The Shameless Looting in Kenya

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By Kenya Confidential Economics Editor – Nairobi, November 23, 2016

The shocking extent of corruption perpetrated by the family of the former Kenyan dictator Daniel Arap Moi is a matter Kenyans should never take for granted. Equally, corruption during the Mwai Kibaki era should be pursued to the last cent.

It is public knowledge that Moi presided over a web of shell companies, secret trusts and frontmen that his entourage used to funnel billions into nearly 30 countries including former colonial master Britain.

To date not a single coin in billions of shillings looted by the Moi family has been returned to Kenya publicly nor has any assets bought with corruption proceeds been recovered to reverse the financial theft from his motherland.

Worse failure to recover the looted wealth has encouraged most politically connected Kenyans to loot their motherland without mercy or remorse. The multi-billion-shilling scandals rocking almost every ministry in Jubilee government and literally all 47 Counties is evidence that Moi era institutionalized corruption in Kenya.

The October 18th Anti-corruption and Governance Summit fiasco at State House was testimony to a lost cause that gave graft cartels the assurance that they need not apply any brakes as they cruise on the gravy train towards illicit wealth. A majority of them are grateful that the celebrated Integrated Financial Management Information System (IFMIS) has become their national looting superhighway.

Their joy stems from the fact that even when IFMIS footsteps can lead investigators to those who manipulated payments by names they entered into the system, the fabrication of figures they keyed in and the time they commissioned their crimes, investigators have chosen to look to a different direction to hoodwink Kenyans in a clear case of witch-hunt.

No one in investigative, prosecution or trial of National Youth Service and other corruption cases is serious about slowing down the evil system. The evidence is in the110-page report by the international risk consultancy firm Kroll, whose allegations that relatives and associates of Moi siphoned off more than Ksh 150 billion of Kenya government money was totally ignored by the Mwai Kibaki regime. Jubilee did not care about it either.

If true, it would put the Moi era looting on a par with Africa’s other great kleptocrats, Mobutu Sese Seko of Zaire (now Democratic Republic of Congo) and Nigeria’s Sani Abacha. Nigeria pursued Abacha’s money and billion have been returned from the United States and Europe.

The assets accumulated by Moi era looters included multi-million shilling properties in London, New York and South Africa, as well as a 10,000-hectare ranch in Australia and bank accounts containing hundreds of millions of shillings.

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The Knoll report, commissioned by the Kenyan government, was submitted in 2004, but never acted upon. Its details indicate that:

  • Moi’s sons – Philip and Gideon – were reportedly worth £384m (now Ksh 48,580,169,702) and £550m (Ksh 69,586,575,465) respectively – it was not clear how the figures were arrived at;
  • His associates colluded with Italian drug barons and printed counterfeit money used in 1992 election;
  • His clique owned a bank in Belgium;
  • The threat of losing their wealth prompted threats of violence between Moi’s family and his political aides – notably his former aide Joshua Kulei and former self-proclaimed total man Nicholas Biwott;
  • £4m(Ksh 505,949,707) was used to buy a home in Surrey and £2m (Ksh 252,986,060) to buy a flat in Knightsbridge. However, to avoid diplomatic row between Kenya and her former colonial master, Kroll said it could not confirm or deny the authenticity of the report.

The Kroll investigation into the former dictatorship was commissioned by President Kibaki shortly after he came to power on an anti-corruption platform in 2003. It was meant to be the first step towards recovering some of the money stolen during Moi’s 24-year rule, which earned Kenya the reputation as one of the most corrupt countries in the world. That is a title Kenya retained during the Kibaki era and continues to defend it in President Uhuru Kenyatta’s tenure.

The Kroll report aside, Kenyans were treated to a whimsical dishonesty during investigations into the notorious Goldenberg grand corruption in which billions of shillings were stolen from national coffers to pay for imaginary exports of gold and diamonds in a criminal scheme hatched by Kamlesh Pattni. Pattni still walks around Kenya as a free man criminally acquiring properties and assets of some of his partners in Goldenberg heist, notably James Kanyotu, who was the director of intelligence and fellow Asian Ketan Somaia serving long term prison sentences on Britain.

The actual figure of cash stolen during Goldenberg scam has never been made public but as much as Ksh 500 billion is believed to have been shared by the crooks involved.The Goldenberg scandal was a political scandal where the Kenyan government was found to have subsidised exports of gold far beyond standard arrangements during the 1990s, by paying the company Goldenberg International 35% more in Kenyan shillings than their foreign currency earnings.

The criminal schame is estimated to have cost Kenya the equivalent of more than 10% of the country’s annual Gross Domestic Product, and it is possible that no or minimal amounts of gold were actually exported. The scandal involved political corruption at the highest levels of the government of Moi. Officials in the government of Kibaki were also implicated prodding him to launch a public inquiry into Goldenberg.

The scheme began in 1991, almost immediately after the Kenya government, following directions from the IMF, introduced measures to reform the economy and increase international trade and investment, and seems to have stopped in 1993 when it was exposed by a whistleblowerDavid Munyakei. As a result, Munyakei was fired from his position at the Central Bank of Kenya, and remained largely unemployed until his death in 2006..

On 3 February 2006, following an investigation under the Kibaki government, a report by Justice Bosire recommended that the Education Minister at that time,  George Saitoti should face criminal charges for his actions and that former President Moi should be further investigated. Saitoti was both vice-president and finance minister under Moi in the early 1990s. Saitoti’s resignation was announced by President Kibaki in a television address but he found his way back after a few months later. But God works in miracles. He later died in a police helicopter crash infernal in Ngong Forest within his Kajiado Constituency.

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The report said that records presented at the inquiry showed that Lima Ltd, which is associated with Gideon Moi, Biwott, and two other people received Ksh 6.3 million from Goldenberg. However, the Commission concluded that in respect of Biwott, who had not been in government at the time, “no moneys of Goldenberg were involved”, the matter was outside the terms of reference and the commission could enquire into it.

The report also said Ksh 158.3 billion of Goldenberg money was transacted with 487 companies and individuals. A list of exhibits compiled by the commission puts Goldenberg International Ltd at the top of the primary recipients of the money, at Ksh 35.3 billion. The directors of Goldenberg were named as Pattni and Kanyotu.

Although Kanyotu was the director of the Special Branch (intelligence unit of the Kenya Police, now known as National Intelligence Services, NIS) and a director of First American Bank, he described himself as a farmer in Goldenberg documents. President Moi was named by Pattni as having been a shareholder of GIL by nominee. However, President Moi himself was never called to present evidence despite despite this alleged link.

Shortly after, Saitoti along with 20 several others suspected to be involved in the scandal were prohibited from leaving the country and ordered to surrender any weapons they possessed. Among those named were

  • Gideon Moi, retired President Moi’s son, also then Baringo Central MP
  • Philip Moi Retired President Moi’s son
  • Moi’s lawyer, late Mutula Kilonzo
  • Moi’s former personal assistant, Joshua Kulei
  • former Central Bank of Kenya governor Eric Kotut
  • former Central Bank of Kenya deputy governor late Eliphas Riungu
  • former Central Bank of Kenya employee Job Kilach.
  • former Central Bank of Kenya employee Tom Werunga
  • former Central Bank of Kenya employee Michael Wanjihia
  • Philip Murgor, the former director of public prosecutions. Murgor’s law firm represented the Central Bank of Kenya during the two-year public inquiry headed by Justice Bosire.
  • Former Treasury permanent secretary Charles Mbindyo
  • former Treasury permanent secretary late Wilfred Karuga Koinange
  • former Treasury permanent secretary Joseph Magari
  • Prof George Saitoti, who resigned as Education minister.
  • Goldenberg architect Kamlesh Pattni
  • Pattni’s business partner and former Special Branch chief James Kanyotu
  • former commissioner of Mines and Geology Collins Owayo
  • Arthur Ndegwa, senior mining engineer in the Commissioner of Mines Nairobi office
  • former commissioner of Customs and Excise Francis Cheruiyot.
  • former Kenya Commercial Bank general manager Elijah arap Bii

Former president Moi himself was not listed.

But soon after the Kroll investigation was launched to probe into Moi era corruption, Kibaki’s government was caught up in what was connived to be its own scandal known as Anglo Leasing, that involved awarding huge government contracts to bogus Asian-owned bogus companies. Kenyan voters must be wary of anti-corruption ticket mongers given Moi. Kibaki and Jubilee rode on it to power but never delivered on their pledges.

The truth of the matter is that Anglo Leasing scandal master mind, Deepak Kamani, came up with the phantom projects during the Moi era and Kibaki inherited them through his personal assistant Alfred Gitonga, head of civil service Francis Muthaura, finance minister David Mwiraria and then interior security minister Murungaru.

Since then, none of Moi’s relatives or close allies has been prosecuted. Kamani and Kibaki’s finance minister Mwiraria are among those charged with Anglo Leasing-related scandal. No money has been publicly declared as recovered. Instead substantial sums of money was paid by Jubilee after legal suits by Anglo Leasing functionaries. Three of the four ministers who resigned after the Anglo Leasing scandal was exposed were reinstated soon after.

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The Kenyan government confirmed that it received the Kroll report in April 2004. But Alfred Mutua, the then government spokesman, said it was incomplete and inaccurate, and that Kroll had not been engaged to do any further work.

“We did not find that the report was credible. It was based a lot on hearsay.” He said the leaking of the report was politically motivated and insisted Kenya was working with foreign governments to recover the stolen money. “Some of the money is in UK bank accounts. We have asked the British government to help us recover the funds, but so far they have refused.”

The report was obtained by the website Wikileaks, which aimed to help expose corruption. The document was believed to have been leaked by a senior government official upset about Mr Kibaki’s failure to tackle corruption and by his alliance with Mr Moi before the presidential election in December.

In the Kroll report the investigators allege that a Kenyan bank was the key to getting vast sums of money of out of the country via its foreign currency accounts. The same bank had already laundered $200m (£100m) on behalf of the late Mr Abacha, with the assistance of a Swiss-based “financier”. “It is believed that twice as much was laundered through the same system by the Mois,” the report said.

Kroll confirmed last night that it had previously done work for the Kenyan government. A company spokesman was given extracts of the report seen by the Guardian. “We cannot confirm or deny that this report is what it purports to be,” he said. “Nor can we talk about the scope, content or results of any work we have done for the government of Kenya, which remains confidential.” Gideon Moi is Baringo Senator and Philip Moi is a businessman.

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US Embassy Nairobi in February 2006 sought suspension of entry into the United States of the Anglo Leasing King pins as Alfred Getonga, Anura Perera, Deepak Kamani, Joseph “Jimmy” Wanjigi. Also caught in the dragnet was Murungaru for his reportedly central role in a number of grand-scale corruption cases under the administration of Kibaki. This cable seeking visa suspension described as chief co-conspirators Getonga, Perera, Kamani, and Wanjigi.

“All were central figures in a network of corrupt government officials and private sector dealmakers that has systematically stolen, or attempted to steal, a cumulative sum as high as $700 million over the past three years by exploiting a secretive system of government security- related procurement contracts in Kenya. These activities have had a serious adverse effect on U.S. national interests in Kenya, which include strengthening democratic institutions and the rule of law and fostering economic development.” said the cable.

In April 2004, information emerged publicly that a shadowy firm, Anglo Leasing and Finance Limited (Anglo Leasing), had secured two bogus contracts with the Government of Kenya (GOK). The first was for the supply of new secure passport issuing equipment, and the second for the construction of a police forensics lab.

Together, the two contracts were worth a combined $90 million (Ksh 9,169,605,000). Anglo-Leasing, it turned out, was no more than a “PO Box company” with fictitious offices in the UK and Switzerland and no identifiable officers or management. The Anglo-Leasing scandal was aggressively investigated at the time by the then Permanent Secretary for Ethics and Governance, John Githongo. Githongo’s investigations revealed Anglo-Leasing to be only the tip of an iceberg of grand-scale theft. They forced the Ministry of Finance to suspend payments and order forensic audits on 18 secretive security-related procurement contracts that followed a very similar pattern to that found in the Anglo-Leasing cases.

This pattern involved a small clique of private-sector dealmakers working together with an equally small cadre of senior government conspirators. Together, they would generate proposals for large-scale government procurement contracts. The same scheme applied in National Youth Service procurement thefts.

Read:

The proposals frequently requested goods not needed or desired by the line ministry targeted to pay for them, and involved large upfront payments or commissions financed by loans arranged by the businessmen. The goods or services were either vastly overpriced or not supplied at all. This kind of scam generated enormous illicit profits, much of which were recycled by the businessmen who received the payments to the concerned government officials and other middlemen for personal gain or to finance future political campaigns.

Coming soon – Jubilee era plunder

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