E-Clips:- Business Pictorial - Key Man In Anglo Leasing Deals

A preliminary investigation into the Anglo Leasing and Finance scandal zeroed in on the shadowy companys linkman in Kenya.

But a report of the investigation – presented to donors who have questioned the Governments commitment to the fight against corruption – revealed the linkman, Dr Merlyn Kettering, was currently out of the country.

And it stated that although he was believed to hold the key to the scandal, investigators had failed to track him down to interrogate him or record his statement. Dr Kettering left Kenya last month to attend the annual convention of the Brethren Church of the USA, which had seconded him to Kenya.

Although the report detailed the series of letters and offers that led to the single-sourced Sh4 billion laboratories deal, there also appear to be a number of surprising omissions.

For example, CID director Joseph Kamau told the Nation yesterday he had not been ordered by the Government to find Dr Kettering.

Also the report itself made no mention of any of the personalities suggested as being behind the scam, in spite of comments last week by National Security minister Chris Murungaru that the report named names and detailed their roles in deals that totalled nearly Sh7 billion.

In addition to the Sh4 billion laboratories deal, Anglo-Leasing Finance were also involved in financing and sourcing a terrorist proof passports system said to cost Sh2.7 billion.

The report failed to mention the parts played in these deals by the permanent secretaries sacked for their involvement in them: Mr Joseph Magari (Treasury) and Mr Sylvester Mwaliko (Home Affairs).

Nor did it mention that Finance minister David Mwiraria approved the passports deal on the advice of his staff, nor what role if any was played by Principal Immigration Officer Henry ole Ndiema.

Other notable omissions included mention of businessmen Deepak Kamani, whose company once supplied the ill-fated Mahindra jeeps to the police, and who has links to Anglo Leasing Finance, nor the part played if any of Mr Jimmy Wanjigi. Both of them were questioned by anti-corruption police over the scandal.

And although the report stated Dr Kettering should be questioned, it did not state how he could have single-handedly convinced top civil servants in the Office of the President, Treasury and Home Affairs to go ahead with the projects.

The report did not even mention the man who wrote to the Government to state he was managing director of Anglo Leasing Finance, a Mr Michel Gruring.

It was compiled by the Kenya Anti-Corruption Commission (KACC) and was reportedly handed over to some donor countries last week when their envoys met President Kibaki at State House, Nairobi. It investigated both contracts and confirmed all the money paid out initially on the two projects had been refunded.

The acting KACC director, Mr Gideon Mutua, confirmed to the Nation that his team was investigating the scandal.

The report indicated local investigations were almost complete while the companys international connections, and possible roles by any other foreign firms was yet to begin.

It identified Dr Kettering as the key player representing Anglo-Leasing and Finance. Efforts by the Nation to obtain a comment from the Brethren Church in the USA, which seconded Dr Kettering to Kenya, proved fruitless.

The churchs executive officer, Mr Lerry Fogle, declined to comment on the affair for two weeks through e-mail contacts, but referred the Nation to the churchs public relations officer, Ms Cheryl Brumbaugh-Cayford. She was not available yesterday.

Entitled, An Interim Statement on the Anglo-Leasing Affair, the report stated the investigators had so far recovered the documents relevant to the investigations and established the key players in the contract, and had recorded statements from a number of witnesses.

The KACC boss said its final findings would be given to the Attorney General, Mr Amos Wako, who would advise the Government on what legal steps, if any, should be taken.

The investigators stated they were close to establishing in which account the Anglo-Leasing Finance cash was deposited, and who received and later returned the money.

The report revealed the three forensic sciences laboratories for the CID were first suggested in 1998 following a realisation that the services of the Government Chemist were expensive and did not meet the needs of the police.

Kenya had to buy in services from foreign laboratories, especially for DNA profiling and other specialised analysis. Consequently, on December 9, 1998, the then CID director Noah arap Too established a committee to study the feasibility of having a forensic sciences laboratory for the police, and in a letter signed on his behalf by an OP official, Mr J. F. A. Agili, wrote to the OP permanent secretary about it.

On June 16, 1999, Forensic Laboratories Ltd of Frances House, Sir William Place, St Peter Port, on Guernsey, one of the UK Channel Islands , wrote to the then PS offering their services.

That letter was signed by Forensic Laboratories senior projects director, Mrs L. Katuschenko, who proposed to send a senior forensic scientist and head of forensic laboratories in Edinburgh, Mr Michael Baxter, to Kenya to evaluate the existing facilities and give a detailed report.

But in a curious discrepancy of dates, Mr J. F. A. Agili, the OP officer who had signed Mr arap Toos letter to the OP permanent secretary, replied to Forensic Laboratories Ltd. in Guernsey on June 5, 1999, responding to their letter which was actually dated June 8, 1999 – three days later than the reply – welcoming Mr Baxter to Kenya.

Mrs Katuschenko again wrote to the PS on June 28, 1999, informing him that Mr Baxter would be in Kenya on July 12 and 13,1999, to discuss the Governments requirements.

She again wrote to the same PS on January 27, 2000, telling him she had sent Guernseys Chief Constable, Mr William J Wilson, to meet senior officers responsible for fingerprinting. The then PS, Mr Zakayo Cheruiyot, replied to that letter on February 3, 2000, authorising the visit.

The investigators report stated Mr arap Toos successor, Mr Francis Sang, wrote to the PS on November 10, 2000, recommending single sourcing for the laboratories – that is giving it directly to one supplier instead of putting it out to open tender – arguing that would ensure the Government had a unified point of responsibility, and that the contractor could be held accountable to get the desired results.

Mr Sang also allegedly recommended that M/S Forensic Laboratories Ltd, UK, be contacted for further information and their ability to source funding for the project.

In a letter dated December 28, 2000, Mr Agili on behalf of the PS invited Forensic Laboratories Ltd of 26 Rutland Square, Edinburgh, to submit the projects technical proposal and to quote its cost.

On March 5, Mr Agili sought the Attorney Generals opinion on the contract agreement with Forensic Sciences Laboratory Ltd., UK and the financing agreement with Anglo Leasing and Finance Ltd. The AG proposed some changes in the documents. The contract agreement was then approved by Mr Dan Ameyo who handled the assignment for the AG.

On May 11, 2001, Mr Agili wrote to Mr L. Muraveno of Forensic Laboratories Ltd. to state the Government had found their technical and financial proposals attractive but wished to explore alternative financial arrangements. He suggested the proposals be changed into a financial leasing deal.

This led to the then Head of Public Service, Dr Sally Kosgei, informing the PS Mr Cheruiyot that the Cabinet had approved lease financing for the high priority security project.

Mr Cheruiyot then on August 1, 2001, asked for a meeting with the then Treasury PS, Mr Mwanghazi Mwachofi, to execute the contract documents. On August 8, 2000, Mr Agili of the OP forwarded four sets of contract documents: Forensic Laboratory – contract No. Kenya.OP/FSL/2001/0.

However, the documents were returned unsigned by Mr Mwachofi the following day. He pointed out the laid down government procurement and tendering procedures had not been adhered to and availability of funds had not been confirmed.

Next Mr Cheruiyot wrote to the then Finance minister, Dr Chris Okemo, seeking confirmation that the procurement procedures had been followed and asked him to authorise the Finance PS to execute the contracts.

Availability of funds was confirmed in Sub-vote 017, Head 003, Item 240, the report stated, and the minister granted authority in a letter to Mr Cheruiyot dated August 10, 2001.

As a result, on August 16, 2001, the contract was signed for the export lease-purchase financing between the Government and Anglo Leasing and Finance Ltd. Forensic Laboratories Ltd was the supplier contracted by Anglo Leasing.

On the same day payment of $900,000 (Sh72 million) was delivered to the Central Bank of Kenya instructing them to pay Anglo Leasing and Finance Ltd of No.1 Penta Court, Station Road, Bohehamwood, in the UK.