Kenya’s Politics of Poverty – Part 3
By Blamuel Njururi, Kenya Confidential Editor-in-Chief, Nairobi – September 3, 2016
Those who have accumulated wealth through corruption are part and parcel of cartels that are invisible to the Kenya Police Criminal Investigations Department (CID), they are undetectable to the Ethics and Anticorruption Commission (EACC) and above all they are undistinguishable to the National Intelligence Service (NIS) when they join politics to launder and protect their ill-gotten wealth in boundless greed
At independence in 1963 Kenya had an efficiently working postal and telephone service under the Kenya Posts and Telecommunications Corporation. But all that would be obliterate within a span of 24 years. Today, response to letters or telephone calls to and from government ministries are a rare experience – even with the advent of electronic communications systems such as emails or mobile telephony short messaging system or SMS. Civil service lethargy that set in during Moi era is deeply seated in government systems.
With a convenient pre-existing economic and political superstructure, Moi did not need to re-invent the wheel once he took over the reins of power. All he needed was to dust his Kadu-era notes and recall his earlier role as a co-architect of a template he knew all too well. His divide-and-rule tactics spanning almost two-and-a-half-decades are sufficient testimony of this philosophy, which, in his marathon tenure, Moi put to even better use, only, this time round, against his own.
On assuming the reigns of power in 1978 after Kenyatta’s demise a politically insecure Moi steered the Kenyan Nation towards despotic autocratic rule after surviving a military coup in 1982. Moi’s despotic rule can best be captured as one that was repressive, corrupt, nepotistic and ethnic driven mal-government Kenya went through. Simply put Moi set up a Kleptocracy in which his regime’s officials were politically corrupt and financially self-interested in a government characterised by rampant greed and corruption in which those in power exploited national resources and stole from public coffers with abandon, thus a rule by thieves. Thieves who even today cannot discuss corruption in Cabinet, National Assembly, Senate or County Assemblies unless they are blaming other people.
Most commonly, this situation arises in authoritarian governments. Such governments lend themselves to corruption because there is little accountability and the head of the government usually appoints friends, family members, and close associates to key positions in the government in order to retain control. This sets up a ruling class, and with no accountability, members of the government can freely abuse government funds. That is how Nyayo loyalists emerged in Kenya.
In a kleptocracy, most government revenues wind up in the hands of officials, and are not applied to public works projects, welfare, and other activities. Government agencies are often dysfunctional as a result of limited funding and being headed by people who lack qualifications. Aid organizations attempting to provide assistance in the country may be frustrated by seeing all the aid diverted for personal profit, with national leaders selling humanitarian aid to the highest bidder instead of allowing it to be distributed for the good of the populace.
Bribery is commonly necessary to accomplish tasks ranging from getting a building permit, subverting justice to opening a new business with which to loot public coffers. The more money people have, the higher they can rise in the kleptocracy, by greasing the way with high ranking officials, and this in turn generates more money for them as they accept bribes and gifts from people fighting for positions in the government. That has been the order of the day in the police service. It is not uncommon to see the justice system break down as people simply refuse to attend their own trials or bribe their way out of legal penalties.
For the average citizen, living in a kleptocracy can be marked with extreme hardship. Lacking clout and funding, people may have difficulty completing basic tasks. The lack of public services can result in problems like uncollected garbage, unpaved and poorly maintained roads, limited access to health care, and other issues. Citizens who protest government policy or attempt to draw attention to the problems with the government may become political prisoners and can face penalties like execution for treason. Free elections are usually not present in a kleptocracy and some nations may not even bother to hold sham elections, allowing leaders to remain in place for decades and to pass power on to their children.
Moi ruled Kenya for 24 years during which corruption became the legal tender to win government tenders and contracts, buy justice and freedom from police and judicial services as well as operate multi-billion-shilling organised criminal rings and syndicates. Post Moi reforms revealed dozens of corrupt judicial officials, including senior judges, and top level police officers who could not account for their wealth during vetting sessions. Shockingly no legal action was taken even when it was beyond reasonable doubt that the wealth was built on corruption proceeds.
Failure to prosecute those found to have accumulated their wealth through corruption makes many conclude that graft actually pays. They see their neighbours, relatives and people who migrated and bought big pieces of land and built huge homes with corruption proceeds enjoying the loot without regrets. They also see them driving big cars to churches where they have seats reserved at the front row of congregations every Sunday with some rewarded with positions of church elders. How then doesn’t corruption pay?
Those who have accumulated wealth through corruption are part and parcel of cartels that are invisible to the Kenya Police Criminal Investigations Department (CID), they are undetectable to the Ethics and Anticorruption Commission (EACC) and above all they are undistinguishable to the National Intelligence Service (NIS) even when they join politics to launder and protect their ill-gotten wealth. With such opaqueness in tackling corruption the majority millions of youths bear no blame in believing graft is the way to joyous and luxurious life in Kenya.
A large population of the Kenyan youth are easy prey for a myriad of criminal cartels engaged in drugs, human and animal trophies trafficking cyber crimes and all nature of other illegal activities including terrorism. Many have never seen drug barons prosecuted in Kenya, they have never heard of human traffickers tried in Kenya or those caught for cyber crimes involving hacking banks and money laundering including 77 Chinese nationals arrested in December 2014 in Runda who were never prosecuted.
Moi, now in his sunset days and enjoying an international reputation as an elder statesman in Kenya and the region, owes Kenyans an unconditional apology for ruining their national economy and presiding over the plunder of billions of shillings. He should be gentleman enough to cause the refund of billions of shillings stashed away in offshore accounts by his cronies who became millionaires, and later billionaires, out of taxpayers’ money.
The global forensic accounting and security corporation Kroll Associates was retained by the Narc Government to probe the corruption and capital flight of the Moi years. In its report, leaked on the Internet but never acknowledged by either the corporation or the Kibaki regime, Kroll revealed in great detail how a corrupt network in the Moi regime looted at least KSh130 billion of Kenyan taxpayers’ money. The countries where some of the money was traced include Britain, Switzerland, South Africa, the United States, Namibia, Malawi, the Cayman Islands and Brunei.
Besides the money stashed away in foreign accounts, the report states that some of the cash moved from Kenya was used to acquire a home in Surrey, UK, worth £4 million (KSh520 million) and a flat in Knightsbridge worth £2 million (KSh360 million). other sources say the late George Saitoti had real properties in the Far East nations of Japan and in Europe. When he died in a police helicopter crash one of his houses in Kajiado was found stashed with millions upon millions of shillings intended for his presidential bid in 2013. The billionaire was using a police aircraft on a Sunday to attend a church harambee because he was minister in charge of security.
A clique around Moi is also said to own a bank in Belgium which has a branch in Nairobi. Kroll investigators alleged that a Kenyan bank, Transnational, was the key to getting vast sums of money out of the country via its foreign currency accounts. The same bank had already laundered $200 million (£100m) on behalf of the late Nigerian tyrant Sani Abacha, with the assistance of a Swiss-based “financier”.
Several other “locally-owned” banks joined in the bandwagon of money laundering and capital flight, but went under as soon as their mission was accomplished. They included Delphis Bank, Euro Bank, Exchange Bank, Pan African Bank, Trust Bank and Trade Bank, to name but a few. they drained the Keyan economy of billions of shillings that could have been used for economic growth.
It is a huge pity that the Kroll Report ended up costing the Narc regime tens of millions of shillings only to go unacknowledged both by the investigators, who flatly refused to acknowledge the document once it was leaked on the Internet, insisting that their practice was to report to the commissioning client on a confidential basis, and the Kibaki Administration.
The Kroll Report is one of the most important documents in Kenya’s national saga so far. It details what happened when the nation hung from a cliff and stared at the void for an entire generation. It is a textbook lesson in what actually happened to a modernizing African nation when a ravening kleptocracy acquired absolute power. Transnational organized crime found its way into the centre of power and policy, command and control, and the serial rape of a nation begun in earnest. By the time the economic rapists of the Moi kleptocracy finished with her, Kenya was in the Intensive Care Unit of almost-failed states.
It took the Herculean effort of Mwai Kibaki’s 10 years in office as the Third President of Kenya to begin to mend the damage and depredations of two-and-a-half decades of official rapine, ravage and national defilement choreographed and organized from the very top of the body politic.
Kenyans weould be further shocked to learn that top civil sernants used their positions in government to perpetuate transcontinental illicit funds transfer by scooping public coffers in a manner that sabotaged public and national security. Fifty years since Kenya’s independence it began to clearly emerge why the Kenyan Nation’s development stalled while newly independent nations in the Far East took off to become industrial Tigers.
“Pillars of Society” entrusted with national finances and assets set upon to corruptly, unjustly and greedily enrich themselves while their contemporaries in Far East Singapore, Malaysia, South Korea and Botswana in Africa, were slaving away to radically transform the lives of the vast majority of their countrymen and women from deplorable poverty to middle and upper income status.
Two notorious cases involve Moi’s illegal succession architect Charles Njonjo and a former neighbour at Kabarak close in Kibera Jeremiah Kiereini. International evidence is now exposing how top government executives teamed up with the private sector not only to loot Kenyan taxpayers’ coffers but to launder funds into offshore accounts. Investigations into fraud allegations at decades long government motor vehicle provider, CMC Holdings, have shed new light on the extent of secret payments to Moi era well-connected individuals who served as directors and executives of the company.
Kiereini and Njonjo: Shamed society pillars who betrayed public trust
Details of investigations by the Capital Markets Authority, the regulator, and CMC Holdings identified prominent personalities who benefited from a mysterious Ksh3.1 billion slush fund kept secret to Kenyans for decades. They include former powerful Attorney-General Njonjo, former Head of Civil Service, Secretary to the Cabinet and defence permanent secretary Kiereini, and Joshua Kulei, who served as private secretary to former Moi, They are on the shame list of individuals who received tens of millions of shillings in what regulators have termed illegal dealings.
They have been identified as part of the “special 25”, received Ksh 1.5 billion from a slush fund on the English Channel island of Jersey, which was fed by inflating prices of motor vehicles supplied to CMC and sold to the Kenya government and unsuspecting Kenyans. Surely former Finance and Energy Minister Chris Okemo and former Kenya Power and Lighting managing director Samuuel Gichuru are not the only men to face corruption and money laundering trials in Jersey.
A report by South African forensic audit investigators, Webber Wentzel, revealed CMC directors built the secret account over three decades by padding import prices of Land Rover, Nissan UD and Suzuki vehicles. CMC would negotiate for arms-length cost with makers of these vehicles, which would be the legitimate price that would go to the manufacturers. They would then ask the car makers to inflate the prices for Land Rovers by 1.5 per cent, Nissan UD prices would be padded by a margin of two per cent while Suzuki invoices were over-stated by 1.5 per cent. The over-charged invoices would be presented to CMC Holdings with the agreement that the proceeds are wired to the secret account.
Njonjo, disgraced from government by Moi as a traitor who wanted to topple his government, was one of only a small clique of the CMC Motor’s directors who knew about the secret accounts that were funded through over-invoicing of CMC’s vehicle imports, according to the forensic investigation report seen by the media. Moi apparently did not know he was a national traitor.
The former Attorney General, was named in the report as one of only five directors who had powers to operate the account since it was opened in 1978 the year Kenyatta died. That would mean the account was used to plunder Kenyan taxpayer coffers during the late President Jomo Kenyatta’s regime, through Moi and Mwai Kibaki presidencies and into the Uhuru Kenyatta’s regime.
Foot note: Kenya youths must choose between making Kenya a better country of potential hell