E-Clips:- Business Pictorial - Kiraitu Gives Pledge On New Graft Arrests

A key member of the Governments fight against corruption yesterday appeared to play down the importance of the Sh7 billion Anglo Leasing affair. Justice minister Kiraitu Murungi described it as "the scandal that never was" – even as an envoy from one of Kenyas major donor countries – Japan – stood by his side and complained, "There is no powerful person who has been prosecuted to date."

Mr Murungi said of the Anglo Leasing scandal: "This matter has been blown out of proportion. It is the scandal that never was. We are not talking about money that was lost. The money that would have been lost . . . that which was paid out during the Kanu regime and in the Narc era has all been returned," he said. And he went on: "Its unlike Goldenberg where public money was lost. What we will be looking for is the conspiracy to defraud the government."

Yet at the same time he announced that fresh arrests would be made as the Government pushed its crackdown on corruption to new and "ruthless" levels in the New Year. His promise came as Attorney General Amos Wako promised to take action over Anglo Leasing once he receives the files from the Kenya Anti Corruption Commission. The minister and the AG spoke out as the Japanese government demanded to see powerful people implicated in graft hauled before the courts to face justice.

The Japanese ambassador to Kenya, Mr Satoru Miyamura, said: "We are a bit dissatisfied with the implementation phase of the fight against corruption." And he continued: "There is no powerful person who has been prosecuted to date. I now understand the measures the Government has taken so far but clear results are important."

Japan is one of Kenyas key donors and has sunk billions of shillings into major development projects in education, construction, hydro electric power and medical research. They have heavily funded the Sondu Miriu hydro electric power project and the Jomo Kenyatta University of Agriculture and Technology, as well as the Kenya Medical Research Institute.

The changing attitude towards Narcs biggest financial scandal first emerged in the middle of last year when MPs of the ruling coalition united in Parliament to rubbish the Anglo Leasing inquiry report issued by the Public Accounts Committee, then chaired by South Mugirango MP Omingo Magara. Parliament removed Finance Minister David Mwirarias name from the committees findings, which held Mr Mwiraria responsible for tying the government to the irregular deal by approving it.

In the first Anglo Leasing scandal, government officials expanded a Sh800million contract for terrorist proof passports to one costing Sh2.7 billion – ignoring protests from the user department – then gave the tender to the shadowy Anglo Leasing and Finance Ltd without competitive bidding. Payments for the deal were approved by the Treasury without reference to Parliament as required of contracts of that magnitude. In the CID forensic tender, a questionable contract awarded to Anglo Leasing by the Moi government was revived by the Narc administration when it took power in 2004.

Even though Anglo Leasing had done no work despite receiving Sh900 million from the Moi government, the Office of the President in the Kibaki regime made possible the payment of another Sh241 million to the firm – yet no construction had started on site. Millions more had been set aside to be paid to the firm in this years budget when the media raised the alarm. Government officials later told the PAC that they did not know Anglo Leasings directors and never tried to establish whether the addresses it gave were genuine.

The company is not registered in Britain, though it uses a Liverpool address, nor is it recorded in Switzerland, althoughit describes itself as Swiss. But Murungis new tune on Anglo Leasing is typical of the changed attitude among government officials close to the centre of power, which has raised fears that no action may be taken against the culprits. Yesterday the Japanese envoy and the minister spoke after a holding private consultations at the ministers office in Cooperative Bank House.

Mr Miyamura – who promised Japanese support in the fight against graft – went on to praise the Government for upholding the freedom of the Press and freedom of speech, which he said were important pillars in the fight against corruption. The minister had just explained that the Government had spent a considerable part of its last two years in power establishing the institutions and laws that would enable corrupt people to be prosecuted.

"We have established KACC and the other necessary laws. This year, Kenyans should expect action. We expect more arrests and we will be dealing with the corruption of the past more ruthlessly this year. But the constitutional power to prosecute rests with the AG and nobody, neither myself or the President can direct or control him. The AG will be expected to take a professional decision," the minister said.

At a separate function at the AGs chambers, Mr Wako said he had yet to receive the file. "As soon as I get the complete file, I will peruse it and if there is sufficient evidence that stands the test in court, I will not hasten to take firm action," he said.

It was anticipated, he said, that KACC would present the file before the end of the month after carrying investigations locally and abroad. The AG disclosed he had helped KACCs investigations by asking his counterparts in various countries for help. Detectives from KACC have been investigating the scandal in countries including Britain, the USA and Switzerland.

The comments by the minister, the AG and the ambassador came just one day after the Nation published an exclusive interview with President Kibakis special advisor on fighting corruption, Mr John Githongo. In it, he revealed that the files on the first of the two Anglo Leasing scandals – a Sh2.7billion passports deal – would be presented to the AG by the end of this month.

The scandal saw the Government paying out huge amounts of money in consultancy fees for a new terrorist-proof passports system that was never installed. Although Mr Githongo did not disclose the names of those suspected of what is seen as the worst corruption case in the Kibaki administration, independent sources said the prosecution could target four people.