Phantom Firms, Shady Contracts And Questions Over All The President's Men

Daily Nation

31 March 2006 Page: 4

President Kibaki The committee accepted Mr Githongo's evidence that he regularly briefed PresidentKibaki on Anglo Leasing and related contracts from the time Anglo Leasing became the subjectof a parliamentary query. That top civil servants were sacked on the authority of the President pointed to adequate information having been provided to him, a fact that was confirmed in testimony by the head of the public service. The report said the President directed Mr Githongo to investigate who Mr Kettering was and to ensure that funds were refunded. "Even if it is accepted that Mr Githongo never briefed the President, as may be claimed, other persons also testified that the President received appropriate briefing. These included MP David Mwiraria and the head of the public service and secretary to the Cabinet, Mr Francis Muthaura," it said. The committee believed that the Kenya Anti-Corruption Commission's reports were made available to the President and especially that his Governance and Ethics permanent secretary kept him fully informed on corruption issues. The committee accepted a memorandum tendered by Mr Githongo, which he sent to the President as a brief on Anglo Leasing contracts. Kiraitu Murungi As the minister for Justice, it was one of Mr Kiraitu Murungi's responsibilities to provide leadership in the fight against corruption. He failed to offer the then-permanentsecretary John Githongo undivided support although he played the role of an informer to Mr Githongo, giving him early warnings of impending danger. The committee found that there was credible evidence to suggest that Mr Murungi gave protection to Anglo Leasing principals. It also found that, based on the minister's discussions, the principals behind Anglo Leasing projects were probably a front for persons in the Government. Mr Murungi advised Mr Githongo to go slow on corruption investigations in return for a favour being extended to Mr Githongo's father's case which was pending in court. "This was obviously a bribe by a minister in charge of justice, punishable under the Public Officers Ethics Act 2004," the report said. Further investigation is required to establish his interference in theJ udiciary as a whole and the removal of a special magistrate for corruption cases. He should also be investigated for the attempts he made to cover up the scandal. David Mwiraria Minister for Finance David Mwiraria displayed a most cavalier attitude towards Anglo Leasing and related contracts. To begin with, according to his testimony before the parliamentary Public Accounts Committee, Mr Mwiraria was only interested in the recovery of the money paid to Anglo Leasing and Finance Limited. Evidence shows that Mr Mwiraria instructed PS Joseph Oyula to call the principals of Anglo Leasing and ask them to refund the money. When the Anglo Leasing deal was exposed, other contracts that were also in place came into question. The Central Bank of Kenya sought the direction of the Treasury on whether these contracts should be paid and although Mr Mwiraria knew of these contracts, he failed to provide leadership on how they should be dealt with. As a result, until the time he resigned in January, he had not addressed this problem. The committee is concerned that in the evidence, Mr Mwiraria was either outrightly incompetent or wanted to give the Anglo Leasing principals an advantage. The committee recommends that he should be investigated with a view to taking appropriate action. Amos Wako The role of the Attorney General in Government is provided for in Chapter 9 (nine) of Government Financial Regulations. The understanding of that role by different people in the government is, according to the evidence, varied. The Head of the Public Service stated that the AG should be involved in all stages of the procurement process, and should advise the line ministry of the need for due diligence and ensure it is performed. The Treasury, on the other hand, said due diligence is the responsibility of the AG. Mr Magari, specifically, blamed the Mr Wako for bringing a criminal case against him for failure to exercise due diligence when the duty is, in Mr Magari's view, vested in the AG himself. Mr Wako said his office should be involved in all stages but that the practice had evolved where he is only contacted at the end. The only role of the AG is to confirm that the persons who have signed the contract on behalf of the government have the authority to do so. The committee found that whereas the procurement regulations empower the Attorney General to participate in all stages, he had not done so in practice. This, in the view of the committee, is an abdication of his responsibilities. Mr Wako was accused of protecting the interests of the foreign investors but not those of the government. Francis Muthaura The committee found it difficult to believe that Mr Muthaura issued an advertisement merely to clear the confusion that there were two Anglo Leasing and Finance projects. The head of public civil service had in the advertisement said there had been no wrongdoing by anybody whereas payments had been made on the two projects without commensurate work being done. The committee said the advertisement was calculated to reduce public pressure on the Government to act on corruption. The committee doubted that Mr Muthaura could prepare such an advertisement without involving Mr John Githongo, whose docket included advising the President on corruption matters. The Principal Immigration Officer, one of the few officials opposed to the passport project, was transferred with the knowledge of the public service head. In fact, he could notexplain why Mr ole Ndiema was transferred. The committee found it difficult to believe that he was not transferred because of being a stumbling block in the passport procurement contract. The team accused Mr Muthaura of misleading it that payment of all security related contracts had been stopped pending an audit by the Controller and Auditor-General. Moody Awori Vice-President Moody Awori should be investigated for his role in the Anglo Leasing passports project, the Parliamentary Accounts Committee recommends. According to the MPs' findings, Mr Awori - under whose Home Affairs ministry the project fell - was sufficiently involved in implementation of the Anglo Leasing contract as to take responsibility for its shortcomings. The VP had denied he was directly involved. Instead he said it was the practice for permanent secretaries to perform tasks in the ministry without reference to ministers. Sometimes, ministers may not even be aware of the progress of implementation once a policy document has been approved, he told the MPs. But the committee said the law does not support such a practice. It bases its recommendations on several points. First, it says, the Home Affairs permanent secretary gave evidence that the Vice-President was involved in the contract and was kept informed at every stage. It cites a September 5, 2003 brief by the permanent secretary seeking the VP's guidance, and a response asking him to submit the contract documents to the Attorney-General and Treasury for action. He also requested that the interest rates be reduced. Secondly, the VP, in a ministerial statement, informed Parliament that the passports contract was valid. The statement later turned out to be misleading. Thirdly, MrAwori defended the reputation of Anglo Leasing in his statement. The committee accepted former PS John Githongo's evidence that he warned the VP before the deal was signed. Joseph Oyula Mr Joseph Oyula knew much more than he volunteered to the committee, the report says. It is not believable that the then-Treasury PS merely sent a fax to Anglo Leasing, leading to a refund of money. It is more likely that he called the principals, whoever they were; he admitted to being introduced to Mr Deepak Kamani, considered the person behind Anglo Leasing. The committee finds a relationship between Mr Oyulaand Anglo Leasing, which made the latter readily heed the request to refund money. Further, the committee finds that there must have been a conspiracy between Mr Oyula and Mr Mwiraria, which made the latter trust Mr Oyula and ask him to seek the refund. Mr Oyula wrote to CBK at the height of House inquiries on Anglo Leasing-type contracts. Whereas the bank had hoped for a holistic review of such contracts, Mr Oyula appears to have interpreted the bank's request as merely the fulfilment of a formality, so that the bank could go ahead and pay. Mr Oyula facilitated the payment for some of the pending 18 contracts when circumspection would have led to a review of the contracts. The committee finds that Mr Oyula consistently took refuge in formality to give advantages to Anglo Leasing. It finds him unreliable and inconsistent and says he was unwilling to give information. It is difficult not to believe that having worked in Treasury for over 20 years he was a chief architect of civil servants who promoted the use of single sourcing, hence overpricing. They had however perfected the art of ensuring that proper authorisation was sought, making it difficult to find culpability on paper.