E-Clips:- Business Pictorial - Corruption Kicking In As Minister Resigns

Pressline.org

It has been a grim week for the Kibaki administration in Kenya, with Finance Minister David Mwiraria falling victim to new revelations about high-level graft - this as the World Bank suspended millions in aid to Nairobi, and an embarrassing report about government expenditure on luxury vehicles was issued.

Mwiraria resigned from President Mwai Kibaki's cabinet Wednesday, after the local and international press reported on the contents of a dossier by John Githongo, formerly the permanent secretary for governance and ethics.

Apart from Mwiraria, a key presidential ally, the report implicated three other ministers in suspect deals involving Anglo Leasing and Finance Ltd - a firm shown to be fictitious.

The Anglo Leasing scam concerned the allocation of dubious contracts to the company for supplying a system to produce passports that could not be forged, and for building forensic laboratories to be used by police. The scheme was first brought to light in 2004.

According to a report in the 'Sunday Nation', government agreed to pay almost 38 million dollars for the passport system, when officials could have bought it for just under 10 million dollars.

Anglo Leasing was paid about 100 million dollars under the contracts, all of which was returned after the scam was unearthed - prompting then justice minister Kiraitu Murungi to term this affair 'the scandal that never was'. Some profits from the attempted fraud were apparently to be used for financing the National Rainbow Coalition government's 2007 election campaign and its bid to have a new constitution endorsed during a nation-wide referendum held last year.

The report by Githongo, a former head of Transparency International-Kenya (TI-Kenya) who spearheaded anti-corruption efforts in Kenya while in office, details how ministers tried to deflect his probe into suspicious contracts, in order to protect those concerned.

Githongo ultimately left his post early last year while on official business in Britain, but said little about his reasons for doing so at the time. He is now based at Oxford University; Githongo's work to uncover graft in Kenya has reportedly made him the target of death threats.

Accusations of impropriety in the Anglo Leasing matter have long surrounded Mwiraria, who maintained his innocence to the last.

'The allegations made about me in the media by John Githongo have cast serious aspersions on my character and integrity and have deeply disturbed me,' Mwiraria told journalists in the capital, Nairobi.

'In order that my name be cleared and to protect the integrity of the president, our country Kenya, I hereby voluntarily step aside as minister for finance and a member of the cabinet,' he added, becoming the first cabinet minister in Kenyan history to leave office over corruption claims.

Pressure is now building for others mentioned in the Githongo dossier - Vice President Moody Awori, Murungi (now energy minister), and former transport minister Chris Murungaru - to follow suit. Francis Muthaura, head of Kenya's civil service and secretary to the cabinet, is also named.

'We have learnt that governments do not move unless pressure is consistent and intense. We must continue with the pressure so that we can change the culture we have: a culture of impunity; a culture of getting away with corruption,' Maina Kiai, chairman of the Kenya National Commission on Human Rights, a government watchdog body, told IPS.

'Even upon (those accused) stepping down, we need to be assured that investigations will be conducted with integrity, credibility and fairness.'

Awori was reported Thursday as saying he would not resign, as he had not committed any crime.

But, in another first for Kenya, the vice president has already been questioned about his alleged role in the Anglo Leasing scam by the Kenya Anti-corruption Commission (KACC): never before has a sitting vice president been investigated over corruption. A copy of Githongo's report was forwarded to the KACC, and to Kibaki - who came to power at the end of 2002 on an anti-graft platform.

For his part, Murungaru made a failed attempt to have the courts block a KACC probe of his assets in connection with graft claims.

Allegations of corruption against the former minister had already led to him being denied entry into the United States and United Kingdom, after which he was dropped from the cabinet. Murungaru is further accused of having overseen a tender for the supply of naval vessels to Kenya at exaggerated cost.

The government maintains that it has made progress in fighting corruption.

'Such steps include the signing into law of the Public Procurement and Disposal Bill by the president in October 2005. Under this law, all government contracts will have to be thoroughly scrutinised before procurement,' a senior official at the justice ministry told IPS in December last year, adding: 'With this law, a repeat of the Anglo-Leasing (scam) will not occur.'

An inter-ministerial team was apparently also set up by Kibaki in 2004 to improve oversight of public finances.

Nonetheless, on Jan. 27 it was reported that government had budgeted for payment of about 52 million dollars to yet another non-existent company in a tender involving a computer system for national security. Disbursement of these funds has been blocked, pending an investigation of the contract.

The funds had been destined for Midland Securities and Finance. While the company apparently has an address in Geneva, the daily 'Nation' paper said it could find no firm of this name registered in Switzerland.

Midland Securities is said to be associated with Globetel; the Nation further states that investigators suspect a link between this company and the Kamani family, also mentioned in connection with the Anglo Leasing saga.

Reports indicate that Anglo Leasing and Finance Ltd has been represented in Britain by Saagar Associates, a firm owned by a member of the Kamani family - which is said to have enjoyed a close relationship with officials under former head of state Daniel arap Moi.

As a result of heightened concerns about graft in Kenya, the World Bank this week delayed payment of loans worth about 267 million dollars to the East African country.

However, the bank gave the green light last week for a 120-million-dollar payment to Kenya, drawing a scathing response from Sir Edward Clay, Britain's former high commissioner to Kenya. In 2004, Clay made a speech in which he famously accused Kenyan officials of greed that caused them 'to vomit all over our shoes'.

The fact that 25 million dollars of this money has been earmarked to help Kenya combat graft has not appeased the envoy, who wrote a letter to World Bank President Paul Wolfowitz in which he noted that the loan would 'appear as a mockery of the brave men and women who are taking risks to ensure that the scourge of corruption is banished from their country.'

In the midst of the clamour generated by Githongo's dossier, Kibaki's government sustained another blow in the form a report issued Monday by TI-Kenya and the Kenya National Commission on Human Rights. (TI-Kenya is the local chapter of Transparency International, a Berlin-based non-governmental organisation that fights graft.)

Entitled 'Living Large: Counting the Cost of Official Extravagance in Kenya', the report states that authorities spent a minimum of about 12 million dollars on luxury cars between January 2003 and September 2004, 'largely for the personal use of senior government officials such as ministers, assistant ministers and permanent secretaries.'

It also gives several examples of how this money might have been spent to better effect. Twelve million dollars could have provided anti-retroviral drugs (ARVs) for 147,000 people for a year, it claims - noting that of the 270,000 people who require ARVs at present, only 11,000 are receiving them.