E-Clips:- Business Pictorial - A Case To Answer

A report on the Anglo Leasing scandals tabled in Parliament calls for investigation of Vice-President Moody Awori, former Cabinet ministers David Mwiraria, Chris Murungaru, Kiraitu Murungi and the Head of Civil Service, Francis Muthaura. The report, prepared by the Public Accounts Committee of the House, reveals the full magnitude of the scandals indicating that 18 separate contracts of Anglo Leasing nature worth more than Sh55 billion were signed by the Government between 1997 and 2003. A total of Sh18 billon was paid on these contracts as at May 2005, out of which Sh1.049 billion was mysteriously refunded. Ten of the projects were initiated, negotiated, contracted and signed under the Narc Government in 2003.

However, while the Committee found that 12 of the projects were still ongoing, as the relevant contracts were not legally cancelled, it notes that no payments were made on them since May 2005. In the two Anglo Leasing projects, the Government entered into Sh7 billion contracts with a non-existent firm and paid it commitment fees before the scandal was exposed. The money was later wired back to the country mysteriously.The first PAC report on the matter was thrown out of the House after some names were expunged from it.Thursdays report was compiled following a fresh investigation that involved a trip by the PAC team to London to take the evidence of Githongo, who fled the country last year while investigating the scam.

The fresh report also calls for investigation of some former senior civil servants in the Ministry of Home Affairs, the Office of the President and Treasury. It lists former Permanent Secretaries Sylvester Mwaliko, Joseph Magari Joseph Oyula and Dave Mwangi as players in the scandal. And it names Merlyn Kettering, Deepak Kamani, Anura Perera, Amin Juma and Ludimila Katuschenko as the people behind the projects."They are the key persons, who are either agents, possible owners or possible directors of this companies," stated the PAC report.

The report says the Public Accounts Committee accepted former Ethics Permanent Secretary John Githongo's evidence that he regularly briefed the Head of State on Anglo Leasing and other contracts since the matter became the subject of a Parliamentary query."The fact that top civil servants were sacked on authority of the President clearly points to adequate information having been provided to him, a fact that was confirmed in testimony by the Head of the Civil Service. It is worth noting that the President directed Mr Githongo to investigate who Mr (Merlyn) Kettering was and to ensure that the funds are refunded," it states. On the Vice-President, the Committee, which was chaired by Leader of the Official Opposition Uhuru Kenyatta, concluded that, despite his persistent denials, the VP was made aware of the Anglo Leasing scandal.

"The Permanent Secretary Mr Sylvester Mwaliko said his boss was made aware of the contracts and was informed at every stage and he wrote a letter dated September 5, 2003, in which he sought guidance from Awori over the contract," said the report. The report became public Thursday afternoon after Speaker Francis ole Kaparo allowed Uhuru to table it "in the public interest." Its tabling had been blocked on Tuesday by Assistant minister Mirugi Kariuki, who questioned the legality of doing so.

Wide-ranging recommendations

The report, titled: "Public Accounts Committee report on special audit on procurement of passport issuing equipment by the Department of Immigration, Office of the Vice-President and Ministry of Home Affairs," gives a background of the Anglo Leasing contract and notes that it "is part of an organised, systematic and fraudulent scheme designed to fleece the Government through the so-called special purpose finance vehicles for purported security contracts." It also makes wide-ranging recommendations on the way forward, including how to deal with security contracts in future. The team, which compiled the report after interviewing Githongo, Awori and three former Cabinet ministers, Muthaura and several other current and former civil servants, questions the ability of the Kenya Anti-Corruption Commission (Kacc) to prosecute the Anglo Leasing related cases fairly, "given its selective exclusion of political figures".And the Committee described Mwiraria's actions as cavalier. It says he failed to show leadership and displayed fear of finding out who was behind the Anglo Leasing scandals.

The report says the then Finance minister was either outrightly incompetent, overwhelmed by responsibilities of his ministry, or "was deliberately remiss with a view of giving the Anglo Leasing principals an advantage." It recommends that he should be investigated with a view of taking appropriate action." The committee accuses Kiraitu of a cover-up. It describes him as a man with divided duty loyalties to his friend Githongo and his colleagues Murungaru, Mwiraria and former President Kibaki's Personal Assistant, Alfred Getonga. "Murungi failed to offer Githongo undivided support, although from time to time, he played a role of an informer to Githongo, giving him early warning of impending danger," states the report.

Kiraitu accused of obstructing justice

It adds: "The Committee finds there is credible evidence to suggest that Murungi gave protection to Anglo Leasing principals. The Committee finds that (from) Murungis various discussions, the principals behind Anglo Leasing projects were probably fronts for persons within President Kibakis administration."The Committee also accuses Kiraitu of obstructing justice by protecting Murungaru and Getonga and recommends that he should be investigated for interference and appointment of the Director of Public Prosecutions, Keriako Tobiko. The Committee dismissed Muthaura's claim that he knew nothing about the scandal."He misled the committee that all security related contracts had their payments stopped pending finalisation or audit by Controller and Auditor General," states the report.

The PAC also learnt that the Cabinet did not approve of the contracts. The Committee stated that no evidence was adduced to show that Cabinet approved the contracts.The team said Treasury performed a ceremonial role of effecting scheduled payments without ascertaining that they were commensurate with services delivered."Treasury abdicated its responsibility of securing external loans and credit on behalf of the Republic of Kenya. It failed to undertake due diligence on the financiers and hence the country did not benefit from the expertise," it says. It also accuses Attorney-General Amos Wako of abdicating his role as the legal adviser to the Government.