E-Clips:- Business Pictorial - Four Suspended Over Passport Graft War

The suspension yesterday of two permanent secretaries and two other senior Government officials linked to the controversial Sh2.7 billion passports contract is being hailed as a bold move in President Kibakis vow to fight corruption.

Mr Joseph Magari of the ministry of Finance and Mr Sylvester Mwaliko of the Office of Vice President and ministry of Home Affairs, were asked to step aside after it was established that the passports deal was irregular.

Also sent on forced leave was the director of Government Information Technology Services Dr Wilson Sitonic and the Chief Litigation Counsel in the Attorney Generals Chambers Miss Dorcas Achapa.

But there were indications that as the full details of investigations into the the project are revealed, more people including senior politicians would be affected.

A document doing the rounds indicates that Mr Magari was given special authorisation as far back as last October by Finance minister David Mwiraria to sign on behalf the Government the financial agreement with Anglo-Leasing and Finance Ltd that has now become so controversial.

The special report of the Controller and Auditor-General was presented to Mr Magari on Monday. Another report by the Kenya Anti-Corruption Authority was presented to Ethics and Governance PS John Githongo on Wednesday and immediately forwarded to President Kibaki.

Though both reports have yet to be made public, sources indicate that they concur in the finding that the passport contract was riddled with irregularities, some of which might lead to criminal charges.

Though the suspension of the four officials was announced by the Head of Public Serve and Secretary to the Cabinet Mr Francis Muthaura, the press release was issued through the Presidential Press Service. That serves as an indication that it was a presidential decision.

The statement read: "Following initial investigations by the Government on the procurement procedure and the pricing of the contract of 4th December, 2003, on the Immigration Security and Document Control Project, the Government has established that there are serious irregularities. Consequently, the following senior officers who are responsible for the authorisation of the project and who signed the contract or gave critical advise that led to the procurement or signing of the contract document have been sent on compulsory leave with immediate effect, to allow for completion of investigations ..."

Sources at Treasury and the Home Affairs ministry said Mr Magari and Mr Mwaliko were still in office yesterday until they received suspension letters signed by Mr Muthaura.

They cleared their desks in the afternoon and left. Mr Githongo, who ordered KACC investigations into the suspect passport deal, was yesterday morning spotted entering the Office of the President at Harambee House for a meeting with Mr Muthaura.

The suspended permanent secretaries are at the centre of a contract for the purchase of passport issuing equipment which was expanded from a Sh800 million project to one costing Sh2.7 billion and then awarded to a French company without competitive bidding.

As news of the suspension broke, the controversial firm contracted by the Government to source financing for the deal, Anglo-Leasing and Finance Company, released a statement saying it was withdrawing from the project. It also said it would return the Sh91 million it as already received as a 3 per cent "commitment fee".

The deal has widely described as corrupt, but was defended in a Government statement read in Parliament by Vice President and minister for Home Affairs Moody Awori.

It is expected that Mr Mwiraria will next Wednesday table the audit report in Parliament. After that, the matter will be taken up by Parliaments Public Accounts Committee led by Mr James Magara.

The anti-corruption police are continuing their investigations after handing in a preliminary report.

Suspension of the four comes two days after the Nation revealed that the delay in tabling the audit report to Parliament was caused by two key Government officials who have not responded to audit queries.

Mr Mwiraria told Parliament on Wednesday that he would table the report as soon as the Office of Vice President and Ministry of Home Affairs responds queries from the Auditor-General.

But this prompted House Speaker Francis ole Kaparo to remind the minister that the Auditor-General is empowered under the law to table in the House the report at the expiry of seven days even if a government official neglects to respond to query