E-Clips:- Business Pictorial - Dubious Deals Cost Sh50bn, Says Githongio

QUESTION: I would like to start by asking you to describe the scale of corruption that you encountered. This wasnt small scale?

Answer: It wasnt small scale. What I encountered were scenes of transactions with entities which in many cases I came to find did not exist and in some cases were being paid by the Kenyan Government but were not delivering goods or services. And in total, when one combines some of the contracts signed by the previous administration which were then inherited seamlessly by our administration, then the contracts that were signed during our administration totalled about US$700 million. (Sh50 billion)

Q: Spell that out for me in terms of what it means to the Kenyan national Budget. A: Kenyan GDP is about 11 billion. Q: So its a sizeable chunk? A: A sizeable chunk, yes. Q: How would you characterise it? I mean, youve used the phrase in the past - Ive heard you use the phrase - looting. Is that what this was?

A: I think it was an attempt at looting. I would like to think that it did not entirely succeed. This was mostly what I would describe as grand corruption, because these were contracts that were, at times, hugely inflated, where goods were not delivered yet they were paid for. When you have goods not being delivered then – then thats looting. Its grand corruption when you are paying really above market rates, sometimes twice over, for a good or service. And this is what I came across.

Q: What was the money being used for? I mean, clearly in the way that you describe it, money was being given in huge sums to contractors. They would then give some of that back to Government ministers. What were they using the money for? Images of Mr Githongo lifted from the Hardtalk programme on BBC television.

A: All I can tell you, what they told me, that it was being used for political purposes or political mobilisation, pay off other politicians for political purposes. Im sure some of it was also used for personal purposes. Thats what they told me. I have actually no evidence in – they were willing to admit to me that this is what they were doing but in terms of following exactly how each shilling was then expended, I did not go that far. All I have is their word...

Q: Well come back to that towards the end, the question of what the money was used for. But when you took office it was just after Kenya had elected a coalition government, the Rainbow Coalition, which was going to change things. The pledge was: An end to corruption. What did you feel when you went into the office on that first day to be the anti-corruption eye?

A: I felt optimism. We had a 70 per majority. The 70 per cent majority of Kenyans had elected us. So we had a mandate to implement extremely radical reforms. And so it was an exciting time when we felt that we could achieve great things. And I think for a period a number of very important reform measures were implemented.

Q: And you believed that it was going to be possible to beat corruption?

A: I believed it was possible to beat corruption of the scale that had been prevalent under the previous administration. I believed it was possible to uproot some of the systems, the networks of corruption that were there in the previous administration. What surprised me was the durability of those networks and those systems and their ability to survive from the previous administration to our administration to, as it were, swallow up even some of our top leaders.

Q: When was your innocence, if I can put it that way? When was your innocence destroyed?

A: Um– early in 2004 it began to dawn on me fairly seriously that something was wrong. And I would say that an important part of the new lot was as bad as the old lot. I think there were still good people. I will not compare to the previous lot where the rot was a lot more systemic and widespread. I think that there remained good people within the system but concentrated around the heart of power were a group of people who were determined to do things the old way. Q: And so how did this manifest itself; how did you start to realise this?

A: By contracts being brought to my attention that were very dubious and when I asked the Anti-Corruption Authority to make inquiries the information that started to become available showed that we had a problem, most fundamental problem being that in many of the cases the Government had contracted entities that did not exist.

Q: So paying money to fictitious companies?

A: Fictitious companies, so we had no legal recourse. And then when we dug a bit, when we asked too many questions, theyd pay back the money or money would be wired back.

Q: The most infamous scam is whats called the Anglo Leasing scam where the Kenyan Government needed, because of the war on terror, to radically upgrade its passport system to make terrorist-proof passports.

A: And they still need to do that today.

Q: How much money was forked out on that to a company that didnt exist?

A: The equivalent of about 956,000 euro which is, what, 91 million Kenyan shillings.

Q: Thats a lot of money in a country like Kenya.

Images of Mr Githongo lifted from the Hardtalk programme on BBC television.

A: Its a lot of money and when the scandal broke, when an opposition member of Parliament raised the issue in Parliament, investigations were immediately embarked upon on the 22nd of April by the Anti-Corruption Authority. In the middle of May, Anglo Leasing and Finance wired back the money to the Central Bank.

Q: So this was a straightforward admission that it had been ripped off, in effect?

A: Yes. And they were not that keen to identify themselves all because the money was coming back but we had initially identified who was paying back this money.

Q: Now as you dug deeper into lots of different contracts you came closer and closer to people at the heart of government. How did they react?

A: Initially was– Initially I felt that I had their support as I went about my work. You have to remember, and this is one of the issues that is– misrepresentations that is made, I wasnt actually investigating. The investigation was being conducted by the Anti-Corruption Commission. I was sort of urging them along, asking questions every day as to whats the latest.

Q: Because you were the overseeing civil servant? A: I was– yeah, I was just, you know– His Excellency, the President, had asked me about so I was pursuing the matter. But what started out as support in April changed into something more lukewarm in May and by June 2004 the feeling that I was getting– what I was told was basically since the money has been paid back - by then about $12 million had been wired back by entities that did not exist. And so I was ordered by senior people, that, you know, leave this matter alone; let sleeping dogs lie, the money has been paid back. So where is the mischief? If the money has come back what crime has been committed?

Q: Why did you want to push on?

A: Because I was convinced that this was simply the tip of the iceberg. That if somebody was willing to pay back $12 million, which is about a billion shillings, in all likelihood it is because theyre involved in other transactions of similar or even larger scale that they would like attention not to be focused on and therefore quickly pay back just to make sure that this attention goes away; number one. Number two: I really did not appreciate their argument that if somebody steals your television and then brings it back to you, doesnt mean that the theft has not taken place. It is simply that they have returned the evidence of a theft, but the theft has taken place.

Q: At what level of government were you being told to drop it?

A: At ministerial level.

Q: What ministers?

A: Well, top ministers. I think the message given to me gently, being told to let go of it. Minister of Finance asked me: "Let this thing– Let sleeping dogs lie" but he will get on– he will get to the bottom of it in his own way. Minister of Justice said, "There are questions being asked, John, as to whether you understand the political implications of you work". So it was a battle.

Q: How would you characterise in a general sense the kind of pressure that was put on you? In effect, before we get on to deal with the business of your father, if you can just characterise for me how all of these ministers– what the general message to you was? A: Well the general message was "back off; keep off". Others were more direct. It came as very gentle advice, where some would say, "Listen, you know, what you are doing now is dangerous to your physical security."

Q: This was at ministerial level?

A: Yes, at ministerial level one would get those kind of warnings. Then one would get anonymous telephone calls in the middle of the night which was abusive. That, I must say, didnt bother me it irritated me because it wakes you up in the middle of the night and somebody hurls abuse and says that your department is illegal, you know, or says nothing on the phone and therefore its meant to be– its got nuisance value. So obviously one becomes concerned when senior people are the ones gently, you know, telling you that what youre doing is dangerous. I thought we were bringing it together. Were all fighting this corruption together. Q: Well, it brings me to the issue: did you inform the President of the scale of the corruption that you were uncovering?