E-Clips:- Business Pictorial - Donors Write To Kibaki Over Shs7b Scam

Kenyas leading development partners now want the government to give a detailed explanation relating to the Sh7 billion scandals linked to Anglo Leasing and Finance company.

The donors are also reported to have written to President Kibaki asking him to take full charge of the review process and end squabbling in the ruling coalition.

The revelations come just a day after a rally called to demand for a new constitution was called off sparking day-long protests and demonstrations in Nairobi and parts of Kisumu.

Sources told the Nation that the donors who include Britain, the US, Germany, Sweden and Switzerland expressed concern at the high level collusion between the government and Anglo Leasing and Finance Company.

They specifically singled out the Treasury and the Office of the President for censure over the scam in which the firm that claimed to have its offices in Liverpool, in the UK, was given two contracts to supply terrorist-proof passports and put up a forensic laboratory for the Criminal Investigations Department.

This is also the first time for the donor community to jointly address President Kibaki since he assumed power 18 months ago.

Two weeks ago British High Commissioner Edward Clay disclosed that his government was assisting Kenya to find the faceless people behind Anglo Leasing and Finance Company. In the first contract, the firm was to finance the passports deal for Sh2.7 billion although an earlier proposal was for Sh850 million.

Consequently, the government released Sh91 million to Anglo Leasing and Finance as commitment fee. After its exposure in Parliament, the government swiftly moved to suspend the contract while the Parliamentary watchdog committee, Public Accounts Committee, swung into action to probe the scam. The PAC stumbled on the second scam relating to the forensic laboratory while investigating the passports one

In it, the government had entered into contract with the finance firm in August 2001 to construct three buildings to house forensic laboratories for the CID.

However, since the contract was signed, nothing had taken off the ground despite the Kanu government having paid a commitment fee of Sh70 million. And when Narc took over, they paid the finance firm another Sh224 million for merely delivering architectural drawings.

The finance firm has since returned all the monies it received from the government while President Kibaki has sacked three permanent secretaries named in the scandals. They are Mr. Joseph Magari (Finance), Mr. Joseph Oyula (Financial Secretary) and Mr. Sylvester Mwaliko (home affairs).

The minister for finance, Mr. David Mwiraria, also cancelled all the promissory notes that had been signed in relation to the laboratory deal amounting to Sh4 billion. He however was unable to explain how a further Sh464 million had been set aside to be paid to the same company in this years Budget.

Despite the sackings, reimbursements of received monies and cancellation of promissory notes, the government has been unable to pinpoint who it dealt with as directors of Anglo Leasing and Finance Company have remained shadowy. Queries have also been raised on why the finance firm has been quick to return money yet it had entered into contract with the government.

Eyebrows have also been raised with the President failing to act on top officials in the Office of the President especially in relation to the CID laboratory project.

And yesterday, sources said the donors had met the President on June 3, at a discussion facilitated by the head of civil service and secretary to the cabinet, Mr. Francis Muthaura.

The donors are said to have told the president in a letter that if the governments commitment to fighting corruption is to carry conviction and credibility, it must be ready to act firmly against culprits in its own ranks, despite their social standing.

They criticised the statement issued by Mr. Muthaura exonerating top civil servants and ministers in the two scandals saying it lacked credibility. "Governments have to take full responsibility for their own actions in initiating major contracts or continuing those initiated by their predecessor," the donors told the President.

As investigations on the two scandals continue, the donors recommended that the PS for Ethics and Governance, Mr. John Githongo, updates Kenyans regularly on the progress made. "If wrongdoing is discovered, we hope that your government will take swift action, not just to recover diverted funds, but to prosecute and convict those involved," our source quoting the donors saying.

They said the Kenya Anti-Corruption Commission should be strengthened with its investigatory powers while the Efficiency Monitoring Units mandate should be clarified. On the factional feuds within the ruling coalition, the donors said they were impeding the government from delivering on its public policy agenda.

They regretted that ministers were spending their time on public quarrelling instead of delivering on their mandates. "A working nation expects a working cabinet and a Parliament that passes government legislation," the donors are said to have told the President.