E-Clips:- Business Pictorial - Passport Crooks In Another Scandal

Investigations into the Sh2.7 billion passports tender scam are running into trouble in what appears to be an attempt by key government officials to cover-up the scandal implicating a number of them.

And the Sunday Standard has authoritatively established that the same Anglo Leasing firm has also been engaged by the government in another suspect deal for the supply of a new forensic kit for the Criminal Investigations Department valued at Sh1.9 billion ($23m) that has not been delivered. Curiously, when asked about the deal a fortnight ago, National Security minister Chris Murungaru denied knowledge of the firm that had obtained a contract to supply the equipment at the inflated cost from the original estimated price of Sh850 million.

It has emerged that in fact the firm was paid Sh222 million last year and another Sh464 million has been earmarked for it in this years recurrent expenditure budget.

Finance Minister David Mwiraria was last evening stunned when asked about the provision. He told the Sunday Standard that the CID project had been cancelled because it had not taken off and he was not aware of any payments due to the firm.

Although it is more than one month since the scandal was exposed in Parliament and the governments plea of innocence blown, nobody has yet been charged in court despite the masterminds being well known.

Now, sources say, investigations are pointing to the involvement of a senior minister who is said to have received a commission from the Sh91 million paid to Anglo Leasing Limited as commitment fee.

It has also emerged that the firm was paid Sh222 million last year and another Sh464 million has been earmarked for it in this years recurrent expenditure budget.

But Finance Minister David Mwiraria was last evening stunned when asked about the provision. He told the Sunday Standard that the CID project had been cancelled because it had not taken off and he was not aware of any payments due to the firm but asked for more time to get a proper answer.

Regarding the passports scandal, Mwiraria said he would not pay a cent more because, in the first instance, the perpetrators of the scandal had "felt guilty enough to return the money".

And as the investigations drag on, the son of a top politician and his associate at State House are being fingered as accomplices in the failed rip-off. The scam has embarrassed the governments slow-punctured war on corruption.

Sources say influential people have been trying to slow the investigations being led, principally, by the trio of PS John Githongo, anti-corruption police chief Gideon Mutua and the investigating officer, Mr Hussein Were. On Thursday, pressure was applied on the team to drop a certain line of investigations after lawyer Fred Ojiambo was arrested for refusing to honour summons to report to the police.

He was charged on Friday in another sideshow to the scandal. At issue is whether a lawyer can be required to disclose the identities of the firm he acted for, allegedly on the instructions of some London solicitors, when the principal suspects are sitting pretty. Mr Ojiambos arrest drew a barrage of criticism from lawyers, including Law Society of Kenya chairman Ahmednasir Abdullahi, who is also, ironically, the chairman of the KACC advisory board. Ahmednasir personally called Mutua to protest at the action against Ojiambo.

Press inquiries

Governance and Ethics PS John Githongo could not be reached for comment but usually eloquent members of the parliamentary Public Accounts Committee (PAC) have suddenly gone quiet on the progress of their own investigations.

Yesterday, Ntonyiri MP Maoka Maore who first blew the whistle on the scam declined to comment on the pace of investigations but maintained that the principals of Anglo Leasing are "well known locals," adding that "if they want to get them, they can".

It is believed that the key to unlocking the masterminds of the scam lies with the local contacts of the company that arranged financing for the deal, Anglo Leasing and Finance Limited.

Mr Jimmy Wanjigi and Mr Deepak Karmani, who are associated with the firm, have recorded statements together with suspended PSs Joseph Magari and Sylvester Mwaliko.

Questions abound on how government officials could have awarded a tender involving the staggering outlay of public funds to a company whose principals they claim were unknown to them. It is inconceivable that the culprits could refund the money and remain anonymous.

The two controversial local businessmen associated with the two deals have a track of suspicious dealings with the government.

Sources indicated that investigations were being extended to London where documents used to process the payment of Sh91.6 million to Anglo Leasing for what was described as "arrangement, commitment and administrative" fees stated that the firm was based at Alpha House, Liverpool, in the UK. Subsequent inquiries revealed that the flat listed belonged to property agent Saagar Associates.

The slow pace it has taken to apprehend and prosecute the suspects has stoked fears that the cuprits are being protected by the Kibaki administration.

Why, observers ask, should the government spend more money in the guise of investigations when the suspects who paid out the money, and who know the recipients who returned it, are walking around free?

The making of a scam

According to a "Special Audit of Procurement of Passport Issuing Equipment by the Department of Immigration in the Office of the Vice President and other related issues" prepared by an internal government watchdog, the passports scandal was essentially masterminded by government officials acting in concert with the firm that won the tender.

The scam began in June 2000 when the Department of Immigration (DOI), then under the Office of the President, initiated a review of its systems and procedures with a view to modernisation.

The idea was crystallised by the DOI on October 18, 2001, which requested the ministerial tender committee to procure a passport issuing system through restricted tendering.

Mischief, the report concludes, was afoot from the beginning. Although Treasury approval came on January 8, 2002, and M/S/ AIT International Plc of the US was deemed to have offered the best deal from among three shortlisted firms including De La Rue Identity Systems of the UK and South African firm, Face Technologies, it was later realised that no funds had been allocated in the OPs recurrent expenditure for the material financial year to fund the project.

"It is not clear," the report says, "why the DOI would go out to tender for such a project knowing very well there were no budgetary provision in the Estimates for 2001/2002."

Subsequently, in a letter dated August 20, 2002, DOI sought and was duly granted, permission to issue the tender again for the year 2002/2003.

Although three firms were again short-listed, the drama that would culminate in the exposure of Narcs biggest scam to date began at a meeting on February 6, 2003 when a technical committee from the Government Information Technology Services of the Treasury rejected all three bids.

These included a bid by Face Technologies valued at Sh779 million, GET groups Sh830 million offer and De La Rues Sh1.1 billion.

Anglo Leasing

On August 1, 2003, a firm by the name Anglo Leasing and Finance Ltd offered what appeared to be an "unsolicited technical proposal for supply and installation of an Immigration Security and Document Control System."

This, the report claims, was a clear attempt at fraud. "It is not clear how the financing firm could have prepared and submitted a detailed proposal for a programme similar to the one recommended by GITS before a request to do so had been officially made to it by the government."

Ignoring legal requirements for diligence tests on the firm, Treasury, on December 4, 2003 signed a deal worth Sh2.7 billion for installation and supply of the system.

In the aftermath of the revelation of the scam, four top government officials including Treasury PS Joseph Magari, Home Affairs PS Sylvester Mwaliko, GITS director Dr Wilson Sitonik and Chief Litigation Counsel Dorcas Achapa.

Informed sources, though, insist that figures far higher in the pecking order were deeply involved in the multi-billion shilling scam. And it remains to be seen if and when these will be brought to book.