens. For instance, literacy rate is over 80 per cent and life expectancy is more than 70 years.
Other reasons for the award published in the November issue of the African Business magazine were: “He paid great attention to sound macro-economic management, good governance and the responsible use of donor support to improve infrastructure, build up the country’s tourism industry and prioritize social development.” Pires did all these and more in 10 years, having inherited a difficult political landscape. He was elected in 2001 and stepped down in August 2011.
In Kibaki’s case, the two terms were spent applying cosmetic surgery on the political rot he inherited, instead of uprooting it. In the FPE theft, he was more concerned with political expediency instead of dealing with Education minister Ongeri, according to the audit recommendations. Kibaki must have been aware of the endemic graft cases among his ministers, yet he never acted in favor of the poor taxpayers. No wonder his indecisiveness earned him the nickname ‘General Kiguoya’ (Kikuyu for the Coward).
According to the 2011 Ibrahim Index of African Governance, “Over the past five years, Kenya’s overall governance quality deteriorated (between 2006 and 2010).” It seems that in retirement, Kibaki will be consigned to political oblivion for allowing corruption to continue as “a way of life in Kenya.”
Jared Odero
Related:
Enjoying the game edespite limited resources
Kenya Stockholm Blog 
Collateral for Corruption – An Objection to the Practice of Using Kenyan Taxpayers’ Funds to Refund Stolen Donor Money
Nov 2nd, 2011 by Mars Group Kenya
Collateral for Corruption Interview – 17.11.11 – NTV Breakfast Show
To Whom It May Concern:
Re: Collateral for Corruption – An Objection to the Practice of Using Kenyan Taxpayers’ Funds to Refund Stolen Donor Money
Mars Group Kenya has seen a letter dated 24th October 2011 from Joseph Kinyua, Permanent Secretary in the Ministry of Finance to Johannes Zutt World Bank Country Director. The letter is of very great concern because it constitutes a clear admission that massive amounts of donor funds have been misused and stolen by Government officers. The letter by Mr. Kinyua states that as recently as 26th and 27th October 2011 the Government paid refunds amounting to about KES 347 million to various donors represented in Kenya.
Why hasn’t Parliament been told about these refunds? Why hasn’t Parliament been told about a written commitment to refund a further KES 2.19 billion to a Global Education Initiative between now and June 2012? Why should Kenyan taxpayers lose twice – once again being asked to shoulder the burden of refunds whilst going without the original benefits the stolen funds were to provide? Which social service will be cut to finance these refunds. Have Kenyan taxpayers’ funds become collateral for corruption?
An Objective Lesson in Impunity:
Permanent Secretary Joseph Kinyua’s letter, reads:
24th October 2011
Reference Number EA/FA62/335/01/(133)
REFUNDS TO THE WORLD BANK & OTHER DEVELOPMENT PARTNERS
“This is in reference to the requirement by the World Bank for the Kenya Government to refund to the Bank funds that were used to finance expenditures for a number of projects, which following a forensic audit jointly undertaken by the Government and the relevant donors, were found to be ineligible because of suspected fraud, corruption and malprocurement. We would like to reiterate the Kenya Government’s commitment to refund to the IDA and other development partners those funds spent on expenditures that have been verified and confirmed to be, indeed, ineligible.”
PS Joseph Kinyua’s letter then lists the amounts to be refunded as follows:-
Program Amount to be Refunded (KES)
Comments in PS Kinyua’s letter to world bank 24.10.2011
Arid Lands Program 40 million Refunded to World Bank – according to attached transfer document
Kenya Education Sector Support Program – 347 million To be refunded to Donors by 26th October 2011
Education Fast Track Initiative 2.19 billion – To be refunded to World Bank by the end of FY 2011/2012 – i.e. by end of June 2012
Western Kenya Community Driven Development & Food Mitigation Project – 50.8 million To be refunded to World Bank by 26th October 2011
National Statistical System Project – 42 million. Kenya National Bureau of Statistics refunded this amount by a transfer to the World Bank out of Citibank Nairobi on 24th October 2011 – according to a Citibank transfer notification attached to Kinyua’s letter
Permanent Secretary Joseph Kinyua’s letter to the World Bank concludes:
“The Treasury on behalf of Kenya Government would like to underscore that in line with its commitment to good governance and to safeguard tax-payers money we will follow up these issues with the relevant government agencies for further investigation and recovery of these funds. In addition, we will be instituting mitigating measures to strengthen government financial management systems so as to ensure that similar fiduciary issues do not recur.”
When Did the Rain Start Beating Us?
It should be remembered that the genesis of all of this was the discovery of widespread fraud in the education sector program known as the KESSP in late 2009. The discovery of fraud was announced by the Minister for Finance in a press statement on 22nd September 2009. This was followed by a public demand issued by DFID of the UK for refund of its funds which were misused within the KESSP. An in-depth fiduciary review of KESSP expenditure concluded on 28th May 2010 that there was ineligible expenditure of KES 234 million during the single month of June 2009. The Kenya Government committed then to refunds, and to conduct further investigations and pursue recovery of funds then, just as Mr. Kinyua is doing in his letter of 24th October 2011.
Indeed the following refunds were made to various donors on 30th July 2010:
Donor Amount KES
World Bank 15,829,245
DFID 14,547,391
CIDA 5,210,024
UNICEF 199,565
Fast Track Initiative (through the World Bank) 28,115,901
TOTAL 63,902,126
Even after refunding KES 63 million in July 2010, Kenyan taxpayers were not out of the woods. The letter by Joseph Kinyua to the World Bank of 24th October 2011 demonstrates this. The situation is now dire. The Government of Kenya has committed in writing to refund KES 2.1 billion to the World Bank (”because of suspected fraud, corruption and malprocurement”) within the next 7 months and parliament has not been told anything about this by the Treasury which signed the commitment.
Kenyans should be very concerned that in all likelihood social services to the Kenyan public will be cut in order to enable the Treasury to repay money which has been stolen by Government officials. Doesn’t Parliament have a right to demand that this letter be tabled by the DPM & Minister of Finance so that Members can debate the way forward? Has it become the practice to make taxpayers funds the collateral for grand corruption?
Questions:
• Can the Permanent Secretary Minister of Finance confirm or deny that he wrote to the World Bank on 24th October 2011 committing the Kenya Government to refund a further amount of over KES 2.4 billion to donors because of suspected fraud, corruption and malprocurement?
• Can the Permanent Secretary Minister of Finance clarify which budget such refunds will be made from, or reassure the country that no social spending will be cut?
• Can the AG explain what progress has been made in investigation, prosecuting and sentencing the culprits as well as recovery of the funds in question?
• Who in the Government will take political responsibility for this complete and utter mess?
Best regards,
Mars Group Kenya
—————–
KESSP fraud facts:
• KESSP was launched in July 2005 and scheduled to run for 5 years. Five donors contributed sector budget support to KESSP; namely DFID, World Bank, CIDA, UNICEF and the Fast Track Initiative. The discovery of fraud was first announced by the Minister for Finance in a press statement on 22 September 2009. The final report from an in-depth fiduciary review of expenditures under KESSP was released on 28 May 2010 and revealed ineligible expenditure of KES 234 million during the single month of June 2009. Reimbursements were received by donors on 30 July 2010 as follows:
• A forensic audit of KESSP was launched in April 2010. Investigations included a review of documentation in the Ministries of Finance and Education, as well as visits to a sample of 512 schools across the country. A draft forensic audit was completed on 26 August 2010. The Ministry of Education was asked to respond (including any additional documentation) by the end of October 2010.
• The final figures from the forensic audit were agreed on 30 April 2011 showing ineligible expenditure of KES 4.66 billion between July 2007 and June 2009 (this figure does not include the KES 234 million that was previously refunded in July 2010). After the April 2011 agreement the amounts to be reimbursed to donors were agreed as follows:
Donor Amount KES
World Bank 1,818,512
DFID 47,475,714
CIDA 164,536,531
UNICEF 144,242,070
Fast Track Initiative (through the World Bank) 2,192,202,728
TOTAL 2,550,275,555
• Reimbursements were made to in-country donors on 27 October 2011 (i.e. to the World Bank, DFID, CIDA and UNICEF). The Ministry of Finance asked for time to repay KES 2.192 billion to the Fast Track Initiative (through the World Bank) and promised to repay by the end of FY 2011/2012.)
Kenya Government Response to Parliamentary Question on Donor Refunds
Question by Private Notice No.1 requested Wednesday 9th November 2011: (the Member for Gwassi) Mr. John Mbadi to ask the Deputy Prime Minister and Minister for Finance:
a) Can the Minister confirm that on 24th October 2011 the PS Treasury wrote to the Country Director of the World Bank committing to refund Kshs 479 million by 26th October 2011 and a further Kshs 2.19 billion before the end of 2011-2012 financial year?
b) Could the Minister provide a breakdown of the various projects the refunds relate to, the reasons for the refunds, and the action being taken by the Government against those involved?
c) Under what budget lines were the refunds expended and was parliamentary approval for the same obtained?
ANSWER BY THE ASSISTANT MINISTER FOR FINANCE (Dr. Oburu) delivered Tuesday 15th November 2011:
a)I confirm that on 24th October ,2011 the PS to the Treasury wrote to the Country Director of the World Bank committing to refund to the IDA and other development partners funds spent on expenditures that were verified and confirmed to be ineligible.
b) The breakdown of the projects that the refundable amounts relate to is as follows:-
Project Name: (ALRMP) Arid Lands Resource Management Project
Implementing Ministry: Ministry of Development of Northern Kenya and Other Arid Lands
Project Name: Kenya Education Sector Support Project(KESSP)
Implementing Ministry: Ministry of Education
Project Name: Western Kenya Community Driven and Food Mitigation Project
Implementing Ministry: Ministry of Special Programmes
Project Name: National Statistical System Project
Implementing Ministry: Ministry of Planning, National Development and Vision 2030
The refunds follow a joint World Bank and GoK forensic audit and a request to the GoK by development partners for refund of funds identified as ineligible expenditures as provided in the Financing Agreement. The Implementing Line Ministries under the supervision of the Accounting Officers and Authorized Officers will take appropriate disciplinary measures against those responsible for the malpractices in line with existing rules and regulations.
c) The refunds were/are being made from reallocations from the respective line Ministries’ Budget Estimates Approved by Parliament. The reallocation will be presented in Parliament during the preparation of the supplementary estimates.
http://blog.marsgroupkenya.org/?p=2643
Thika Super Highway/Vision 2030
August 12, 2011
Friends,
I have been following this debate and today morning, a revelation from the Commissioner of Police that they are ill equipped to fight crime in the country made me have some quick thought process that I must share with you.
Of what economic value is Thika Road and its expansion to Kenya? How is it fulfilling the economic interests of Kenya vis a vis Vision 2030?
I bet scholars will develop theories that will justify the need for Thika Road. However, I want to start my analysis by looking at how Thika Road feeds into our basic hierarchy of needs as Kenyans.
The need to food; Food is such a basic thing without which, we will not function. As we debate this issue, Kenyans are responding to food crisis that has seen hunger in our midst. I want to believe that we should have engaged in this triest event only once we had assured ourselves as a country that we can indeed feed our own people. Of what economic worth is it that we spend the kind of money we are on something like Thika Road at a time we cannot feed ourselves.
The need to adequate shelter; We al know that Kenyans in major towns all across the country are faced with adequate and commensurate shelter. We know of dingy high rise buildings that keep coming up in our towns despite the laid down Building Codes and the Council By-Laws. We also know that the Government has not done much to address the need for adequate and affordable shelter for Kenyans across the country, yet, we are spending amounts of immense proportions on just a highway that serves no known economic value except being a commuter line for residents.
The need for security; It is a known fact that we are living in insecure times. It becomes more worrying when none other than the Commissioner of Police admits that the Police are ill equipped to fight crime, yet, we can spend such monies on a grandiose project such as Thika Road. We are still very far from the UN recommended ration of 1Police officer to 400 civilians. Could we have used this money to expand our training facilities for the Police Force, give them better shelter, better equipment, better pay and motivate them to be proud citizens serving Kenyans in the Police Force? I bet we would have secured the needs of the Police before we become this messy.
The need to affordable health care; Kenyans know that Health Care is a serious issue in Kenya right now. We do not have enough trained Doctors to attend to our growing population just like we have no drugs in our Hospitals. I bet we could have used part of the money we have sunk into Thika Road to expand our Medical Training Facilities all across Kenya as we stock our Medical Stores with life saving essential drugs. But again, our priorities were topsy-turvey.
The right to education; The whole world knows how our education system has been reduced to tatters. The ratio of Teacher to Pupil does not inspire quality education. We have no books, stationery and adequate classrooms for our school going lot. Our Teachers are always on the news making threats of downing their tools on account of poor pay. Yet, we had money for this one road that serves only residents along the same road.
Now, those are just a few of the basic needs we should have addressed adequately. But I am not saying that we do not need better roads. We need good roads to Thika as well. But we do not need the kind of road being constructed to Thika at the moment. That road should have been built to connect Mombasa and Malaba/Busia.
If it were about building roads, Thika Road is not the busiest in Kenya. It serves residents along the road just like the Waiyaki Way and other roads do. If we were to prioritize, then, Mombasa Road would beat all Kenyan roads hands down.
The Mombasa Road is of far much more economic importance to Kenya than Thika Road. The road to Mombasa connects us with our regional business partners. We have lots of cargo being transported through Mombasa Road which earn Kenya lots of revenue. If you asked me, I would have given Mombasa Road the kind of attention that we have sadly given to Thika Road.
We could have made the 8 lanes from Mombasa to Malaba and Busia to ease the constant gridlocks we see on that road. This could have increased the turn-over rates of trailers on that busy highway to help us earn more income to the exchequer in a manner that inspires growth and development of the aforementioned basic needs.
But to be honest, what exactly is the economic worth of Thika Road to our exchequer? Which commercial activity will Thika Road serve other than giving those residing along the highway some fancy drive to and from Nairobi?
I beg to be inducted into the relevance of this nice piece of road to Kenyans at a time when we cannot feed our people.
I beg to be inducted into the relevance of this nice piece of road to Kenyans at a time when we cannot adequately house our people.
I beg to be inducted into the relevance of this nice piece of road to Kenyans at a time when we cannot address the education needs of our people.
I beg to be inducted into the relevance of this nice piece of road to Kenyans at a time when we cannot equip our Police Force.
I beg to be inducted into the relevance of this nice piece of road to Kenyans at a time when we cannot provide affordable Health Care to our people.
I beg to be inducted into the relevance of this nice piece of road to Kenyans at a time when we cannot efficiently move cargo from the Port of Mombasa to our business partners for economic gain.
This is a case of intentional assault with a dangerous weapon; a case of the Doctor amputating the wrong leg upon proper diagnosis.
Kenyans, we must accept it. With all the 8 lanes, Thika Road serves no known economic value to Kenyans. It is simply a misplaced project, but a very good project at that.
Saturday, June 18, 2011
PRESIDENT KIBAKI`S INACTION ON CORRUPTION IS A HUGE BLOT ON HIS LEGACY.
The implementation of the Kenya Education Sector Support Program (KESSP) was seen as a final bright star falling into alignment. However, nine years down the line, this program is on the verge of collapse. Close to 4.6 billion of the total money injected into KESSP has been embezzled.
Yet the government is desperately and frantically engaged in semantics in a bid to downplay the enormity of this embezzlement. What the public is hearing is that this money has been misappropriated. However, there is a huge gulf in terms of meaning between embezzlement and misappropriation. The latter may occur due to unauthorized and unregulated virement. On the other hand, embezzlement is outright theft of public finances. So far all indications are that this is an outright act of embezzlement. In fact a few individuals are set to appear in court for theft. However the money that these individuals are alleged to have stolen is less than two hundred million. The million dollar question is where is the rest of the over four billion shillings?
There can only be two plausible explanations. First it could be that though the money was allocated to the Ministry of Basic Education, treasury did not release all of it. This explains why Professor Ongeri has requested parliament to give him more time to reconcile figures. He probably has a point given that treasury has of late been a target of unrelenting opprobrium especially from the Ministry of lands for allegedly sitting pretty on money meant for the resettlement of IDPS. Treasury has on the other hand insisted that it had duly released all the funds. To date, intrigues still surround these funds. Given this history with treasury it is only after Professor Ongeri reconciles the figures that the public can determine the whereabouts of the unaccounted billions.
The second explanation is that a few bureaucrats in the Ministry of Basic Education are being used as a smokescreen to conceal the real faces behind the four billion scam. Obviously the real culprits are people high up in the citadel of political power. They probably need these billions to put in place effective political campaign machinery that will shake all the four corners of the country. KESSP thus became a perfect conduit pipe to harness the necessary billions. This could explain why Professor Ongeri is unshaken even as the public is exposed to the damning audit report. Later he had the gall to furiously spin strange tales in parliament. He even indicted the public for demanding for his immediate resignation. In the opinion of Professor Ongeri anyone remotely associating him with this scam must be too benighted, uncomprehending or completely misinformed. It is hardly surprising that he imagines that calls for his resignation are an “orchestrated evil scheme” to bring him down politically. To this end, he has sought parliament’s protection!
According to Professor Ongeri the fact that his name is not mentioned anywhere in the audit report is enough for him to be vindicated. But there is something in his demeanor that savors of deceit. His utterances are indicative of a minister shirking responsibility. He must be reminded that as the substantive minister, he is the chief custodian of public funds in the ministry of Basic Education. He has the responsibility of ensuring that any public finances including debts incurred by the Government on behalf of the Kenyan people is managed and administered in a transparent and accountable manner.
In this regard, I implore parliament not to take seriously Ongeri`s rhetoric for in so doing parliament will only be sanctifying the depths of his errors and imagine (as he has done) that there are hidden motives in the public`s call for his resignation. Contrary to what Ongeri believes, this insidious scheme threatens to bring down (not him), but the future of millions of the poor Kenyan children and the future of the country as a whole.
His denial reminds me an Igbo saying that states that “a rock behind the sea does not hear rainfall even if it rains torrentially.” This is because such a rock is always wet to notice the rain. Like this rock, Professor Ongeri is absolutely drenched in the FPE scam. No matter the torrential outpouring of complaints from the public, he is simply tone deaf.
Finally, the true picture on graft among public officers would be incomplete if President Kibaki`s nine year presidency that has been punctuated by stunning inaction is omitted. The only time he seemed active was last year when he suddenly found the voice to denounce the PM`s suspension of professor Ongeri and William Ruto over corruption allegations. Later on he gave a fiery speech in parliament whose unmistakable intention was to lambast the PM. Furthermore, reports that President Kibaki is keen to have suspended Higher Education Minister William Ruto back in the Cabinet despite the fact that he was acquitted on frivolous grounds is indicative of the fact that President Kibaki is least interested in converting his rhetoric on graft into action.
President Kibaki must know that his inaction on corruption is a huge blot in his nine year legacy. It is high time he took notice of the public discontent with the state of affairs and took the necessary action against corrupt public officers.
Posted by TOME FRANCIS at 5:03 AM
Muhaka Primary school in Ukunda got the worst KCPE score in Kenya. It has only six teachers for a total of 600 pupils. This is Kibaki’s Free Primary Education!!
Kivuitu blames Kibaki over ECK
Former polls chief Samuel Kivuitu now blames President Kibaki’s appointment of members of the electoral commission for the bungled 2007 elections. In the run up to the 2007 elections, President Kibaki ignored calls by the Opposition — then led by Mr Raila Odinga — to involve them in the filling of positions in the now defunct Electoral Commission of Kenya. And for the first time since the election, Mr Kivuitu revealed that he was not in “full control” of the commission.
In an interview with the Nation, he also “clarified” that he did not declare that he did not know who won the election.
“Commissioners were appointed in a way that I disapproved. President Kibaki should have consulted the Opposition. I was not in full control of the commission because I was working with people who were uncomfortable with me,” he said.
He said had he been given opportunity to give evidence in case of a court petition, he would have testified against President Kibaki — especially on the appointments. “The appointments should have been transparent and fair. I did not enjoy the kind of control I would have preferred,” he said.
The Mystery of KEN REN Fertilizer company
While researching the notorious Russian MI-17 helicopter overhaul contract, we came across a puzzling exchange in the Parliamentary Hansard of June 26th 2007.
The scene opens with Joe Nyagah, MP for Gachoka in a full frontal engagement with John Michuki, the Minister for Administration and National Security over the 12.8 million dollar helicopter overhaul contract that was awarded to the highest bidder. At issue is whether or not Mr. Nyagah is in a position to give the true facts over helicopters. Joe Nyagah suddenly shifts gears and thanks the government in the ultimate back-handed fashion. If he intended to silence Mr. Michuki, it worked.
“Mr. Deputy Sir, I wish to thank the Government for wishing to repay the [sic] Ken Ren loans. As we know, Ken Ren collapsed in 1970’s. I see that from this year, we will start repaying those loans dating back to 1970’s.”
Mr. Nyagah’s thanks cannot have gone down well at all. He had raised a gigantic bogey from the past. The distant past – three decades ago.
Ken Ren Chemical and Fertiliser Company; a 30 year-old scandal had re-emerged, with less than 4 months to go before the 2007 presidential election.
A thumb nail sketch of Ken Ren:
In its hey-day, Ken Ren was the Goldenberg and Anglo Leasing of Kenyan public sector corruption. It had a mix of local and foreign players and was shrouded in mystery. Shrouded in mystery, for a generation of Kenyans, Ken Ren is almost completely unknown.
In the early 1970’s, a decision was made to enter into a joint venture with an American Company to establish a fertiliser processing plant at Mombasa, on the Kenyan Coast. The company was called Ken Ren Chemical and Fertilizer Company. The government was both a shareholder and a guarantor for the factory. The deal collapsed in scandal and the factory was never built. The company ended up in liquidation and embroiled in litigation in Europe. At the heart of parliamentary and public scrutiny, was the role of treasury, then headed by Mwai Kibaki, as Minister of Finance.
What we know of the litigation:
Information on the litigation is hard to come by. Nevertheless, research reveals two cases. In the first, SA Coopee Lavalin v. Ken Ren Chemicals and Fertilisers Ltd, a U.K. House of Lords decision of 1994, the court records the plaintiff as a Belgian company who had contracted with the Kenyan defendant (Ken Ren) to build a chemical plant in Kenya. When a dispute was referred to arbitration by the ICC in London, the Belgian company sought security from Ken Ren, which had become insolvent, on the ground that Ken Ren’s backers (which included the Kenyan Government) were unlikely and could not be forced to pay costs, should Ken Ren’s claim at the ICC fail. The House of Lords agreed to order security, partly on the basis that the insolvent Ken Ren was being funded by the Kenyan Government.
The second litigation ended more recently. The ICC Arbitration proceedings, Republic of Kenya vs. Bawag of Austria, resulted in an award against Kenya in November 2000; and heralded the beginning of the re-entry of Ken Ren into the public consciousness.
Fast Forward to 2007:
Soon after Joe Nyagah’s altercation with John Michuki, on July 11th 2007, Peter Kenneth (Assistant Minister for Finance) tabled a list of all loans signed by the Government of Kenya between January 1963 and December 31st 2006.
On this list there are two Ken Ren related loans. Unpaid loans. Collectively, they are worth just over Ksh. 4.3 billion. The questions rapidly follow:
•Why would we have such loans on our books, in 2007 if the Ken Ren Fertiliser Company was never built?
•Why do the budget estimates provide for a payment of at least Ksh.268m on principal and interest payments for Ken Ren, which by all accounts ended in failure 30 years ago?
•Why should Kenyans pay for a 30 year old dud project?
•Who was responsible for getting us into this debt, in the first place?
The Ken Ren Debts:
It is possible to depict the Ken Ren debts in tabular form. The information below is derived from public domain Kenyan Ministry of Finance documents including the list of loans signed between 1963 and 2006, the statement of public debt and the budget estimates 2007/8. Ken Ren, it would appear, has been hidden in plain site.
Creditor
Date
Purpose
Amount
Outstanding June 2005
Repayment Terms
Budget 2007-8 Provision
Austria –
Bank Fr Arbeit und Wirtschaft AG
(BAWAG)
November 14th 2000
Ken Ren Fertiliser Company Restructuring Agreement
Ksh 1.4 billion
Euro 16.63 million
Ksh 1.48 billion
Loan of Euros 16,635,156 payable semi-annually commencing 30 September 2003 and ending 31 March 2014 as per agreement dated 14 November 2000
Principal redemption Ksh 192,982,604
Interest Ksh 75,644,019
Belgium – Ducroire
ICC Award November 6th 2002
Ken Ren Rescheduled debt agreement (No. ii)
Ksh 2.89 billion
Euro 32.5 million
Ksh 2.85 billion
Loan of Euros 32,520,319 repayable in 21 semi-annual instalments the first falling due on 31st December 2003 and ending on 30th June 2015
Bearing in mind that our public debt accounted for 50.5% of our GDP in 2006, is it not time Kenyans started asking pointed questions about Ken Ren and other odd debts?
Especially now in this is election year, as Minister of Finance Amos Kimunya continues to borrow at unprecedented levels – even while an 11 country study by the World Bank study rates Kenya’s debt management capacity as weak (Business Daily, July 10th 2007).
Paradox of Fertiliser Plant After Ken Ren
Indiatsi Nasibi
10 February 2011
Nairobi — The government is contemplating a feasibility study on a fertiliser plant. It plans to go it alone after Tanzania and Uganda were “slow in responding to our request.”
Our neighbours and development partners have a good reason to be slow and reluctant.
First, the Kenyan Government is not taken seriously by our neighbours. In the early 1970s, the government proposed to establish a fertiliser plant in Mombasa.
Feasibility studies were carried out in the name of the Ken Ren Fertiliser plant. President Kibaki was then the Finance minister. What followed was the famous Ken Ren scandal.
Tanzania and Uganda are fully aware of this episode. It is estimated that Ken Ren cost the taxpayer more than Sh4.3 billion.
Subsequent scandals like Goldenberg, Anglo Leasing, Triton and Grand Regency Hotel were imitations of the Ken Ren scandal.
It is not by accident that most of these scandals emanate from the Treasury. As late as last year, there was a Sh10 billion “computer error” in Finance minister Uhuru Kenyatta’s budget that was no more of an error than Anglo Leasing or Goldenberg.
We may have forgotten these harrowing experiences but our neighbours have not. The Kroll report revealed that Sh750 billion was lost under the Moi regime.
Anglo Leasing took another Sh8 billion, Triton Sh7.6 billion, and Grand Regency Sh2.9 billion. Our neighbours and development partners have not forgotten all those corruption cases.
Second, Uganda has its own national interest and a healthy fear of Kenya’s legendary corruption tag. The Uganda Investment Authority is looking for an investor to help set up a fertiliser plant at Sukulu in Tororo District.
The Sh300 million plant is designed to supply the East African market and is located in a region with plenty of raw materials.
The fact that we have raw materials in Uganda and Tanzania negates arguments that a fertiliser plant would have to rely on imported materials and that this would render local production unprofitable.
In the 1970s and 1980s, the Kenyan Government believed in import substitution. Organisations like the Kenya Industrial Estates, Industrial and Commercial Development Corporation (ICDC), Industrial Development Bank (IDB) and Development Finance Corporation of Kenya (DFCK) set up projects through import substitution policies.
They remained viable until we destroyed the industries through corruption. Under that policy, we set up projects like the Pan Paper Mills, Mumias Sugar Company and East African Spectre. Despite mismanagement, many of these projects remain viable and consistent in their production processes.
The projects that collapsed, especially the textile industries like Rivatex, Raymond, Kicomi and Thika Textile Mills did so because of the mitumba imports that the Moi regime encouraged. We were net exporters of textiles and did well.
The paradox of setting up a fertiliser plant in Kenya is the high cost of corruption, impunity, accountability and poor governance. This is what makes our products expensive.
Remember that American and European Union firms have moved to Third World countries because of availability of raw materials, cheap labour and investment opportunities which include tax havens and transfer pricing benefits.
How Kibaki Gave Kenyans Falls Hope in 2002:
‘We Are Going to Be Empowered By Kibaki’ – Woman Voter
By Ofeibea Quist-Arcton, 26 December 2002
Muthaiga, Kenya — Josephine Owiro, 50, is a small business woman who sells vegetables on the street in the Kenyan capital, Nairobi. One of 10.5 million potential voters, Owiro goes to the polls, Friday, to elect a new president and parliament for Kenya, ending the 24-year leadership of veteran President Daniel arap Moi.
Owiro, and several other women, told allAfrica.com’s Ofeibea Quist-Arcton they would be voting for change come election day, to end the 39 year rule of the governing Kenya African National Union, Kanu, party.
The women want the opposition to win the election and were actively campaigning for their candidate, Mwai Kibaki. They saw him off as Kibaki left his Nairobi residence en route to his Othaya constituency and home district of Nyeri and, in Kenya’s Central Province, to cast his all-important vote.
Owiro shared her feelings ahead of Friday’s historic poll.
We’re outside the house of Mwai Kibaki, candidate of Kenya’s main opposition National Rainbow Coalition (Narc). Madam, may I ask if Mwai Kibaki is your candidate?
He is my candidate, yes.
Why?
We need a change in Kenya, so I thought wisely that if he is going to be our president I know that we are going to gain something from him.
What do you expect to gain and what do you think Mwai Kibaki would bring to the presidency?
Hospitals, because we need good health. And we need our children to go to school. Some of them are just lying outside our houses and they don’t go to school because of lack of money.
We don’t have money in Kenya, there is no money. It’s because of poverty there’s no money in Kenya and there is a lot of poverty in Kenya now.
And why do you think that situation would change under Mwai Kibaki?
Mwai Kibaki will bring a change, because he worked a lot when he was minister of finance and now, since he’s no longer there and is an MP and presidential candidate, it’s as if only (President Daniel arap) Moi can do each and every thing. He seems to be the only one who can talk, because he is the president, and then everything can be done. So, we need a change. If we have another president we think there will be a change in Kenya.
So on election day, are you going to vote and for whom?
I am going to vote for Kibaki and my area MP is Maina Kamanda and my councillor is Joe Aketch who is going to be our next mayor by next year. So we need a change.
When I met you, you were busy chanting something, ‘Kibaki Tosha’.
‘Tosha’ because Kibaki is able. He can do each and everything for us. And Kenya needs a change, with him being our president he can do each and everything for us.
What does ‘tosha’ mean? Something like ‘Enough’? ‘He is everything we need’?
Tosha means he is powerful, he is able and he can do each and everything for us, because we have had enough of Moi and Kanu. Now we are going to have something from Narc.
What about those who say Kibaki is a has-been, a recycled politician and reluctant democrat from the old guard who has no new ideas and is tainted by the legacy of a corrupt regime and that he served under Moi for years?
But you know when we were under one government, which stayed there for quite a long time, for years and years, people did not have the power to talk. This time we think we are going to be empowered. Anybody can talk in parliament from any constituency. An MP can stand and talk on behalf of his people, from any constituency. But with Moi’s game, no you can’t! If you say something, you are not wanted. That is why they were not even talking when they were under Moi, they could not talk.
So do you see the departure of President Moi as the end of era in Kenya and the start of a new one?
Yes it is. It is the end of an era and the start of a new one. I am telling you we need a change. We are for Kibaki, because he is the only one who is going to bring us a change.
What if the government candidate Uhuru Kenyatta wins?
No, he can’t win. I doubt if he can win. He can’t win.
Why not?
The majority needs change in Kenya. We don’t want to elect Uhuru, because those who are surrounding Uhuru are the people who just spoilt the government before.
But he’s a young man, he’s 41, not tainted by corruption and says he has fresh ideas.
Though he is young, he can do nothing for Kenyans. He is young, he was just nominated by the president. He has worked for 9 months only. He was given a ministry which is now doing nothing. That ministry of local government, you know he was made minister of local government. Have you been to town to look? No salary for his people and the place is full of garbage and whatever.
So, he can’t make it. He can’t, we doubt if he can make it. We will try him out in years to come, but for now, no. We need a change. And we need a new party. We are going to see how Narc is going to do and how Narc is going to work for us. So, Uhuru can’t make it. That’s why we need a change.
But supposing Kanu does win? What will you do, because one of the Narc leaders, Raila Odinga, has suggested that you should march on State House if the opposition is cheated of victory.
Unless they’re going to rig, they won’t win. But if they win, we’ll just say okay, they win. There is a winner and there’s a loser. But we will be very disappointed.
So, contemplating possible victory for Uhuru Kenyatta, What will you do?
If Uhuru Kenyatta gets elected, I will just stay like that, but I’ll not feel good, because there’ll be no change. Because Moi has said that if we elect Uhuru, then Moi is elected. Now how can Uhuru be elected and then Moi takes over? Moi is just waiting for Uhuru to be elected for him to take over. He’ll put somebody instead of Uhuru. He is having that power.
So when President Moi said on Jamhuri [Independence] Day that he was going to retire gracefully from politics, and that he won’t intervene in the next government, did you believe him?
No. I didn’t believe him, because he said that if he had done bad to anybody, then they should forgive him and he will forgive anyone who has hurt him. But he is still talking about the same, same evils when he goes round. He was to forgive on 12 December, on Jamhuri Day, but he’s still talking. But he is going to forgive who? He said that if he has done something bad to anybody, he should be forgiven and if anyone has done anything bad to him, he will forgive. But if you want somebody to forgive you and you are not forgiving – he has not forgiven.
Another Kibaki supporter, Freda Mungatiya, currently unemployed but seeking work as a secretary, chips in.
What has Moi ever done for this country? Kibaki has been patient all of this time, he has been opposing all of this time, even when there was nobody to assist him. It’s now that we Kenyans have realised what Kibaki realised so many years ago!
Which is what?
Which is changes, yes, changes. In this country we need changes. What has Moi really done for this country? Tell me. Look at the roads. Talk about whatever you want to talk about, but what has Moi done? Ask him, ask Uhuru, the person who put him there as Kanu’s candidate, the person who is helping him to be there, that is Moi.
You tell me yourself, what has he done for the last 24 years? Heh? You tell me yourself. Tell me what he has done, anything that has actually improved in this country, hmmm?. All the projects, can he tell me, surely, what he can account for?
I am jobless. I am job seeker and a mother. And yet see how the economy has become. And I have children. I am a full executive secretary, yet I have to move from office to office in this Kenya today. I am hoping my children will not, you know, face this. That is why I’m voting not only for myself, but for the future, for the children who are sick in the hospitals. We have to be together as Kenyans to be united with one aim – for what can better us tomorrow.
Nooooooo!! We need a change and that is why we are saying Kibaki will [bring] change. Yes! We trust him and this is a matter of trust, a matter of believing in somebody. Here is Uhuru, you see, and here is Kibaki. Who can we account for, who can actually do the job? That is the question here.
And your answer?
And my answer is, yeah, me as a person I believe Kibaki has the capability and has the self will-power to do it and that’s why I’ll give him my vote. Thank you.
Two girls, one in Nairobi and another in Belgut, have committed suicide because of low scores in KCPE. KIBAKI, do u get this?
Sunday Standard, May 30, 2004
Murungaru: I made all my money honestly
By David Makali and Murithi Mutiga
For raw power and sheer influence, the gangly minister for National Security, Dr Chris Ndarathi Murungaru, is peerless in the Narc administration.
The minister is seen as President Kibaki’s foremost ally and principal political Mr-Fix-It. And as the man in titular charge of the nation’s security forces at Cabinet level, Murungaru’s is easily the most powerful docket in government outside the presidency.
Increasingly, though, government critics finger the 48-year-old minister as a metaphor for an emergent class of fabulously wealthy, unabashedly powerful and allegedly corrupt members of the Narc administration.
But where is the evidence?
In a wide-ranging interview conducted on the back of a three-week investigation by the Sunday Standard into allegedly corrupt deals involving the minister last Thursday, Dr Murungaru flatly denied all accusations levelled against him by his critics.
“There are many who would like to paint members of the Narc administration as corrupt for their own purposes,” he says. “People say that I have bought a Sh40 million house in Lavington and that I drive around in an armoured Range Rover. The truth is that I live in a rented house and the vehicles I drive belong to the state,” he said.
The minister defended the secretive procurement procedures for security equipment, which is shielded from the rigours of public scrutiny on the pretext that opening it up would jeopardise national security.
Chris Murungaru
Murungaru inspects a guard of honour mounted by graduands of the Administration Police at Embakasi
He further categorically denied claims by opposition legislators that the procurements had been turned into a cash-cow by corrupt government officials.
Additionally, Dr Murungaru rejected as “rumours and crap” charges that he was at the head of a monopolistic cartel seeking to unfairly take over the Sh10 billion-a-year pharmaceutical industry.
And on claims that a select circle of insurance companies associated with the minister had used bully tactics to take over the lucrative business of insuring government parastatals, Dr Murungaru had this to say:
“In the past, I think there were a select few insurance underwriters and brokers who used to enjoy almost exclusive government business. With the coming of the new government, that has been opened up and there are many businesses that are capable and worthy of doing business with government.
“And because they have had to struggle so much to be able to access business, they honed their business skills so well that they are out-competing those who existed. I am aware that there are some insurance brokers who have been complaining that they are not getting business where they were getting business. I can only advise them, really, do business. Get down and roll up your sleeves like everybody else.”
While the minister successfully rebutted some of the accusations leveled against him, investigations by the Sunday Standard reveal that, on the question of exerting the influence of his office to trammel on the competition in the insurance industry and a number of other issues, he is rebuked by the facts.
Facts
The dramatic reversal in fortunes of the Nairobi firm Canopy Insurance is a case in point. On the minister’s own admission, Canopy was set up in May 1992 with himself as one of the key shareholders.
Documents we obtained reveal the minister’s partners as Wanjuki Muchemi (now Solicitor-General) and Nyeri businessman William Mahungu Kang’aru, who all had an equal stake in the company.
Immediately after Narc’s assumption of power, Canopy began its transformation from what was a relatively small insurance firm servicing largely the personal and small business sector to a veritable juggernaut that today counts several key government parastatals among its clientele.
Current Canopy Insurance clients include some of the most capitalised or liquid government parastatals: National Social Security Fund, KenGen, Kenya Power and Lighting Company, and Telkom Kenya.
In last year’s controversy-ridden tenders for annual contracting of insurance firms for government agencies, several firms connected to powerful government officials elbowed out more established underwriters and brokerages sparking outrage in the industry. Insurance sources speaking in confidence were emphatic that underhand connections explain the prosperity of some firms and the dwindling fortunes of others. “There is no doubt about it,” claims shadow finance minister Billow Kerrow. “The tendering process was trampled upon by powerful forces who went as far as rejecting the objections of the public procurement complaints and appeals board to have their way and corruptly monopolise this very lucrative sector.”
Dr Murungaru denies these claims. “I would like to state categorically that if this business (Canopy) has got a disproportionate share of business, it has absolutely nothing to do with the minister,” he told the Sunday Standard.
“I do not involve myself in acquiring business for this company. I have not lifted a telephone to tell somebody, ‘Give business to Canopy Insurance’.”
However, a letter we obtained dated May 10, 2003, seeking a loan facility with a local bank and jointly signed by Canopy Insurance’ chairman, Mr M.N. Githaiga, and its managing director, Mr Muchemi Ndung’u, reads:
“We refer to your discussions with Hon C. Murungaru and attach herewith the following: A photocopy of the memo and articles of association and the certificate of incorporation; photocopies of the Identity Cards of M.N Githaiga and Muchemi Ndung’u. The photocopy of the Identity Card of James Murigu follows in due course.”
Another letter to a local bank dated April 28, 2003, seeking another loan also states:
“Hitherto Canopy has largely serviced the personal and small/medium business sector. Gross income for year 2002 was approximately Sh70 million. With the changed political climate and anticipated economic growth, Canopy wishes, and is well placed, to service the corporate sector — principally government parastatals and statutory boards.”
Attached to the letter is an impressive list of virtually all key government parastatals and public institutions, including the Kenya Revenue Authority, (whose tender Canopy has already clinched), Kenya Airports Authority, Kenya Railways Corporation and NSSF.
It is instructive that although the minister said he had asked the firm not to seek business from the Office of the President which he heads to “avoid conflict of interest”, the annexure also lists the Department of Defence/Police aircrafts as agencies which Canopy targets to deal with.
Manipulation
Players in the insurance industry are now complaining that the next round of annual insurance tendering has effectively been rigged by a memo dated January 23, 2004, and signed by former Finance PS Joseph Magari, ordering all parastatals to “demand professional valuation for the purpose of determining insurable risk” from competing insurance firms.
Magari’s communiquÈ states: “Meanwhile all procurement entities should request their tender committees to approve the extension of the existing insurance contract agreements by reasonable time to enable the valuation exercise to be completed before new contracts are arranged.”
But some industry observers smell a rat.
“Valuation is not a cheap exercise,” says one informed source. “For state corporations with assets running into hundreds of millions of shillings, valuation of their assets would cost about Sh50 million each. How do they expect insurance companies to raise this unbudgeted expense before submitting tenders?”
They argue that the order is a barefaced attempt to extend all the contracts awarded last year to firms linked to powerful politicians without being required to compete again.
Questions abound, too, over the opaque process of purchasing equipment for the Police and Armed Forces.
Opposition legislators have in the past few weeks raised numerous queries about what they say are shady deals where government officials enter into multi-billion deals with the sole intent of pocketing kickbacks through agents.
But the National Security minister rejected questions raised about his own probity, saying his accusers were motivated by malice.
“Let me state plainly that in the past year, there have been virtually no purchases by the Department of Defence because we simply do not have the resources to finance them,” he said. ” We are only hoping to do so when we get funds. Our wish list is long.”
And that wish list includes fairly controversial purchases, which legislators are demanding be vetted by the House Defence Committee.
In the case of the Sh900 million-worth of vehicles purchased from various companies, questions have been raised about the low discount (4.5%) given to the government for such a high number of vehicles (387) ordered. Industry sources argue that such an order should have attracted a discount of over 10% and finger the deal as one in which kickbacks were exchanged. A source in one of the companies supplying the cars declined to confirm or deny the deal citing “security” confidentiality of the transaction but other sources said incentives had been offered.
The minister said part of the consignment of 407 vehicles has been delivered, 23 of which account for the 4 per cent discount. He denied receiving kickbacks on the purchase of handcuffs, a new forensic fingerprinting system for the Criminal Investigations Department and patrol boats for the police.
Handcuffs
He said the allegation by MPs that close to a million handcuffs had been shipped in from South Africa was “fallacious”, pointing out that only 1,200 pieces had been procured by the police force after examining “at least 10 quotations”.
He confirmed that the patrol boats, to be bought with American anti-terrorism funds, would involve the donor in the tendering process. But security sources questioned the need for patrol boats when Kenya’s waters are patrolled by the Navy.
But, Dr Murungaru says, the navy does not carry out police duties of patrolling the sealines.
Murungaru also denied that the cost of the CID’s forensic project had soared in recent months to the profit a company in India and local agents who are associated with the passport scandal.
But information availed to the Sunday Standard shows that the government is at an advanced stage in ordering the forensic equipment from an Indian firm, CMC Hydrebad, at an inflated cost.
What’s more the Sunday Standard has learnt that the controversial proposal to purchase eight jets at Sh12.3 billion for the military from a Czech company, Aero Vodochody is still on. The plan masterminded by the previous regime had been opposed by sections of the Kenya Air Force after it leaked out to the press early last year.
Although the plan to purchase the L159B trainer jets had been declared “dead and buried” after air force pilots reportedly rejected the plane as unsuitable for their needs, the minister admitted that the plane was still under consideration “along with others” but no deal has been concluded. The minister’s answer was intriguing:
“What I will tell you is this,” he said. “Let’s take my own personal view. I think it is a very sound aircraft only that it is a bit over priced. The aircraft has got parts made by (American manufacturer) Boeing. Who is going to argue about the quality of Boeing? It has got parts made by Honeywell (a Boeing affiliate.) In actual fact it is an American plane only that it is made in Czechoslovakia.”
He added: “In actual fact I doubt if those military officers who expressed reservations about its quality were truthful.”
Air Force jets
Separately, the Sunday Standard has established that a small (local) private bank has been trying to arrange financing for the purchase of three transport planes for the Kenyan military from the European Aeronautical Defence (EADS) to the tune of Sh5.6 billion. The plan had run into trouble when the suppliers rejected the letters of credit and referred them to a multinational bank headquartered in the UK that regularly finances aircraft acquisitions. However, the bank declined the deal early this year when it became apparent that the proposal was fraught with many political risks and did not enjoy the approval of the Treasury. It is a wonder why the government would choose a little-known bank and not the more established institutions.
Murungaru says that he has improved transparency in the OP by allowing the parliamentary defence and foreign relations committee to play a more robust oversight role.
But the secrecy with which deals involving defence expenditure is conducted, critics say, is susceptible to abuse.
A retired senior military officer who requested anonymity said there was need for the Kenyan military to open itself up to scrutiny by forming an independent evaluation committee with private sector representation to police the sector and curb graft. In Murungaru’s estimation, though, accusations of graft leveled against the Narc administration’s officials are laced with malice and untruths.
“Because of the position which I hold and because I am seen as having access which others do not have I naturally attract many enemies. We will not be deterred from making efforts at improving public governance and the welfare of this country,” he said.
Fair but some people still question the minister’s conduct and point to some secret meetings he has held in and outside the country — such as a parachute visit he made to an Indian ocean island in December — which they say leave a lot to the imagination.
Kibaki is useless. He gave a promise in 2002 which he could not fulfil. Also, statistical indicators in the FPE high enrollment rates have not brought quality. It’s unfortunate because Kibaki’s political life dates from Kenya’s pre-Independence era. Therefore, he should have done better, given the errors he saw done by Jomo Kenyatta and later, Daniel Moi. Kibaki then remained a traitor never close to Wanjiku, aka the poor Kenyan. The FPE program cannot succeed as long as a few super-rich operatives continue to siphon State and donor money for personal use.
Vision 2030 Is Not Realistic – Wikileaks
Lola Okulo
2 September 2011
THE US views Kenya’s development plan Vision 2030 as highly ambitious and largely unattainable considering past failed economic plans by government.
Latest Wikileaks cables sent to the US government by immediate former ambassador to Kenya Michael Ranneberger in May 2007 casts doubt on the practicability of the vision.
However, though the blueprint was launched almost towards the 2007 election period, the cable said it was launched in good faith and not for political mileage by President Mwai Kibaki’s government. “The Vision captures nearly the entire reform agenda and is thus awesomely ambitious in scope – and by the same token, probably unrealistic. Consistent and coherent implementation of anything so large will be problematic,” states a part of the cable released last week by Wikileaks.
Vision 2030 formulation started in October 2006 when Kibaki National Vision Steering Committee to produce a development plan for the country. The plan seeks to propel Kenya to middle income economy level with improved living standards for citizens. It also seeks to achieve a 10 per cent GDP growth annually for the country. Kenya’s GDP grew by 5 per cent in 2010 and the Central Bank had predicted another growth 5.7 per cent for 2011 earlier in the year. The vision is based on three pillars which are economic, social and political development.
The cable cited the vision as capturing the entire reform agenda to make the country a mature democracy and middle income economy all at one go.
Therefore, the cable noted, “Vision 2030 often reads like a naive call for a perfect society, smacking a bit of old-fashioned socialist central planning.”
The government, according to the cable, is good at composing ambitious plans and strategies to address key challenges faced by the country but is equally infamous for failing to implement such plans. The cable cites an example of over 20 year old plans to build by-pass roads around Nairobi which had not been built at the time.
Presently, several by-pass roads are in the process of construction while the Vision 2030 secretariat prides in the passing of the new constitution as one of the major achievements to roll out reform agenda politically and eventually socially.
Though largely cynical of the government strategy until 2030, the cable also notes that with political will, some major gains could be made within the Vision 2030 framework. “But with the right leadership and a little bit of luck, Vision 2030, even if only partially successful, could help frame a reform agenda that puts Kenya on a higher growth path,” states the cable in part.
“Kibaki has been in power close to 10 years but I have never seen him even lift a finger to address issues. Money disappears, roads fall apart, land grabbing, corruption, impunity, etc. Kibaki is silent through all these. It’s amazing how his supporters are busy trying to re-write his legacy. The man is a lazy bum who had neither the courage nor will-power to actually get anything done. Kenya has gone through 10 years of wasted potential under Kibaki!”
“The only time Kibaki speaks with authority is when people mess with his wife Lucy. You can steal billions read Triton, Maize, military contracts and Makaburi (cemeteries), and Kibaki will not sack you or say anything. But you mess up with his wife and he will even hold a press conference to tell you off. Some have been sacked for messing up a shopping trip of Kibaki’s wife read the many statehouse comptrollers. I say Kibaki buree kabisa (totally useless).”
Nyamu ino igwito Kibaki-ri Muimwoniiri-ri atuura thirikariini athabotaga eki nai-ri .Wambere ,Muimwo niiri uyu -ri Githayo giki Kirimu gia kuuma Chinga kuria Nyeri itura riumaga o thata cia bururi-ri Ati umuthi muimwoniiri uyu-ri niwe Wathaga bururi-.uyu witu wa kenya .Muuragani ,mwendia bururi na ruriri rwa Agikuyu o,hamwe na nduriri iria ingi ciothe cia bururi wa kenya-ri Kwagiite o njamba imwe ingirutira imutathukie na bunduki akue biu!
Why Anglo Leasing thrills Kibaki’s kitchen cabinet
by John Kamau
Rather than worry them, the Anglo Leasing revelations are exciting current members of Kibaki’s Kitchen cabinet. Although the Anglo Leasing scandal reads like a thriller and is giving senior Cabinet ministers sleepless nights, it is also a chance to sort out – for good – who is who in Kibaki’s inner circle. The only worry at the moment is where the broom will stop to sweep and whether it would sweep all, including the President. Inside and outside State House, and in private golf clubs, Kibaki’s court of friends are said to be jolly as the media turns political heat on the President to act on a group that once tormented them. As they privately say, the political tit-for-tat time has come: The chickens are finally coming home to roost.
On the cooking pot are politicians who constituted themselves as President Kibaki’s key advisers, immediately after the NARC victory, and include (but not limited to) Vice President Moody Awori, Finance Minister, David Mwiraria, Energy Minister, Kiraitu Murungi and ousted Transport minister, Dr Chris Murungaru – all holding cabinet positions for the first time. Those watching them burn are Kibaki’s old buddies who include University of Nairobi chancellor, Dr Joe Wanjui, Defence minister, Njenga Karume, and parastatal heads, Eddy Njoroge, and George Muhoho, and businessmen Nathaniel Kangethe, Solomon Karanja, and other allies of many years.
When President Kibaki visited Laikipia on Friday he sent a signal that days of “looters” are counted perhaps fortifying the Wanjui camp’s conviction that Kibaki will overcome the Anglo Leasing crisis. On the other hand, members of the Murungaru axis, which, has lost its place within the inner circle have been hoping that the words of Benjamin Franklin: We must all hang together, or, assuredly, we shall all hang separately,” will make sense to Kibaki’s Kitchen Cabinet. Ever since Kibaki entered State House, through Gate C in the family’s Mercedez Benz, KAC 525P, on the morning of January 2, 2003, two separate groups emerged to jostle for space around the President.
Knowing the two groups helps understand why the Wanjui team is watching the drama with glee. The emergence of the two groups – actually three – had started even before Kibaki’s December 2002 victory, having coalesced as campaign outfits for the National Alliance Party of Kenya, even before the Rainbow Alliance of Raila Odinga came on board to found NARC. While one group was made of former Democratic Party financiers and long-time allies of President Kibaki in the golf circles, the second group was made up of former DP politicians, mostly from the Mt Kenya region. The elderly Awori remains the odd man in the circle and was a late entrant.
The story begins in November, 2002, when it clearly emerged that KANU was falling apart, after an internal rebellion sparked by former President Daniel arap Moi’s insistence that Uhuru Kenyatta was the party’s presidential contender for the December 2002 General Election. By then Mwai Kibaki, Charity Ngilu and Ford Kenya leader, the late Kijana Wamalwa, had crafted a coalition, National Alliance Party of Kenya (NAK) that would have fielded a single presidential candidate against KANU. In the NAK campaign circles two groups had solidly emerged to compliment each other, rather than compete, and were known as either Muthaiga Group and the Hurlingham Group because of the separate locations that they all met in Nairobi to organise campaign strategies and try and woo the rebellious Rainbow Alliance into the fold.
While the Muthaiga Group organised the financing, the Hurlingham Group of Murungi and Murungaru handled politics. Although Odinga’s Rainbow Alliance walked into NAK and the two had a Memorandum of Understanding, the Hurlingham Group was less excited about the partnership and did not allow the Odinga group into their fold. It is interesting to note that, apart from Odinga who joined the presidential campaign camp in an unmarked secretariat that was headed by Matere Keriri in the Kilimani suburb, no other member of the Liberal Democratic Party was invited; and they were left to deal with Alex Mureithi, the Kibaki cousin who led the nominations at the party’s Mwenge House.
In the periphery one more group, the PanAfric Group, made up of youthful activists, professionals and former members of DP’s Young Democrats also met in the afternoons at PanAfric Hotel. This was headed by Kibaki’s personal assistant, Alfred Getonga, and key members included Kibaki’s two children: David Kibaki and Judy Wanjiku. In the Muthaiga Group emerged Mary Wambui, a key political ally of President Kibaki in Nyeri politics. While Wambui emerged as a respected member of the Wanjui Group, it is interesting that the First Lady Lucy Kibaki was associated with the Murungi-Murungaru axis that was running Kibaki politics, especially when the President was still recovering from the motor accident. It is also interesting to note that the demise of the PanAfric Group saw its key members join the Murungi-Murungaru Group; and they are now feeling the heat over the Anglo Leasing scandal.
* * *
At Uhuru Park, December 30, 2002 at 2.07 pm, Othaya MP, Mwai Kibaki was sworn in as the third President before an excited crowd and quickly signed documents of office handed to him by then High Court Registrar, William Ouko. Behind the scenes, and with or without his knowledge, battle lines were being drawn as the campaign groups started to battle to consolidate their space and place. Even before he left for State House on January 2, most senior members of the campaign found their way blocked at Muthaiga if they were not members of the Hurlingham Group. The battle lines had been drawn.
It has not been lost to observers that the Murungi-Murungaru Group is today blamed for Kibaki’s first political mistake in office: to ignore the MoU. The appointments that were made saw most of Kibaki’s golfing buddies scattered into parastatals and training institutions keeping them away from the Presidency. Thus, only the Hurlingham group was having unfettered access to State House. The Muthaiga Group by then had only one hope: Kibaki’s Private Secretary and State House Comptroller: the Kerugoya-born and Makerere trained economist, John Matere Keriri. But Keriri was having problems with First Lady, Lucy Kibaki, since he was perceived to belong to the Wambui camp and had extended State House favours to the Othaya activist.
The scattering of the Wanjui camp and demonising of the Liberal Democratic Party became part of “political project” that was to “protect” President Kibaki. That the Hurlingham Group is today accused of co-authoring the Anglo Leasing scandal is borne of this desperation and determination to become the main power brokers, perhaps to have money like the Muthaiga Group. While Wambui, via Keriri, was a constant visitor to State House, she soon became the person who the Wanjui Group would rely on for a return; but this led to tension at State House. First Lady Lucy Kibaki started to miss important public meetings organised by Keriri to assure the public that the President was recovering.
It is instructive to note that, when Kibaki left Nairobi Hospital on the afternoon of January 28, the first time he publicly walked after the December 3, 2002, car accident, the First Lady Lucy was not by his side. That afternoon, the only members of the Kibaki family who had gone to see him include his younger sister, Esther Waitherero, and Kibaki’s sons David and Jimmy.
Back to State House, the Hurlingham Group had consolidated its power and held key positions in the Government. While Murungaru was the Minister of State in the Office of the President in charge of Internal Security and Provincial Administration, Mwiraria took the Finance docket, while Murungi was to run the Justice and Constitutional Affairs ministry. They had also got new contacts in the business world through Jimmy Wanjigi, a son of a former Cabinet minister.
* * *
Before they were all scattered – and as the Anglo Leasing scandal was reworked, the Hurlingham Group had Kibaki appoint John Githongo as Permanent Secretary for Ethics and Governance. It is interesting that he was neither placed at Murungaru, Mwiraria, or Murungi’s ministry, but was based at State House. With Githongo at the helm — the Wanjui Group believed — it was easy to monitor the activities of the Hurlingham Group; and, by spilling the beans, he has helped old Kibaki allies win a political battle.
The Kibaki Government was having problems as the Bomas talks dragged on and as the government started losing key bills, including the much-waited Forest Bill. It is this political project that the Murungaru Group wanted to finance. Thus, when the Anglo Leasing scandal became public it not only messed up a plot by the Hurlingham Group to ostensibly save the Kibaki Presidency but also tainted it. The Muthaiga Group also used the scandal as the new weapon to fight the powerful Murungi-Murungaru axis, which ,in turn, waged war against Raila Group, whom they wanted out of the Cabinet.
As that happened the Wanjui Group regrouped to convince Kibaki to put some order in the Government. Although they did not advocate the sacking of the Hurlingham Group they wanted the President to give them an ear and recommended the appointment of one of their own as the presidential adviser: Stanley Karuthai Murage. Also they had KANU MP, Njenga Karume, squeeze back to the corridors of power. Outside, the Murungaru-Murungi axis continued to boldly call for the sacking of Raila as the Anglo Leasing heat rose. Behind the scenes, the heat was turned to Githongo, who was continuing to report to Kibaki on the scandal and to collect more dossiers against the Hurlingham group. He also became the target of the gutter press.
The Murungaru-Murungi group believed that Githongo was working at the behest of the Muthaiga Group or was just against them. When the Anglo Leasing scandal broke out it provided an opportunity for the Wanjui group to demonstrate to Kibaki how one single economic scandal could damage the reputation of his Government. In Parliament, the Murungaru-Kiraitu axis stopped a bid to blame Finance minister, David Mwiraria for the Sh2.7 billion scandal. They had hoped that with Githongo out of town the scandal would die away. How wrong! It has been a long week for the Hurlingham Group as they now fight for survival. It is their turn to burn, but will they burn the full house? That is the dilemma.
What do Kibaki men know or what are they planning?
Published on 26/11/2011
By Hassan Omar Hassan
It is highly unlikely that Kenya’s next president would be a Kikuyu. President Kibaki is not the iconic Nelson Mandela. It did not matter at the point of Mandela’s exit as president of South Africa that a fellow Xhosa would succeed him.
Yet Kibaki had an unparalleled opportunity to position himself as an iconic statesman, Africa’s reference point. We were at ‘Tahrir’ well before the Tunisians or Egyptians got there. Many then thought our democratic revolution of 2002 that ‘overthrew’ Moi and Kanu would give rise to the ‘African spring’.
Apart from some expanded roads with flyovers and an economic growth index, Kibaki’s legacy reflects an unacceptable institutionalisation of ethnicity. The imbalances in the recruitments in Public Service as supported by the report by the National Cohesion and Integration Commission to shameless dominance of all key sectors of Government. In 2002, it did not matter whether Kibaki or Uhuru Kenyatta became president.
From the unfortunate look of things, ethnicity will impact on the choice of president in the 2012 General Election. The 2007 presidential election were too ethnically charged. The Waki and the Kenya National Commission on Human Rights reports on the 2007 post-election violence provided a clear background as to some of the circumstances leading to the violence. Ethnic exclusion and imbalances, perceived victimisation particularly of Moi’s Rift Valley communities among a host of inequities and injustices.
You scar and bleed a nation when you willfully negate its sensitivities. To pass the microphone from one Njoroge to another, then to Nyoike and Murungi while addressing the soaring costs of energy. Or when Ndung’u passes the microphone to Kinyua then to Kenyatta to tell us why the shilling is losing ground. Or when the leadership of the country’s security apparatus is almost exclusively from Kibaki’s ethnic Kikuyu. You then wonder why there’s ethnicity in Kenya when the Government is working ‘tirelessly’ to patch your roads and build you new ones with flyovers. Kenyans are not idiots. We are a people endowed with sufficient talent, intellect and reason, alhamdulillah (Thank God)!
A possible Uhuru victory is premised on the G7 Alliance holding together. It cultivates on the common belief that Prime Minister Raila Odinga is behind their Hague predicament and consolidates itself on account of demonising Raila. If the cases proceed to full trial upon confirmation the unifying factor around the ‘Raila theory’ will puncture.
Many of the testimonies to the Waki Commission, the KNCHR and the Human Rights Watch on the violence in Rift Valley were from PNU co-ordinators and activists. I trust that a number of the Moreno-Ocampo witnesses in the Ruto case are too from this political divide. When the politics of the violence plays out at The Hague, many of the theories and conceptions would be demolished. The G7 Alliance, which provides a realistic formula for an Uhuru triumph might be unable to hold on account of these revelations.
The chances of ‘Kibaki’s men’ succeeding Kibaki rest on high improbabilities. It is therefore puzzling to read reports of how some of these operatives are attempting to centralise power through the devolution bills or such nonsense as locking out popularly elected governors from County security committees. Wisdom would dictate that there is more reassurance and ‘protection’ in decentralising power and ‘weakening’ the influence of the centre. In trying to decimate the motivation, one wonders what the Kibaki men know or are planning. Can they imagine a successor dictator president from outside their axis with an overloaded centre who proclaims to follow in these footstep and kufuata nyayo!
The writer is a commissioner with the KNCHR
Prof Ongeri is a disgrace to the education sector. Why have so many of our students gone to private sector? why are so many of our kenyan students going to Uganda?
2003 December – Government decides to grant former president Daniel arap Moi immunity from prosecution on corruption charges.
Kibaki could not fight old corruption since he was in bed with Moi and freed him of all corruption charges. That was the deal, to protect him,his thieves and their wealth. The Kroll Report that traced all the money stolen by Moi and his thieves was never released by Kibaki. Since 2006, Kenyan taxpayers have paid Moi more than Sh100 million for allowances to keep him living good after stealing from them. In 2011 Uhuru Kenyatta’s budget included a raise in his allowances after getting OK from the thieving MPs.
Moi’s pay more than doubles
By MUNA WAHOME Nusiness Daily Africa
Posted Tuesday, June 14 2011
The cost to the taxpayer of keeping retired president Daniel arap Moi in comfortable retirement more than doubled last year, putting him firmly among the best paid public servants in Kenya.
Treasury documents show that Mr Moi, who has largely kept to non-official duties and political campaigns, pocketed Sh58.4 million in allowances, reflecting a major jump in the cost of his retirement package.
Mr Moi had received an average of Sh12 million in personal allowances since 2006, before the sudden and unexplained rise in his retirement pay.
The payment means Mr Moi has cost the taxpayer more than Sh100 million in allowances alone since 2006.
In the fiscal year starting July, nevertheless, Mr Moi will have to live within the modest pay of Sh18 million in personal allowances.
Treasury plans to keep the payout at that level in the next three years at the expiry of which he will be joined in retirement by President Mwai Kibaki as per the stipulations of the new Constitution.
Treasury officials on Monday declined to comment on the sudden rise in the retired president’s take-home and Mr Moi’s personal secretary Lee Njiru referred our inquiries to the head of the civil service, Francis Muthaura.
Mr Moi retired in 2002 after serving as Kenya’s President for 24 years, which has entitled him to regular payments, the first ever for a former head of State in Kenya. The first president, Mzee Jomo Kenyatta, died in office.
The numbers published by Treasury indicate the State at the same time provided a reimbursable medical expenditure cover for inpatient services amounting to Sh8 million to Mr Moi.
This figure, also set to remain constant, was first factored in the 2006/07 estimates. In terms of personal allowances, Mr Moi took home more money than President Kibaki who earns Sh16.1 million in personal allowances annually. The President was also paid Sh8.4 million in basic salary meaning he took home Sh24.5 million in the current year. President Kibaki constitutionally vacates office in 2012/13 and his successor will inherit the same payments, according to projections carried in the recurrent estimates.
Details of Mr Moi and his successors’ pay are contained in the recurrent expenditure estimates under the Consolidated Funds Services.
This is the account under which constitutional office holders and debt services are paid from.
In terms of payment, the Teachers Service Commission, employer of all government teachers, takes most of the cake with the chairman, deputy and members allocated Sh200.9 million.
It is equalled by the Salaries and Remuneration Commission, which is in the process of being set up.
Like TSC, the Civil Service salary determiner will have its budget scaled up to Sh211.7 million by 2013/14.
A number of constitutional commissions are winding up and will not cost the taxpayer any money in the coming financial year.
They include the Interim independent Electoral Commission, the Committee of Experts on Constitutional Review and Interim Independent Constitution Dispute Resolution Commission.
But the pay burden on taxpayers will not ease because the Constitution has created even more commissions and constitutional offices that are set to push up the salaries and allowances bill.
Top in the list of new commissions is the National Land Commission, where office holders will take home a total of Sh125 million in the coming year.
Parliamentary Service Commission members will take home a similar amount of money while the Controller of Budget office, where the aborted selection of Mr William Kirwa sparked controversy, has been allocated Sh11.5 million. National Police Service Commission gets Sh125.4 million while Independent Electoral and Boundaries Commission get Sh211 million.
The looting of Kenya· Leak of secret report exposes corrupt web
· More than £1bn moved to 28 countries
· Property in London, New York , Australia
Xan Rice in Nairobi
The Guardian, Friday 31 August 2007
The breathtaking extent of corruption perpetrated by the family of the former Kenyan leader Daniel Arap Moi was exposed last night in a secret report that laid bare a web of shell companies, secret trusts and frontmen that his entourage used to funnel hundreds of millions of pounds into nearly 30 countries including Britain.
The 110-page report by the international risk consultancy Kroll, seen by the Guardian, alleges that relatives and associates of Mr Moi siphoned off more than £1bn of government money. If true, it would put the Mois on a par with Africa’s other great kleptocrats, Mobutu Sese Seko of Zaire (now Democratic Republic of Congo) and Nigeria’s Sani Abacha.
The assets accumulated included multimillion pound properties in London, New York and South Africa, as well as a 10,000-hectare ranch in Australia and bank accounts containing hundreds of millions of pounds.
The report, commissioned by the Kenyan government, was submitted in 2004, but never acted upon. It details how:
· Mr Moi’s sons – Philip and Gideon – were reported to be worth £384m and £550m respectively;
· His associates colluded with Italian drug barons and printed counterfeit money;
· His clique owned a bank in Belgium;
· The threat of losing their wealth prompted threats of violence between Mr Moi’s family and his political aides;
· £4m was used to buy a home in Surrey and £2m to buy a flat in Knightsbridge.
Kroll said last night it could not confirm or deny the authenticity of the report.
The Kroll investigation into the former regime was commissioned by President Mwai Kibaki shortly after he came to power on an anti-corruption platform in 2003. It was meant to be the first step towards recovering some of the money stolen during Mr Moi’s 24-year rule, which earned Kenya the reputation as one of the most corrupt countries in the world.
But soon after the investigation was launched, Mr Kibaki’s government was caught up in its own scandal, known as Anglo Leasing, which involved awarding huge government contracts to bogus companies.
Since then, none of Mr Moi’s relatives or close allies has been prosecuted. No money has been recovered. Three of the four ministers who resigned after the Anglo Leasing scandal was exposed have since been reinstated.
Last night, the Kenyan government confirmed that it received the Kroll report in April 2004. But Alfred Mutua, the government spokesman, said it was incomplete and inaccurate, and that Kroll had not been engaged to do any further work.
“We did not find that the report was credible. It was based a lot on hearsay.” He said the leaking of the report was politically motivated and insisted Kenya was working with foreign governments to recover the stolen money. “Some of the money is in UK bank accounts. We have asked the British government to help us recover the funds, but so far they have refused.”
The report was obtained by the website Wikileaks, which aims to help expose corruption. The document is believed to have been leaked by a senior government official upset about Mr Kibaki’s failure to tackle corruption and by his alliance with Mr Moi before the presidential election in December.
On Tuesday Mr Moi said he was backing Mr Kibaki for a second term, saying he was disappointed that “selfish individual interests have been entrenched in our society”. Mr Moi remains an influential figure in Kenya and his endorsement is expected to go some way to ensuring his successor’s re-election.
In the Kroll report the investigators allege that a Kenyan bank was the key to getting vast sums of money of out of the country via its foreign currency accounts. The same bank had already laundered $200m (£100m) on behalf of the late Mr Abacha, with the assistance of a Swiss-based “financier”.
“It is believed that twice as much was laundered through the same system by the Mois,” the report said.
Kroll confirmed last night that it had previously done work for the Kenyan government. A company spokesman was given extracts of the report seen by the Guardian. “We cannot confirm or deny that this report is what it purports to be,” he said. “Nor can we talk about the scope, content or results of any work we have done for the government of Kenya, which remains confidential.”
Gideon Moi is an MP and Philip Moi is a businessman. Daniel Arap Moi’s spokesman did not return calls last night.
Shocking land fraud revealed
3rd February 2012
By Cyrus Ombati
Hundreds of unsuspecting settlers, many with forged title deeds, face eviction following discovery of massive fraud in the allocation of public and private land on a scale unprecedented in Kenya’s history.
A taskforce says the shocking level of land-related fraud in Mavoko Municipality is a wake-up call for the Government, as it is likely to have been replicated in other parts of the country.
So bad is the rot that it has the potential of deterring investment in Athi River District that could create much needed jobs, and has also prevented the National Housing Corporation (NHC) from building low cost housing in the area.
But before the evictions, the police and Ministry of Lands will have to determine if the beneficiaries have legal title deeds and if any of them will be compensated.
A majority of those targeted for eviction are living on land belonging to Government institutions, including Kenya Airports Authority, East African Portland Cement Company, Numerical Machining Complex, NHC and the National Social Security Fund.
Most of the land allocations by the Municipal Council of Mavoko are irregular, yet it continues to receive land rates and issue Rates Clearance Certificates without verifying ownership.
The taskforce says in its report obtained by The Standard and KTN that the matter is directly related to rising insecurity in Mavoko Municipiality due to increased conflict over land, as genuine owners struggle to evict illegal settlers.
Implicated in the fraud which occurred over many years going back to the 1990s is the Commissioner of Lands, Land Control Boards, Lands Registry, Municipal Council of Mavoko, local politicians and speculators operating as self-help groups.
The council has no trust land and all the fraud relates to public and private freehold and leasehold land.
The report implicates prominent personalities in the present and past governments who irregularly benefited from public land and turned them into private property.
Damning evidence
Of 30 title deeds presented to the taskforce during its investigations, 10 (or 33 per cent) were forgeries.
It is more damning evidence of the scale irregular acquisition of public land in Kenya. The anatomy of land fraud depicted in the report shows how parcels stretching over 18,000 acres belonging to State corporations and government institutions were invaded by land speculators, who sold them off to unsuspecting individuals and issued them with fake title deeds.
Parcels of lands belonging to churches, self help groups and individuals were similarly targeted for invasion and fraudulent sale.
The Commissioner of Lands is linked to multiple allocations of land in Athi River District. The Commissioner and Municipal Council of Mavoko have been allocating land “without consulting each other”, says the taskforce. At the same time, the District Land Registry in Machakos has been working with speculators by “intentionally delaying issuance of search certificates thus creating an opportunity for land speculators to mislead potential buyers”.
But the owners and settlers have hard luck. Demolitions of structures belonging to senior government officials, former military chiefs and prominent businessmen are among those targeted in Athi River in a planned eviction.
The Taskforce Report on Irregular and Appropriation of Public Land and the Squatter Problem in Athi River has been submitted to the Office of the President for action and is in the hands of Internal Security Minister Prof George Saitoti.
Structures earmarked for destruction include buildings erected on land earmarked for the Mavoko Stadium, which was grabbed and allocated to individuals.
Already the newly formed Land Fraud CID unit is on the ground investigating eight main suspects who include a former mayor for Mavoko in connection with the illegal sale of parcels of land in the area. It was not immediately clear if the investigations will include a former senior military general believed to be untouchable.
It is after the team comes up with their report that the exercise is expected to kick off, probably before the end of this month.
The taskforce says the beneficiaries of Mavoko Stadium land include two former military chiefs, a senior official at the Treasury, a sitting Member of Parliament and a former colleague and media owner, among other prominent business persons.
The report indicates there were 154 beneficiaries who were allocated the stadium land by then Machakos DC Zachary Ogongo, and Town Clerk P M Mailu.
The report says the allocation in June 1994 was irregular as it left the municipality without a stadium.
“This allocation while authorised by the Commissioner of Lands on February 18, 1994 remains irregular. It is, therefore, strongly recommended that that the authorisation be reversed and the land reverted for the development of a municipal stadium,” reads part of the report.
The report recommends that the local municipality must acquire land forcefully for cemetery and dumping site. Apart from the beneficiaries thousands of other people who have settled on illegally allocated land in area are to be evicted in the eviction.
The land is privately and publicly owned but unscrupulous spectators formed unregistered land buying companies and sold them to unsuspecting individuals.
Identified fraudsters
The taskforce also identified eight fraudsters who have been behind the illegal business in the past years.
Some of the fraudsters targeted for questioning and arrest forged court orders to cover their actions. One of them is said to have formed a non-existent group called Settle Villagers Scheme and Trustee for Kenya National Organisation of Victims of Ethnic Clashes and led an invasion of a private land.
Two other suspected fraudsters are former mayors of Mavoko who are said to have sold part of the land and obtained money by false pretence after forming fake groups.
Another suspect earmarked for questioning is a former chief in the area for allegedly leading an invasion onto a private land.
“Those who have settled on illegally acquired or irregularly allocated land must be evicted and land reverted to the lawful owners who may need to be assisted to access their land,” reads part of the report.
Mr John Abduba, who chaired the taskforce, said there are no squatters in Athi River, but only 10,000 slum dwellers staying on the affected land.
To ensure the recommendations of the taskforce are effected a new DC has been posted to the district and a ban on the Land Control Board lifted. The taskforce wants the entire security teams in Athi River transferred and Mlolongo Police Station placed under the command of Embakasi.
It also wants a new police team in the area to prevent future invasion of public and private land, and that Mavoko Municipal Council stop accepting payment of rates based on share certificates.
Back to school, but no books available
By SIMON SIELE and BENJAMIN MUINDI Tuesday, January 3 2012
Schools reopened on Tuesday to an uncertain start after booksellers declined to make fresh supplies over a Sh2 billion debt.
The debt accrued from last year’s supply of books and stationery under the free education programme.
The schools were to pay the money to the suppliers after they received free education funds disbursed to them by the government.
The head of the Kenya Booksellers and Stationery Association said the group had alerted its 15,000 registered distributors not to extent credit facilities to schools unless the debt was settled.
Association chairman John Mbugua said they were not going to rescind the decision, after prices of exercise books rose by 30 per cent and those of text books increased by 15 per cent since last year.
“We are tired of being tossed from one office to another and the only option we have is to stop further supply of books and stationery to schools until the pending debt is cleared,” said Mr Mbugua.
This means parents may be forced to buy essential learning materials previously catered for under the free education programme as schools frantically tried to persuade the suppliers to relax their stance.
But Education Permanent Secretary James ole Kiyiapi said that the government was last evening processing Sh5.3 billion to be sent to the secondary schools.
The money is to be sent to 6,170 schools under the free day secondary education programme, which will benefit 1.78 million students.
Each student has been allocated Sh2,971 as a part of the Sh10,265 that the government is supposed to send for each student before the end of the year.
“The money is expected to be in school accounts before the end of the week,” Prof Kiyiapi said, adding that more money will be sent in the course of the term.
He also noted that Sh4.3 billion, for 8.5 million pupils, would also be sent to primary schools.
Kenya Secondary Schools Heads Association chairman Cleophas Tirop said the withdrawal of credit facilities by suppliers may cripple school operations.
“This is why we are urging the government to send the money immediately,” Mr Tirop said.
“The schools need to procure learning materials that are core to the services they offer to students.”
A survey showed that prices of both secondary and primary school text books in most of the bookshops in Nairobi had gone up by between Sh50 and Sh120.
“The number of parents buying books for their children has drastically reduced this year compared to the same time last year,” said Mr Darshit Patel, the manager Himani Traders and Distributors Bookshop.
“We expected the suppliers to raise the prices of 8-4-4 based curriculum books as they usually do every time schools are opening. But we did not expect them to raise the prices of other topical books,” said Mrs Arnita Sharjani of Great Scorers Bookshop.
She said that whereas every school opening period comes with higher book prices, this year’s was by a much bigger margin.
But boarding schools are the hardest-hit by the difficult economic times, with food prices hitting record highs.
Parents have appealed to the Education ministry to block schools from imposing exorbitant fees to cater for the high cost of living.
Their outcry follows last year’s resolutions in which most schools decided to increase fees to counter rising inflation.
At an annual general meeting in Nakuru Boys’ High School in September, parents were informed that the increment would be effective from this year.
Public boarding primary schools have also endorsed review of their fees structures.
Power Play: Behind Kengen’s Great Wall Of Corruption
By Michael Rigby 03 Jan 2012
When the Kenya Electricity Generating Company (KenGen) Limited placed an advertisement in the local dailies on April 13 and April 18, 2006, no one suspected that this straightforward announcement could one day metamorphose into one of the biggest corporate scandals in Kenya.
Much less, no one could foresee the chain reaction of thievery, corruption and outright stealing of public funds running into tens of billions of shillings that followed what, on face value, looked like a simple advertisement to generate power for the country.
In a typical horror story, KenGen, its Managing Director Eddy Njoroge, and the ultimate winner of the tender put into process a well oiled, skillfully-designed scheme that is astonishing in terms of audaciousness and bravery. The breathtaking acts of impunity on the part of the conspirators and the magnitude of the loss have been kept secret from the Kenyan taxpayer.
An important consideration for the conspirators in this daring theft must have been their calculation that the scheme had a low risk factor. They must have calculated that in terms of their influence and power, the protection they enjoy and the general level of impunity in the country, the plot was a low-risk, high-gain one worthy of execution. It shows, if any testimony is needed, that in present day Kenya certain individuals are immune to the law and enjoy absolute immunity and protection from powerful offices.
This is a tale that shows how the rich and powerful “servants of the people” make billions through the outright manipulation of contracts. Five years since this contract was signed, The Nairobi Law Monthly brings you this exclusive story. It is a sad story of how our country is habitually pilfered by the very people we entrust with a solemn public duty.
Following the advertisement, 12 companies expressed interest, but only three submitted bids for drilling the six appraisal wells. The three companies were: Century Resources International of Australia, Great Wall Drilling Company of China and PNOC Energy Development Corporation of the Philippines.
The tender evaluation of these companies raised an early red flag on the eventual winner. All the three companies satisfied the minimum technical score of 75 per cent required for a firm to have its financial proposals evaluated.
PNOC-EDC scored 80.7 per cent and quoted US$70.2 million. Great Wall Drilling Company on the other hand scored 80.1 per cent and quoted US$20.9 million. Century Resources International scored 77.3 per cent with US$40.2 million as its financials. On the basis of this evaluation, the contract was awarded to Great Wall Drilling Company.
It is after the contract was awarded that one sees the depth and breadth of a scheme that was all along in gestation and came into immediate fruition. Suddenly and literally out of the blue KenGen came up with the idea that Great Wall Drilling Company should be given a further 15 wells to drill. This is over 300 per cent variation of the contract.
The decision by KenGen and Mr Njoroge to award such a lucrative contract to Great Wall Drilling Company without a competitive tendering process in a way explains why the Chinese company offered a very low financial proposal to the initial contract for six wells.
To provide a rationale for this variation of contract, a Mr David N Ngari, who is a Geothermal Equipment Officer with KenGen, was assigned the trying task of writing a concept paper for the tender committee that would mask the real intentions of the conspirators. He made a number of recommendations that show the length at which KenGen would go to ensure that the Chinese company was given the lucrative contract.
One of the startling recommendations was that the price for the additional 15 wells to be drilled by the Chinese company be increased by 11.2 per cent of the original contract. In a strange and illogical thinking, KenGen did not insist on a lower figure from the original contract despite the Chinese company enjoying economies of scale in light of the variation of the contract to its advantage. Mr Ngari, in conclusion, recommends to the tender board that the Chinese company be awarded a new contract to drill 15 additional wells at a cost of US $82 million. All this without a competitive process.
KenGen justified the increment of the contract price by 11.2 per cent on the basis of two reasons that border on the absurd.
First, while appreciating it was a dollar contract, KenGen went out of its way to state that since the initial contract, the dollar has depreciated against the Chinese yuan and thus the escalation of the price in favour of the Chinese company was justified.
Second, it stated that even if KenGen paid 11.2 per cent for the job, that increase was still lower than the price quoted by the two unsuccessful bidders. Consciously, KenGen was determined to pay the Chinese firm as much money as quoted by the two unsuccessful bidders.
The biggest obstacle facing KenGen and Mr Njoroge in awarding this sweet-heart contract to the Chinese was that Parliament had enacted the Public Procurement and Disposal Act 2005 and the Minister for Finance gazetted the Public Procurement and Disposal Regulation 2006. This Act and its regulations brought into force a very rigid and transparent procurement system.
In fact, in a letter dated January 18, 2007, the Permanent Secretary in the Ministry of Finance, Mr Joseph Kinyua, addressed all CEOs of State corporations and ordered them to operationalise the Act and inaugurate new tender boards as stipulated by the Act.
In line with the Treasury’s directive, KenGen and Mr Njoroge constituted tender boards for the period January 23, 2007 to July 31, 2008. It must be appreciated that the procurement and disposal Act expressly prohibits directors of State corporations and their chief executive officers to sit in tender boards.
KenGen thus appointed a seven-member tender committee comprising Mr Joseph Ng’ang’a, deputy managing director, Mr Wycliffe Temesi, chief manager, finance, Mr Richard Nderitu, chief manager operations, Mr George Muga, chief manager technical assurance, Mr Joseph Ombongi, information technology manager, Ms Rebecca Miano, company secretary and Mr Daniel Mutunga, chief manager procurement.
This tender board consisted of individuals who were well regarded in the company and who had previously refused to rubber-stamp the wishes of Mr Njoroge. The composition of the board provided the biggest obstacle to the scheme of awarding the Chinese company the lucrative contract variation. It appears Mr Njoroge quickly came up with the idea that a special tender board could look into the issue. He thus sidestepped the only legally recognised and lawfully constituted tender board of the company. In the process, he showed all concerned that nobody could stop the Chinese deal.
On February 5, 2008, Mr Njoroge convened what he called “the 54th meeting of KenGen tender committee” which now comprised of his supposed henchmen. Among them Mr Titus Mbathi, chairman of the KenGen board of directors; Mr Musa Ndeto, a director; Ms Sarah Wainaina, a director; and Mr Njoroge himself.
As expected, this special tender board authorised the variation of the contract. In minute No. KTC/345/10-2006, it adopted the resolution that: “the committee therefore authorised the management to hold discussions with M/S Great Wall Drilling company and negotiate terms for a contract extension to drill 15 additional wells”.
It is clear that the tender committee that awarded the generous variation of the contract to the Chinese company was not the bona fide tender board of KenGen. It thus had no legal capacity and was a fraud on the taxpayer.
This tender committee was not constituted in accordance with the mandatory provisions of the Second Schedule of the Public Procurement and Disposal Act, 2005. Contrary to provisions of the law, it was chaired by a board member and attended by three others. Members of the board of directors are ineligible to sit on a State corporation’s tender board.
In all tender variations there is a statutory upper limit on what can be varied on the existing contract. Contracts awarded through tender can in law be varied upwards to a maximum of 15 per cent of the value of the original contract.
Here the contract was almost tripled. It is certain that the parties entered into a new contract that is distinct from the initial agreement and was favourable to the Chinese company.
Sections 59(3) and 70 of the PPDA Act prohibit any entity from changing the substance of the tender once it has been awarded. KenGen, by tripling the original contract of six wells and adding 15 more, illegally changed the substance of the tender.
Since this variation was not requested for in the original tender document, much less priced, the mechanisation by the parties stifled fair play as the two losing bidders were not given a similar chance to revise their prices in light of the extra 15 wells on offer.
A number of sweeteners were added for the benefit of the Chinese company. For instance, advance payment was not included in the second contract, so was the issue of withholding tax and even direct procurement of cementing services.
This illegal contract extension was a hush-hush affair and the Kenyan media either elected to remain silent or were silenced by the powerful guns of KenGen.
Out of the blue but clearly in line with the modus operandi of Mr Njoroge, KenGen took to the airwaves and newspapers and started defending the variation of the contract.
This was done when the public was not aware of the magnitude of the scam. Mr Njoroge challenged allegations of impropriety through a Press advertisement indicating “an important notice to the public” on August 20, 2008. The advertisement stated that it was responding to a “document in circulation”. It neither stated the author nor area of circulation of the document. The advertisement also made the following false and misleading statements.
First, it stated that the deal that awarded the 15 additional wells to the Chinese company was not “a case of contract variation but a contract extension”. Either Mr Njoroge was engaging in senseless semantics or did not know the legal meaning of “contract extension” and “variation”.
A contract in law can be extended only as it relates to time or the period of performance. If a given time frame was initially provided for its performance, and one of the parties sought more time to perform his obligations, the parties can extend the time. Variation of a contract on the other hand occurs when its other terms like subject matter, consideration and other critical components are changed. It is clear that Mr Njoroge varied substantially the contract with the Chinese company.
Second, it was purported that the tender board that authorised the variations of the contract was the same as the original board and thus it had the mandate.
Mr Njoroge contended in the advertisement that by virtue of the Transitional Clause 3(2) of the Third Schedule of the Public Procurement and Disposal Act, the initial tender board was in law entitled to sit and vary the contract.
Mr Njoroge deliberately misled Kenyans in the advertisement. Let us reproduce Section 3 of the Third Schedule of the Public Procurement and Disposal Act (2005).
“3(1). Procurement proceedings commenced before this Act comes into operation shall continue in accordance with the applicable law before this Act comes into operation.
“3(2) A procurement proceeding commences for the purpose of subparagraph (1) when the first advertisement relating to the procurement proceeding is published or, if there is no advertisement, when the first documents are given to persons who wish to participate in the procurement proceeding”.
It is apparent that Mr Njoroge was not only misleading Kenyans but deceptively so. The tender was already awarded and concluded and a lucrative contract was on the table for the Chinese.
Between February 11 and 15, 2008, a Kenyan delegation led by Dr Silas Simiyu and a six-member team from the Great Wall Drilling Company led by Mr Zhang Zhaofeng held contract negotiations at the Holiday Inn in Nairobi. The opening remarks gave away the purpose of the meeting.
It read: “KenGen invited GWDC for negotiations on the contract extension for drilling… KenGen explained that the purpose of the meeting was to negotiate extension of the contract. In this contract extension, 15 production wells will be drilled.”
After going through a number of simulations, the parties agreed to lopsided negotiations and thereafter signed a contract worth over US$82 million dollars for the Chinese company.
The Permanent Secretary in the Energy ministry, Mr Patrick Nyoike, and the Solicitor General, Mr Wanjuki Muchemi, tried to close the stable when the horse had already bolted. A number of letters were exchanged between these two offices raising the issue of how far the rot in KenGen goes and how powerful Mr Njoroge is.
In a letter dated April 4, 2008, Mr Nyoike reassured the Solicitor General that “with respect to section 27 of the Public Procurement and Disposal Act, 2005, I would like to confirm that Great Wall Drilling Company of China was procured through a very thorough international competitive bidding process”.
Mr Muchemi said he was not aware of the contract and that his advise was not sought. His annoyance, however, comes across as stage-managed. In a reply dated April 24, 2008, to the letter by Mr Nyoike, Mr Muchemi wrote, “We hereby wish to state categorically that the State Law Office must be consulted before a contract is signed and at all stages during negotiations. We emphasis once again that posto facto clearances are completely discouraged”.
Up to this point Mr Muchemi was rightly outraged that a contract of this magnitude could be signed without the legal authorisation of his office. But the last paragraph of the letter gave away the charade these offices were engaged in. They were simply playing ping-pong on Kenyans.
He concluded the letter by stating: “We are unable to do a proper legal due diligence at this stage. Nevertheless, we hereby confirm that the above mentioned commercial contract is valid and legally binding between the parties”.
If the Solicitor General had discharged his professional obligation to his client, he would have realised that the contract was contra statute and illegal ab initio.
His advice exposed the cavalier attitude with which the State Law Office handled multi-billion contracts. It explains why billions of shillings were lost through sheer negligence and gross ineptitude.
Notwithstanding the patently illegal aspects of varying the contract in favour of the Chinese company, the contract does not make economic sense. It runs foul of the cardinal economic principle that the cost per unit of production decreases as more units are produced.
This is because the large number of units produced share the fixed costs. But in this contract variation, the average cost per well for the initial six units is US$3.4 million, but for the additional 15 wells the cost increases by 61 per cent to US$5.48 million per well. It is hard to justify this steep rise. It can, however, be explained by the chain of events that was well choreographed by Mr Njoroge and the Chinese company.
The amount was varied to defraud Kenyans and provide for kickback for the KenGen cartel.
This contract and the general conduct of Mr Njoroge bring into sharp focus the impunity that has gained currency in the country. Mr Njoroge has blatantly breached the law and made the taxpayer lose billions of shillings in questionable circumstances.
The Nairobi Law Monthly has filed a constitutional reference that seeks to gain access to all the information and documents in the custody of Mr Njoroge and KenGen.
We have further written to the Director for Public Prosecution, Mr Keriako Tobiko, asking him to prosecute Mr Njoroge.
It is only by boldly addressing these issues in the public that masters of grand corruption and impunity can be held to account.
In the coming months we will keep you informed of the turns and twists of these two cases.