E-Clips:- Business Pictorial - Pressure Mounts On Officials To Resign

Pressure is mounting on members of President Kibakis Cabinet implicated in the failed bid to rip off Kenyan taxpayers of up to Sh7 billion in two scams tied to a shadowy finance company to resign or be forced to quit.

Analysts predict that the drip-drip effect, which has seen a new angle emerge in the tangled investigation into the scam virtually every day, could irreparably damage Kenyas standing with international donors and kill efforts to revive a battered economy.

Sunday Standard investigations into the dual schemes to upgrade the Kenyan passports security system and construct a forensic laboratory at the CID headquarters at an extremely inflated cost reveal an intriguing dance between shadowy and immensely wealthy powerbrokers from the previous regime and officials of the new Narc administration. On the strength of detailed back and forth correspondence between Kenya government officials and their Western associates, a number of key government officials will have a tough time extricating themselves from the twisted web of intrigue and deception that yielded the Kibaki administrations biggest financial scandal yet. The permanent secretary in the Office of the President in charge of national security told the parliamentary watchdog Public Accounts Committee (PAC) that he knew nothing about the shadowy Anglo Leasing and Finance Company Limited that is at the heart of the scam.

Yet, as the chief accounting officer in the Office of the President, Dave Mwangi signed a letter marked Confidential and addressed to Public Works PS Erastus Mwongera indicating the governments intent to set up a forensic science laboratory.

The letter, dated March 4, 2003, Reference No. OP.24/014 requested Mwongera "to nominate one of your officers, preferably the Chief Architect, to meet the Director of the Criminal Investigations Department (CID) for more briefing and details regarding the proposed project."

Yet, when the scandal broke, Mwangi, who happens to have been the under-secretary in the same office under the Kanu regime when the entire project was hatched, feigned ignorance of the firm that was to undertake financing of the forensic science laboratory project. Since the Sunday Standard broke the story last weekend, on the heels of the allocation of Sh486 million to the same company in the new Budget, Mwangi shifted blame from his ministry to the Treasury.

But contrary to his claims, Mr Mwangi has always been the chairman of the tender board since he was moved to the Office of the President over six years ago. In that position, he presided over all security purchases in conjunction with the Chief Arms Procurement Officer. As such, he established close connections with businessman Deepak Karmani, who has been questioned in relation to the Anglo Leasing scam.

Clearly, in the light of emerging documentary evidence and his own position as chief executive of the ministry that authored the forensic laboratory project, Mwangis denials are hollow and inconsistent with the facts at hand. His position is becoming increasingly untenable.

Dr Chris Murungaru

The Minister of State in the Office of the President in charge of National Security and the Provincial Administration went on the record, in an interview with this newspaper, to deny any knowledge of award of an inflated tender to refurbish the forensic science laboratory for the Criminal Investigations Department.

But in his evidence to the PAC, acting Finance Permanent Secretary Joseph Oyula stated that the contract documents for the controversial passports deal were countersigned by the OP.

The minister for National Security cannot plead ignorance to details of a security project involving Sh4 billion under his docket. Moreover, Anglo Leasing is not a new entrant on the scene. Upon taking over government, the Narc administration reviewed all pending bills and projects. The OP decided to push on with the project and the firm despite the fact that it had failed to deliver even satisfactory architectural designs for the planned headquarters.

It is not conceivable how the OP can claim it had no role in recommending payment of Sh152 million, last year, to the firm and recommending the extra budgetary allocation in the current financial year. Clearly, the minister is culpable for the goings-on in his ministry.

David Mwiraria

The Finance minister who had hitherto been regarded as one of the more decent members of the Kibaki administration has been badly tainted by the whirl of recent scandals.

As head of Treasury, he has the ultimate oversight of public expenditure and he alone has authority (delegated or real) to sign off payments for any services rendered or goods delivered to any ministry and to commit the Kenya government to debt with foreign companies and financial institutions.

Mwiraria exercised this role in the initial payment of Sh152 million, which was released to Anglo Leasing for merely submitting architectural drawings for the proposed forensic science laboratory and a Sh91 million payout to the same firm for the passports contract.

The minister further approved the allocation of Sh486 million in the current financial year to the firm at the centre of the laboratory controversy. But when asked by the Sunday Standard last weekend why he had allocated money to the project, he was taken aback.

Mwiraria has doggedly refused to release names of the Kenyan contacts for Anglo Leasing even though he can extract their identities by merely demanding the trail of papers and authority to the money transfer. The payee is listed in contract documents as Account No.57043 at the French Banque Paribas PLC, London. He claims that the money has been refunded. If he cannot, with his resources and Interpol, trace the recipients, then Mwirarias position as chief custodian of the public purse is untenable and he owes the public a resignation letter. It is not enough to claim, as he has, that he was misled by senior Treasury officials.

J.F.A Agili

A senior OP bureaucrat, it is Mr Agili who signed the initial contract documents and maintained subsequent communication with the suspect firm. It is he who was the link person with the project consultant, Merlyn Kettering, and handled most of the paperwork involved in the scam. He knows the identities of the parties he dealt with in the evolution of the project from conception under Kanu and its revival and expansion under the Narc administration.

Dan Ameyo

The current Postmaster General and former Chief State Counsel at the Attorney Generals chambers gave the export-lease purchasing agreement between Anglo Leasing and the Kenya Government the legal seal of approval.

In a June 15, 2001, letter addressed to the PS in the Office of the President and drawn to the attention of Mr Agili,he wrote, in part:

"We have no objection to this because all the essential legal elements of the transaction as identified in our earlier letter to you, have been incorporated into the earlier tripartite document."

In his audit report of the scam, however, Controller and Auditor-General E.N Mwai punched holes in that clearance of the scheme, citing a slew of irregularities.

John Githongo

The PS in charge of Ethics and Governance with an office at State House is singularly charged with fighting corruption. The long period he has taken to apprehend the crooks involved in the scam in spite of obvious evidence and official trail of papers has left many questions about his commitment to bring the culprits to justice. He faces a practical test to his oft-repeated rhetoric about stopping corruption.

Other senior officials of the previous administration who called the shots when initial contact with Anglo Leasing was made and who may have answers to the Anglo Leasing riddle are:

Zakayo Cheruiyot

Anglo-Leasing and Finance Ltd first secured its lucrative contracts with the Kenya Government under his watch as Permanent Secretary in the Office of the President in charge of internal security. Indeed it is he who signed the contract on behalf of the OP on August 15, 2001, while Colin Flynn signed for Anglo Leasing. Former Finance Secretary Mwaghazi Mwachofi signed for the Ministry of Finance. Subsequent audits established that the contracts handed to Anglo-Leasing could only have been given as a result of blatant preferment and graft. Competitive bids for the same projects were rejected and the passports tender given to Anglo Leasing through single sourcing.

Such was the enthusiasm of senior government officials to work with Anglo Leasing that they handed the firm a contract "knowing very well that there were no budgetary provisions in the Estimates for 2001/2002."

Francis Sang

He was the director of CID when the project was first mooted. As the officer in charge of the department, the project of the forensic science laboratory and the planned headquarters was conceived under his watch. By the time he left, the project was at inception although impeccable sources say it was being overseen from the OP.

A number of business wheeler-dealers have been fingered by the parliamentary watchdog, PAC, as the linkmen between the new government and erstwhile corrupt officials.

But ultimately, the buck stops with President Kibaki and government officials who are custodians of the public interest. The longer it takes for convincing action to be taken the more his governments will to fight the vice-is doubted.

Will they resign or wait to be fired?